By now, you’ve no doubt heard of the global computer chip shortage that’s causing delays across several manufacturing sectors. Industry experts and tech execs are now calling it a crisis and predicting it could take years for this situation to resolve fully. So what does the shortage mean for your business?
This article breaks down what’s causing the computer chip shortage, potential impacts on your business, and the role of refurbished equipment in mitigating some of the risks.
Recommended Reading: Buying Refurbished IT Equipment: 5 Tips from the Pros
What’s behind the current computer chip shortage?
Your first question may be: “How did this happen?” In the simplest terms, demand is greater than supply. However, it’s a far more complex issue created by a perfect storm of factors:
- Chips have a complicated supply chain, and only a small number of manufacturers
- Factories had to close at the beginning of the pandemic, which created a production backlog
- Demand for technology increased during the pandemic as people geared up during lockdown
- Some chip manufacturers experienced production issues (e.g., raw materials)
To compound matters, chips are now a critical component in a growing number of products. It’s no longer just computers, automobiles, and mobile phones that rely on semiconductors. It’s washers, dryers, smart toothbrushes, and more.
What does the computer chip shortage mean for your business?
The automotive sector has been the hardest hit at this time, but the impact can be felt far and wide in other industries, and it’s expected to spread. Businesses can expect to see:
- Increased costs – with chips harder to come by, they’ll be more expensive when they are available. In particular, the cost of hardware like servers and networking equipment could be affected. This will be a fundamental supply/demand challenge that organizations will have to work to overcome.
- Equipment delays or lack of availability – you may not be able to rely on orders getting fulfilled as quickly and as thoroughly as they have in the past. For example, a recent article in The New York Times said HP could not meet the demand for computers ordered by school systems because of the chip shortage.
- New procurement strategies – planning much further ahead will be critical, as will finding new and different ways to meet your equipment needs.
Recommended Reading: 10 Ways to Reduce Your IT Costs
The role of refurbished IT equipment
If you’re considering new ways to procure equipment for your business, refurbished equipment could be a viable option. Whether it’s networking, server, or storage equipment, refurbished hardware has a variety of benefits, including:
- Prices can be up to 90% less than new
- Equipment life cycles are being extended
- Amortization savings are being realized
- In-stock items are being delivered overnight
- Items can be sourced and shipped within a day
Want to learn more about the role refurbished equipment can play in your IT mix? Review our guide to purchasing refurbished IT equipment or contact us today.
