and you still can't buy a PlayStation 5.

Not only that, Samsung is raising concerns

about chip shortages for its phones.

And Foxconn says that it might have part issues until 2022.

It's not just tech companies either,

car companies like Ford and GM

have also had to push pause on manufacturing.

There's a big problem with computer chips right now.

There's just not enough of them to go around.

- [Reporter] Massive worldwide chip shortage-

- Earnings being cut by up to $2 billion-

- We don't have these chips, we're in trouble.

- There's a lot of reasons why this is happening right now.

Slow downs from the COVID-19 pandemic,

a spike in demand of laptops, gaming PC parts,

and of course,

next gen consoles while everyone's been stuck at home,

and lingering effects

from former president Trump's trade war with China.

It's a decades-long problem, though,

that's been building towards this moment.

- Let's take a step back year, 2000.

We used to have around 30 companies

they make their own integrated circuits,

but then they discovered that it's cheaper to outsource.

- [Chaim] So while almost every major tech company,

with one or two exceptions,

says that they design their own chips,

the reality is that the actual production

is done by just a handful of companies.

- And we promised that the first Mac with Apple Silicon

would arrive by the end of this year.

Well, that day is here.

- So when Apple says

that it was making its own Mac processors last year,

that was technically true.

Apple does design those chips

using designs it licenses from ARM,

but then it ships those designs off

to other companies to build.

In fact, Sony, Apple, Microsoft, Qualcomm, AMD,

and Nvidia all use the same company to build their chips,

TSMC, or Taiwan Semiconductor Manufacturing Company.

And even Intel, which is one of the few companies

that does make its own chips has announced

that it'll also be outsourcing

some of its more advanced manufacturing

in the years to come.

- We are increasing our engagement with TSMC,

Samsung, Global Foundries, and UMC.

- In real terms, what that means

is Intel's been struggling to keep up

with TSMC's manufacturing techniques,

and that's left it vulnerable to competitors like AMT

which does outsource its chip manufacturing

and has been able to benefit

from those more advanced techniques.

(upbeat music)

Trump's trade war with China further complicates things.

On the one hand,

it's made it harder to work with Chinese chip companies,

putting a further strain on that supply.

On the flip side,

Trump's limitations on companies like Huawei

from using US designs means less demand

for chip manufacturers like TSMC,

at least in the short term.

Meanwhile, global demand for chips is greater than ever.

- Time has changed and also technology has changed.

So now we're no longer thinking a chip

is using by a computer is can have so many applications.

I think that you differentiate your products in the future,

they realize that actually the chip

could be the key differentiating factor.

- [Chaim] You're not just fighting against everyone else

who wants to buy a PS5,

you're fighting against everyone

who wants to buy an RTX 3090, an M1 Mac,

a Qualcomm-powered smartphone, a Ford truck, and more.

(gentle music)

- So now I think that the pendulum

is swinging back to the other side.

He say, "Hey maybe we need

to have some domestic supply chain

such that in case of emergencies or disruptions,

at least there is some capability

within the domestic region."

Intel has just announced

they're going to invest $20 billion in Arizona.

At the same time, also TSMC from Taiwan,

they're going to build a facility in Phoenix.

I think that that is only the first wave.

- Intel also plans to start manufacturing chips

from other companies with interest from IBM,

Microsoft, Qualcomm, and Google.

And adding another major semiconductor manufacturer

to the mix, especially one that won't have to deal

with trade wars, tariffs,

or security concerns from abroad

could have a big impact, eventually.

- To build a semiconductor manufacturing facilities,

it takes a long time.

Intel or TSMC, they are under the gun

to create more capacity, but it will take years

to build a brand new facility.

(gentle synth music)

- But these changes are going to be a ways off,

and while they might help things down the line,

the only real solution to this shortage might be time.

- So I think that's the move that Intel is making.

And also in terms of TSMC, investing in Phoenix

is a good first steps,

so I think that we are in the right direction.

Because I think that you look at the 5G rollout

and the internet of things,

and so there will be huge demand for this kind of high-tech.

- In the longterm, this could be a catalyst

towards a much more efficient supply chain for chips,

possibly for other manufacturing too,

which means that you'll probably still have to wait a while

before you can buy a PS5,

but it could mean that you won't have to wait as long

before you can buy a PlayStation 6.

Thanks so much for watching.

If you wanna learn more

about the semiconductor supply chain,

or when you can finally buy a PlayStation 5,

check out theverge.com,

we'll have tons more on the YouTube channel,

like and subscribe, all that good stuff.