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News hardware & software 28 September 2021, 16:16

author: Arkadiusz Strzala

Electronics Crisis Grows Worse - Power Shortages and Lockdowns

Shortage of chips, shortage of computer components, can it get any worse? How about power restrictions in China, lockdown in Malaysia and the resulting shortages of everything?

IN A NUTSHELL:
  • What does China do when the electronics industry can't meet demand? They turn off the electricity;
  • The pandemic continues, affecting many electronics component manufacturers.

The consumer electronics market is struggling with chips shortages, the problem is so global that it even affects the automotive industry. The main reason for this is the shortage of semiconductors, but also workers (lockdowns caused by Covid-19). Just as some hopes of normalization appear, China puts a rod between its cogs and imposes restrictions on electricity consumption, which is hampering the industry and will cause shortages of... basically everything.

The Chinese government, when introducing bans on cryptocurrency transactions, was unlikely to have the gamers' best interests in mind (as crypto miners are buying up GPUs). Energy restrictions in the industrial sector announced in some provinces may have many reasons. It could be to improve the air before the upcoming winter Olympics or to stockpile fuel for power plants. In all likelihood, it's both.

As a result, many electronic component manufacturers are reducing or even stopping production in some factories. Several key suppliers (e.g. Eson Precision Engineering) of companies such as Apple and Tesla will not work until Friday, with current orders being met from part inventories. Companies packaging and testing chips from Nvidia, Intel and Qualcomma also have to suspend operations for a few days. The shortage of electronics is unlikely to have a positive impact on prices.

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In addition, as PCGamer reports, manufacturers of electronic components, especially electrolytic capacitors from Malaysia and Indonesia, have problems due to the pandemic. Quite recently, the daily number of cases of Covid-19 exceeded several tens of thousands in these regions (more than 50,000 in Indonesia). Although the situation has improved, the industry is still not back to full capacity.

Due to a significant increase in demand, the prices of the so-called rare earth elements (e.g. lanthanum, scandium, europium), used mainly in the production of batteries and displays, as well as copper, rise as well. This may affect the cost of production and availability of these components. Essentials such as plastics and packaging are also beginning to be in short supply. Energy rationing by the Chinese government is unlikely to improve this situation, especially in the run-up to Christmas when demand for all manner of goods is rising. The combination of all these circumstances does not bode well for our wallets.

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