Posted On:

May 3, 2023


The Importance of Electronic Components: A Lesson from The Chip Shortage

As technology has advanced, the importance of electronic components has grown as well. Electronic components are electrical elements that have terminals allowing them to connect to other components. There are two types of components: active and passive, both used to build functional devices. For instance, a tiny chip that contains a collection of electronic components like resistors, transistors, and capacitors is called an integrated circuit (IC). These ICs are the foundation of modern electronics, all built from electronic components.

Everything from smartphones to vehicles, medical and military equipment, rely on these components. Billions of transistors power the microchips at the heart of these ICs. For instance, Apple’s A15 Bionic chip, which powers the iPhone 13, requires 15 billion transistors.

As Chris Miller notes in the Introduction of Chip Wars, “Strategists in Beijing and Washington now realize that all advanced tech – from machine learning to missile systems, from automated vehicles to armed drones – requires cutting-edge chips, known more formally as semiconductors or integrated circuits.”

The simple fact is that computers and processors need chips, which means they also need electronic components. With nearly everything needing chips, even down to cars, washing machines, and refrigerators, you can see how supply chains are heavily reliant on them.

The Chip Shortage’s Ripple Effect on Global Economics

The 2020 COVID-19 pandemic significantly disrupted supply chains and logistics. The availability of key chips needed to manufacture electronics was affected, and with so few manufacturers of electronic components in the world, the ripple effect was felt globally across various industries.

This dependence on a handful of companies to produce a majority of the world’s electronic chips resulted in a scramble for solutions to the chip shortage. On August 9, 2022, President Joe Biden signed the CHIPS and Science Act into law, providing about $280 billion in new funding to boost domestic research and manufacturing of semiconductors in the United States.

However, the CHIPS Act isn’t without its scrutiny. The challenge of providing the sheer number of skilled laborers needed to employ the plants will likely be a struggle, not to mention the time it will take to even build the manufacturing plants.

The Future of Sourcing Electronic Components

The unforeseen effects of the pandemic on the chip industry are still ongoing. The automotive industry is slowly trying to recover after its production lines ground to a halt.

The importance of electronic components cannot be understated, as they are the fabric on which our modern technological society relies. Life-saving medical devices that use computing power depend on electronic components. In short, lives can be saved with these tiny electronic components.

With so much uncertainty in an ever-changing marketplace, it’s essential to act before a critical issue arises. Direct Components Inc. has over 25 years of industry experience in helping companies source hard-to-find electronic components. Despite the uncertainty of semiconductor manufacturing, DCI is your direct source for quality components. Thanks to our state-of-the-art in-house lab and climate-controlled warehouse, Direct Components is here to source and deliver electronic components as seamlessly as possible, and at price points that work for you.

If you need specific parts, reach out directly with your RFQ. Or, submit an excess inventory list to help recover some of your production costs.

Related Posts

Chip Supply Chain Chokehold

The Chip Supply Chain Chokehold

Semiconductors are integral to today’s modern world. Smartphones and computers are the most obvious objects that utilize semiconductors, but consider all manner of transportation, too.

Navigating a Worldwide Chip Shortage

Written by Aaron Nursey, Founder and CEO/President of Direct Components, Inc. The past two years have brought a unique set of challenges to businesses of

Quality Policy

Direct Components is committed to customer satisfaction by supplying quality products and services on time, while maintaining unsurpassed levels of ethical standards. Our quality goals are achieved through continual process improvement, adhering to applicable requirements, innovation, ongoing training, and teamwork.