When the chips are down
We increasingly live in a world that’s powered by microprocessors, or chips. Without them, many of the devices we take for granted – from smartphones to cars – simply wouldn’t function.
This means that there is of course huge demand for chips globally – a demand that is usually met by some of the world’s largest electronics firms. At the time of writing this blog (November 2021) there are continuing signs that – due to a unique combination of factors – the world is facing an unprecedented shortage of chips. The consequences of such a shortage could be far-reaching indeed.
Not enough to go round
The shortage of chips has been reflected in companies that make smartphones, cars and games consoles being unable to meet demand for new products, as they cannot source the chips they need to produce at full volume. Apple, for example, recently announced that the roll-out of its new iPhone 13 would be slower than anticipated for exactly this reason. Smart TVs, fridges and washing machines have also been identified as likely candidates for production delays.
COVID and chips
The pandemic dramatically altered consumer behaviour and spending patterns worldwide. Car sales dried up, while the move to working from home and going out less meant that people started buying many more laptops and other devices. As a result, chip makers switched their production towards smart device chips. At the same time, the spread of 5G networks created additional demand.
With the vast majority of the world’s chips being produced by just a handful of companies, political factors and national rivalries may also come into play as the shortages continue. Manufacturers are working to increase capacity, but experts predict that the current shortage of chips will persist well into 2022, as companies work through a backlog of orders.
How this may affect you as a Kemtek customer
Chip shortages will lead directly to device shortages, and these could last for many months yet. The laws of supply and demand also suggest that prices may rise, while smaller OEMs may lose out to larger firms when it comes to sourcing chips. The same goes for vital components and spares, such as thermal print heads which are already in short supply.
Most of Kemtek’s technology solutions are made overseas, which means that other supply chain constraints (such as reduced numbers of cargo flights and a global shortage of shipping containers could lead to further delays.
We are working with our principals to get the necessary stock into South Africa and – where possible – to absorb cost increases.
Our advice
In order to mitigate the possible impact of the chip shortage on your business, we would advise you to consider the following options:
- Don’t delay – order today. If you’ve been considering upgrading your equipment or expanding your service offering, make investment commitments sooner rather than later to avoid long waits.
- The latest may not be greatest. If the very latest iteration of the equipment you are looking for may not be available for some time, then consider buying a previous generation model – for less CAPEX, you could get a brand-new machine that’s more readily available and almost as capable.
- Repair instead of replace. Our superb aftersales offering includes the ability to repair and refurbish many devices and printing presses. Our qualified, experienced technicians can give your equipment a new lease of life, and further lower the TCO of your presses, scanners and other devices.
Repairing rather than looking to replace can lower your costs, and help you to run your business more sustainably. Ask us how.
Above all, please be assured that Kemtek is here for you – just as we have been throughout the entire COVID pandemic. We’re committed to helping you thrive rather than merely survive and to applying innovative thinking and novel solutions to new challenges. To find out how we can help, contact your Kemtek representative or visit https://kemtek.co.za/contact/
