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A discussion of the causes and effects of the computer chip shortage during the pandemic across the world. What’s the hype around the latest Apple product, AirTags? A quick look at what games our co-host is playing at the moment and why.
Show Notes
If you’re interested in all the latest happenings in and around the tech world and how it affects business, then you’re in the right place! Each month on ScreamingBox Technology & Business Rundown we discuss the latest digital technologies, analyze which technologies are gaining traction in the market, and examine the different ways those technologies are impacting or will affect business in the future. The show features guests who will share how technologies have impacted their lives and businesses and share their unique experiences.
Our guests will include experts in technology and digital development, CEO’s and CIO’s, business analysts, and technology and business thought leaders; who will help us take a thoughtful journey to explore the intersection of technology and business.
Connect with this month's hosts below:
Dave Erickson = https://www.linkedin.com/in/daveerickson1/
Botond Seres = https://www.linkedin.com/in/botondseres/
Kenlyn Terai = https://www.linkedin.com/in/kenlynterai/
Creators & Guests
Host
Dave Erickson
Dave Erickson has 30 years of very diverse business experience covering marketing, sales, branding, licensing, publishing, software development, contract electronics manufacturing, PR, social media, advertising, SEO, SEM, and international business. A serial entrepreneur, he has started and owned businesses in the USA and Europe, as well as doing extensive business in Asia, and even finding time to serve on the board of directors for the Association of Internet Professionals. Prior to ScreamingBox, he was a primary partner in building the Fatal1ty gaming brand and licensing program; and ran an internet marketing company he founded in 2002, whose clients include Gunthy-Ranker, Qualcomm, Goldline, and Tigertext.
What is ScreamingBox Technology & Business Rundown ?
Join us for interesting conversations about technology and the business of IT.
Dave Erickson 00:00
Welcome to the ScreamingBox technology and business rundown podcast. Join your hosts myself Dave, along with Kenlyn, David and Botond on a thoughtful exploration between the intersection of technology and business. Each month we will be looking deeper into the latest technologies to help you understand which technologies are gaining traction, and analyze and examine the different ways those technologies are being applied in affecting business. We will be featuring guests to illuminate how technologies have impacted their lives and their businesses and be able to share their unique experiences. Now let's start this month's rundown.
Dave Erickson 01:11
I have a question. So what is an astronaut's favorite place on the computer? Anybody know?
Botond Seres 01:21
Oh, God. I don't dare to guess.
Dave Erickson 01:25
The space bar YAY (laughs all around)
Dave Erickson 01:36
All right. Well, I guess we can start a little bit. Our topic for today. At least, the main topic for today is going to be the silicone shortage, and how this silicone shortage affects business technology and all types of things in our pandemic, or post pandemic life that will be coming up. But we definitely have a silicon shortage. You know, probably the most obvious news of the week has been that several of the automakers are shutting down some of the production lines, because they're not able to get a lot of the chips they need for a lot of the stuff they've integrated into the cars. Anybody want to talk about what they know about what's going on? Or any thoughts on that
Botond Seres 02:33
Silicone shortage has affected me dearly, personally. And I think it affected me in the same way that many people have been affected by this. And it's extremely painful. So basically, the entire world is unable to get new GPUs. So while I'm really sad that folks who are not going to see this, can't make their new cars with their new hardware bits, it was said about not having access to any new PC components, like I hear the rumors. I hear the rumors that apparently Nvidia came out with a new set of graphics cards, but I have yet to see one in person. So, I don't know about you.
Dave Erickson 03:18
Yeah, I was in that industry for a long time. I did 15 years in the gaming industry and helped put together graphics cards with X FX and Abid and other computer companies. The idea that you can't buy graphics cards because they don't have enough of them. That's really kind of a first, never heard of in the industry before. But you know, the newest graphic card, they're selling it to everybody who has a PC and is a PC gamer because they need to get the frame for a second up. But yeah, that could have a really interesting effect on the gaming industry.
Kenlyn Terai 04:00
Yeah, one thing that was really interesting about what I learned recently was that the reason for the shortage is partially driven by the cryptocurrency and Bitcoin mining because with faster processors the more Bitcoin they can get. So they've actually started to build in like slowing down the cards so that people from the cryptocurrency aren't buying up these, these gaming cards.
