Chip Shortage 2023 Update – Is It Over Yet?

One of the biggest business stories of the last several years has been the fragility of the worldwide supply chain, brought on by the COVID pandemic. One of the most closely followed subplots of that story was the semiconductor chip shortage which caused profound issues and disruptions in the technology device and automotive markets.

Three years into the chip shortage, where are we? Is it over yet? Is there more pain to come? This blog post will look at what caused the chip shortage, what current conditions are regarding chip availability for the workplace technology market, and why the recently passed CHIPS Act may help protect against future chip shortages.

First, let’s start with the 4 industries hardest hit by the chip shortage:

  1. PCs and Consumer Electronics. The rush to remote work and remote learning at the start of the pandemic created a flood of laptop sales, and according to Canalys, the worldwide PC market posted an increase of 55% in Q1 2021.
  2. Automotive. The lack of semiconductors forced many automakers to stop or delay production lines, causing what AlixPartners estimated to be losses of $110B for the worldwide automotive industry in 2021, attributed directly to the chip shortage. 
  3. LEDs. The pandemic slowed down or stopped new construction of both residential and commercial properties, including “smart homes” which heavily rely on LEDs, decreasing the overall demand for LED lighting.
  4. Power Generation. Renewable energy sectors, like solar and wind turbines, rely on electronics like semiconductors and sensors, and their scarcity caused a large slowdown in this industry.

A Look Back

It’s the beginning of 2020 and COVID-19 is closing businesses and schools across the globe. Lockdowns are closing factories and forcing organizations to transition in-office work arrangements to work from home ones and schools are instituting remote learning. Chipmakers were mostly idle for most of 2020 because of COVID-19 restrictions and shutdowns and chip production stopped.

Since everyone is at home and not driving, automakers dramatically cut their chip orders and semiconductor manufacturers shift production to components for computers and mobile devices, whose demand spiked with people working and learning remotely.

To make matters worse, ports were shut down for months, and even when they reopened, they were so congested that goods just sat on the water for weeks. According to the Susquehanna Financial Group, the lead time for semiconductors increased from 4 days to more than 20 weeks.

In the second half of 2020, the automotive industry experienced a strong rebound in demand for new vehicles, but since automakers had canceled their orders for new chips, after they used their existing chip inventory, they had to cut production. Chipmakers did what they could, but with reduced manufacturing capacity and a huge increase in demand for consumer electronics, they struggled to ship enough chips to meet demand, and a backlog started to form that we’re only now recovering from.

A Look Forward

Even with chipmakers shifting resources to PC components, in 2020 and 2021, device manufacturers could not keep up with the demand for new devices to support so many people working and learning from home. But in 2023, the chip shortage for PCs and tablets has eased significantly because of decreasing demand caused by fears of a recession, the cost of products pushed higher by inflation, and higher inventory levels.

According to Dr. Gaurav Gupta, vice president analyst at Gartner, “While consumer demand for semiconductors continues to decline, the enterprise market, which includes networking, servers and storage, should also see a significant oversupply in chips, which will help ease inventory imbalances and reduce pricing.”


In July 2022, Congress passed the CHIPS Act (Creating Helpful Incentives to Produce Semiconductors) to strengthen domestic semiconductor manufacturing because of the chaos created by pandemic-induced supply chain issues. The share of U.S. semiconductor manufacturing capacity had decreased from 37% in the 1990s to around 12%, and the Act included semiconductor manufacturing grants, investments in R&D, and a tax credit for investing in new chip manufacturing facilities. The Act was an effort to make the U.S. more competitive, as foreign governments had aggressively invested in chip manufacturing, while the U.S. government had not.

Since the CHIPS Act was passed, hundreds of billions of dollars in semiconductor investments have been announced, and industry experts believe it will relieve much of the supply chain pressure which caused the chip shortages over the last few years.

The bottom line: The chip shortage isn’t completely over, but it is getting better. Laptop, tablet, and smartphone product availability should return to relatively normal conditions this year, although random shortages may appear, depending on vendor and product category.

To paraphrase a song, “what a long, strange chip trip it’s been.” Having a workplace technology partner like MCPC on your team can help with supply chain issues because we work with OEMs, distributors, and can redeploy your existing devices to keep your organization productive.

If you’d like to explore the concept of letting us co-manage your IT supply chain, including device selection, imaging, provisioning, deployment, maintenance, security, and retirement, contact us to have an introductory conversation.

We’re the Outcome Engineers. MCPC is a global endpoint management company, founded in 2002, and our approach inspires not just endpoint defense, but business offense. By protecting your devices, bringing simplicity to endpoint management complexity, and empowering employee performance, we reduce your business risk and increases digital innovation. Our consultative approach creates a true partnership where your endpoints are just the starting point.