Planning ahead for supply chain pressure for anything with a chip inside… Waiting months for a new car is really old news now.
Planning ahead for supply chain pressure for anything with a chip inside…
Waiting months for a new car is really old news now. If you have been in the market for a car you know the ‘chip shortage’ has created a pretty long waiting period to get a new car.
On the flip side of this story, however, about one-half of the chips in the semiconductor industry are for PCs and smartphones. Because of the high demand for these technologies, these are two areas where we are seeing the shortage situation turn into a glut.
But, did you know that you could be waiting months to get a replacement for your checking account debit card? Although the big card-issuing banks are in the front of the line for chips, lead time is increasing. Expect longer lead times with smaller financial institutions. The chip shortage is impacting product availability and driving up the costs of anything-with-a-chip inside.
- It can take weeks to get that replacement credit card from a small- to mid-sized bank. This used to take a few days, but now chip components in higher demand require longer lead times.
- This shortage is impacting every industry – and the cost of goods. Automotive chip shortages are driving up the price of new cars. The average price of a new car hit record highs in 2022. Prices went to $46,382 in December 2022 from $40,000 at the end of 2020.
- According to an article on DigitalTransactions.net, “After more than two years, payments providers are still reeling from the chip shortage. Indeed, lead times for chips used in POS terminals and credit cards can be as long as nine months, compared to six months a year ago, says Stewart Watterson, a strategic analyst for Aite-Novarica. Pre-pandemic, lead times on orders were about 12 weeks.”
- In addition to just taking care of current requirements for chips, demand is expected to grow 10% in the next year – both in terms of quantities AND costs.
The list of industries that are being impacted is extensive. Led by the auto industry, the group includes the Consumer Electronics Industry, the LED Manufacturing Industry, and the Renewable Energy Industry. That’s just the beginning.
If your business requires ANYTHING with a chip inside, better get out in front and plan ahead.
You’ll be kept waiting – the only question is, “how long?”
See how the chip shortage is impacting payment systems: https://www.digitaltransactions.net/how-the-chip-shortage-is-prompting-payments-players-to-adopt-a-variety-of-workarounds/
Four key industries affected by the chip shortage here: https://supplychaingamechanger.com/4-industries-affected-by-the-global-chip-shortage/
However, chips for PCs and Smartphones are in abundant supply. Read it here: https://www.marketplace.org/2022/11/10/from-dearth-to-glut-why-theres-an-oversupply-of-some-computer-chips/