Dave Erickson 04:07
The cryptocurrency market fluctuates, right? So when the prices go down, there's not as many people mining and then when the prices go up, everyone buys graphics cards to mine because the graphics cards actually produce a slightly better result when you stack them and do the mining using the GPUs as the processing part. And they have software that basically runs on the server of the PC. So though they actually have motherboards with like eight graphics card slots on them, and they stack graphics card slots on the PC and they're basically processing Bitcoin with all the graphics cards not actually the CPU. So yeah, and I know that Bitcoin and all those had dramatic increases in the last four to five months. So probably there's a bunch of miners out there who you know, are buying 20 - 30 graphic cards at a time, or hundreds of graphic cards at a time, if they're a mining office with, you know, 100 miners in it.
Botond Seres 05:37
As a miner, myself, I cannot get a single GPU. So it's been impossible for me.
Dave Erickson 05:45
I looked at the mining business, like two years ago and just said the electricity wasn't worth it, but, you know, maybe that's now different with the prices.
Botond Seres 05:57
I mean, I hear that in China, electricity is free for GPU mining, for some reason.
David Levai 06:02
Well, actually there's a whole industry built on mining. I mean, there are warehouses, where they are doing crypto mining, and I think that's why you as a single person can't profit from it.
Dave Erickson 06:19
Well, that's definitely one industry that's going to be affected. So gaming, and Bitcoin mining, from the silicon shortage. My understanding is that a lot of the silicone that shorted is the older silicone using older technologies, because that's what a lot of the Bluetooth chips are made from. And a lot of the more common products, and those are really impacted. Those foundries are really struggling to produce those kinds of lower end chips. But it obviously affects the high end stuff too. That's one of the things that we've noticed, and the other is obviously shipping, you know, they're pumping out all these chips, so you have to ship them to various manufacturers, who assemble them on the boards. A lot of that's happening in China. So the foundries in China are shipping to factories in China, who then put the chips on the boards. So, you know, if the manufacturing is done outside of China, then there's a delay of all the shipping issues and all the shipping ports are kind of backed up. So that compounds the problem. The automakers are really the ones in trouble because, you know, they're putting those chips in locally, where they're manufacturing the cars there doing the PCB assembly, you know, in the States or in Europe and those chips have to ship by boat. So that's creating a problem to you know,
Kenlyn Terai 07:55
Yeah, that's a whole can of worms. With with the COVID crisis that we've had, I guess, automakers had actually scaled back their orders from the foundries anticipating that people aren't just going to buy cars but then what happened is that the consumer electronics blew up and then took their place in line.The automakers gave up their spot, the foundries reconfigured their manufacturing and then now that they're coming back, there's there's no production lines for them anymore, because now they're tooled for the consumer electronics, not for cars. So now they're just up a creek.
Botond Seres 08:39
Oh, yeah
Dave Erickson 08:39
Well, I think everybody that affected everybody. I know in the bike industry in the health and fitness industry, last April, they were all predicting doom and gloom, so they canceled a lot of orders for Fitbit watches, Garmin watches, all those kinds of things that are used for fitness and cycling, but the cycling boom, you know, the personal fitness, that's a big boom, that industry has like really grown in the last year, because everybody's trapped in their houses. So all those products that again, use these kinds of more common chips and lower grade technologies than the latest GPU or latest CPUs. They're all struggling. So, auto, health and fitness, medical, all those now want those chips so they can't build the factories fast enough, right. And even though it's happening, most of it, most of that stuff's done in China now. You know, the companies that make the equipment that the factories use for making the chips, some of them are Chinese, and some of them are European and some of them are American. So the equipment is kind of the lead time on building a factory, putting up the walls, putting on the roof and getting the physical building ready. China can do that in a month, but to order all the machinery and some of the lead times on these machinery is six months or a year. So ramping up production takes a long time. It's not like you just say I want machines, and they have them in stock, and they ship them and it's done. Some of these machines, when you ship them, you can only ship them by boat, and a large boat. So it just takes a long time. I read in one article that they're saying it's going to take 12 to 18 months to ramp up production to meet the current demand. And they don't know what the demand will be like in another 18 months when they get the factory built and the machinery in it. It could be that they needed twice as much machinery, because the demand went up even more or it could be that they have less demand because people don't need the products anymore. So there's a real hesitation on how they ramp up and how much they invest in the ramp. It's really a complicated business and logistics problem as well.
Kenlyn Terai 11:19
They started out running behind, because they'd shut down a lot of the production because of COVID. So then, when they finally came back in, after they figured out how to manufacture safely, they were already running behind, and then they had this boom in demand.
David Levai 11:35
What do the impacted companies expect right now? I mean, I've read that Intel and Nvidia don't expect things to get better in the next two to three years. What about any other companies?
