How the global chip shortage affect MSPs

Even after the pandemic created supply chain issues, there is still a huge shortage of semiconductor chips all around the world. This shortage has impacted more supply chains at large as a result since laptops, phones, cars, and many other smart devices need these chips to function.

Overall, there has been a 20 percent increase in demand in 2021, and it has since grown further this year. It’s also predicted that this demand will only continue to increase for the foreseeable future. This higher demand has also worn down the supply chain as the pandemic in 2020 pushed workers to work remotely – thus a surge in laptop and home computer purchases. To this day, manufacturers are still catching up from that initial demand.

But what does this mean for MSPs? Firstly, it’s important for MSPs to watch this trend carefully as this will impact an MSP’s ability to upgrade different devices for in-house staff and for their clients. It will also affect their overall ability to support customers if they have specific needs.

Shortages Impact All Businesses

The shortage in chips also created a ripple effect that spreads across industries. These chips are critical components to many devices that people use daily for work and for personal use. It’s harmful especially to MSPs as they are now faced with upgrading to keep clients safe, but also to source devices themselves.

In addition, with demand for these technologies being so high, the price of them is expected to increase more than they normally would have. Both customers and MSPs will be facing higher costs for device refreshes. MSPs will need to manage expectations in the coming months as well.

When Will The Shortage End?

At the time of publishing this article, the shortage is ongoing. As for when it will end, it’s uncertain how long shortages can last. What is clear right now is that demand is still increasing as sales of semiconductor chips increased rapidly in 2021. Combined with new emerging tech trends occurring every day, further digitalization, 5G networks, and connected cars, the demand for chips is only going to increase more in the future.

Currently, manufacturers are creating more semiconductor chip vendors to meet that demand, but construction of these facilities are costly and time consuming. For example, Intel announced that they’re investing $20 billion into a chip-making complex in Ohio. This includes two new plants and eight new factories. The construction of those facilities could take over a year or more so that doesn’t solve the immediate demand.

What MSPs Should Do

As demand continues to increase and the resolution will require years to have it solved, MSPs need to prepare their client strategies for the long term. There are many ways to address this, but a quick solution is to plan device refreshes proactively. This allows more time to source and procure devices. Another avenue is to consider strategies that would prolong the life of existing devices. Actions like routine maintenance and testing can help to ensure devices can perform longer and be effective.

Overall, it’s hard to predict the future and the chip shortage may be resolved sooner rather than later. However, the fact still remains that MSPs need to be mindful of current events and to leverage them whenever possible.

About MSP Corp

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