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The Global Chip Shortage - What You Need To Know

The global pandemic has presented a number of challenges over the last year, shifting global markets and damaging supply chains across a multitude of industries. An example of this across our own industry is the shortage of IC chips that power phones and other devices. There has been a lot of talk around the subject, but it can be difficult to understand without a grasp on the situation as a whole. Let’s break down what this could mean for you as a repair shop owner.

First of all, what are these chips?

Think of these IC chips as the engine of your car. Without the engine, the car can’t run. The same goes for the chip and the computer within your phone’s screen. Without it's IC chip, it loses touch capability and accuracy, backlight functionality, and more. Basically, without this chip, your screen simply won’t work.

Why is there a shortage in the first place?

As nice as it would be to have chip manufacturers making them only for our industry, unfortunately that isn’t the reality. IC hips are necessary to run a multitude of different kinds of computers. The main contributor to the shortage overall is the flux in the automotive industry.

Once the pandemic hit, forecasting for vehicle manufacturing went down and production of chips followed suit. But when the demand for cars came back up, suddenly chip manufacturers were behind in production. Now, chip manufacturers that were supplying the consumer electronics industry are scrambling to make up for the automotive industry, leaving both short.

What does this mean for your repair shop?

With the lack of chips, we’re seeing a shortage of display assemblies across a variety of brands. Considering Apple has the largest market share in the industry, you’re likely seeing the biggest dip in availability within the iPhone parts. This is specifically infringing on iPhone XR and 11, based on their popularity.

What is Mobile Defenders doing to keep your shop stocked?

We’ve worked with our partners in China to secure the raw materials needed for these chips. This will work as a stop-gap for us to be able to ride out the shortage until the market begins to stabilize again. The supply that we’ve secured will also help to keep extra costs down as supply and demand inflates the price of chips.

When will the shortage end?

It’s hard to give a definitive answer, but we’re hearing that it could potentially stabilize by August. However, we’re still in the earlier stages of the shortage and August may be a bit hopeful. Realistically, we very well could see this shortage push into 2022.

Overall, Mobile Defenders is doing everything we can to ensure that this shortage affects your business as little as possible. We’re keeping our finger on the pulse and will provide updates as they arise.