The global microchip shortage, caused by the coronavirus pandemic and other supply chain disruptions, has created significant delays in fulfilling orders for many types of electronic devices that require these components. Automotive OEMs, mobile device manufacturers and GPS device manufactures have been particularly hard hit by these shortages.
It is more important than ever before for buyers of these items make an effort to forecast their needs as far in advance as possible. Fleets and other companies that use telematics devices are being encouraged to assess their needs and provide these forecasts to their suppliers to help prevent business disruptions that are likely to occur of orders can’t be fulfilled in timely fashion.
“One of the consequences of the COVID-19 pandemic has been a chip shortage that is impacting fleets worldwide, as well as any business that uses electronic devices,” said Randy Read, Co-Founder of EnVue Telematics, a leading supplier of telematics devices and connected solutions. “The shortage is beyond our control, but we’ve been getting the word out to our clients to encourage them to share their new device needs with us for the coming three to six months and beyond, if possible.”
What Led to the Global Microchip Shortage?
One of the sure signs of the shortage is the fact that auto and truck manufacturers have slowed production of new vehicles as demand for chips outstripped supply. However, vehicle manufacturers aren’t the only industry facing a shortage. Demand for microchips is high in many sectors, including transportation, telecommunications, cloud-based storage and appliance manufacturers.
Supply chain disruptions caused by the global pandemic have led to the shortage in microchip supply, as have strained relations between the U.S. and China and sanctions against Chinese tech companies.
Consumers also led to tighter inventories as people stocked up on laptops, gaming consoles and other electronics during the pandemic, according to Reuters. People also bought more cars than expected in 2020, putting more strain on microchip supplies.
Most expect the shortage to last through 2021. But telematics device leaders such as Geotab expect supplies to increase as the year progresses, especially as the third quarter of the year begins.
How EnVue Is Helping Clients During the Global Microchip Shortage
While there is no way to guarantee order fulfilments lead times, EnVue Telematics is working with clients to ensure they have looked down the road at the new devices and upgrades they need throughout 2021 and into 2022.
Ordering devices in advance is the only way to ensure companies get what they need on time, as there will be an expected 60 day lead time on orders. This is especially important for upgrading any equipment that currently works on the 3G network, which cellular companies are ending by the close of 2021. “Clients who can proactively plan their telematics needs in the coming weeks and months will help us get them the devices they need on time,” said Read. “We’re encouraging every client to reach out to us so we can work together on this important issue.”