How the Global Chip Shortage is Affecting Audio Visual Industry
There is a global shortage of semiconductor chips that is affecting the AV industry. AV technology plays a crucial role in the productivity of modern workplaces, and the shortage is directly affecting them. This shortage of semiconductor chips has increased the price of AV equipment and delayed their availability.
Understanding the nature of the shortage and the near-term future of semiconductor supplies will help you manage your budget. This article will provide insight into both issues.
Reasons for the Chip Shortages
Supply Chain Issue
The current supply chain issues with semiconductor chips owes to a reduction in manufacturing and shipping. The pandemic did not really subside the demand for chips. Rather COVID-19 led to the shutdown of manufacturing factories on a large scale which added to the global chip shortage.
Rise in Remote Work
The strong demand for the chips began in the spring of 2020 with a massive shift to remote work. The remote working forced workers to invest in monitors, headphones, webcams, and other home office equipment. People also invested in home entertainment devices. The increase in demand for this electronic equipment was more than supply availability in the market.
Hybrid Office Upgrades
At the same time companies also began to make upgrades to their infrastructure by adding AV suites and devices to support the hybrid work environment. These AV upgrades and new installations demanded advanced AV equipment. This surge in demand from both sides, remote employees, and companies, resulted in a shortage and delays in supply of AV equipment globally.
The semiconductor industry has not been able to meet this strong and persistent demand.
The Current State of Electronic Components
Demand for new semiconductor chips rose 17% from 2019 to 2021. However, supply remained stagnant. Taiwan, South Korea, and Mainland China are world’s major chipmakers, but currently they are operating at 90% of production capacity. This has created a supply bottleneck, as there is not enough shipping, storage, and distribution capacity to keep up with this output.
Such bottlenecks are not easily alleviated. Taiwan alone controls nearly 60% of the world’s semiconductor foundry market. There is little room for competition outside of the latter. It takes time to find the investment and build a manufacturing capacity that could offset these shortages. And one cannot ignore the scarcity of materials and the cost of production.
The bottom line is that even with a concerted effort, it will take years before producers outside of Asia can scale to production levels high enough to alleviate the current supply chain constraints.
How Chip Shortage is Affecting the AV Industry
Every small and big piece of equipment in an AV setup uses one or multiple types of semiconductor chips. Thus, the global shortage of semiconductors and other components is causing shipping delays and price increases for all AV equipment.
Manufacturing a finished semiconductor chip is a complex process and can take up to 26 weeks. While many analysts believe that this current chip shortage will eventually adjust to demand, it is worth monitoring the situation closely.
In fact, individual companies within the AV industry have responded to the global chip shortage by diversifying their supply chains. This step has allowed most of them to meet end-user demand with little or no delay.
Another reason why the AV industry is facing chip shortages is that it’s not a high-priority industry for chip manufacturers. The greatest share of the chip business comes from home entertainment, laptops, and mobile devices. That’s why they serve them first. The same is happening during the global shortages. And this made AV companies vulnerable to sudden sharp declines in the production of semiconductor chips.
How Chip Shortage is Affecting your Meeting Rooms
It’s not as if the whole AV industry is completely shattered due to chip shortages. Companies like JVN Systems are coping well with the situation with their smart planning and diverse supply chain.
However, if you plan to upgrade your current AV suite or install new AV equipment in your meeting rooms, you should carry out the project sooner rather than later. This will help you avoid fulfilment gaps and ensure that the technicians have the AV equipment they need to set up the meeting room. Meeting rooms incorporate all sorts of AV equipment, and more parts mean more delays.
How JVN Systems is Delivering Amidst the Global Chip Shortage
Engineers at JVN Systems are aware of the global shortage of semiconductor chips and have come up with innovative solutions to meet the audio-visual needs of its clients.
JVN Systems has reorganized its operations to deal with the global chip and equipment shortage. We know equipment may take almost 6-9 months to arrive due to the export and import process.
In a typical process, we provide a quote for the AV meeting room — the client approves it — and we start working on procuring the equipment as per the quote. But if one company takes a month or more between getting the quote for the room with a particular set of equipment and then approving it, some of the equipment may become unavailable by the installation time. This situation can delay the entire upgrade or installation project.
To address such issues, JVN Systems is not limited to a singular manufacturer. We are not dependent on only one manufacturer for some equipment. This way, even if one AV manufacturer does not deliver on time or any of the equipment becomes rare at the time of delivery, JVN Systems can tap into other manufacturers. And you get your AV Room setup on time.
These connections with different manufacturers and suppliers give us the capacity to deliver high-quality AV products not just on time but also at much cheaper rates. With our reach with each manufacturer, we can easily substitute one piece of equipment with another without affecting the productivity of the room.
Despite the global chip and equipment shortage, JVN Systems have been standing strong and delivering state of the art meeting rooms on time due to:
- 24+ Years of successful operations and experience in the AV industry.
- Well-honed capability and knowledge of the dynamic nature of the audiovisual market
- The ability to deliver high-quality meeting room solutions across the US.
Experts predict this shortage could last until H1 2023, and the prices could keep rising. So, if you are planning to get a meeting room, contact us, we can help you get it under your budget. Give us a call or fill out the contact form to get an honest meeting room quote.