Connect with us

Chip Shortage: Causes, Severity And The Impact On Bitcoin

What are the causes of the global chip shortage, how severe is it and is there any impact on the Bitcoin ecosystem?

Published

on

What are the causes of the global chip shortage, how severe is it and is there any impact on the Bitcoin ecosystem?

Without a steady supply of new chips, our economies would grind to a halt. To get an idea of how important chips are: MOSFETs, semiconductor components of all modern chips, are the most frequently manufactured device in history. It’s increasingly harder to find a modern electronic device that doesn’t contain any chip, as I personally found out the hard way when my toaster broke down because it needed its circuitry replaced. So when we’re talking chip shortage, it’s not just computers and cellphones - it’s almost everything around us that runs on electricity.

A supply chain crisis pertaining to the chip industry is a grave problem. How did we get here?

The Cause

As the shortages and price hikes permeate more and more industries, we seem to always be given an explanation that touches on the special circumstances of the given field, without addressing the elephant in the room: the basic economic fact behind chronic shortages and rising inflation is that money printing isn’t a substitute for manufacturing real goods.

Whether through real health risks or political power plays, the fact is that manufacturing companies, seaports, and blue-collar workers everywhere have been repeatedly prevented from doing their jobs in the past 20 months, which has resulted in less stuff being made and shipped. To make matters even worse, consumer spending has been ramped up by money printing and cheap debt.

To get an idea about the supply and demand gap, consider the following chart. It maps U.S. payroll data and retail sales - which have always been highly correlated - revealing a major split in the metrics over the last year.

Wondering how it is possible for retail sales to skyrocket while payrolls collapsed? The rate of indebtedness and money printing have increased a lot since the beginning of 2020:

These charts show that we have now entered uncertain territory where the official economic policy seems to be to completely ignore the laws of supply and demand. But what seemed to work in the first few months of 2020 is biting us in the bottom fast: when more money chases fewer goods, we will inevitably see high prices and missed deliveries.

Combine the ignorant economic policy with the innate inability to quickly scale up production in the highly-specialized and capital-intensive chip industry, and you have a shortage on your hands that won’t be resolved any time soon. This is because the interest rates will probably stay near zero for the foreseeable future in fears of widespread bankruptcy, so the demand will stay artificially high, while manufacturers will remain burdened by mandatory Covid-19 policies that limit their manufacturing capacity.

The Severity

Even though we live in an inflationary environment, the massive productivity growths in the consumer electronics industry always made our computers, phones and gadgets cheaper and/or more capable over the years. This effect may have come to a halt now, at least temporarily. In the following chart, we can see that since the end of 2020, the producer price index (PPI) for semiconductor manufacturers began to rise.

Image: https://www.gurufocus.com/ sourced from U.S. Bureau of Labor Statistics http://www.bls.gov/ppi/

Rising prices and prolonged delivery times are causing trouble across all industries. Here are just a few examples:

  • Raspberry Pi increased the price of their hobbyist computer for the first time in the company’s history, and reintroduced an older model.
  • Japan car manufacturers are moving away from just-in-time manufacturing - which they pioneered in the 1930s.
  • Intel, Nvidia, and AMD agree that the chip shortage will last at least for another year.
  • Global auto industry expected to lose $210 billion in lost revenue as a result of the chip shortage (revised from $110 billion previously forecast back in May).
  • A kitchen appliance shortage is causing “how to” guides to appear across the internet. There’s something very wrong with the economy if you need to apply specific tactics to how you shop for a replacement dishwasher!

Most industries are expecting shortages to last for the better part of 2022, and probably well into 2023. But things could get worse if something were to happen to TSMC, the world’s largest semiconductor manufacturer,which is based in Taiwan. The biggest risk there is China taking over Taiwan following successful assimilation of Hong Kong, and with China-Taiwan tensions being at their worst in 40 years this risk isn’t to be taken lightly.

The Impact On Bitcoin

In the Bitcoin industry, the effects are magnified by the price hitting all-time highs twice this year, with a strong growth in demand for anything Bitcoin-related, be it ASICs, full nodes or hardware wallets.

