A shortage of computer chips, which began early in the COVID-19 pandemic and limited production of everything from cars to computers, won’t be ending anytime soon.
That’s the warning from Intel CEO Pat Gelsinger, who predicts the shortage will last until at least 2023. He also warned investors that Intel expects sales to fall 2% in the third quarter because of the shortage.
“We’re in the worst of it now; every quarter next year, we’ll get incrementally better, but they’re not going to have supply-demand balance until 2023,” Gelsinger told CNBC.
Trade-ins have more value
Consumers have been negatively impacted by the shortage when they’ve shopped for a car. There are fewer new cars available, and that, in turn, has caused prices of used cars to rise. But Taylor, of Hugheston, W.Va., recently found that the chip shortage worked to his advantage when he used Carvana for a trade-in and learned he could trade up.
“Due to the current chip shortage, the sub-compact vehicle I had was worth some value,” Taylor wrote in a ConsumerAffairs review. “I decided to trade in for an SUV. Once I found the car I wanted, shopping on the app was very easy. In total, it took me around 40 minutes to complete what was needed.”
Shortages of anything usually result in higher prices. Jason, of Hartford, Wisc., shopped for a new gaming system and found generally higher prices, but he also found an exception.
“Given the chip shortage, the prices were really high,” Jason wrote in his review of CyberPower PC. “I had a budget of $5k and I had anticipated spending to obtain the CPU, GPU, and RAM requirements that I had for the device I wanted. I found this device on Newegg's site and not only did it meet my spec requirements but it was on sale.”
Exceptions may be rare
But in the months ahead, industry experts think these exceptions will become rarer. They point out that PC sales have been strong for the last year as consumers around the world purchased new laptops and desktops to work from home. Gelsinger said he believed that there will be little decline in demand for these devices in the months ahead.
“We do think the PC business is now just structurally larger, a million units-a-day kind of business,” Gelsinger said.
Consumers shopping for a new car will also find smaller selections as dealers struggle to fill their showrooms. Toyota cut production by 40% in September. The only silver lining for consumers like Taylor, who have a late-model car to trade in, is that the value of that trade-in may continue to go up.