Dave Erickson 11:55
Well, you know that, it's kind of a stacking issue. So in the computer industry, a, you know, a lot of the motherboard manufacturers a Zeus gigabyte ASRock those guys, they don't need the CPUs to build products, right, because that's what the consumer buys, but they a lot of them now have onboard graphics so they do need GPUs. But even if they made the motherboards, the consumers could buy the motherboard but they can't buy the chips that go in them. That doesn't allow them to complete the computer. Right? So they're sensing that they're going to have an impact on their sales indirectly because they're built right. Same with, You can buy motherboards, but you can't buy GPUs. And all those companies Gigabyte Asus and ASRock, which are the big three, they all make their own GPUs are basically an AMD or an Nvidia GPU and they're buying the chips from those people and assembling the the cards, but they can't get the GPUs, they can't assemble the card. So, you know, the PC Gamer, which is the biggest buyer of PCs, but also businesses are going to have a real hard time getting new computer components and new parts.
Botond Seres 13:19
I also heard the rumor that Intel is taking a pretty radical step of building a completely new foundry on US soil and expect it to be finished in five years, or something like that. Yeah, so that's, that's the first sim production moving out of China into the US. Let's see.
Dave Erickson 13:44
Well, I think a lot of companies, really felt the impact of the pandemic, and the realization that they had set up their supply chains to be just in time, and to have long channels, outsourcing a lot of materials to China, which is across the Pacific Ocean or the Atlantic Ocean, and not having anything as a backup in the local market, right. The local market in the United States is one of the largest markets in the world, but we moved all of our production to China. Then during the pandemic, they're really starting to feel the effects of that. And so I think you're going to find that some more production will be moving back, not just into the United States, but I think Europe will also be expanding that, because they found that yes, there's a cost benefit to have the long supply chain, the long lines, but if there's a change or fluctuation, it could really damage business. So I think you will see some business not all of it, but maybe 10% Move out of China and back into local markets to make it so that the next time this happens and from what everyone's saying, there will be a next time, right. There will be a different pandemic and a different virus. And whether it happens in 10 years or 30 years, the probability seems high that something's going to happen. So I think a lot of businesses and manufacturers are looking at keeping more of the productions split, so that they have a backup in the local markets. But, you know, until then, we're all suffering from shortages. Some products are not a big deal and other products are. You know, it's really interesting reading about Garmin, and the health industry.Their issue is, that they're actually manufacturing about 20% more, and they're selling about 20% More than they did in the past two years. And so they're importing all this stuff and selling it, but the demand is 40% more. So they're missing out on that extra 20% growth of business, because they just can't get enough product, right? You go into a running store or a cycling store, and it's really hard to find any Garmin stuff, particularly newer Garmin stuff, or Fitbit. They're selling out of it. Right. So that's a big issue. And obviously, in the PC market, you know, that's holding back a lot of game sales and other things. And that's a very big market that had the same problem. Everybody got trapped indoors, so they started playing games more. Actually, I don't have that time anymore to play games, even though I was in the eSports industry for a long time. But Botond, what game are you playing?
Botond Seres 17:00
You mean right now? I just started Outriders. It seems like it's the first legitimate spiritual successor to Mass Effect, which, as a series, died with Andromeda. So for the last eight years, we haven't really had insignificant entries. I mean, we had significant entries, but they were, I think, in the eyes of many huge disappointments, Mass Effect, three in particular was, let's just think about that ending. You played through three of the first games, like 123. All throughout the games, you get told that every single one of your choices matters, everything affects the worlds, the characters in that world and the story. And at the end, you get three distinct endings and the only thing that changes is the color. So you get the green ending, the blue ending, and the red ending. That is absolutely amazing.
Kenlyn Terai 18:01
I want to circle back on what you mentioned about business and you're talking about how some companies are having a hard time meeting demand, because you brought up apple, and I think that one's a really fascinating one, just because now, they actually can't keep their promises or keep their competitive advantage. Well, they're gonna always be competitive, but there's some things that like new features and stuff, they cannot release because of the silicon shortage, for example, like the mini LEDs like things are going to get delayed, or they can't build things in to meet their roadmap, that they were planning on releasing for 2021 In the same way they would have without the shortage. So I don't know, just as interesting to see how it is impacting all kinds of industry.
