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Microchip shortages impact computer, gaming industries

MYRTLE BEACH, SC (WBTW) — The nationwide microchip shortage is affecting almost every industry from cars to appliances and cellphones.

The computer and gaming industry has experienced shortages and price increases since the pandemic began.

“Chips are used all over these days for communication, appliances in your home so that’s created more demand,” said Chuck Walker, with T-Rex Computers in the Myrtle Beach area.

Walker said the players have been greatly affected by the shortages.

“On the gaming side I have a lot of customers who want those systems,” he said. “They try to upgrade their existing gaming computer with a new video card or a new chip and find trouble getting it.”

He said companies created problems by “hoarding” products.

“Companies are ordering more than they need,” he said. “Some of them are just in back-up not knowing what their volume needs are and one is price control because obviously there is supply and demand when there is limited supply the price will go crazy.”

According to him, this is what he sees now in the price of chips. While a single chip used to cost between $200 and $300, high-end chips are now $600.

“Then computers — which use about a third of all chips made — drive up the cost of computers,” he said.

The development of cryptocurrency during the pandemic also increases the demand for high-performance video cards.

“This creates a shortage in the industry because anyone and everyone can set up their computer – as long as it is a high-end computer and has enough video cards to mine their own cryptocurrency,” he said.

He said that the shortage has improved recently. By the end of the year, he expects some of the deficits to be over and at a more normal level.

He said the industry is addressing the issue.

“Now, the industry is bringing in some of the old equipment to increase the capacity to make a temporary supply, solving the issue,” he said. “But of course, there are new manufacturing facilities starting in South Korea as well as in the US that will make things even better in the future for the continued increase in demand.”

President Joe Biden is expected to sign the CHIPS and Science Act next week to try and address these issues. The CHIPS and Science Act would subsidize US-made chips used in cars, appliances and computers.

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