File picture: Reuters/Kim Kyung-Hoon
File picture: Reuters/Kim Kyung-Hoon

Why the semiconductor chip shortage matters to Africa

By Shifaan Ryklief Time of article published Aug 4, 2021

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Cape Town - As technology continues to advance, now more rapidly than before because of the Covid-19 pandemic which has boosted virtual communication, the demand for semiconductor chips has outstripped supply, hampering output from many companies across the globe.

The chips are tiny electronic components or transistors made from silicon which gather and process information and control the movement of electric current from one component to another.

They enable electronic devices to work and their properties can be altered to meet the needs of the components.

Everyday appliances from washing machines to game consoles, as well as laptops, tablets, smartphones, smart TVs and medical equipment have been affected by the semiconductor shortage.

“What it will mean is (the average person) can’t get something, or prices are slightly higher,” Alan Priestley, an analyst at Gartner told CNBC.

According to the South China Morning Post, there are not many companies around the world that can manufacture silicon wafers and older factories have not upgraded their production lines as the technology advanced.

The rapid increase in sophisticated products that now require these chips has increased with the automotive industry being a prime example. Previously, cars needed basic on-board computer systems, but this has changed with the advancement of electric vehicles which rely heavily on the chips.

Another reason for the shortage is Covid-19, which has resulted in lockdowns globally, leading to more people working from home. This has not only made people more reliant on tech devices, but the lockdowns have also hampered production lines.

Geopolitical tensions between the United States and China have also been a major contributor to the shortage, after the latter was as hit by sanctions during Donald Trump’s presidency.

More than five billion people across the world use smartphones and according to a survey done by Research ICT Africa, around two in 10 people on the continent now own a smartphone.

The survey also found that the number of people older than 15 who use the internet has increased from 15% in 2007 to 28% in 2017. The semiconductor shortage will ultimately affect Africans using the internet to grow their small businesses.

The BBC cited the example of Douglas Wanjala and his wife, farmers in Nanyuki, Kenya who run a small business growing maize and potatoes and use their smartphones to market and find buyers for their crops.

While many will feel the impact of the shortage or delay in their favourite products and appliances, those in rural areas will further struggle to connect to the world or access basic information such as weather forecasts for running a farm, finding business investments and access to online education.

African News Agency (ANA)

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