Has the cost of hardware investment gone up?

Component costs for PC systems and similar on the rise

One Dollar Bill

Since 2020, you may have noticed a trend in the technology sector: rising prices. When it comes to parts requiring specific components like chipsets and semiconductors, there’s a notable jump of low-to-mid tier hardware rocketing into the hundreds. CPUs and GPUs have seen some of the biggest price hikes, making it challenging to invest in new hardware. As an SMB, it can be especially problematic when building new infrastructure requiring an investment of dependable setups.

Things like business and enterprise laptops can make a huge difference in productivity, especially with increased reliance on remote working.

This creates a problematic cycle. Demand for limited supplies goes up, which increases prices. Supplies are further limited by the demand, and so it goes until the shortage is addressed. Some expect price bumps and the shortage to continue throughout 2022.

What caused the overall shortages?

Plenty of factors fall into the “why.” As you have likely guessed, the COVID-19 pandemic kickstarted shortages across the globe. And though said shortages were not limited to just technology, the sector has still been heavily impacted.

COVID-19 did a lot of things. On the business side, many SMBs were forced to close. Survivors switched to remote working, spiking demand for remote-ready systems, hardware, and devices. COVID also caused production shortages due to lack of labor. Safety mandates, loss of life, and COVID protections created a fault line in manufacturing operations. Those operations included production for components to build GPUs, CPUs, and other critical hardware.

But rising costs don’t deter demand. For enthusiasts and business owners alike, the need (and want) of strong hardware remains consistent. The problem is, ergonomic, affordable components are now priced much higher.

Bitcoin Mining and Shortages

The problems caused by bitcoin are multifaceted, but issues revved up in early 2021 by contributing to the overall hardware and chip shortages. Bitcoin farms, entire hubs with bought GPUs and other processing units, were used to rapidly farm Bitcoin or other cryptocurrencies.

“Farms” operate in warehouses where racks of GPUs and processing platforms mine the digital “currency.” Often, these farms house hundreds of individual units, all of which make use of the affordable components used for other electronics. In 2021, this farming led to shortages of semiconductors.

Aspects like what I’ve talked about thus far are all causes of both shortage and price rises. The more pressing question is, though, when will it finally end?

Ending the hardware and chip shortages

Depending on who you ask, the shortages are expected to last well into 2022. Deloitte, for example, predicts the shortage will persist throughout 2022 and into 2023, impacting market sectors and users differently depending on the semiconductor/chipset need. In response, there’s a heavy emphasis on companies and venture firms to focus on semiconductor production to meet the demand. Because, despite shortages, the need for chipset technology remains high.

If you’ve noticed the spike in prices and additional difficulty of acquiring new hardware for your enterprise (or personal use), these factors are the primary culprits.

If your SMB is struggling with resources and infrastructure, getting assistance can help. Consider contacting Bytagig for additional help by contacting us today.

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