Global chip shortage. Toyota, the world’s largest automaker, downwardly revised its full-year production forecasts in September. Ford has cancelled shifts at its Dearborn F-150 plant in Detroit. General Motors has predicted a profit hit of up to $2 billion.
Global chip shortage
The effects of the ongoing global chip shortage are starting to be felt. And it’s not limited to the automotive industry. New consumption habits, sparked by Covid-19 and subsequent lock-downs. Dramatic spikes in demand for online devices like games consoles, TVs, computers, and smartphones coincide with production shutdowns. Extreme weather events also temporarily removed multiple plants from operation in the past year. This only added more pressure on chip manufacturers. already dealing with demand from the development of tech-heavy products and services.
Demand outstripped supply
This imbalance is creating chip shortages. But also scarcity. Due to the greater demand for remote working equipment and on-premises IT infrastructure, the available circuit boards, resistors, capacitors, and other parts are becoming scarce. This is directly affecting the data center.
A major exacerbator of the chip shortage has been underinvestment in substrates. Two of the world’s biggest semiconductor companies are now incurring increased costs in their efforts to handle the shortage. Advanced Micro Devices committed investment into its own capacity. Intel is working with additional partner suppliers to ease the shortage.
Price inflation
With companies shouldering higher costs along their supply chains, price inflation seems inevitable. This is confirmed by Robert Johnson, CEO of Vertiv, a market leader in data center infrastructure provision.
For companies already dealing with significant management challenges of operating data center infrastructure, this inflation presents serious financial and logistical obstacles. Even if the chip shortage abates this year, or the next. Higher product prices are likely to remain in place.
Normal IT infrastructure budgets drained due to the spikes in capacity requirements and the boom in working from home Covid-19 caused. As a consequence, the profitability, and survival, of some businesses could be threatened. Basically due to the chip shortage and the prospect of costs rising.
Evernex helps to avoid disruption
Evernex can help to avoid such a disruption. As the expert IT company extend the life of IT infrastructure with cost-effective support of up to 70% less than the original equipment manufacturer (OEM). With its expertise in third-party maintenance provision, it removes the need to replace useful equipment with new.
This gives companies independence from End-of-Life-the OEM stops manufacturing the hardware- and End-of-Service-Life -the OEM stops supporting the hardware- dates. In this way, Evernex reduces both company costs and demand on manufacturing supply chains, responsible for driving up prices.
Evernex’s refurbished hardware
Evernex’s refurbished hardware offers many advantages, when a company needs to purchase replacement or additional hardware to accommodate greater capacity.
First of all, refurbished assets from Evernex are inspected, cleaned, tested, and restored to meet original factory specifications. So, businesses sustain normal levels of operation while increasing return on investment, without the need to purchase new equipment. Without compromising on performance or quality. And preserving chip supplies for where the’re needed most.
Secondly, supported by Evernex’s unique Spare parts as a Service,
er”>SPaaS™ offering, businesses can access refurbished hardware quickly and with ease from 330+ fully equipped forward-stocking locations worldwide. With over 850k+ multi-vendor items in stock across networking, server and storage assets, the required parts are immediately available to be delivered in a timely manner to ensure business continuity, even during the current climate of disruption.
Conclusion
In summary, it is clear when using a combination of refurbished assets and TPM, infrastructure and operational leaders can mitigate the short-term impacts of the shortage. These approaches will reshape our unsustainable consumption of chips by challenging an industry-wide culture of hardware replacement- addressing the urgent appeal for a more sustainable future in IT.
