Growing shortage of chip demand for bitcoin servers

Ahmedabad: Demand for semiconductors has increased due to the growing popularity of Bitcoin across the globe. Given these circumstances, global chip manufacturers are rebuilding their plants to make the chip suitable for the high processing speeds required for bitcoin servers. They are also building a small but powerful nanometer chip that can fetch a high price. However, because of this, car manufacturers and telecommunication device manufacturers are facing a shortage of chips that can be seen for a long time.

Applied Materials, a well-known manufacturer of equipment for chip makers, estimates that it may take 6-20 months for a new plant to start full production in view of the growing demand. The chip shortage began about a year ago.

Hari Om Rai, chairman of Lava International, a company that manufactures mobile devices, said the shortage was longer than expected.

"It will be over in a year, but we believe it could take another six months," he said. "Companies are getting 40-50 per cent less than what they need, which could have an impact on production," Rai said.

Rising demand from bitcoin companies is not the only reason for the chip shortage. Rai believes that this problem may be due to the sudden increase in demand for phones.

Srinivasa Satya, country president, Applied Materials India, said vehicle manufacturers in India and around the world have asked chip makers to reduce their production as vehicle sales and production levels have declined. Importantly, the chip used in the vehicle yields less profit while the chip used in the Bitcoin server has a higher profit margin.