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Global Chip Shortage – What does it mean for your business?

  • 22 June, 2021

Article, Cisco, Industry News, News

Why is there a Global Chip Shortage?

Over the last few months, the global chip shortage has been worsening. Chips are essentially the “brain” that exists in every electronic device and without them, electronic products cannot be produced.

The problem started at the beginning of the COVID-19 pandemic. Chip factories across the globe had to close as most other businesses did. This created a backlog of a few months where no chips were being produced. However, the problem got dramatically worse as demand increased to an all-time high because of several different factors. The need for new technology as people began working from home, the release of the next generation of games consoles, and the boom in the electric vehicle market all pushed the need for microchips to heights never before seen. This problem is forecast to persist until at least mid-2022.

The combination of these factors is exactly what has caused this hugely problematic global chip shortage.

Some of the industries worst hit are the automotive market and consumer technology. For example, Apple who were forced to delay the release of the new iPhone because of the chip shortage. General Motors were also forced to remove stop-start functionality from some of their models because they simply could not get their hands on the technology they needed.

How does the global chip shortage affect your business?

You are likely wondering about how this chip shortage may affect you and your business. Obviously, if you are in any type of electronics manufacturing you will be affected severely, but businesses in all industries are likely to see some level of disruption.

Business technology vendors such as Cisco and Microsoft are also struggling to meet the demand they are currently seeing. This is where this shortage can begin to affect you. Let’s say one of your firewalls breaks down and you need another one, usually you could call up your vendor and have one shipped within that day. However, now this process is not so smooth. When it comes for you to buy new devices for your business you will most likely have to join a waiting list of up to 3 months, depending on the device you need.

This can cause a real problem if it is a business-critical piece of technology you need. In some cases, it can cause problems with your security, or even interrupt productivity amongst your staff. This is something you should want to avoid altogether.

  • Delayed shipments for business-critical technology
  • Cancelled/severely delayed projects
  • Loss of engineer time
  • Hardware failure replacement delays
  • Increased maintenance windows
  • Running devices past their end-of-support/end-of-life dates

How to prevent the chip shortage from affecting your business?

The best way to protect your business from problems related to this situation is to be proactive. Review your current technology estate. If you are involved in IT or procurement, you should ensure that you know the end-of-life dates for all of your devices, whether or not you need to perform upgrades in the coming few years, and if your team will be growing anytime soon. Keeping track of licenses and support is key. For advice on licensing, please click here to download our Cisco Licensing Cheat Sheet.

  • Review your technology estate
  • Check all the EOL dates of your devices
  • Confirm upgrade plans
  • Review technology needed for upcoming projects

A network review, a security review, and a collaboration review are important projects to undertake if you want to avoid problems arising for you from the chip shortage. We can help you with any of these tasks should you require. We offer various technology reviews which will assess where you are and explain the steps you need to take to achieve your goals. Please click here if you would like to learn more about how we can help you.