How is the worldwide chip shortage impacting IoT?

Al Sisto

Blog by: Al Sisto - 12 / Nov / 2021

If you’ve heard about rising costs and production delays, you might be wondering “how is the worldwide chip shortage impacting IoT?” Internet of things (IoT) devices are set to take over - despite the shortages. Statista states, “The number of Internet of Things (IoT) devices worldwide is forecast to almost triple from 8.74 billion in 2020 to more than 25.4 billion IoT devices in 2030.”

But what impact will this chip shortage have and for hold long will businesses remain affected?

First, what is IoT?

Internet of things (IoT) devices are objects that connect to the internet and allow for monitoring or user inputs in real-time. Even back in 2016, IBM was touting the applications for IoT in business and personal use settings. Through connected cameras, sensors, monitors, trackers and more - businesses can operate more efficiently and provide an enhanced level of personalisation for their consumers. Think about smart commutes that use real-time weather and traffic reports to wake you up earlier if there are delays. There are more options for smart living and smarter production joining the marketplace every day. And with the uptake of 5G, these devices are more powerful and faster. But they now need more chips than ever before.

What is the worldwide chip shortage?

According to DZone, “Because of the sheer complexity of the technology, problems with chip manufacturing date back to before Covid-19. The simple answer is that making computer chips is extremely difficult. The process takes months, sometimes years, and the more advanced the technology becomes, the longer it is taking developers to make it.” Not only are there specific conditions involved, but those factories had to close or operate less effectively due to the pandemic. And shipping lines dried up or became delayed too. On top of that, consumers all over the world began making more IoT purchases to accommodate home and remote working. And so were companies. IoT purchases helped them weather the storm. But that compounded an already existing shortage and has resulted in - according to ZDNet - “an overwhelming 80% of global manufacturers [currently] facing challenges in producing digital products and services.”

So, what can we do?

Reportwire suggests, “tech providers could be impacted by the [worldwide] chip scarcity until eventually at the very least 2022. Other predictions suspect the dilemma could continue to wreak havoc right up until 2023.”

Unless you have the means to open up a computer chip manufacturing facility, your options are limited. First, take an assessment of your existing IoT deployment. There are probably ways you can make better use of your IoT resources or extend their lifespan through regular maintenance. This will reduce your need to purchase more IoT during this shortage. An expert partner  can help you analyse your opportunities for efficiency. And think about the ways you can inform your clients and customers about delays in real-time. This will improve overall satisfaction and reduce attrition as we navigate this difficult period of worldwide chip shortages


Topics: IoT, IIoT, microchip

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