OTTAWA (Granthshala) A global shortage of a key computer component is affecting a variety of industries from auto manufacturing to video gaming and telecommunications – and some Canadians are standing in line overnight to get their hands on the goods.
Semiconductors prices have skyrocketed partly due to shortages due to the COVID-19 pandemic.
It’s a supply chain problem, which means car dealerships can’t get new cars for their lots, and new graphics cards and video game consoles are reselling online at more than twice the retail price.
In some cases, the prices of components have increased five-fold in the past two years.
“I think it’s really unprecedented,” said Sarah Prewett, chair of the Semiconductor Council of Canada. “It’s a perfect confluence of factors in terms of increasing demand.”
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The pandemic, coupled with huge demand for consumer electronics, kicked shortages into high gear.
But the factors beneath it were present for years. Most semiconductors are made by a small number of companies, most of which are manufactured in Asia, and most of which were already running factories 24 hours before the COVID-19 hit.
“When the companies that make those devices actually need those chips for their products – and that ranges from automakers all the way to mobile phones – they have to place those orders well in advance. It is,” Prewett said. “In terms of the time taken from the time of ordering to the time the chip is received, the order may be six months.”
For ordinary Canadians, this means either paying the price of a scalper for sought-after computer components or camping overnight if they are available at a retail store.
Canadians lined up — and camped — at an Ottawa-area Best Buy until 8:30 p.m. Tuesday when the store announced it would get a limited supply of 30 Series Nvidia graphics cards.
“The cost difference getting them from here? Is it worth it to wait overnight instead of buying them online. You can save $1,500 to $3,000,” one person in line told Granthshala.
“I’m here for my little cousin. He needs it for gaming. He’s trying to build his own PC. So close to Best Buy that he has, so I went out to him today.”
While some planned to use the cards in their computers, others said they aimed to sell them immediately for a quick profit.
“Usually I buy my cards from scalpers so I can do mining. But now I’m like, I’ll try to see what you experience, scalpers life,” said another person.
View: Global semiconductor chip shortage (January 26, 2021)
Recent reports say that the shortage may continue into 2023. But Canadian industry is not waiting.
“We don’t have chips domestically here in Canada,” Prevet said. So we need to think about where we can play. Because it’s a $7 trillion global market.”
The Semiconductor Council of Canada is a grouping of businesses and industry leaders hoping to make Canada a player in the chip market.
A lot is working against Canada: Asian manufacturers have decades of experience and government investment. But Canada has a major advantage, Prewett said.
“If we can get the skills and talent or maybe research and development in Canada – the things we are world-renowned for, our wonderful educational institutions – that are going to give us a competitive advantage at the start of the supply chain, then to be capable of negotiating and taking advantage of the supplies being manufactured abroad.”
—Xiaoli Li. with files of