The COVID-19 Pandemic has had widespread impact across the globe. It’s impacted our lives, our families, and, not least of all, our businesses. Now that things are starting to open back up, businesses are also starting to open back up to investing in technology. There is just one problem: no one has any technology available!
Alright, that might be a bit of an exaggeration, but the truth is not too far off. Many stores and online vendors are experiencing major delays on current and last generation tech. Desktop hardware, laptops, smart phones, even cars are on the shortlist of shortages.
Companies who needed new computers in the last year and a half are intimately familiar with the incredible lead times and skyrocketing prices which have become part and parcel of buying technology. These new behaviors in the market have many business owners asking:
How We Got Here
There are several distinct factors which have combined into a perfect whirlwind of market destruction. The first of these is COVID, as you might have guessed. Labor shortages, company restrictions, plant closures, and uncertain production schedules have caused massive unavailability and unreliability in shipments of new computers and parts.
To be specific, the companies harvesting silica sands (an incredibly important component of processors and semiconductors, which themselves are incredibly important for every piece of computer hardware) handled the pandemic incredibly poorly and destroyed their supply lines. It would not be an exaggeration to say that the silica sand shortage is responsible for nearly 75% of the total computer shortage.
A secondary effect of the travel and general life-style restrictions of the pandemic is demand. With everyone stuck at home, a never-before-seen demand for electronics of all kinds was created nearly instantaneously. As any junior economics student will know, sharp demand with no supply will create severe shortages and price spikes.
Next on the list is the quickly expanding practice of cryptocurrency mining. This process converts graphical processing power into complex mathematical equations which can be sold in certain markets for standard currencies.
The best way to secure large amounts of cryptocurrency is to use a high-power Graphical Processing Unit (GPU, or Graphics Card) to create the incredibly valuable equations. Bitcoin alone reached over $60,000 in value during the pandemic.
To capitalize on the crypto spike, miners have flocked to and regularly buy out fresh shipments of graphics cards. Those of you doing graphical processing (video and photo editing, 3D modeling, gaming, etc.) have felt this shortage especially sharply.
Finally, it seemed even nature itself conspired against technology lovers. An earthquake shook Taiwan in late 2020 and a large-scale power outage in Japan caused damage to several large technology companies. Factories were damaged and shut down, leading to even greater lead times on LCD screens and processors.
Now that we know how the market came to be so tight, let us look at:
What You Can Do
The best plan, unfortunately, is to flex that patience muscle and wait for parts to become available. If you have disposable income and time, it is possible to track shipments of parts to stores and be first in line as the shelves are being stocked. For most business owners, however, that simply is not a viable option.
If you absolutely know you are going to need a new computer or part, you need to be prepared. Start placing orders and look for replacements months in advance. I want to make sure you read that so here it is again: start placing orders and look for parts months in advance.
In the current market, parts and computers simply are not available faster than that. If you need something tomorrow, you are going to have to compromise on either quality or quantity. The best you can hope for is to get a subpar computer and replace parts as they become available.
Even if you are sure you will not replace a computer this year, remember that emergencies often happen at the worst times. You need to be monitoring your systems and ensuring that things are performing well. Computers can be silent about failures for months before showing any outward signs of the failure. By then it might be too late. Can you afford to wait two, three, or four months – or more – for a replacement? If not, let us start a conversation about what monitoring and support can look like on your systems!
We know the state of the market, but what are the experts saying about:
Where We’re Going
Despite the grim results of 2020 and the rough projection for the remainder of 2021, there is hope for next year! Market experts who have analyzed supply chains and recent trends believe shortages will continue through to early 2022 and then supply will finally start catching up to the rampant demand.
Producers of silica sand are actively repairing their processes, more factories are being built, new graphics cards are limiting mining output, and COVID restrictions are lifting. Our hope is that summer 2022 will be full of fresh new tech!
One quick note on the future of mining: A new coin is rumored to be coming out later in 2021 which uses available storage space in a computer instead of graphical output. This brand-new technology could do the same thing for SSD and hard drive supply as earlier coins did for GPUs. Be on the lookout and order early!
Thanks for Reading
Thank you so much for taking the time to read this blog! Did you like what we wrote? Anything you would change or disagree with? We would love to hear what you thought in the comments or on our social media pages! And if you are looking for a technology partner, you know where to reach us.