It’s been hard to miss the semiconductor chip shortage happening around the world, having impacts on global supply chains and making it difficult to find laptops, phones, cars, and other smart devices in stores.
In total, it’s estimated that the demand for chips increased 20 percent in 2021, with more growth predicted to come in 2022 and beyond. This rapid increase caused supply shortages worldwide as manufacturers around the world struggled to keep pace with new demand, driven in part by the rapid shift to remote work and the increased digitization that has occurred in recent years. In addition, technology companies briefly slowed down their purchasing at the onset of the pandemic in 2020, and manufacturers are still catching up.
For managed services providers (MSPs), this is an important trend to keep an eye on, as it may impact their ability to upgrade many different types of devices for customers, as well as their overall ability to provide customers with the support they might need. On top of that, it may affect their own ability internally to find the devices they need in order to continue to deliver the vital services they provide to clients.
Shortages have a big effect on businesses
This shortage in chips has caused a ripple effect across many industries, as these chips are critical components of many of the devices that we rely on in our work and personal lives. For MSPs especially, this has presented a new challenge in sourcing the devices they require in order to support their customers’ environments and fulfill their needs.
In addition, the increase in demand also means that devices are likely more costly than they would normally be. This means that customers may face increased costs for regular device refreshes, and MSPs will have to manage their expectations in this regard over the coming months.
Is the end of the chip shortage in sight?
Unfortunately, there’s no clear-cut answer to whether the semiconductor chip shortage will be resolved anytime soon. What’s clear is that demand continues to rise, with sales for semiconductor chips increasing rapidly in 2021, up 25.1 percent to more than $500 billion. Experts predict that this demand will only continue to increase, fueled by continued digitization, connected cars, 5G, and other emerging technology trends.
To meet this rising demand, many semiconductor chip vendors are working to open new facilities to enable increased production. For instance, Intel announced that it plans to open one of the largest manufacturing sites in the world, a $20 billion chip-making complex in Ohio that includes two new plants and up to eight new factories. While this is encouraging for the long-term market, it will take time for these new facilities to be built and to get up and running to meet immediate demand.
The continued rise in demand and slow path towards resolution to match supply with demand means that MSPs likely need to prepare their client strategies for a long road ahead with regard to chip shortages. One way to address this is by planning device refreshes more proactively, thus allowing more time to source and procure devices. They could also consider strategies that would help prolong the life of existing devices, where possible.
While it’s hard to predict the future without the help of a crystal ball, the chip shortage is another great example of a way that an MSP can leverage current events to act as a trusted advisor to their customers. By helping them navigate the supply chain ripple effects today, an MSP can continue enhancing the value they provide to their customers for a long time to come.
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