video cards

There has been a microchip shortage for quite some time. Many factors contribute to this shortage, all of which we will explore in this article. We will also discuss what you can do to avoid any problems that might come from this shortage.

Computer chips are an essential component of almost every technology in the world. Their size has decreased ever since their invention to accommodate smaller but more efficient technologies, becoming what we know as microchips. It’s found in spaceships that NASA and Space X is building to your computers and smartphones found at home. This is why a microchip shortage can cause real-life consequences that can hinder our life as a species.

The Microchip Shortage

The microchip shortage started around May of this year, and experts explained that it is generally because of the pandemic. But such an explanation can easily be believed in hindsight. As we all know, more straightforward explanations tend to prevail when looking into the general cause of a particular phenomenon. But in this case, the reason for such a shortage is much more complex than the pandemic, even if the pandemic has some fault in this given situation. One of the leading reasons for the microchip shortage is when the Suez Canal was blocked by the Ever Given Ship.

Suez Canal Blockage

The Suez Canal blockage led to significant devastation of the world’s economy. It’s estimated that it cost the world’s economy $400 million per hour of international trade when it was blocked, and it was blocked for six long days.

Some of the items blocked during this time were parts for creating microchips and the microchips themselves. As a result, millions of dollars worth of microchips were stuck in the ocean, waiting to reach production centers and businesses alike. When the blockage was finally fixed, the damage could not be reversed. Many industries in the world have lost production time they can never gain back, costing many businesses millions of dollars in the process.

To this day, factories are still struggling to keep up with the demand for microchips, which is a severe problem for many businesses to supply their ever-growing consumers.

Trade Sanctions

The trade sanctions between China and the US have been affected the world as a whole. Currently, China produces the majority of microchips in the modern world through its thousands of factories. But they have been keeping it for themselves because they know that they cannot stop the microchip shortage, even if the sanctions are lifted.

China can only produce so many microchips with or without the trade sanctions. But experts believe that lifting the sanctions can give way to better production of microchips.

The pandemic, the Suez Canal, and trade sanctions between the U.S. and China play a significant role in today’s microchip shortage. But what does this mean for businesses?

A Serious Concern for Computer Businesses

Every industry in the world is affected by this shortage because every industry relies on technology nowadays. But the computer industry is the one suffering the most from this shortage.

Video cards and other computer parts have skyrocketed throughout this year, almost reaching quadruple their normal price. The thing is that this affects both physical and digital PC-building businesses alike, pushing these companies to follow the status quo or perish. For example, the former price of 4GB GPUs used to be around $120 last year. Now you’ll be in luck to find some that cost around $200.

So what can you do to protect your business from this shortage?

Keep Buying and Selling as Long as Demands Are High

The reality is that the demand for computer parts such as GPUs is still high, and people are willing to spend thousands of dollars on high-quality ones. In addition, experts believe that the growing savings and annual wages of the average American play a big role in the affordability of computer parts. Sure, you’re still going to hear buyers complain, but that doesn’t mean that they won’t buy it. However, keep track of the prices, and if it reaches a too high point, it’s time to move into plan B.

Sell Older GPUs with the Same Quality

GPUs improve over time, but not so much. Most consumers nowadays look into the VRAM or the Video Random Access Memory that most video cards offer. Many video cards are offered in the market, but they each have their own category or VRAM, 4GB, 6GB, 8GB, and so on. Selling older GPUs produced two years before is still feasible to run most games and programs of today, and they are much cheaper than the high-end ones being sold right now. So resort to selling old GPUs if the prices reach too high because of the shortage.

The microchip shortage isn’t going to end anytime soon, but it is stabilizing. This means that prices for computer parts, especially GPUs, will largely remain the same until the end of the year. If the shortage does affect prices again, then resort to selling old computer parts to survive.

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