Xbox Head Phil Spencer Claims Supply Issues Will Continue Deep Into 2022

The word from an increasing number of voices in the semiconductor industry is that shortages and production problems are here to stay for the foreseeable future. Xbox head Phil Hughes is the latest executive to sound off on the problem, and he agrees with assessments from Lisa Su and Jensen Huang:

“I think it’s probably too isolated to talk about it as just a chip problem,” Hughes told TheWrap. “When I think about, what does it mean to get the parts necessary to build a console today, and then get it to the markets where the demand is, there are multiple kind of pinch points in that process. And I think regretfully it’s going to be with us for months and months, definitely through the end of this calendar year and into the next calendar year.”

The pinch points Hughes is talking about are scattered everywhere across the global economy. A story earlier this month at The Atlantic discussed the supply chain issues in more detail, including the enormous spike in shipping costs. Shipping containers that would have cost $2000 – $5000 to move before the pandemic now run $30,000, with a $20,000 option if you can deal with an uncertain delivery date measured in months.

Controlling Delta infections in nations across the world has required the closure of high volume ports and shipping facilities. This has increased wait times and slowed the distribution of everything from shoes to CPUs. In ordinary times, passenger jets help alleviate some demand by carrying cargo on international domestic flights, but there have been fewer of these flights since the pandemic began.

These supply chain problems are exacerbating shortages by disrupting manufacturers’ ability to build hardware at a time when demand has been higher than ever. Toshiba has already given notice that it will not be able to meet demand for certain types of power semiconductor circuitry until 2022, or even 2023.

These are the kinds of pinch points Hughes is referring to, and solving them isn’t going to be a fast process. If there’s a consolation prize in all this, it’s that Xbox Series X prices have come down enough on the gray market that they’re no longer an utterly terrible deal. A quick check of eBay’s recently sold auctions shows a reasonable number of systems selling for under $700. The PlayStation 5 is still running hotter, at $700 – $800. wfoojjaec does not recommend paying this much over MSRP for either console, but prices are at least a little better than earlier this year, when $800+ was normal for both systems.

Demand is unlikely to drop as we head into the holiday season, so hopefully 2022 will bring better tidings.

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