The global chip shortage has led to low inventory and high prices for cars, computers, phones, and more. With long waitlists for new electronics, many shoppers wonder if they should wait for the shortage to end before making big purchases. Here’s what to consider when deciding whether to wait out the chip crisis.
What’s Causing the Shortage?
There are a few key factors behind today’s chip scarcity:
- COVID-19 disruptions – Chip factories shut down early in the pandemic. Production has been constrained since.
- Surging demand – New technologies like 5G and AI require more chips. People also bought electronics for work and school.
- Supply chain issues – Fires, droughts, and storms have impacted chip materials and production.
- Trade wars – Ongoing tensions between the U.S. and China are driving protectionism.
With demand still rising and plants struggling to catch up, there’s no quick fix. Industry leaders say we’re in for another 12+ months of shortages.
When Will the Shortage End?
Though hard to pinpoint exactly, many estimates suggest the chip shortage could improve by mid-to-late 2023. Some tech CEOs remain less optimistic, warning shortfalls could last through 2024.
New chip factories are being built to help meet demand in the next few years. Major expansions are underway in the U.S., South Korea, Japan, and Taiwan. But it takes time to build this infrastructure and get production fully up and running.
The rollout of vaccines and improved containment measures could also minimize future COVID-19 impacts on manufacturing and transport. This may help smooth out supply chain kinks exacerbated by the pandemic.
Which Products Are Most Impacted?
Anything with an electronic component likely uses some type of semiconductor. Here are some product categories facing the biggest inventory crunches:
- Cars – Today’s vehicles require thousands of chips. With low inventory, buyers face huge markups, limited selection, and long waits for popular models.
- Smartphones – New smartphone releases continue as normal. But even giant players like Apple and Samsung have cited supply issues.
- Computers – Leading PC makers have reported double-digit shipment declines amid production delays.
- Appliances – Items like refrigerators, microwaves, and washing machines require chips too. Scarcity has led to low stocks.
- Gaming Consoles – Restock issues for PS5s and Xbox Series X/S consoles have frustrated gamers since 2020.
Should I Wait to Buy a Car?
The car shopping experience is certainly not ideal these days. But experts say the best deals and widest selection may still be months away:
- Dealers have little incentive to offer big discounts when buyers line up for whatever’s on the lot.
- Most models remain either out of stock, backordered, or priced well above MSRP.
- Used car prices keep hitting new records since new inventory is so hard to come by.
Unless your vehicle is no longer drivable, waiting 6-12 months could potentially yield significant savings. Production should catch up with demand by late 2023 or 2024. This will give buyers more bargaining power.
Key Questions for Car Shoppers:
- Is your current vehicle still reliable enough to drive for another year or so?
- Can you afford to continue maintenance, repairs, and insurance payments until the market stabilizes?
- Are you flexible about colors, makes, models, and options? Pickiness reduces chances of finding an acceptable vehicle.
- Is a used car a viable temporary option while you wait out the chip crisis?
If your vehicle is costing too much to keep on the road, leasing for 2-3 years may be the most cost-effective option. This gets you into a newer, more reliable car without paying today’s inflated prices.
Should I Wait to Buy a Smartphone?
Smartphones aren’t seeing the insane price hikes plaguing cars. But new model shortages are likely, especially for highly anticipated releases like the iPhone 14. Here are a few considerations if you’re due for an upgrade:
- How urgently do you need a new phone? If yours is broken or obsolete, waiting may not be realistic.
- Can you compromise on color, storage, or other specs to get a model sooner?
- Are you comfortable buying last year’s version if the latest is hard to find?
- Will you kick yourself if hot new features come out during your waiting period?
Since phones are essential for most people, it may not make sense to hold out indefinitely for the perfect device. Consider your must-have features and buy when you find a reasonably priced model that meets your needs.
Should I Wait to Buy a Computer?
PC and laptop sales took a hit in 2022 with around 10-15% fewer shipments industry-wide. Inventory issues have led to some product delays spanning months rather than weeks. Things to think about if your computer purchase isn’t urgent:
- Are you comfortable using your existing device until late 2023 or beyond?
- Can you manage with a cheaper or refurbished computer for now?
- Do you have specific performance needs that can only be met with the latest models?
- Are you OK potentially missing out on new 2023 features by buying a 2022 computer?
With processors and graphics cards hard to come by, even custom rigs are difficult to assemble. If you rely on your computer’s performance for work or school, it may be worth grabbing something sooner than later.
Should I Wait to Buy Other Electronics?
Gaming consoles, wearables, appliances, smart home tech, and more require semiconductors too. Stocks fluctuate, but popular items often sell out quickly. Things to consider if you can postpone these purchases:
- Can you comfortably use what you have for 6-12 more months?
- Are you OK buying open-box or refurbished items in the meantime?
- Will you regret missing out on the latest features while you wait?
- Are you flexible about brands, colors, and other product specs?
Even products not directly requiring chips are impacted since supply chain slowdowns cause inventory issues across many industries.
Prices and Promotions to Expect
Shoppers who can wait may benefit from improved supply and more sales down the road. Here are some possible price and promotion changes as the shortage eases:
- MSRP prices may decline, especially for electronics that are aging out.
- Retailers may offer new bundle deals as production ramps up.
- Higher trade-in values to entice buyers into upgrades.
- More seasonal sales around the holidays, school shopping period, etc.
- Reduced or waived delivery fees that were implemented during the shortage.
- Lower interest rates if buying big ticket items on credit.
It will be a buyer’s market again once sellers rebuild inventory. Take advantage of sales and discounts when stocks are plentiful.
Alternative Options to Consider
Waiting is tough, especially when your current items are outdated or broken. Here are some temporary solutions while the shortage plays out:
- Continue driving older vehicles and repairing as needed.
- Look at affordable leasing deals to get a newer car for 2-3 years.
- Consider buying used electronics in good condition.
- Trade phones/tablets with friends or family who have upgrades available.
- Repair screens, batteries, or other damaged parts instead of replacing items.
- Explore refurbished or open-box deals on popular electronics.
- Use desktops as temporary replacements for laptop shortages.
Choosing affordable alternatives, repairing rather than replacing, and buying used can minimize expenses until supplies rebound.
Conclusion
Severe chip shortages will likely persist through 2023 and potentially into 2024. The situation should gradually improve as production stabilizes and catches up with surging demand in the next 12-18 months.
Electronics shoppers willing to compromise on brands, specs, colors, and features can often still find devices to meet their needs – even if new or first-choice options are unavailable. However, patience will be required to get the best value.
For major purchases like cars, waiting 6-12 months could yield huge savings, provided your current vehicle remains serviceable. Avoid paying today’s inflated prices if you can swing it.
Resist the urge for instant gratification. The chip shortage will run its course. Stay in close touch with retailers and salespeople to jump on coveted items as soon as stocks are replenished.
