It is unfortunate to report the current global semiconductor shortage, however it is important to outline the situation so the real world impacts can be further anticipated and understood.
Chip Fabrication
Chips are used in a plethora of devices to store data, from medical equipment, to smartphones, to digital cameras, to car brakes, etc.
Semiconductor components are extremely important to the integrated circuit chips, in order to conduct the electricity needed to function.
Taiwan Semiconductor Manufacturing Company, or TSMC, is one of the world’s leading chip fabrication foundries and mega suppliers. They supply companies like Apple and Qualcomm.
Because the world, including us at Owl Home, relies on TSMC for the distribution of their chips, this shortage has brought the spotlight onto them.
How It All Started
Various factors and errors led to the cumulative effect that is now the global chip shortage crisis, with the automotive industry being hit especially hard. Those factors include;
- The Pandemic: Demands for chipped electronics like laptops and tablets skyrocketed when the workforce transitioned to remote/from-home dynamics. This leads to certain industries (personal tech) dominating the market stock of chips and leaving none for those less affected by the pandemic (automobiles, military, etc).
- Overcompensation Consequences: When the shortage began, companies like Apple panicked and placed massive orders, hoarding the supply and manufacturing labor and preventing workers from fabricating other future orders. Think the toilet paper shortage at the beginning of the pandemic.
- Trump’s Trade War With China: the situation was further exacerbated by the policing of foreign imports. He blacklisted growing Chinese chip companies like Semiconductor Manufacturing International Corporation, suppressing market production.
- Sheer Dumb Luck: Some natural disasters have hit some large semiconductor manufacturing plants in Japan this year.
- Lack of Business Continuity Planning: the inability to project potential cumulative consequences forward (re: pandemic, changes, etc) lead to full cancellations in business supply chains at the start of lockdowns. Those chains moved on to bigger and better things in the meantime and are now being held in those high-demand industries. Others who forecasted better aren’t as desperate.
How the Shortage Impacts Us
Unfortunately, Owl Home, we rely heavily on chips, much like the rest of the world. Our devices use ICs to perform sensor detection, radio communications, data processing, and storage.
Without companies like TSMC running smoothly we could see significant production deceleration.
Some predict the shortage is to stretch into 2023, causing billions in loss.
How are We Handing
To avoid as much impact as possible we have been proactive since the beginning.
We began purchasing items with foreseeable shortage potential ahead of time in larger supply than usual. We consulted with manufacturers to understand the patterns they were beginning to see on their ends in order to best anticipate our needs and business continuity.
We also started dealing with domestic manufacturers rather than overseas imported parts.
We are certainly doing our best in a dire situation to stay afloat. Many of our products use this technology, and these events have reminded us to never take anything for granted.
We at Owl Home appreciate your continued support and business, and we hope to meet each and every single production demand. We’re proud to say our efforts have paid off thus far.
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