Microchips Are the “Brains” of Every Electronic Device in the World and They’re Becoming Scarce

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Generally speaking, computers were created to make our lives better. I love them, indeed. I can’t imagine a day without sitting in front of my monitor to write or watch a couple of videos before going to bed. I’ve written a few articles about how technology can indeed provide us quite strong support in some of our activities.

For example, computers help with surveillance, automation of things such as gate openings, lights, and even windows. You know, all that SmartHome new-age stuff that you may or may not find helpful. Many people use computers to make a side income. In my case, these days, it is the primary income, indeed. In some homes, computers are used for communications and record-keeping, among other things. 

The world is facing a microchip shortage

Everything nowadays uses a chip. Fridges. Laundry machines. Air conditioning. You don’t want to know how many chips your car needs. And now the world faces a microchip scarcity – 34%  under the market demand has surfaced. Why? This situation presents because of geopolitical factors that the pandemic made worse. Let’s remember when the US administration tightened the regulations for sales of semiconductors to firms like Huawei and ZT. 

Harvard Business Review authors wrote

Geopolitical factors also played a role, specifically when the Trump administration began tightly regulating sales of semiconductors to Huawei Technologies, ZTE, and other Chinese firms. Those companies began stockpiling chips essential to 5G smartphones and other products. At the same time, American firms were cut off from chips made by China’s Semiconductor Manufacturing International Corporation after the federal government blacklisted the firm.

It’s not like this couldn’t have been impeded. Modern practices like “Just on time” deliveries of parts for assembly (a clever idea to avoid paying money for storage warehouses) left many industries extremely vulnerable to chain supply disruptions. 

Lockdowns led to more people at home needing computers and gaming consoles

The pandemic lockdowns, led to an increased demand for work-at-home devices. More people than ever are working from home and more children are attending school via computer “distance learning.”

An article published on New Scientist had this to say about why we are experiencing this shortage:

The covid-19 pandemic caused an initial slump in car sales of up to 50 per cent, because few people were travelling anywhere and confidence in the economy was low. Car companies reacted by slimming down manufacturing and reducing orders for parts. This included huge numbers of computer chips, because modern cars contain dozens of them to control everything from braking to steering and engine management. According to research firm IHS Markit, 672,000 fewer vehicles than usual will have been made in the first quarter of 2021 as a result.

At the same time, there was a rush for home office items like laptops and smartphones, vital because many people transitioned to working from home. There was a similar rush for games consoles, so that people had something to do to keep their minds off the global pandemic.

The big factories supplying manufacturers switched from making car components to smartphone, laptop and tablet chips instead. In fact, production is going stronger than ever in terms of total sales, and the problem is as much about demand as supply. The Semiconductor Industry Association (SIA) says that chip sales in January 2021 hit $40 billion, which is up 13.2 per cent on the same month last year.

How will this shortage affect us?

Hard to say. Just as a general idea, if your car needs an ECU to work and suddenly it stops working, you might be in an uncomfortable position. If you’re in your homestead 30 km away from civilization in the middle of the winter, you’re in a potentially dangerous problem. Just imagine, God forbid, a member of the family needs medical attention. No Bueno. I believe technology is good for us. For most of us, at least. But being an engineer who preps, I am a bit biased. I know how valuable reliable equipment is. 

The auto industry is calling this the “Second COVID Shutdown.” 

“It’s a temporary, but very, very harmful shortage for the auto industry,” to lose essentially the “brain” of the modern-day vehicle. ~ Flavio Volpe, president of the Automotive Parts Manufacturers Association.

Even cell phone manufacturers are taking the hit:

“There’s a shortage of microchips this year. It’s not just shortfall but severe shortage,” Lu Weibing, vice president of Xiaomi group said on his Weibo account on Feb 24.

Jiang Xiaofeng, sales director of Umidigi, a Chinese mobile phone company, told Global Times on Monday that the whole industry is facing challenges including increasing prices of raw materials and even running out of stock.

“Due to the influence of COVID-19, the cost of mobile phone manufacturing industry is rising rapidly.” said Jiang.

Chips are everything? Woah, not so fast, amigo. It does not have to be that way.

