Since the pandemic, the world has been turned upside down, and the technology industry is no exception. The current silicon shortage is a result of many factors. One is the change in consumer behavior where many people started buying PCs and laptops for their work-from-home setups. Some even started upgrading their older pcs with newer GPUs.
This led to increased demand by the market for which most OEMs were not ready. This, combined with bitcoin hitting a historic high of $63,729 per coin, led to more people getting into bitcoin mining. Nvidia’s latest lineup of 30 series GPUs was finally competitive enough in pure compute power vs. the previous 20 series of GPUs, which was not competitive. Thus, many users decided to hold off for another generation which explains part of the problem.
Companies generally use the previous year’s demand to plan for the following year, but many companies did not prepare for this specific problem, often referred to as an edge case.
Bitcoin?
So, what is Bitcoin? according to a statement to the United States Senate, “Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.”
To mine Bitcoin, one would need to solve a problem for which they would be rewarded for successfully solving the problem. This requires massive amounts of computing for which GPUs can be used.
Bitcoin is just one of many crypto currencies. There are many others, such as Ethereum, dogecoin & Ripple, to name a few. Bitcoin can be seen as the most mature form of crypto currency as it was the first. Credit for building it goes to an anonymous developer named Satoshi Nakamoto.
The shortage could be mitigated; however, with crypto miners buying 7-10 cards in one go for mining, this might not happen for quite some time. GPU vendors such as Nvidia are working on a solution to limit the hash rate (the speed at which a GPU can mine) on specific models.
Another issue is that as data and the information we compute in the cloud increases, so will demand with very few foundries out in the world which fabricate chips which is a highly technical process. Thus, it is not as easy to ramp up production as this process would take years and can take billions of $.
The automotive industry is also a factor. During the early days of the pandemic, the automotive sector canceled a large chunk of their silicon capacity that larger companies bought. Now that the demand has picked up back to pre-pandemic levels, they cannot get silicon for cars.
It’s to be noted that the silicon found in cars is often low-cost chips. However, a modern vehicle requires dozens of these for the various features of the car; for example, a digital speedometer needs a display chip to show the car’s speed. Tesla is one company that was recently affected by this.
The solution kinda, sorta
So, if you can’t get the new PS5 or the latest graphics card, you know why. This situation will not go away any time soon. But we can mitigate the problem.
Here are some solutions for the average Habib:
- Buy a laptop rather than building a PC. Laptops have much higher sales and will be more readily available.
- Buy an older console, especially if you are playing esports games like apex legends.
These are not the best solutions but given the state of the market its a choice.
