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The Global Chip Shortage May Be Coming To An End — Here’s Why

China's record-breaking chip output could be part of the solution to finding a PS5 restock or a new Nvidia GeForce RTX 3080

(Image credit: Morozov Anatoly | Shutterstock)

The rather savage shortage of semiconductors has made it stupidly difficult when it comes to finding new tech. The challenges of securing a PS5 restock or finding where to buy the Nvidia GeForce RTX 3080 have seen those chip shortages manifested as a proper consumer tech problem.

But the winds could be changing, as the South China Morning Post has reported that China’s chip makers built a combined 31.6 billion integrated circuits (IC) units in July. That’s a healthy 41.3% increase year-on-year and the country’s highest monthly production yet, thanks to companies upping their output to meet sustained high demand. And more chips may, and we do stress may, mean more parts for the likes of the PS5, Xbox Series X, Nvidia GeForce RTX 3080, AMD Radeon RX 6800 XT and more desirable hardware.

It’s also a modest increase month-on-month, with 30.8 billion units produced in June. Altogether 203.6 billion units have been produced in 2021 so far, 47.3% increase year on year.

As our friends at Tom’s Hardware note, Chinese chipmakers have a harder time sourcing the parts and machines they need due to U.S. sanctions. This is however also part of the reason why the Chinese government is focussing on chip production and offering generous subsidies, in order to make China less reliant on foreign silicon. However this is focussed on China’s biggest manufacturers, with smaller companies facing financial trouble or buy-outs.

But the reports don’t specify what these chips are going to be used for, so we can’t say for sure what tech this boost in production will help. Currently, the PS5 and Xbox Series X get their chips from chip maker TSMC in Taiwan, as do a lot of GPU makers, meaning that they are still at the mercy of TSMC’s chip production.

However, if China makes its chip fabrication appealing to the likes of Sony, Microsoft and others by offering to make the parts they need for competitive prices, then those companies could diversify their chip supply chains. In turn, that could see PS5 and Xbox Series X production ramp up. If nothing else, TSMC may even subcontract its backlog out to one of these Chinese chip makers.

It’s all speculation, but if this does happen the depressing challenge of trying to get hold of new gaming tech could start to abate. Time will tell, but we have our fingers cross that console and graphics cards shortages will start to get better come 2022.

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