Why a Shortage Has Made Computer Chips the New Toilet Paper

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Most people need toilet paper and computer chips every day, and yet we rarely think of either.

That changed during the coronavirus pandemic when bathroom rolls ran out first, then chips. Computer chips aren’t that disposable, but they’re just as important as electronic brains for products like smartphones, cars, planes, and cutting edge devices. The shortage of chips has brought new car manufacturing to a standstill, hired rental cars difficult, and complicated business even for the dog washing industry.

I spoke to Don Clark, who has been writing about computer chips for years, about the importance of chips, why the US government is obsessed with making more of them in America, and how a new chip mania is revenge for the nerds.

Shira: What are computer chips used for?

Don: Computer chips are like tiny brains or storage containers. This makes them important to pretty much everything in modern life. The obvious places are electronics like computers, smartphones, video game consoles, and voice activated speakers.

Chips are also found in products that track milk production from dairy cows and ensure that truck production stays at an appropriate temperature. A modern car can have several thousand chips, including for the ignition, the brakes, and the entertainment system. This year, production of $ 50,000 cars will be halted due to the shortage of $ 1 worth of computer chips.

Right, how did chips lead to a? Freezing in the automotive industry?

Last year, when the pandemic first hit, automakers estimated that a lot of people didn’t want to buy cars and they cut orders for computer chips. When auto sales were found to be increasing, companies tried to spontaneously order more chips. But the chip manufacturers had already moved on. They’d moved production to fill orders for products like phones and game consoles.

Are chip shortages unusual?

No, but bottlenecks are usually limited to a specific type of chip. What is unusual about this year is that there aren’t enough of many different types of computer chips as some disruptions related to the pandemic and the overwhelming demand for more and more chips are being combined for everything.

To give just one example: every new smartphone with a 5G internet connection contains 100 small components, so-called filters, that connect to all the different frequencies. That’s 100 computer chips for just one function.

When will the deficiency improve?

Companies are trying to get more chips out, but it’s difficult to react quickly. Chip companies are also trying to discourage customers, including automakers, from ordering twice the number of chips they really need just to make sure they get some. But bottlenecks are likely to persist through 2022 and could get worse before they improve. This is in part because many rare chips come from older factories that are difficult to upgrade.

Congress and President Biden seem very likely to assist Billions of tax dollars to make more computer chips in the United States. Why?

The shortage of products such as personal protective equipment made in China has led the public and policy makers to debate the disadvantages of manufacturing essential products outside of the United States.

Updated

May 9, 2021, 9:46 a.m. ET

Many advanced computer chips are made in Taiwan, and this makes the Pentagon especially nervous for its inability to obtain essential computer chips if Taiwan-China relations deteriorate. And the US government wants to be more self-reliant in emergencies like an earthquake in Taiwan.

Another problem is global competitiveness. Countries like Ireland, Taiwan, and Israel are giving shiploads of government incentives to factories that produce chips. Intel, the big American computer chip company, doesn’t really need US taxpayers’ money. But it wants to make sure the company doesn’t do much worse by making its chips in the US.

Forgive me, the computer chip industry is very nerdy. How do people feel in the industry? a hot topic?

Yes, this was the boring old tech industry like steel making. That changes in part due to the attention to chip bottlenecks, but that’s not the only reason.

I wrote an article on Friday about investing in new computer chip businesses – roughly eight times the dollars invested in 2016. Young people who may have started software startups a few years ago are now choosing to start chip companies. There’s a lot of interest and excitement in chips right now, and people in the industry think it’s nice to be seen as really important.

  • Not a good look for ISPs: An analysis by the New York Attorney General found that Internet service providers such as AT&T and Comcast funded an action that produced millions of fake comments against the rules on net neutrality, wrote my colleague David McCabe. And from February: A declaration of net neutrality and the long war over it.

  • Not so great either: The Markup reported that drug companies find potential patients on Facebook by using drug ads to target people based on their interests in topics like bourbon or oxygen, or their involvement in a depression and bipolar support group.

  • Yes, better online security for everyone! Google announced that users would need to take additional security measures, such as: For example, answering a smartphone notification to sign in to Gmail and other accounts. It’s great that Google is making this the standard. Because of this, adding a confirmation to sign in to our digital accounts is the most important thing we can do to protect our security.

The saga of red-tailed hawks named Billy and Lilly and the babies Alba and Eli is “a story of regeneration and joy, with a touch of sadness and some dead rat carcasses.”

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