In a report I read, the following caught my attention:

“Chips are everything,” says Neil Campling, media and tech analyst at Mirabaud. “There is a perfect storm of supply and demand factors going on here. But basically, there is a new level of demand that can’t be kept up with, everyone is in crisis, and it is getting worse.”

As much as I would hate to have to use a typewriter to complete this article or have to use a vintage terminal to send it via packet radio, I would still do so. Computers were designed to ease our life, not to enslave them. That will be one of the hardest lessons for me when we return home. I will not be on the internet most of my day. I will instead make my hutch a suitable living place and keep working on the kiddo’s education. With a basic PC, our books, and someone with a teacher’s degree authorized to sign his grades, we can advance a lot.

Simplicity, redundancy, and practicality is my advice

Perhaps it is best that these microchips not be “everything” for us. Tech can make us lazy if we rely on it more than we should. Not everyone has a degree in mechanical engineering. And Daisy has long recommended low-tech prepping.

I can tell you it is going to be much easier to find someone to fix that old diesel on your truck than an ECU for your fancy fuel-injected SUV if this stuff keeps going the way it is. I’ll take the old, non-chip diesel, thanks. And the generator. Sure, my solar array will be in place, but the freezer and most of the stuff running will be as simple as can be. I will be sure to leave behind well-written maintenance and repair procedures for the coming generations!

Stay tuned, amigos!

How do you think this will affect you?

What items do you rely upon that use microchips? How can you work around this? What about your place of business? Let’s talk about the ramifications in the comments.

About Jose

Jose is an upper middle class professional. He is a former worker of the oil state company with a Bachelor’s degree from one of the best national Universities. He has a small 4 members family, plus two cats and a dog. An old but in good shape SUV, a good 150 square meters house in a nice neighborhood, in a small but (formerly) prosperous city with two middle size malls. Jose is a prepper and shares his eyewitness accounts and survival stories from the collapse of his beloved Venezuela. Thanks to your help Jose has gotten his family out of Venezuela. They are currently setting up a new life in another country. Follow Jose on YouTube and gain access to his exclusive content on Patreon. Donations: paypal.me/JoseM151

Microchips Are the \
J.G. Martinez D

J.G. Martinez D

About Jose Jose is an upper middle class professional. He is a former worker of the oil state company with a Bachelor’s degree from one of the best national Universities. He has a small 4 members family, plus two cats and a dog. An old but in good shape SUV, a good 150 square meters house in a nice neighborhood, in a small but (formerly) prosperous city with two middle size malls. Jose is a prepper and shares his eyewitness accounts and survival stories from the collapse of his beloved Venezuela. Thanks to your help Jose has gotten his family out of Venezuela. They are currently setting up a new life in another country. Follow Jose on YouTube and gain access to his exclusive content on Patreon. Donations: paypal.me/JoseM151

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  • Dodge announced that some of its low end trucks won’t have chips.
    I foresee a large black market coming.

    • I can’t see how this is possible anymore. Yes you could build a vehicle like they did back in the 60’s and 70’s but that would require them to be made of steel, not fall apart plastic. Airbags need some sort of sensing and computational mechanism to work properly, voila, that’s a chip. Anti Lock Brakes? oops, there goes another chip. Just to mention two quick things off the top of my pointed little head.

      So you want to drive in something that does not have any of the safety features our ‘modern’ cars have, because it has no chips. I don’t even want to think how much the insurance companies are going to charge for that, IF they would even insure them. Will the thing run after the EMP, very possible but up to that point, might be a lot of trouble getting tags and ins on it. While I love the idea of this, one needs to think on it carefully before just jumping on it. If you need to just get around, a battery operated bicycle would work too.

      A A ROn

  • “I will be sure to leave behind well-written maintenance and repair procedures for the coming generations!”

    Maintenance manuals . . . in hard-copy.

    Looking around the house, aside the obvious computers, cell phones, cable modem, Wi-fi, what else has a microchip in it?
    The blender?
    The stove?
    Microwave?
    Termostat?

    • Dear 1stMarineJarHead
      Exactly! I tried to get a microwave some years ago, old models without electronics and it was impossible. Not that it was a big deal, those things generate bad radiation enough to make me leave the kitchen when they´re working, but they´re quite useful though.

