The Playstation 5 was launched late November last year, globally by Sony to huge fan fare and some great reviews by those who managed to get hold of them.
“The result is a console that we can’t help but be impressed with, and it helps that it has a compelling lineup of games to play on day one, many of which are exclusive to Sony’s machine. ” This is from Techradar, who also have a weekly updated page of which stores are expected to receive new stock and when.
The consoles themselves launched for £350 and £450 based on which edition you go for but there were reports of consoles changing hands at almost double their original price on Ebay ahead of Christmas. Was this just Sony being clever in their release to increase the hype surrounding the console ahead of the festive period?
Today three months after Christmas and its still proves difficult to track down consoles at their original retail prices. Amazon sold out of its consoles this morning within a rumoured 37 minutes. Not sure how many consoles they released for sale but that’s pretty impressive almost five months after launch.
These problems of availability extend beyond Playstations to include cars, mobiles and even instant pots! This is all being caused by a global short of semiconductors – a key component of almost everything around us. A lot of our ‘chips’ come from a select group of Asian powerhouses including well-known names Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. Additionally Renesas Electronics, one of the world’s largest chip makers has warned that a recent fire at one of its factories was going to have a massive impact on global semiconductor supplies and halt their production for at least a month and potentially longer.
This is my attempt to explain what has been responsible for causing this shortfall of chips and why it is so hard to get hold of Playstation 5.
During the lock-downs as people changed their working patterns to work from home the demand for tech products soared. Laptops sales were at their highest for a decade, monitors were difficult to track-down in certain countries and even fancy multi-function mice producers reported difficulties meeting increased demands. The demand for tech extended beyond work related goods to include items such as home appliances and wearables.
In the early days of the pandemic given the vast uncertainties that faced the global economy many companies decided to cut costs and this involved reducing their order sizes for components such as semiconductors. While this may have appeared to a prudent course of action at the time there was a large scale underestimation of how quickly sales would rebound. During the second half of the year when these companies attempted to re-stock their components they were simply turned away as the chipmakers were already struggling to meet their existing orders from others.
From early 2020, PC makers had been warning about the potential for semiconductor supply issues. Then by mid-year Chinese smartphone and networking product makers began to hoard components, this was all exacerbated by the pending introductions of sanctions from the US. By the end of the year almost one fifth of all imports into the country was semiconductor related.
The recent cold weather in Texas in the month of February has resulted in cross state power outages which has led to many semiconductor plants based in and around Austin being closed. This did not help supply.
So there aren’t enough chips – what does this mean for us? A number of ‘chip-heavy’ products such as cars to games consoles could see shortages and / or price hikes. Samsung has highlighted that it expects continued problems from this semiconductor shortage. Car sales are expected to be affected to the tune of $61 billion of lost sales this year alone. Just think about how many different electronic bits there are in your car!
