Global Computer Chip Shortage Hitting Vegas Businesses

The global computer chip shortage is impacting Las Vegas businesses in massive ways. If you have tried purchasing a new computer or video game console in the past year, you may have likely come across out-of-stock listings.

by | Sep 27, 2021 | Tech Insights

Global Computer Chip Shortage Hitting Vegas Businesses

The global computer chip shortage is impacting Las Vegas businesses in massive ways. If you have tried purchasing a new computer or video game console in the past year, you may have likely come across out-of-stock listings or notices on eBay or Amazon, and if the products existed, the prices might have more than doubled. As the economy slowly reopens after the COVID-19 pandemic, businesses still must deal with the continued global shortage of computer chips.

Global Computer Chip Shortage Hitting Vegas Businesses

Why Are Computer Chips So Essential?

Computer chips, or semiconductors, function as the “brain” of electronic devices. They are found in every machine you could think of, including cars, internet cables, water treatment plants, computers, etc. Nearly anything that plugs into an electrical outlet has at least one chip that acts as a miniature computer to make the device function.

TSMC is the largest chipmaker in the world and the organization that manufactures the processors used by AMD, Apple, Qualcomm, Nvidia, and some Intel products. Thanks to the global computer chip shortage, its products are getting a lot more expensive by the day. In fact, the company plans to increase the prices of its advanced chips by about 10 percent and less advanced ones by about 20 percent.

Semiconductor supply is an important factor for all tech and automotive companies. Unfortunately, chips are continually becoming hard to come by. A lot of factors contribute to the prices of electronic devices such as laptops, phones, and game consoles beyond the actual cost of materials. That means that a 10 to 20 percent rise in processor and SOC costs may not necessarily trigger a similar jump in prices for consumers.

However, increasing the prices of what was already a costly component of any electronic device means that we could witness massive price increases on some of the essential devices in the world. Besides, TSMC is currently the only global chip supplier capable of manufacturing chips at the advanced level and quantity that Apple requires to make A-series and M-series chips for iPhones, Macs, and iPads. This means that the price increase will impact every business relying on Apple devices.

Effects of Chip Shortage on Small- and Medium-Sized Businesses in Vegas

Consumers are already bearing the brunt of the worldwide chip shortage since chips and computers are both critical to consumer electronics. With diminishing supply for manufacturers, consumers are witnessing a spike in the prices of the already-costly electronics devices. Many video game consoles, such as Sony’s PlayStation 5 and Microsoft’s Xbox Series X, are completely sold out at most retailers and may only be available for highly marked-up prices on eBay and similar third-party sellers.

But it’s not just the large organizations that have invested hugely in technology that will be affected by this chip shortage. Even small- and medium-sized businesses in Vegas are going to be negatively affected by this dearth of supply. In fact, vendors are already finding it difficult to keep a healthy inventory of modern business essentials, such as laptops, desktop computers, printers, display monitors, and servers. If your business requires new computer hardware, you may find it challenging to acquire office tech affordably in 2021 and beyond.

The Tech Industry at a Crunch Point

Millions of electronic products, such as cars, washing machines, laptops, smartphones, and more, rely on computer chips or semiconductors. And right now, the tech industry doesn’t have an adequate supply of chips to meet the demand. As a result, most popular products are in short supply.

Toyota, Ford, and Volvo have had to slow down or temporarily halt production at some of their factories. Smartphone manufacturers are also feeling the pinch, with Apple warning that the diminishing supply could affect iPhone sales too.

The shortage does not spare even businesses that aren’t necessarily associated with computer chips. For instance, CSSI international, an American company that makes dog-grooming machines, has felt the effects. Some shoppers are already noticing these problems across the board. For instance, sales of used cars are up significantly because new vehicles, which are often equipped with thousands of computer chips, are already in short supply.

Why Outsourcing Your Business’ IT Services Could Help

Due to the global computer chip shortage, computer and networking parts have become harder to come by, and the available products have had their prices skyrocket, thanks to low supply. While the semiconductor shortage continues, many Vegas businesses are learning ways to make do with their available equipment. Therefore, there is a heightened need to outsource IT services to care for the aging systems and migrate most services to the cloud. Businesses relying on older computer systems may also likely run outdated software, exposing their organizations to threats such as malware and viruses.

IT outsourcing is an excellent way for many small- and mid-sized businesses to access quality technology without spending on expensive computing devices. It allows an external IT service provider to deliver all or some of the IT functions your business requires, including managing IT infrastructure, running the support desk, and directing strategy.

An outsourced IT company is also better equipped to deliver computer hardware at a much lower cost due to economies of scale. With outsourced IT services, your business won’t need to invest in expensive computer systems and equipment but instead, pay a fixed per-use or monthly fee to an IT outsourcing company. As a result, you could cushion your business from the impact of the global computer chip shortage that has seen the cost of technology devices skyrocket.

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