You work for a mid-sized to large organization and finally received approval from IT and purchasing to acquire laptops for your department. You gleefully opened up your browser and went to your favorite online store to place the order. Your smile quickly turns to a frown when you see the expected ship date – four months from now! Thinking this is a glitch in logistics, you call the local computer store and ask about their supply.
“I’m sorry, we only have one of those in stock and are not expected to have additional laptops for five months,” the sales associate says.
Now, you are bewildered and starting to get angry. What is going on?
The Perfect Storm: Chips, Competition, China, and COVID-19
There are many reasons businesses are incapable of getting laptops right now.
First and foremost, a chip is to a laptop, much like an engine to a car. You can have all the shiny outer components, but you aren’t going anywhere without the motor.
Second, China, Japan, and Korea mass produce most of our chips, so they make their own technology investment decisions. While wafers come in different sizes from 100mm to 300mm, there has been insufficient investment in 200mm wafers, which have the greatest use within laptops.
Why haven’t Samsung, TSMC, Qualcomm, and others invested in laptop chips? Three words – competition and profitability.
Chips are manufactured for a sundry of products, including cars, Wi-Fi routers, Bluetooth technology, and of course, smartphones. The focus is more on these products due to car and 5G device demand.
Third, US sanctions against Chinese tech companies. Many Asian companies have stockpiled their chips to create shortages. Of course, with a shortage comes price increases. Unfortunately, this means laptop lag times may extend well beyond the recession and cure for COVID-19.
Lastly, COVID-19 has created logistical nightmares, talent shortages, and prolonged delivery cycles.
What are Organizations to Do?
- Skip the order and go for a long-term laptop lease.
Perhaps you don’t require the fastest chips or largest monitors for your department. Signing a capital lease still allows for depreciation of the equipment over time.
- Evaluate your computing needs and have a two-pronged approach – place the order and rent/replace for the most urgent needs.
Those laptops should be replaced immediately if individuals in your department have slow computers or outdated operating systems. However, not everyone has the same need. Rank and replace as appropriate.
Since most laptop chips are not produced here and COVID-19 isn’t going away anytime soon, and competition will remain fierce among the other tech players (i.e., automobile manufacturer, telephony providers); you need to have a game plan regarding your laptop replacement strategy.