ASIC miners have been in short supply for some time now, with prominent Bitcoiners already commenting on this issue in early 2021:

The Chinese crackdown on domestic mining back in June may have eased the shortage for the foreseeable future, since a lot of ASICs are changing their owners on the secondary market. Moreover, a true ASIC shortage would not endanger the Bitcoin network’s security in any way, because a fall in hash rate would simply lead to a mining difficulty adjustment. The blocks would still keep on ticking on a ten-minute schedule.

Popular Bitcoin full-stack solutions such as Umbrel are starting to be impacted, mostly indirectly through the Raspberry Pi shortage, as that is the hardware these solutions usually rely on.

This could somewhat slow down Bitcoin adoption around the world, though Bitcoin full nodes and other Bitcoin-related software such as Lightning node implementations or BTCPay Server can be run on a laptop as well.

Hardware wallets might be the most impacted sector in the foreseeable future, as wallet manufacturers do not wield the negotiating power of smartphone companies and there is no good substitute for consumer-friendly bitcoin cold storage. Sure, experts can build their own Trezor or create a safe environment using air-gapped laptop running Linux, but such an approach isn’t viable for most people that just want to do the right thing and withdraw their coins from an exchange. To satisfy all the demand and prevent stocks from running empty, we can expect backorders and moderate price increases in this industry in the coming months.

The Fiat Illusion

The ongoing supply chain crisis is just another reminder that there is no way around the laws of economics, just as there is no way around the laws of physics. Reality prevails over illusion in the end, and all the debts incurred have to be paid one way or the other.

Fiat money is the greatest illusion of today. It seduces us with the lure of getting something for nothing; of consumption without production. We need to wake up from this collective hallucination before it’s too late to repair our economies. Bitcoin is the wake up call - with sufficient bitcoin adoption, the information superhighway that is the undisturbed price system will work again, and the problem of chronic shortages will be consigned to history.

"Fiat Money Is Babel, Bitcoin Is Clarity"

This is a guest post by Josef Tětek. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Read More

Continue Reading

Uncategorized

Pharma industry reputation remains steady at a ‘new normal’ after Covid, Harris Poll finds

The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45%…

Published

on

The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45% of US respondents in 2023, according to the latest Harris Poll data. That’s exactly the same as the previous year.

Pharma’s highest point was in February 2021 — as Covid vaccines began to roll out — with a 62% positive US perception, and helping the industry land at an average 55% positive sentiment at the end of the year in Harris’ 2021 annual assessment of industries. The pharma industry’s reputation hit its most recent low at 32% in 2019, but it had hovered around 30% for more than a decade prior.

Rob Jekielek

“Pharma has sustained a lot of the gains, now basically one and half times higher than pre-Covid,” said Harris Poll managing director Rob Jekielek. “There is a question mark around how sustained it will be, but right now it feels like a new normal.”

The Harris survey spans 11 global markets and covers 13 industries. Pharma perception is even better abroad, with an average 58% of respondents notching favorable sentiments in 2023, just a slight slip from 60% in each of the two previous years.

Pharma’s solid global reputation puts it in the middle of the pack among international industries, ranking higher than government at 37% positive, insurance at 48%, financial services at 51% and health insurance at 52%. Pharma ranks just behind automotive (62%), manufacturing (63%) and consumer products (63%), although it lags behind leading industries like tech at 75% positive in the first spot, followed by grocery at 67%.

The bright spotlight on the pharma industry during Covid vaccine and drug development boosted its reputation, but Jekielek said there’s maybe an argument to be made that pharma is continuing to develop innovative drugs outside that spotlight.

“When you look at pharma reputation during Covid, you have clear sense of a very dynamic industry working very quickly and getting therapies and products to market. If you’re looking at things happening now, you could argue that pharma still probably doesn’t get enough credit for its advances, for example, in oncology treatments,” he said.

Read More

Continue Reading

Spread & Containment

I created a ‘cosy game’ – and learned how they can change players’ lives

Cosy, personal games, as I discovered, can change the lives of the people who make them and those who play them.

