Where Did All the Chips Go?

Even though the world has begun to open up, the after-effects of the pandemic on the supply chain are noticeable. Limited shipping containers and flights have created a backlog putting massive pressure on component manufacturers. Where does that leave Africa?

- By Tiana Cline

Semiconductors power the modern world. They’re not only in every single device that we use on a daily basis, they’re a key part of data centers, factories, cars, household appliances, gaming consoles and aircraft. But now, there are simply not enough to go around. As the demand for electronic devices grows, the global chip shortage continues to impact a number of industries and what Africa is now experiencing is less product, significant price hikes and a slower supply chain as big brands prioritize high profits over stocking up the emerging world.

“Because of the chip shortage, logistics has really become a real challenge for us. The North African markets are really suffering when it comes to stock allocations. Distributors would rather service bigger markets where logistics are easier,” says Johannes Groenewald, the head of Demand Factory at the Tarsus Technology Group, an IT reseller with offices throughout southern Africa. Another issue is that 70% of the technology reseller market in Africa is made up of government spend but when the pandemic hit, IT investments were cancelled in order to focus on Covid-19 programs.

“Botswana was our biggest market by quite a margin but for the past two years, they’ve invested nothing in IT purchases,” adds Groenewald. “This puts the market back a couple of years because in Botswana, for example, students get subsidies to buy hardware for their studies. Because the budget has been reallocated, the technology becomes outdated and there is now no availability to supply that market.”