Why the Microchip Slowdown Could Affect Your Christmas

A global shortage of semiconductor chips has been affecting the auto industry, making it hard to buy or rent a new car these days, but the impact in this highly connected world goes far beyond one industry. If you haven’t been impacted yet, even if you’re not in the market for a new car, wait till you start your Christmas shopping.

If you’re a gamer, especially one in need of repairs, you know. The lines to buy a graphics card at places like Micro Center can be hours long or even overnight, says Alex Diaz, an owner of Top Tech Experts in Houston. His office is seeing the same thing. The shortage of graphics cards has sent prices soaring from an average of $750 a year ago to $1,200 today. That’s if you can find one.

Microchip manufacturers have been among the severe victims of Covid 19, plants in South Korea, China and Taiwan fighting infections among workers first, then lockdowns, then supply chain backlogs. It all happened at a time quarantined people the world over were streaming videos, snapping up computers and devices, looking for any sort of distraction, most of which involved microchips, or turning their residence into a voice-activated smart home. Demand has overwhelmed supply of an item that can’t be produced quickly. Prices are up at least 25% as a result.

American auto manufacturers have had to slow or halt production of some makes and models due to shortages. Downstream that’s now even affecting the car rental business and ride shares. But oh – just you wait.

The full Monty of the chip shortage will be felt by a wide audience come Christmas. In 2019, back when things were normal, 74% of Americans bought a tech gift for someone. Game consoles under the tree are always popular, but in 2021 you may need to bribe Santa. New TV? That could be a problem. Smartphone? Ewww. Laptop? It’s a seller’s market for consumer electronics, and with the chip shortage expected to extend well into 2022, possibly 2023, prices will be higher than expected come Christmas.

photo: Getty Images

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