Another chip famine has arrived, and it's rattling industries from auto manufacturing to technology.
Shortages of the silicon chips used in practically all devices isn't a new phenomena. They tend to occur whenever crises disrupt the supply chain. Such crises can include anything from natural disasters to tech advancements-and the latest has come on the heels of a global pandemic. What makes this time particularly disconcerting is society's extreme dependence on chips to power everything from pacemakers to PCs. The world runs on silicon chips and is built around their continuing use.
As a result, consumers and businesses may find the electronics they need and want increasingly difficult to acquire. Without semiconductor chips available, many worry that an already shaken market will undergo more pain. But there's hope that open-source software could fill the gap.
Why the Chip Famine Occurred-And Why It Won't Disappear Soon
Some people saw the chip famine coming from miles away as soon as Covid lockdowns occurred. But widespread reports about the semiconductor chip shortage started bubbling to the surface in the second quarter of 2020. The underlying issue for the shortage was an abrupt demand for everything electronic. Remote workers needed laptops. Gamers stuck at home invested in consoles. Families upgraded to 5G-enabled smartphones to stay in touch.
Concerns about the increased chip demand led to a surge in online buying. The issue, though, was that manufacturing plants couldn't skirt social distancing restrictions. Some had to close down or operate at reduced capacity. Consequently, they couldn't get chips or produce enough goods to satisfy the public.
The automotive manufacturing industry was hit especially hard. When shutdowns affected dealerships and showrooms, automakers had to stop ordering semiconductor chips. Accordingly, the chip manufacturers scaled back, too. By the time consumers were ready to buy new vehicles again, the chips weren't available. Instead, they were earmarked for orders for products from other sectors. In fact, since the end of 2020, many automakers have been forced to halt or slow their production lines because they don't have all the components they need to present next-gen models to the market.
To make matters worse, consumers became aware that the supply of products they wanted such as computers and trucks were dwindling. They sensed the chip shortage and panicked, preemptively attempting to hoard all the merchandise they could. Businesses joined in on the hoarding, too. Huawei, a well-known tech company out of China, hoarded chips. So did Apple, although Apple may have been late to the hoarding behavior. Apple, Microsoft, and Sony have all cited the chip famine for causing hiccups in their expected rollouts for 2020, 2021, and perhaps beyond.
The Chip Shortage: Widespread and Worrisome for IoT
The chip shortage isn't limited to forcing consumers to wait for a new Camry or stick with their old PlayStation. It's a far greater problem because chips have become important components in airplanes, HVAC systems, and so many related Internet of Things (IoT) devices.
IoT isn't just a drop in the pan, either. As KPMG noted in a 2019 report on the state of the semiconductor industry, IoT is a top revenue producer. Without chips, IoT items like smart appliances and self-driving vehicles can't function. To make matters more challenging, IoT requires diverse chips, which isn't as much of a concern for other industries. Smartphones can usually use the same chip design for all their devices, so specialization isn't as concerning. In other words, the chip famine will be felt seismically and for a while across the IoT landscape.
Another consideration regarding IoT products is that manufacturers are quickly consolidating or partnering. This helps limit compatibility between dissimilar brands, forcing consumers to purchase brand-specific items. For instance, Nest products can't be controlled by non-Google applications, per changes in Google's operations. This move might make sense in a thriving market where companies are jockeying for lead positions. However, it's only bound to create more friction thanks to chip shortages. It could even exacerbate the chip famine as people retire their unsupported devices in an effort to find newer, supported hardware.
Open-Source Software: Could It Be the Right Solution?
The lack of semiconductor chips seems to be an unavoidable problem that can only end when more chips flood the market. Yet there may be hope from an unexpected place: the world of open-source software.
Some companies are experimenting with using an open-source, silicon-to-service framework in place of chip technology. This type of buffer would enable IoT users to connect their smart products to WiFi without the need to upgrade. The right open-source system could also give service providers the opportunity to build up their WiFi infrastructure for customers on the framework.
This isn't just a theoretical solution to the overarching issue, either. It's being practiced by several companies that have discovered OpenSync. This joint initiative between Samsung and adaptive WiFi leader Plume is poised to open doors and minds to an open-source revolution.
How does OpenSync bypass the need for chips? The system links hardware to the cloud, fostering reliable IoT device communication and collaboration. All routers, modems, and other access points can co-exist within the OpenSync framework. As long as the access points remain OpenSync enabled, users can add future access points.
As the fastest growing system in its category of home connectivity curation, management, and delivery, OpenSync is cloud-agnostic, CPE-agnostic, and silicon-agnostic. Already, it's won the support of Liberty Global, Comcast, and other forward-thinking telecom enterprises.
OpenSync is proving that an open-source framework is a viable "win-win" for all stakeholders. And it's becoming an attractive differentiator for Communications Service Providers that want to provide customers with needed services like pushing updated software to past-generation devices containing legacy chips.
It's unlikely that the chip famine and chip production bottlenecks of 2021 will go away anytime soon. However, open-source software like OpenSync has shown that chips aren't the only way to keep consumers' IoT devices connected and performing. Certainly, chip use will never fully go away. Yet having an open-source software alternative as a workable patch will help mitigate the blow of worldwide chip shortages.