It feels like every product these days comes equipped with a microchip. That is a big problem now that there is a massive shortage of necessary semiconductor chips. The shortage that’s been plaguing American auto manufacturers for months is now slowing production in the consumer electronics industry as well, just in time for holiday shopping to begin.
Our production system is built to make a lot of stuff, for the lowest possible cost. And when you ignore swirling gyres of plastic, melting glaciers, or growing mountains of toxic electronic waste, that system might seem acceptable. But in addition to being wasteful, it’s easily disrupted. As one writer described it, it’s not that the supply chain has a bottleneck, but a “veritable hydra of bottlenecks.”
Empowering repair can help shield us from vulnerabilities in the supply chain. It helps us keep going when we can’t rely on the entire global system to run at peak efficiency. Despite that, manufacturers often restrict repair by denying people access to the tools and information we need to fix our stuff.
Pandemic closures and panic buying
A whirlwind of factors, most notably the COVID-19 pandemic, created the perfect storm in the chip manufacturing industry in 2020. First, starting in Southeast Asia, the virus led to long shutdowns in factories, creating ripple effects throughout the supply chain. As people around the world buckled down to stay at home for months on end, electronics sales skyrocketed. People needed new computers to work or take classes from home -- and purchased gaming consoles and other devices to fill their more-isolated leisure time.
By the fourth quarter of 2020, computer sales had risen more than 26% compared to Q4 in 2019. According to Matt Murphy, CEO of the semiconductor producer Marvell Technology, while you and I were panic-buying sanitizer and toilet paper, companies were panic-buying semiconductors in anticipation of higher consumer demand. Murphy expects this supply and demand disparity to start evening out over the next year as some sectors of the electronics industry inevitably come back down from the current peak, freeing up supplies for other sectors.
Ramping up domestic production will take time
Trade disputes between China and the United States also played a role when then-President Donald Trump banned the use of chips from China’s biggest chip producer. This pushed U.S. companies to rely on chips made in other areas of Southeast Asia, such as Taiwan. But when Taiwan faced a harrowing drought earlier this year, its production ability was also stunted.
Since then, the United States has tried to ramp up domestic chip manufacturing to make up for shortages across the globe. The Biden administration introduced the CHIPS for America Act as part of the 2021 National Defense Authorization Act, which was passed by the Senate in June and is still awaiting a vote in the House. CHIPS for America would invest $52 billion into domestic research and manufacturing of semiconductors. Intel and TSMC have invested $20 billion and $12 billion, respectively, into the development of new factories in Arizona. Despite these efforts, industry insiders still disagree about how long it’ll take for production to catch up with the current demand.
While some believe the demand will fall in 2022 and give the supply chain a chance to equilibrate, others including Murphy worry that it will be years before production from the new factories can make a sizable impact on supply levels.
“Higher prices and fewer options”
The chip shortage hit car manufacturers the hardest; companies such as GM produced fewer cars to sell. Now, the effects are being felt in the electronics sector as well. In July, Apple CEO Tim Cook said that “industry shortages” will lead to fewer iPhone and iPad sales in the coming quarter.
The biggest obstacle for consumers this year will be price increases, as companies are opting to put their available chips into higher-end products to make bigger profits. Commerce Secretary Gina Raimondo noted that the shortages will be problematic as demands for consumer tech increase during the holidays, stating that we’ll be facing “higher prices and fewer options.”
Analyst Ryan Reith from the market research firm IDC similarly warns that “unless they were already planning to buy a premium laptop like a Mac, consumers should be prepared to pay more for a laptop this year.” Gaming consoles such as the Microsoft Xbox Series X and the Sony PlayStation 5, as well as new Windows 11 PCs and Surface Pros will also be hard to come by.
How we can weather shortages
Buy used and refurbished electronics.
This holiday season is the perfect time to explore the refurbished and used tech market for several reasons. First, it will help you avoid last-minute scrambling because of back-ordered gifts and higher prices. Buying used will often get you even better deals than most Black Friday and Cyber Monday promotions, and, if you buy from reputable sellers, without sacrificing quality. Check out our guide for more.
You’ll also be helping reduce the adverse climate effects of throwing away old electronics and manufacturing new ones. Repairing an old smartphone and putting it back into use, for example, reduces the device’s global warming potential by 68% compared to buying a new one. That’s because manufacturing a smartphone emits as much carbon dioxide as 34 years of using it.
Pass Right to Repair legislation to improve community resilience.
One way we can weather global supply issues is to have local options for keeping our stuff going. But manufacturers continually undercut local fix-it shops and DIY enthusiasts by restricting their access to diagnostic software, repair guides, schematics and other critical repair materials. Making matters worse, manufacturers try to limit repairs to their brand authorized locations and repair people. This fragile-by-design system gives us less choice and gives one provider too much power over our needs.
We need to create an ecosystem of maintenance, reuse and repair. That means buying less unfixable stuff and adopting a “fix it first” mentality. By not relying so heavily on a system that, with just one click, gives us overnight delivery of an item produced across the globe, we can prevent ourselves from feeling helpless when some part of that system inevitably breaks down. We have a growing movement of repair advocates at our side, fighting to make sure we can keep using the tech we have. It’s time to take action to put Right to Repair protections into law.