“Inflation and the Finite endgame.” Global computer chip shortage. Will it lead to a analog retrofitted future? (Part 2).
(Chart shows the reliance of microprocessors on wireless, automobiles and computer technology. Bloomberg)
The question is in regards to the computer chip shortage is when will prices begin to impact the consumer? Which in its normalizing of business modeling would be to pass on the rising costs in light of the manufacturing collapse of microprocessing components. The answer could be now. According to an article by the Wall Street Journal, in studying the Amazon Keepa consumer price tracking website, prices for the ASUSTEK, a Taiwanese made gamer laptop, which Amazon lists as one of its best selling laptops, spiked from $900 to $950 in the month of June 2021, also rising via Keepa was the popular HP Chromebook, which also rose to $250 from $220, also in the same month. Although prices do fluctuate with newer technology, what will be interesting to note is whether last year’s tech will be holding onto its prices or even going up in cost as opposed to the depreciation that usually occurs to older computer equipment.
So, the idea that computer equipment may, if the global Chip Shortage does indeed crash digital technology starting with laptop computers mostly built in Taiwan, sends prices to unfathomable heights for newer equipment. It could price out the consumer altogether. This distinct possibility in an already looming inflation economy, is not beyond the realms of science fiction, that analog technology may return as a substitute and for the car and transport industry analog has made a comeback. The European car marker Peugeot has replaced their digital dashboard readouts to analog settings, starting with their 308 model recently manufactured for the 2021 market. An analog world may spread to other consumer goods in light of Taiwan’s drought which, ontop of an already declining chip market, is further adding to pressures of supply issues, particularly the worlds biggest chip company Taiwan Semiconductor Manufacturing Co Ltd. In February 2021 ordered water trucks were told to be on standby at its Hsinchu factory in Northern Taiwan, with water restrictions already in place, due to the droughts, these extreme measures from TSM will continue. As noted in this series, Inflation and the Finite Endgame, could be pushing towards a dramatic shift in technological use. And this could solely be on the premise of climate change regardless of consumer demand and periodical droughts.
It has been estimated that on average a larger chip manufacturing plant can use up to one billion gallons of water per year. Although location and population comparisons are necessary in an overall calculation of microprocessing and its water use, however, Taiwan’s chip industry, according to an article from Forture.com, uses 10% of the total water consumption of the country with what is deemed as evidence of water conservation from microprocessor developers. But regardless, a drought can change the ratio from its industry water use very quickly into an unsustainable rate. And with an industry that is heavily reliant on fresh water drawn from the same water supply of rivers and catchments – the scarcity of water to it cost efficiency will effect the output of chip companies. Which is what we are seeing today in this global computer chip shortage.
But, for the world to revert, at least partially back to analogue technology would be very much a strange paradigm, in a society now so dependent on the digital. Yet, feasible if the chip shortage turns into an inflationary collapse of digital technology.
Authored: A.Glass 2021
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