Published

on

By

Cosy games exploded in popularity during the pandemic. Takoyaki Tech/Shutterstock

The COVID pandemic transformed our lives in ways many of us are still experiencing, four years later. One of these changes was the significant uptake in gaming as a hobby, chief among them being “cosy games” like Animal Crossing: New Horizons (2020).

Players sought comfort in these wholesome virtual worlds, many of which allowed them to socialise from the safety of their homes. Cosy games, with their comforting atmospheres, absence of winning or losing, simple gameplay, and often heartwarming storylines provided a perfect entry point for a new hobby. They also offered predictability and certainty at a time when there wasn’t much to go around.

Cosy games are often made by small, independent developers. “Indie games” have long been evangelised as the purest form of game development – something anyone can do, given enough perseverance. This means they can provide an entry point for creators who hadn’t made games before, but were nevertheless interested in it, enabling a new array of diverse voices and stories to be heard.

In May 2020, near the start of the pandemic, the small poetry game A Solitary Spacecraft, which was about its developer’s experience of their first few months in lockdown, was lauded as particularly poignant. Such games showcase a potential angle for effective cosy game development: a personal one.

Personal themes are often explored through cosy games. For instance, Chicory and Venba (both released in 2023) tackle difficult topics like depression and immigration, despite their gorgeous aesthetics. This showcases the diversity of experiences on display within the medium.

However, as the world emerges from the pandemic’s shadow, the games industry is facing significant challenges. Economic downturns and acquisitions have caused large layoffs across the sector.

Historically, restructurings like these, or discontent with working conditions, have led talented laid-off developers to create their own companies and explore indie development. In the wake of the pandemic and the cosy game boom, these developers may have more personal stories to tell.

Making my own cosy game

I developed my own cosy and personal game during the pandemic and quickly discovered that creating these games in a post-lockdown landscape is no mean feat.

What We Take With Us (2023) merges reality and gameplay across various digital formats: a website, a Discord server that housed an online alternate reality game and a physical escape room. I created the game during the pandemic as a way to reflect on my journey through it, told through the videos of game character Ana Kirlitz.

The trailer for my game, What We Take With Us.

Players would follow in Ana’s footsteps by completing a series of ten tasks in their real-world space, all centred on improving wellbeing – something I and many others desperately needed during the pandemic.

But creating What We Take With Us was far from straightforward. There were pandemic hurdles like creating a physical space for an escape room amid social distancing guidelines. And, of course, the emotional difficulties of wrestling with my pandemic journey through the game’s narrative.

The release fared poorly, and the game only garnered a small player base – a problem emblematic of the modern games industry.

These struggles were starkly contrasted by the feedback I received from players who played the game, however.

This is a crucial lesson for indie developers: the creator’s journey and the player’s experience are often worlds apart. Cosy, personal games, as I discovered, can change the lives of those who play them, no matter how few they reach. They can fundamentally change the way we think about games, allow us to reconnect with old friends, or even inspire us to change careers – all real player stories.

Lessons in cosy game development

I learned so much about how cosy game development can be made more sustainable for creators navigating the precarious post-lockdown landscape. This is my advice for other creators.

First, collaboration is key. Even though many cosy or personal games (like Stardew Valley) are made by solo creators, having a team can help share the often emotional load. Making games can be taxing, so practising self-care and establishing team-wide support protocols is crucial. Share your successes and failures with other developers and players. Fostering a supportive community is key to success in the indie game landscape.

Second, remember that your game, however personal, is a product – not a reflection of you or your team. Making this distinction will help you manage expectations and cope with feedback.

Third, while deeply considering your audience may seem antithetical to personal projects, your game will ultimately be played by others. Understanding them will help you make better games.

The pandemic reignited the interest in cosy games, but subsequent industry-wide troubles may change games, and the way we make them, forever. Understanding how we make game creation more sustainable in a post-lockdown, post-layoff world is critical for developers and players alike.

For developers, it’s a reminder that their stories, no matter how harrowing, can still meaningfully connect with people. For players, it’s an invitation to embrace the potential for games to tell such stories, fostering empathy and understanding in a world that greatly needs it.