Dave Erickson 18:55
I think Apple got themselves into a really interesting position. They mostly exclusively build with Foxconn, which is one of the largest contract manufacturers in China and they don't have a lot of flexibility. Apple probably has the money to start up production in the United States or in Europe, and maybe build out stuff but again, 5 - 10 years they might be able to do it by getting everything together and getting those factories running and learning how to do it. But in the short term, there just has to be a short product and it probably will delay product releases, which affects all these developers who want to, you know, get an edge by learning the newest iOS or technology that Apple is going to introduce. That's going to get kicked down the road a little bit a year two years three year delay. So it will affect developers learning new technologies or learning how to apply the new features in software or in phones or in whatever Apple releases. So it will have an effect somehow on the development industry as well.
Botond Seres 20:15
About Apple, I don't know if you watch the new events, which was, I think spring loaded, maybe. And they managed to announce a product that has been in the works for many, many years. And everyone has been anticipating it since at least 2019. And that's the Air Tags. Which, interestingly, includes a completely new technology. I mean, not new, in the sense, it's a breakthrough, but it's, yet another amazing merger between software and hardware, where you have the 3D guide to find your lost keys. I mean, how many times have you misplaced your keys? Well, it finally seems like we have a decent solution. How could it take 2000, more than 2000 years to get here? Like many many 1000s of years.
David Levai 21:18
Yeah, actually Air Tags look pretty great and you can only search for them by directions if it's close to you but if it's not close to you, if you lost it somewhere on the road, or somewhere on the street, it can actually talk with other apple devices via Bluetooth and NFC and you get the exact location of your Air Tag, like, using any other apple devices.
Botond Seres 21:53
Also, it has the coolest feature, like it's not Apple exclusive. There's the first time Apple made something that's not Apple exclusive. So you can just, if you find a tag, you can use your NFC reader on your Android phone and it will, if it's in Lost Mode, it will display a phone number where anyone can reach you to find your stuff. I mean, it's great something not really suited for Eastern Europe, but it's great nevertheless
David Levai 22:21
Actually, it's easier to scan an Air Tag with an Android phone because you can just use NFC and put it to the phone, but if you want to scan it with an Apple device, you have to open the find my application and go to some menu and scan it that way.
Botond Seres 22:42
Oh, but they added an amazing feature about that. So when you slip an air tag into someone's pocket, it will detect that your phone is no longer close to the air tag and it appears to be following the different iPhone, assuming the guy you want to track has an iPhone, and this will warn that person you are trying to track with the air tag that, hey, someone seems to be trying to track you with this device. That's absolutely amazing.
David Levai 23:12
Yeah, so if you have an Android, anyone can track you with an air tag? You say this?
Botond Seres 23:20
I guess so I mean, we live in a world of endless opportunity.
Dave Erickson 23:26
Yeah, might be an endless opportunity, but we will see how that market goes. I can imagine if you have five kids, and they're all running around, you put air tags on them, you'll be able to figure out which ones are where.
David Levai 23:41
I think Apple only said, please don't use it to track your kids because they don't want to get sued for lost kids, who might try with air tags.
Kenlyn Terai 23:56
Yeah.
Botond Seres 23:59
The range is not so hot. It's like 40 feet, 30 feet, something like that. So that's what, like a couple meters.
David Levai 24:10
I've already ordered one for my dog.
Dave Erickson 24:17
Well, hopefully the chip shortage won't affect that too much. I don't know about the Air Tags. There is probably some little radio inside the Air Tag that talks to something either the Bluetooth or on the GPS. I don't think it's Bluetooth. What was the range again?
Botond Seres 24:40
That's like, it's like Bluetooth v4 range, thereabouts. So they're using this.
Dave Erickson 24:46
Maybe they're using a Bluetooth chip or something.
Botond Seres 24:50
They're using an in house chip the same thing they use in air pods.
David Levai 24:54
Yeah, I think that's something you can use it for. It's some kind of a modified Bluetooth chip. I think it can show you the exact directions from 30ft to 40, maybe.
Botond Seres 25:07
60 in the best case, but that's stretching it.
Dave Erickson 25:16
For the Air Tags, what kind of development or business applications do you think will arise for development opportunities for them? We kind of explained a couple of them that are like finding things, but are there other applications that businesses can use them for, maybe material tracking or something like that?
Kenlyn Terai 25:42
Yeah, probably like supply chains or maybe even I wonder if medical devices could use them somehow, because they have such a specific tracking for each device. I wonder if that could be useful there.
Dave Erickson 26:01
I know that RDF tags are used in a lot of industries. I assume they're different from what Apple's doing. Apple may use something different. I think those tags are more a tag where you scan them, but they also involve tracking somehow. I don't know if they're the same thing.
