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Chip shortage for Datacenter market is worsening amidst low supply from manufacturers

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We all know that currently, tech companies around the globe are facing a severe shortage of semiconductors which has resulted in lower production of CPUs and GPUs. The shortage of supply has increased the prices of the latest released models as demand has overwhelmed the supply.

Just when we got the news that after the release of Nvidia’s latest Hash rate limiter the prices on GPUs are slowly coming down, yet another major bombshell has been dropped in the latest crisis. According to the latest reports, the ICs for servers and data centers might be running out of materials to be produced. Due to the shortage of components production is getting delayed and thus, the delivery lead times for some critical server chips have been extended to 52 – 70 weeks. 

Datacenter chips have been a hot topic in recent times due to the rise of AI and cloud computing, and modern servers use more components than an average consumer’s PC. It’s a well-known fact that when it comes to chip manufacturers and suppliers Data centers are given the topmost priority, however, the demand for data center machines is so high that there are widespread shortages.

The shortage of supplies has limited many companies to limit their production and they have been unable to meet the demand. This in turn limits their ability to grow in revenue, despite strong demand for their products.  

Wiwynn, a company that mostly produces rack servers and has a customer base including Facebook stated that “has been undermined the most by the shortage of switches, as most of its orders are rack server systems.” It even stated that the condition seems unlikely to improve in 2021.

According to sources, the shortage of server components is unlikely to ease until Q4 2021 or Q1 2022, however, many analysts believe that the crisis could be extended through 2022.

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Avatar of Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.

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