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Worse Shortages Before Improving: Panic Buying Occurs In The Industry

The next-gen consoles’ supply might still be not satisfying the demands of the customers, but the situation will improve over time.

Bloomberg, citing its anonymous sources within supply chains, claims that those who buy semiconductors in smaller volumes (such as Sony and Microsoft) will face shortages, as bigger tech companies buy up all the stocks from them, and it could impact even the Holiday season at the end of the year.

Bloomberg pointed out that the console shortages (which also apply to Nvidia’s RTX graphics cards) are based on multiple factors, but it’s mostly due to Asian companies that manufacture the advanced semiconductors who cannot keep up with the increased demand to provide supply, and the coronavirus global pandemic doesn’t help their situation. (Despite this, Sony still officially shipped 4.5 million PlayStation 5 units by the end of 2020.)

South China Morning Post adds that bigger companies, such as Apple and Huawei, are hoarding components. Will Bright, co-founder and chief product officer of peripheral manufacturer Drop, said that there’s „a chip stockpiling arms race.” Strategy Analytics’ Neil Mawston adds, „The virus pandemic, social distancing in factories, and soaring competition from tablets, laptops, and electric cars are causing some of the toughest conditions for smartphone component supply in many years.”

Taiwan Semiconductor Manufacturing Co., one of the world’s biggest chip suppliers, has reportedly been discussing the issue with Qualcomm, Corning Inc., and officials from Joe Biden’s administration. Sony, Microsoft, and Nintendo have been suffering from shortages for a year. Sony’s chief financial officer, Hiroki Totoki, had pointed the situation out recently as well: „It’s difficult for us to increase the production of the PlayStation 5 amid the shortage of semiconductors and other components. [We will] continue to do everything in our power to ship as many units as possible to customers who are waiting for a PlayStation 5.”

Source: PSU, PSL

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