What Does the Chip Shortage Mean for Your IT Growth?

Before the onset of global supply chain issues, it is unlikely that the average person was aware that semiconductor chips are vital to the technology they use daily. Individuals and businesses are now aware that these chips are the driving force behind computers, smartphones, and even some electronic toothbrushes. As the demand for semiconductor chips exceeds the supply, consumers and businesses will feel the effects of these issues for years to come.

A British semiconductor design company named Arm Holdings predicts people will feel the effects of the chip shortage through 2023. Essentially, this means that global supply is not changing any time soon, so businesses must learn how to adapt. As business owners begin to understand the logistics responsible for the chip shortage, they can implement strategies that enable them to navigate the new landscape.

What Caused the Global Chip Shortage?

As with most issues of this scale, there is no singular cause of the global chip shortage. Before the pandemic began, certain Chinese companies were stockpiling chips due to U.S. foreign policy and relations issues. Once the pandemic started, people around the world increased their electronic usage in light of social distancing regulations. Consequently, manufacturers experienced an uptick in demand for server hardware and consumer electronics.

During this time, factories ceased operations to prevent the disease from spreading. As social distancing regulations became less strict, the demand for automobiles increased once more, and it became impossible for manufacturers to meet these increased demands. Furthermore, when severe snowstorms in Texas caused power outages, companies were forced to suspend plant operations for weeks on end. 

Further exacerbating this crisis, relations between Russia and Ukraine are strained. Although this may seem inconsequential, it is essential to note that Ukraine manufactures 70% of the world’s neon gas. Manufacturers use this neon gas to power industrial lasers in semiconductor chip manufacturing. If Chinese semiconductor manufacturers don’t comply with sanctions against Russia, the U.S. can stop supplying them with the technology they need to manufacture chips.

The global supply is a highly complicated system that was created with efficiency rather than resiliency in mind. Ultimately, electronic and automobile manufacturers are having trouble recovering from unfortunate global events. All of these factors interact with one another to cause the chip shortage that we are currently experiencing.

How to Protect Your Business’s I.T. Assets During the Chip Shortage

As the demand for computer chips drastically exceeds the supply, companies that need to manufacture products will experience delays, higher prices, and decreased volume production. When it comes to business computing plans, companies that purchase new devices from vendors will find it challenging to get the devices they need within a reasonable timeframe. As a result, they may need to pay excessively high prices for replacing I.T. devices.

During this time, you must make the provisions necessary to protect your company by planning ahead of time, maintaining your current I.T. assets, and decommissioning those that are no longer usable. Consider implementing the tips below to survive the chip shortage.

 1. Plan to Wait

Before chip shortage issues began to affect the world, companies could save time and money with “just-in-time” ordering. Companies that use just-in-time ordering only request products from suppliers when customers place an order. The just-in-time system exists to reduce holding costs because companies do not need to store their items for too long.

Now, companies need to switch their strategy from “just-in-time” to “just-in-case.” When it comes to your I.T. assets, work with an ITAD provider who can help you assess the current state of your I.T. assets before issues occur. ITAD providers will help your company establish a timeline for when your I.T. assets will reach their end of life. Use this information to order replacement devices or recycle your unusable devices before it negatively impacts your ability to conduct business as usual.

2. Use the Cloud

Recent research from Insight and IDG states that 91% of I.T. decision makers are struggling with the impacts of I.T. supply chain disruptions. Companies are coping with these challenges by ordering I.T. assets ahead of time and improving their ability to predict their long-term equipment needs. However, many companies are mitigating these chip shortage issues by shifting workloads to the cloud.

Most companies state that their most significant issue with moving information to the cloud is shifting their back-office systems from their current structure to the cloud. However, since many employees work remotely, it’s actually more efficient for companies to move their back-office applications to the cloud and upgrade their systems simultaneously.

3. Partner with Reputable ITAD Providers

One of the best actions you can take to manage the chip shortage is to form a strong partnership with ITAD providers. They will help your company assess the current state of your I.T. assets so that you can make provisions to better maintain the electronics that are currently in your possession and decommission the I.T. equipment that is no longer useful.

As the chip shortage persists, recycling your I.T. equipment is vital. ITAD providers will allow you to salvage any remaining value from your I.T. assets. Since outdated I.T. equipment retains a portion of its value, ITAD providers can help you resell your equipment after they wipe out all sensitive data or asset identification. This process enables your company to earn money back from your I.T. devices. If your I.T. assets have reached their end-of-life and have no remaining value, ITAD providers will help you safely and ethically recycle your electronic devices.

Maintain Your IT Growth with First America

It appears that no one could have predicted a global chip shortage, but with the right strategy and tools, your company can navigate these changes and maintain IT growth regardless of external factors. When you’re ready to decommission your end-of-life IT assets, partner with FAMCe.

First America has over 30 years of experience helping businesses safely and responsibly recycle their outdated devices. Our high level of expertise and exceptional customer service have built our reputation as an industry leader, and we are committed to exceeding each client’s needs and expectations.

Want to recycle your old devices with confidence? Contact First America today for e-waste disposal that’s ethical and secure

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