Looking for something good? Cut through the noise with a carefully curated selection of the latest releases, live events and exhibitions, straight to your inbox every fortnight, on Fridays. Sign up here.


Adam Jerrett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Read More

Continue Reading

Government

The SNF Institute for Global Infectious Disease Research announces new advisory board

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in…

Published

on

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

Credit: Lori Chertoff/The Rockefeller University

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

This international advisory board was created in part to give guidance on how to best use SNFiRU’s resources, as well as bring forward innovative ideas concerning new avenues of research, public education, community engagement, and partnership projects.

SNFiRU was established to strengthen readiness for and response to future health crises, building on the scientific advances and international collaborations forged in the context of the COVID-19 pandemic. Launched with a $75 million grant from the Stavros Niarchos Foundation (SNF) as part of its Global Health Initiative (GHI), the institute provides a framework for international scientific collaboration to foster research innovations and turn them into practical health benefits.

SNFiRU’s mission is to better understand the agents that cause infectious disease and to lower barriers to treatment and prevention globally. To speed this work, the institute launched numerous initiatives in its inaugural year. For instance, SNFiRU awarded 31 research projects in 29 different Rockefeller laboratories for over $5 million to help get collaborative new research efforts off the ground. SNFiRU also supports the Rockefeller University Hospital, where clinical studies are conducted, and brought on board its first physician-scientist through Rockefeller’s Clinical Scholars program. “One of the surprises was the scope of interest from Rockefeller scientists in using their talents to tackle important infectious disease problems,” says Charles M. Rice, Maurice R. and Corinne P. Greenberg Professor in Virology at Rockefeller and director of SNFiRU. “The research topics range from the biology of infectious agents to the dynamics of the immune response to pathogens, and also include a number of infectious disease-adjacent studies.”

In the past 12 months, SNFiRU often brought together scientists studying different aspects of infectious disease as a way to spur new collaborations. In addition to hosting its first annual day-long symposium, SNFiRU initiated a Young Scientist Forum for students and post-doctoral fellows to meet regularly, facilitating cross-laboratory thinking. A bimonthly seminar series has also been established on campus.

Another aim of SNFiRU is to develop relationships with community-based organizations, as well as design and participate in community-engaged research, with a focus on low-income and minority communities. To that end, SNFiRU is helping develop a research project on Chagas disease, a tropical parasitic infection prevalent in Latin America that can cause congestive heart failure and gastrointestinal complications if left untreated. The project will bring together clinicians practicing at health centers in New York, Florida, Texas, and California and basic scientists from multiple institutions to help the communities that are most impacted.

“The SNFiRU international advisory board convenes globally recognized leaders with distinguished biomedical expertise, unrivalled experience in pandemic preparedness and response, and a shared commitment to translating scientific advancements into equitably distributed benefits in real-world settings,” says SNF Co-President Andreas Dracopoulos. “The advisory board will advance the institute’s indispensable mission, which SNF is proud to support as a key part of our Global Health Initiative, and we look forward to seeing breakthroughs in the lab drive better outcomes in lives around the globe.”

The new advisory board will hold its first meeting on April 11th, 2024, following the second annual SNF Institute for Global Infectious Disease Research Symposium at Rockefeller.

Its members are: Rafi Ahmed of Emory University School of Medicine, Cori Bargmann of The Rockefeller University, Yasmin Belkaid of the Pasteur Institute, Anthony S. Fauci, the former director of the National Institute of Allergy and Infectious Diseases, Peter Hotez of Baylor College of Medicine and Texas Children’s Hospital Center for Vaccine Development, Esper Kallas of of the Butantan Institute, Sharon Lewin of the University of Melbourne Doherty Institue, Carl Nathan of Weill Cornell Medicine, Rino Rappuoli of Fondazione Biotecnopolo di Siena and University of Siena, and Herbert “Skip” Virgin of Washington University School of Medicine and UT Southwestern Medical Center.


Read More

Continue Reading

Trending