The PS4, Xbox One and Nintendo Switch are all in high demand this holiday season. The shortages may finally end soon with a rumored new console on the way!
The “when will the console shortage finally end” is a question that many gamers are asking. The answer to this question is unknown, but it is believed that the shortage of consoles will not be over anytime soon.
NEWS IN TECH – The coronavirus, along with the semiconductor problem, has resulted in a supply shortfall that might be resolved in the coming months. When will we be able to go into a store and purchase a PS5 or Xbox Series without having to chase them down or do a pre-order? Here’s all you need to know about it.
The crisis in semiconductors has touched close to home. Consumers have been affected, and it is no longer a case of one-offs. The most obvious example is that it is still difficult to get consoles such as the PS5 or Xbox X Series a year after they were released. And there’s a simple reason for this: there’s a scarcity of the semiconductors that power their internal circuitry. What is the reason behind this? Is there a way out? How long will this calamitous scenario continue?
It’s uncertain, but it’s evident that this technical issue is tied to the coronavirus outbreak. It’s a complicated subject that needs a thorough examination to address at least three aspects of the issue: what triggered the scenario, which sectors are impacted, and when (and how) things are anticipated to return to normal. I’ll warn you ahead of time that the answers aren’t fully definitive, but one thing appears plain… and even obvious: things will get better, and there are hints that we’re starting to see the light at the end of the tunnel right now.
The year 2023 is being hailed as a watershed moment, when more than a hundred sectors (including hardware) would see a rebirth in integrated circuit manufacturing. And by this, I’m referring to firms like Nvidia or AMD, as well as a slew of others (including automotive) who have had production issues that can be explained by what I’ll discuss below. Are you planning to join us?
Stock shortages on consoles are caused by a variety of factors.
In a nutshell, this is how it goes:
- Because of the confinement, there was a surge in demand for semiconductors.
- There are just a few manufacturers, and they are all in China and Taiwan: there is a strong reliance on a small number of enterprises.
- The drought in Taiwan in 2021 made manufacturing and meeting demand challenging.
- The trade war between the United States and China has exacerbated the problem.
It would be inaccurate to say that the semiconductor scarcity is caused by a single factor. A number of elements have combined to create a snowball that is growing in size and becoming more difficult to stop. The cause of the issue might be located in the fact that demand for these circuits is increasing while manufacturing capacity remains same. The development of COVID-19, which caused production delays by shutting down multiple factories throughout the globe, exploded this dynamic.
The coronavirus, on the other hand, had a much more devastating effect: it raised demand for semiconductors. Due to the restrictions, sales of electronic devices such as cellphones, tablets, laptops, and video gaming consoles skyrocketed. The desire to work, learn, and be amused without having to leave the home resulted in a 40 percent rise in the consumption of these gadgets, which translated into a high demand for chips to make them. What is the issue?
The issue, as we have said, was that the industry was not prepared.
It seems to be hopeless. The semiconductor industry was too reliant on third parties, as COVID-19 demonstrated. Large firms, such as AMD, outsource their chip manufacturing to companies like TSMC (the Taiwanese semiconductor giant). As a result, console makers such as Sony, Microsoft, and Nintendo are affected. These chips are very difficult to make, involving a large number of distinct steps (over a thousand) and a highly specialized workforce. Not to mention the financial outlay that a proper innovation and development department entails. It is for this reason that it is outsourced: it is the most cost-effective option.
However, the bottleneck caused by low output and high demand has other important factors. One of them is the implementation of tariffs and the ensuing trade war between the United States and China, which began under Trump’s presidency. In summary, SMIC (another Chinese semiconductor behemoth) found it impossible to do business with the United States, exacerbating the problem. Due of the drought in Taiwan, the other main manufacturer, TSMC, could not operate at full capacity. As previously said, this is the ideal storm.
Affected businesses
In a nutshell, this is how it goes:
- The home electronics business, which accounts for half of the total, is the most impacted.
- Nintendo’s Switch has a sizable installed base and has fared well in the aftermath.
- Sony has sold fewer PS5s than projected, but plans to make up the difference.
- Xbox has also had supply problems with the X Series.
We’re talking about a worldwide disaster that will impact every sector that relies heavily on semiconductors. The car industry, for example, has been heavily damaged, since it accounts for 15% of global semiconductor output. However, the home electronics sector, which accounts for 50% of production, is the most affected. You would think that this just impacts the most costly and cutting-edge chips, but you’d be wrong… Everything from the ones that drive your graphics cards to the ones that enable you to connect to the internet has been impacted by it.
