Semiconductor chip shortage is now hitting sex toys

Squeeze on microchips could last until 2022 as demand outstrips supply

Graeme Massie
Los Angeles
Friday 30 April 2021 18:42
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Global chip shortage to last into 2022: Semiconductor giant TSMC

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The global semiconductor chip shortage has hit manufacturers around the world and is now causing a headache for the sex toy industry.

Demand for microchips has been growing for the past decade as smartphone usage boomed and computer power increased dramatically.

And the use of semiconductors in products that were once mostly mechanical, like cars, has also spiked with the development of high-tech display screens and in-car electronic systems.

Auto manufacturers were the first to be hard hit by the current shortage when they underestimated vehicle demand last spring and the amount of chips they would need.

Car makers have also faced stiff competition from the consumer electronics industry, which saw a massive surge in business during the Covid-19 pandemic.

Consumers stuck at home during 2020 bought a vast number of laptops, video game consoles and other products as they were forced to work and study remotely, which put huge pressure on supplies.

With the number of available chips dwindling every company that uses them stocked up, creating a scarcity and increasing the cost of the components and the final product.

San Francisco-based Crave Inc., a sex-toy company, says it has been forced to redesign half of its product line because of the chip shortage, and carry out scheduled product upgrades.

The company’s CEO said that a typical product contains 30 different electronic parts, including semiconductors.

Crave began stockpiling chips at the end of last year as lead times, the period of time between a purchase order being placed and the manufacturer fulfilling the order, increased.

“We’re sort of bracing for at least a year and, theoretically, beyond two years,” CEO Michael Topolovac toldThe Wall Street Journal.

The problem is exacerbated by the fact that there is just a small number of foundries, which can cost tens of billions of dollars to build, manufacturing the chips for the $488bn industry.

And 91 per cent of chip manufacturing is done in Asia, mostly in Taiwan and South Korea, and expanding their production capacity can take over a year of tooling up and testing. 

US sanctions against Chinese tech companies have also contributed to the squeeze.

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