Global Chip Shortage & Turkey

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Global Chip Shortage & Turkey

   The global chip shortage had a number of causes and a good number of negative effects on the Turkish population. To this day, there has been no concrete solution made to solve the issue. Ever since the pandemic began, the prices of computer hardware have increased exponentially due to the supply-demand imbalance. According to the article "Salgın sürecinde tablet bilgisayar satışlar katlandı" published by TRT Haber, a Turkish news agency, sales of computer systems in Turkey increased by 113 percent in 2020. (A, 2021). This issue notably affected the prices of graphics cards, which increased by over 200% (Walton, 2021).

As we move towards the digital era, increasingly commodities rely on computer chips, and as a result of the chip shortage, development in the power, automotive, and electrical industries suffer (Baraniuk, 2021). As the Turkish economy disintegrates, citizens are struggling to obtain new devices for work, education, or to upgrade their outdated systems; small organizations that now have to operate online have a sudden surge of clients on their web services, and they must now modernize their infrastructure to handle the number of clients to stay up and running, but at what cost? (Nandor, 2021)

As consumer electronics costs rise owing to the supply-demand mismatch, compared to pre-COVID-19 levels—there are 'scalpers' who acquire computer components in bulk at MSRP to obtain a better bargain, then sell them to the general public at an outrageous premium (Schiesser, 2019). Unless you have a lot of money to spend, you're stuck with whatever you have for the time being, and this has become a huge impediment for individuals who just couldn't afford electronics to begin with since they are now barred out of the online world, whether they're working from home or doing distance education.

Unfortunately, there is no current support from the Turkish government to help mitigate the problem of cost. The slight solution is that they offer a limited number of android tablets to individuals who cannot access the e-education platform, however, this is done on a very small scale and cannot solve the issue on a large scale, let alone on the core. Furthermore, there are no incentives on innovating new technologies locally as it is very convenient to just import advanced technology.

The chip scarcity has had a significant impact on Turkish residents' everyday life, and a solution must be found as soon as possible to avoid the situation from worsening. 

About the Chip Shortage

Here are our perspectives on the issue, along with our proposed solutions

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Bogdan Itsam Dorantes-Nikolaev
Computer Engineering Student at MEF University

Turkey has no in-house chip designers or manufacturers, relying on outsourced/imported technologies, designs, and production. This is the major local cause of the chip shortage, which has a wide range of negative consequences.

The largest consequence is that Turkish residents are susceptible to market price fluctuations of foreign products [chips] owing to a supply/demand mismatch.

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Tan Bayav
Mechanical Engineering Student at MEF University

With the ongoing chip shortage combined, Turkish residents have seen consumer electronics' prices skyrocket. Retailers haven't done anything to ease out the situation leading to high demand products like graphics cards to be hoarded by select individuals.

This created a "black market" for high demand products where people who were able to buy out all available stock would mark up the prices and sell them for unfair prices.

Bogdan's Solution
Domestic Design & Production

To minimize reliance on foreign technology and avoid being affected by overseas pricing, regulations, and potential sanctions, I believe the optimum solution is to begin producing homegrown chips and processors.

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Tan's Solution
Purchase Limits for High Demand Items

To mitigate the most felt effects of the ongoing chip shortage, my solution focuses on distributing what is already available evenly. This way consumers will be able to get what they need at reasonable prices.

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