The absence of chips is the reason why getting a PlayStation 5 or Xbox Series in stores is so difficult… and it’s not in their favor. If demand had been satisfied, companies like Apple may have had even greater financial outcomes. Because it already had so many systems on the market, Nintendo has been one of the least hurt by the scenario (92 million Nintendo Switch currently). As a result, games like Animal Crossing: New Horizons have broken records in the captivity genre.
“The scarcity began when individuals began working and learning from home,” says Patrick Moorhead of Moor Insights.
But let’s not fool ourselves… Nintendo is also impacted. In reality, Nintendo is now re-examining hardware design to attempt to mitigate the affects of the semiconductor scarcity: “We are re-examining hardware design to try to mitigate the consequences of the semiconductor shortage.” Shuntaro Furukawa, the firm’s president, recently confessed that they haven’t sold as many consoles as they had planned, prompting the company to modify its sales forecasts: “We are doing all we can, but there is a rising feeling of concern regarding manufacturing plans.”
PlayStation 5 has a greater challenge since it employs graphical technology that is now difficult to develop. The lack of semiconductors is already impacting Sony’s output, according to the company. The business confessed in its fiscal reports that it had missed its distribution objectives (which is self-evident), but that it plans to improve its sales pace to 22 million consoles by March 2022. Given their present population of 15 million, this isn’t a concerning statistic.
The scenario is similar with Xbox, however they have a minor edge since the X Series and S Series are two separate hardware platforms, with the latter being less demanding in terms of graphics chip output. Still, as Cédric Mimouni told us in an interview, Microsoft was heavily impacted since it was the first time they introduced two systems at the same time. The CEO justified certain things that support what we’ve mentioned so far: that demand was really high, that there is a chip shortage, and that it’s unclear when everything will be resolved. Or, on the other hand, maybe this final point is now a bit obvious. We’ll have a look at it below.
When will the situation come to an end?
The issue began with the epidemic in 2020, but it has now continued into 2021 as demand remains very high. Much of the problems are likely to remain in 2022, with a scarcity of semiconductors leading to stock shortages once again. Microsoft’s executive vice president, Phil Spencer, is aware of the problem and has previously said that it will last for months beyond Christmas. This is something that technology experts also advocate: the problem isn’t going away anytime soon, therefore “first-come, first-served” will continue to be the rule for the next several weeks. The clearest example is not just the insane PS5 and Xbox Series pre-order campaigns, but also Steam Deck, which had a months-long pre-order and a delayed delivery.
Is there a way out? Lisa Su, AMD’s CEO, believes that the semiconductor industry’s production capacity has to be increased. TSMC, the Asian behemoth, has already announced intentions to spend millions of dollars in improving its output. Companies are accumulating chips at the same time to prepare for future difficulties. However, there is a more pressing trend, with Europe emerging as the new semiconductor manufacturing hub (with Germany and France leading the way). This would move the industry’s attention away from China and Taiwan, which it now relies on.
In the end, the process will be slow, but supply will eventually catch up with demand. Basically, semiconductor businesses will spend millions of dollars to upgrade and streamline manufacturing procedures. The issue is, when will everything arrive? In a nutshell, it’s still a long way off. It is not projected that the semiconductor problem will be resolved until 2023. The most optimistic forecasters predict September 2022, however this is contingent on the pandemic scenario as well as the manufacturers’ own success.
This means that how Sony, Microsoft, and Nintendo manage the current situation will be crucial. There’s a lot of labor that goes into console production, with daily calls to secure components. Getting the chips will be critical, and if it means foregoing other internal components, that may be a viable option (as long as they are invisible to the consumer and do not alter the original features). It will be fascinating to observe how the scenario develops, but remain hopeful. This will be a one-time occurrence from which the sector will undoubtedly recover stronger.
To summarize:
- The console scarcity is expected to endure until 2022, however it will gradually improve.
- A significant amount of money has already been invested on semiconductor manufacture.
- To speed up the process, hardware vendors might update components.
- By 2023, the problem is expected to be completely resolved.
(Adapted from an article by Jess Bella, 3DJuegos’ lead hardware analyst.)
3DJuegos is the source of this information.
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The “when will xbox series x shortage end” is a question that has been asked for years. The Xbox One and PS4 consoles are in short supply which means the prices of these consoles will continue to rise until the shortages finally end.
Frequently Asked Questions
How long will the semiconductor shortage last?
A: The semiconductor shortage will last for many more years. It is expected that by 2021 the industry should be back on its feet as it was in 2017, though some companies are still recovering from the shortages of 2015 and 2016
How long will the ps5 shortage last?
A: The PS5 will not be released before 2019, the date of release is unknown.
Will the chip shortage end soon?
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