With cryptocurrency pyramids like FTX collapsing, “mining” or verifying blockchain transactions with graphics cards is no longer worth investing in pricey rigs that are very power-hungry.
As a result, graphics card sales are tanking and local shops are starting to offer discounts on them.
With world economies being kicked where it hurts by inflation and reserve banks wanting to drive up unemployment with interest rate hikes, you’d think there would be a market adjustment that would level out supply chain issues.
Unfortunately, it’s not so easy, due to Covid-19. The pandemic remains part of our poly-dystopia and we seem to have run out of effective responses to the virus.
China tried harsh lockdowns and meticulous contact tracing, but gave up on that after people distrustful of the government started rioting against the harsh measures.
Now, and it can’t have come as a surprise to anyone, workers are falling ill in huge numbers which has led to labour shortages everywhere.
That situation is likely to get worse with new SARS-COV-2 variants that evade immunity. Not even Apple has escaped virus worries as its main manufacturing partner, Foxconn, hasn’t been able to produce enough iPhone 14 Pros.
Increasing geopolitical tensions between the West and an autocratic China add to the problem.
It’s hard to see that the threatened attack on Taiwan would be anything but a monumental own-goal for mainland China which still depends on access to global markets, and which trades intensely with the island nation, especially for high-value IT products.
The above assumes rational thinking of course, which has never been a strong suit of autocratic regimes. Like Putin in Ukraine, Xi in China might take a gamble to deflect attention away from local woes, including Covid-19.
If Taiwan comes under siege, it will cause immense human suffering and be a disaster of unheard-of proportions for world economies, as there’s no turning back the tech clock.
We’ll still need faster and more capable chips as just about everything has been “digitally transformed”. Without the required chips, unexpected product shortages pop up.
Take carmakers which have been unable to meet demand as modern vehicles are equipped with multiple computers and electronic computer systems. That will only increase with electric and hybrid cars, and chip makers such as Qualcomm and Nvdia are hurriedly pivoting towards vehicle electronics and infotainment system components.
This is why despite the looming economic downturn, the United States and the European Union are handing out billions of dollars and euros to semiconductor companies to establish local manufacturing of electronics normally made in Asian countries.
South Korea recently followed suit, and will offer massive, 35 per cent tax deductions to semiconductor and tech companies that invest locally.
Earlier on, German chip maker Infineon said it was on the prowl with an acquisition war chest filled with billions of euros. Building new manufacturing and logistics capacity will take years, however, and is likely to raise costs compared to components made in China.
Globalisation certainly disrupted local industries, but it didn’t deliver resilient supply chains, as we’re now finding out at an enormous cost. It’s a giant but necessary transformation for world economies which this year will gather pace, and it’s guaranteed to be a bumpy ride as well.
