Why some used computer parts sell for hundreds

OTTAWA (CityNews) ─ A global shortage of a key computer component is affecting industries from automotive manufacturing to video games and telecommunications, and some Canadians are lining up overnight to get their hands on the goods.

Semiconductor prices have skyrocketed due to the shortage caused in part by the COVID-19 pandemic.

It’s a supply chain issue that means car dealerships can’t get new cars for their lots, and new graphics cards and video game consoles are selling for more than double their retail price online.

In some cases, component prices have quintupled over the past two years.

“I think it’s really unprecedented,” said Sarah Prevette, president of the Canadian Semiconductor Council. “It’s a perfect confluence of factors in terms of growing demand. “

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The pandemic has shifted the shortage into high gear with huge demand for consumer electronics.

But the underlying factors had been in place for years. Most semiconductors are made by a small number of companies, most of which are made in Asia, and most of which were already operating factories around the clock before COVID-19 hit.

“When the companies that make these devices really need these chips for their products – and this ranges from automakers to cellphones – they have to place those orders well in advance,” said Prevette. “The order could be six months in terms of the time from when the order is placed to receipt of the chip. “

For ordinary Canadians, that means either paying the price of a scalper for sought-after computer components or camping overnight when they become available in retail stores.

The Canadians lined up and camped out at an Ottawa-area Best Buy starting at 8:30 p.m. Tuesday when the store announced it would be getting a limited supply of Nvidia 30-series graphics cards.

“The difference in cost to get them to come from here?” It is worth the wait for the night rather than buying them online. You could save $ 1,500 to $ 3,000, ”one person online told CityNews.

“I am here for my little cousin. He needs it to play. He’s trying to build his own PC. If the closest Best Buy that has it, then I went out for it today.

While some planned to use the cards in their own computers, others said they intended to sell them immediately for a quick profit.

“Usually I buy my cards from scalpers so I can mine. But now I’m like, I’m going to try and see what experience you know, the life of scalping, “another man said online.

WATCH: Global Semiconductor Chip Shortage (January 26, 2021)

Recent reports indicate that the shortage could continue until 2023. But Canadian industry is not waiting.

“We don’t have domestic chip manufacturing here in Canada,” said Prevette. “So we have to think about where we can play. Because it is a global market of $ 7 trillion.

The Canadian Semiconductor Council is a group of companies and industry leaders who hope to make Canada a player in the chip market.

There is a lot of work against Canada: Asian manufacturers have decades of experience and government investments. But Canada has a key advantage, said Prevette.

“If we can develop the skills and the talent or maybe the research and development here in Canada – things for which we are recognized globally, our incredible academic institutions – that will give us a competitive advantage at the start of the chain. ‘supply, then being able to negotiate and have leverage to get the supply that could be manufactured abroad.

—With files from Xiaoli Li