      My advice? buy wisely, browse the internet, download, backup and hardcopy the manuals for those simple appliances you´ve got, people. Internet of Things is great? yes, sure it is. But the world seems to be headed to a different path, and a low-tech backup stash could be needed someday.
      Cheers!

    • “. . . in hard-copy”

      on waterproof archival paper.

      ‘fact put everything on waterproof archival paper, then in a hard binder to protect it physically. prep samizdat now while the materials are available.

      • Have you done this with all of your maintenance manuals?
        What was the cost (aka economics)?
        What was the time, effort and energy (logistics) of such an endeavor?

        If so, by all means, write up an article, provide photos, receipts of cost and submit to Daisy for publication.

        I would be all ears.

  • their are “integrated circuits” that do many things. Just to come out with a blanket statement that chips are the brains.. is not entirely correct…
    Please consider the fact that their are many types of integrated circuits that are not “brains”… as in a CPU…
    Many chips are to interface with the analog world… buffering that outside world to the logic. If you cannot find a ” analog to Digital converter” to interface to the outside world, then yes, we are in a quandry. Im just splitting hairs, to let people know that “Chips” do many things… not just a “CPU”… The microwave oven will work just fine, but if the touchpad matrix “Chip” is not available, then the Start button wont work… Companies that complain about chip delays can always come up with a solution… i.e. substitution of devices.
    If I was in procurement, I would have a staff meeting to come up with an alternative… even if it means substituting with a PIC device and a daughter board riser. etc.etc. Just dont sit on your hands and play stupid… I dont understand why they just throw up their hands and say they cannot do anything…
    ok… done… off my soapbox. Going to go buy an old diesel truck. screw this…

    • Dear seesa

      Yeup, I understand your points. All of them. But as of now, all sorts of CPUs, “chips” or whatever sort of similar device are increasingly powerful. They will interconnect, and we truly don´t know what will happen once there is a rogue AI. Yes, I´m fantasizing, but all of us did it before November 2019, right? Thing is there is a chain supply issue in that market, and we should be aware, especially preppers who rely on newer appliances or vehicles just because of the warranty or its reliability (which is totally valid, but not the approach I would use in a country like the mess mine is right now). So I make choices based in my own experiences, and write plainly about this, supporting them with a few links here and there.
      It´s great you get a diesel. I hope to get one, too. And make my own DIY biodiesel plant. 🙂

      Stay tuned!

  • First, let’s kill all the chips. Give me a car that is fully mechanical. Give me a better life without the internet of things. We don’t need them.

    • Amen, Sista.
      Invest that money in a good infrastructure, maybe a good health insurance, or some other stuff. Financial independence is the goal we should all look for. And generational wealth for those we left behind.

  • communist societies always have shortages, usually caused by “wreckers” that need to be arrested so everything can “get back to normal”.

  • I’ve not researched this to verify it, but don’t the majority of IC’s come from Asia? I know the board repair work I used to do, consisted mainly of Chinese and Japanese IC’s. Very few were actually ” Made in America,” and that illustrates the root of this problem/crisis.
    I’m with others on this, hard copies of all pertinent data, and increased use/collection of older pre chip technology.

  • You want some new automobile? Got wait one year for it (chip shortage). Houses are in short supply as people move out of the city.

    I know a guy being outbid for homes the last few months. He wants to buy his first home and is getting frustrated.

    Some consumer goods are not available and so are some service industries are falling behind due to worker shortage (workers rather collect stimulus money and unemployment checks) and still others told to work from home, be furloughed, or laid off.

    I’m still waiting for them to do my roof and several months has passed. I’m getting a bit worried about everything.

  • ok, so if you’ve taken all your paper photos and put on computer or backup, how in the world would you be able to print them all out???? absurd….so they would now be useless….have also put taxes, house papers and lots of other stuff on external hd and disposed of the actual papers….are you saying now to print them all out for safekeeping….holy moly…the ink, paper, time etc…..!!!!not feasible….

  • We are there. 90% of our microchips are made in China. everything from pet scans to Autos(1400), computers, Cell Phones. There are even more needed next year, and Electric autos, and autonomous cars. We are going to produce several million less cars this year, and will have to reduce instead of increase by 10% every year, or china will have to limit sales. They will have an impact on all our production because of this.

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