Rise in chip shortage worldwide in next normal, some is aware of it, some thought is not related to them personally. But if you think in a bigger context, you will know it will contribute to one thing that every analyst is mentioned hyperinflation is coming.
At the time of writing, millions of products, regardless of category, semiconductors and computer chips are under shortage of supply. As such, it halt most of the product final assembly and make the supply. Whether it is a consumer game console, computer device, smart car, smart factories and anything that needs the component all is under the impact. The more advanced and complex the modern smart device, whether high end smartphone to smart car, you can not assemble and miss some of the part in the process, some of the part is easily 3 months to a year late before they can be fulfilled by the semiconductors suppliers. This is the reason why most multinational corporations are shifting offshore to onshore, and moving from one country (complete disinvest) and more to another.
Global shipping, where during COVID-19 have less air transport mean, all ship toward sea shipping, despite the sea shipping rising in skyrocket, it is not able to meet the order quantity and operation requirements for most of the market. With the rise in the shipping and transport costing, what will you expect for the final goods every consumer and buyer acquired? The cost is rising and at an accelerated rate. This is why you see some of the new product launches, it is always out of stock, because it does not have enough, and restock is given to those who are willing to pay for the “premium” rate.
Semiconductor factories cost billions to build and take time, so even if you want to relocate it will not slow the current situation for the chip shortages for a minimum of 2 years. When it comes to willing to pay for the premium, not every buyer is willing to do so, it will shift the demand and supply, so this is the next normal that we will expect to see. For businesses that depend on supply hardware and if the order time is 3 months, not all the buyer is willing to wait, in particular for the product there will lot of substitution available.
E-SPIN Group in the enterprise ICT solution supply, consultancy, project management, training and maintenance for corporation and government agencies did business across the region and via the channel. Feel free to contact E-SPIN for your project requirement and inquiry.
