Tomorrow’s Upgrades… Today

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Published in The Business News on 06/20/2022

You may have noticed a backlog in ordering computer equipment. To be fair, you’ve probably noticed a backlog in ordering just about everything. The global chip shortage, that we started to notice last year, is still wreaking havoc on planned, or unplanned purchases now. Cisco released a statement in the last couple of months, telling consumers to place their orders today, for a Q1, 2023 fulfillment.

Global Chip Shortage?

Let’s back up. The global chip shortage is a multi-part problem, stemming from the pandemic, and an initial slowdown in orders. Big companies, from the auto industry, consumer electronics industry and business technology companies, all reduced orders at the beginning of the pandemic. The assumption was that there was going to be a major shortfall in orders. As it turns out, that was wrong. Temporary at best.

With so many people heading home to work, computer sales were up. People needed laptops, that would allow them to work from the safety of their homes. They needed printers and Wi-Fi and other network equipment, to beef up their home office. People also rushed out to buy treadmills and Peloton equipment, to keep in shape, while their gym was no longer an option. Gaming systems, home appliances and other personal electronic devices all became high-demand items. Yet, the big tech companies had decreased their chip orders.

It takes about two months to make a microchip. The process involves a special kind of sand and very clean water. The Taiwan Semiconductor Manufacturing Company (TSMC), one of the largest producers of chips, uses over 60,000 tons of pure water, per day in the manufacturing of chips. Part two of our multi-part problem is a 2021 drought in Taiwan. The worst they’ve had since the 1960s. Drought equals less water, equals less chips. Add to this a major fire at Japan-based chip manufacturer, Renesas Electronics Naka Factory and some political problems in sourcing chips from China, and we all have a very big problem.

The video below does a nice job explaining the chip shortage:

The chip shortage will eventually be resolved. Most of the reports that I have heard, provide a best-guess of mid-2023, for things to normalize with chip availability. In the meantime, we will be paying more and waiting longer, for anything that has a chip in it. Cars, appliances, computers, business technologies, you name it. If it plugs into the wall and scares the heck out of old people, we are probably going to have trouble getting it for a while.

So, what do you do?

Well, you do what you should have been doing all along. Plan ahead. If you are considering a network upgrade at your business, don’t wait to get that equipment ordered. Computers, laptops, printers and servers seem to have about a month or two lead time lately. Network equipment however… months or longer. If your manufacturing facility needs Wi-Fi and you are planning for next year, get a plan in place now. If your medical practice needs a new firewall, to maintain HIPAA compliance, get a plan in place now.

Non-network equipment, like servers and laptops are more readily available, but that seems to depend on the manufacturer and vendor. Dell has been shipping laptops to arrive about a week or two from ordering, and servers about a month from ordering. Yet, other manufacturers, like HP are often still taking a couple months to fulfill orders. I suspect this is related to who you are order from though. Some of the larger channel partners, like CDW, seem to have an easier time sourcing HP. I suppose the company that orders 10,000 of anything, is going to get priority over the company that orders only 20.

Plan Ahead

The underlying theme here is to plan ahead. Don’t wait until the day before your new employee starts to consider getting them a laptop. Start planning. What does the next year look like? How about the next three to five years? Take that plan and apply it to the real word problems of chip shortages, inflation, hiring struggles and difficulties sourcing raw materials. What is most important now, and what can you do now? Play chess, not checkers. Look at all angles and plan a realistic strategy. Stomping your feet, like a tired three-year-old is not going to get your equipment faster. Putting on your big boy/girl pants and planning like an adult is the only way to successfully navigate these problems.

Another thought is to become less-hardware dependent. Leveraging cloud-based systems, eliminates some of the internal need for chip-based hardware. Options are abundant, when you make a realistic plan, based on your business needs and the hectic world around you.