How Long Will the Chip Shortage Last?

The global chip shortage continues, and in this highly-digitized world where chips help power essentially everything—from cars to IT devices, to everyday appliances, and even toothbrushes, no industry has remained unscathed from the adverse impact of the chip shortage crisis.

Tiny Chips, Huge Crisis

According to a Semiconductor Supply Chain report released by the US Department of Commerce in January of this year (2022), the average inventory of chip-utilizing manufacturers has plunged from a 40-day supply in 2019 to a less-than-5-day supply in 2021. While for the average consumer, this will simply mean longer waiting times and higher prices for devices, the ill effects are more consequential for enterprises.

For instance, the drastically reduced chip inventories of manufacturers would mean that, if for some reason production in a semiconductor facility is halted even for a couple of weeks, the lack of chips could cause the shutdown of a manufacturing site elsewhere, putting numerous jobs at risk. The data center industry looks pretty bleak as well. Network equipment vendors such as Cisco Meraki and Juniper estimate a 12- to 18-month impact on availability, while the delivery of router orders could be delayed by 60 weeks.

In the midst of managing the negative effects of a lengthening chip shortage, the question on everyone’s mind is: how long will the shortage last?

When it comes to forecasting the end of this shortage crisis, different sources have varied takes on the matter. Gartner’s prediction last May 2021 was that the shortage could continue until the second quarter of 2022—which is actually quite soon. Forrester, on the other hand, sees the crisis go well into 2023, an estimate shared by CEO Jean-Marc Chery of chipmaker STMicroelectronics and Intel CEO Pat Gelsinger.

While possible ease into normalcy isn’t too far off in the future (if we are to believe these estimated dates), there is still no guarantee that this will happen. In the meantime, there is a now to deal with where the chip shortage is still very much felt.

Escalating costs, loss of revenue and business opportunities, lengthening OEM lead times, and hardware surcharges are only some of the consequences that businesses have had to deal with during this time. As demand remains high and supplies low, expect issues on availability and price increases to persist even more.

To ensure that critical IT infrastructure can be maintained despite the shortage, organizations should identify the essential components of their equipment that would be significantly impaired if a replacement part was not supplied immediately and ensure the availability of these components. With the problem in the IT supply chain leading to ever-increasing OEM lead times, one option for businesses is to diversify their supplier base and explore partnerships with secondary market providers.

Partnering with a reseller and considering refurbished hardware for your replacement components can help mitigate the risk of non-availability of parts as well as cushion the considerable price increases and surcharge costs.

CentricsIT provides both new and refurbished spare parts globally, mostly shipped same-day, so your IT equipment won’t be left out of commission for long.

However, while we have ample supply at the moment, this will not last very long considering the current chip shortage. Plus, while our stocks cost less than those sourced from OEMs, the high demand could eventually drive prices up. It’s best to get the supply you need while we have the stocks on hand and at relatively lower costs.

Below are some of the most in demand items we have in stock currently.

Here is a list of the servers that we are actively selling.

New, Certified Refurbished, and Used

What we’ve listed above is merely a snapshot of what we have available so please contact us directly for any requests or inquiries.