hardware

Global Chip Shortage: More Ripple Effects

To save water for chipmaking, Taiwan cut off irrigation to ⅓ of farmland.
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Francis Scialabba

· less than 3 min read

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We’ve talked about the semiconductor shortage here and there, but there’s no better microcosm for what’s going on than the farms of Taiwan, as detailed by the NYT.

Close your eyes and let us transport you to a rice farm in Hsinchu. A man with a weathered blue forklift is examining his browning rice fields amid Taiwan’s worst drought in 50+ years.

  • His farm’s neighbors are computer chip factories, including TSMC’s, that manufacture the brains of many of our smartphones, laptops, and vehicles.

Further complicating things: The Taiwanese government recently decided to cut off irrigation to one-third of the country’s farmland to save water for chipmaking. And, like many major companies, the farmers aren’t sure how all of this will affect business in the coming years.

Across the (mother)board

Taiwan is the world’s chipmaking epicenter, but zoom out and you’ll see the shortage’s ripple effects far and wide.

Even Apple isn’t immune to the time-tested laws of supply and demand. The company had to delay, and even pause, production of some MacBooks due to the chip shortage, reports Nikkei Asia. The main snag: Lack of chips to mount on the laptops’ printed circuit boards.

Also feeling the hit: Home internet. The tech and infrastructure that allow us to WFH are in higher demand than ever.

  • Broadband providers have been quoted ~60-week wait times when ordering internet routers—more than doubling previous waits, per Bloomberg. That bars carriers from adding new customers, translating directly to lost sales.

Changing the chain

Who’s coming out on top: Toyota. After a 2011 earthquake in Japan that left the company’s main plant paralyzed for months, the automaker took an entirely new approach to supply chain management: creating a database not only of its suppliers, but those suppliers’ suppliers—and then monitoring the network for early signs of shortages.

  • Toyota’s database flagged the need to stockpile chips early on, which helped it mostly steer clear of the current manufacturing slowdown.

Looking ahead: The semi shortage illustrates just how important the chip has become to all facets of life. Increasing fears that China may attempt to regain control of Taiwan make the industry’s future even less certain. —HF

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