In the past few years, the word ‘chip’ has taken centre stage and is now a prominent buzz word in the tech industry. Most people are aware of the shortages that have disrupted businesses all over the world from upgrading their hardware. Whilst device shortages are now starting to resolve, docking stations are still in short supply. So, what’s behind this widespread issue?
As businesses lean into new hybrid work structures for their employees, the idea of smaller, more portable laptops is trending. And, as much as they offer a high-level convenience, they also generally lack in connectivity. Docking stations enhance user experience and productivity which makes them a vital piece of technology for the modern business. Unfortunately, many businesses are now facing long wait times for this valuable piece of technology.
Other benefits include:
- Capability to use multiple peripheral devices at once
- Universal compatibility
- Adds more ports to your laptop
- Users can connect old devices with modern ports, making them more functional
We all know that semi-conductors are the brains within all electronic devices. Therefore, inventory shrinking industry-wide is somewhat disastrous for some businesses trying to get their hands on more hardware and devices.
The shortage began during the rise of the COVID-19 pandemic, where manufacturers in East Asia halted all chip production for months. And when you consider that East Asia produces up to 70% of the world's chips1, it's no surprise that this had a major impact on supply. On top of this, as businesses were trying to navigate through lockdowns, the demand for technology grew to support remote and hybrid workers. This created the perfect storm for a supply shortage of chip reliant technology.
You might be wondering why more companies don't make semi-conductors to solve or avoid this issue. There are high entry barriers which prevent new companies from taking part in the high demand market. Aside from a steep learning curve, it also requires between $10-$12 billion to build a next-generation chip factory2. Not to mention that the time it takes to become production-ready is around three years. And even then, it would be almost impossible for a new manufacturer's chip yields to match the current players.
The chip industry is also risky. Semi-conductors rapidly become outdated and price pressures are a major problem in the tech sector, gambling with revenue prediction accuracy. That is why it only made sense for a handful of large players to invest in manufacturing capabilities as those companies have the means to take these risks across a large base of customers.
Semi-conductor production has ramped up; however, the supply has not made it through the chain to reach the consumer adequately. Pair this with the order backlog in nearly all manufacturing sectors, and basic economics indicates that we have a problem. Even though big names like Intel® are doing their bit to try to resolve this dilemma, it is expected that semi-conductors will continue to be in a deficit beyond the beginning of 2023. Despite the ongoing global demand, chip manufacturers continue to struggle to fulfil the backlog of order requests, let alone the high quantity of new orders pending.
So, what's the solution?
Fortunately, there are many work-around alternatives for docking stations. With the correct connectivity accessories, you can redesign a productive workstation in the absence of docks. Here at Area9, we are experts on everything tech. Not only do we offer high-level device and hardware advice, but we also have our own marketplace to source you the right technology when you need it.
References:
1 https://www.eenewsanalog.com/en/reports-tsmc-lost-market-share-2q20
2 https://venturebeat.com/business/globalfoundries-next-generation-chip-factories-will-cost-at-least-10-billion