Botond Seres 26:25
Well, as far as I know, RFID is usually a passive thing. Whereas the air tag is an active sort of thing. Even though it doesn't have GPS, it can communicate its ID, and try to find other devices in range. So they have this sort of net where if you put it in lost mode, and someone walks by it, it can update the location via GPS from the phone. So without RFID, you couldn't really do that. Technically, it would be possible, but this would be very difficult to carry a device that constantly reads RFID codes off of everything. Like then at that point, you're basically walking around with a credit card skimmer.
Dave Erickson 27:20
Maybe we go on to the next topic, we're talking about Apple Air Tags, but we can segue into our next topic, which is about facial recognition. We can kind of have a conversation about life in facial recognition land. Because even with things like air tags and other things, security is gonna start becoming more and more of an issue. As you get more devices that allow people to access technology. I think it's even going to come up in the automobile industry, that the only way you could use the electronics in the car, you know, with electric cars, you don't need keys and other things. Facial recognition may come into play there. Right.
Kenlyn Terai 28:11
That is a good segue. I was thinking with the Air Tags, there's probably like potentially some privacy concerns there. How much can they extend the use of it beyond what it already does without infringing on privacy in some form, but then that's what we're talking about with facial recognition. There are a lot of ethical considerations there. How do you confine that to the specific purpose and it's intended for and not for something else?
Botond Seres 28:48
It's also a question of ethics. Is it ethical to put up facial recognition towers around town?
Kenlyn Terai 28:57
Yeah, because Amazon home, they have these cameras, I guess in the front, these security cameras, but apparently they can store a recording. I was listening to a newscast that said that this person was able to be tracked, like just up and down the street, because so many people have these Amazon cameras or security cameras, how much security is now infringing on, just privacy?
Botond Seres 29:30
We gave up privacy a long time ago, in favor of better, personalized advertisements that happened decades ago. I think the most amazing story about this one is a book written by a researcher who was doing some research and development for targets. Target systems back more than a decade ago were so refined that they could predict that certain life events are happening, and then send coupons or discounts for whatever is required for life events. So it was like a huge controversy that a father found out that his teenage daughter was pregnant, because Target kept sending them coupons for diapers and baby formula.
Dave Erickson 30:31
Yeah, that could be an effect.
Botond Seres 30:35
This ship sailed such a long time ago.
Dave Erickson 30:43
Data privacy, and how to access your data, I think is gonna become a bigger issue. I think as more people's personal data gets leaked on the Internet and other places, there's going to be a revolution in a sense in data security. You know, Europe has GDPR and now California has their version of it. I think that's going to become more and more important. And I believe that facial recognition is going to really be a key, but it's not a proven technology, it has errors, and people can manipulate it and use it. I think that those solutions have to be solved and I think that's a great opportunity for developers to work with it, but there's a hardware aspect of it as well. I think there's a great opportunity for that. But you know, at what point does it become a privacy issue? Police and government doing facial recognition, and then tying you to some event or something, but then if there's an error rate of 10%, then 10% of the population might get in trouble without any recourse. So that's something that's going to have to really be refined and resolved for facial recognition to work. But on the other hand, there's great opportunity and it is a great benefit to secure your data without having to go through a lot except to just take an image of your face. But they have to figure out how they can make it so it can't be forged and hacked, right? Because if it's recognizing somebody through an image, that image can be transferred, manipulated, and other things. So I think facial recognition has to address those questions. Plus, in some countries, it might be really sensitive, and they might not allow it. And in other countries, they don't care. So there's got to be a lot of other stuff that is mixed with it.
Botond Seres 33:02
And there's also a question of what we can combine the AI with, especially the European legislation, which doesn't specifically say that facial recognition is going to be illegal. It is proposed to make the use of AI software to aid in facial recognition should be illegal. Since when you introduce AI, you introduce an error rate that is huge. I mean, depending on the datasets that you feed a developing AI, it can come up with some pretty interesting results. I think we can find a great picture from when they fed the data set to an AI with pictures of chihuahuas, faces of chihuahuas and cookies and at the end, it couldn't tell the difference. Until many, many training cycles.
Dave Erickson 34:03
Yeah, you know, facial recognition, the advantage of facial recognition is that everyone's faces are unique. The problem with facial recognition is people's faces change over time. So that's going to be a big challenge to the industry. So probably the applications for facial recognition in the beginning are going to be more simplified and orientated around access. Even then, they are still going to have to solve the question about how to make sure that that access is given to the right person and that somebody isn't hacking into something. You've all seen those movies like with the eye scanners, where they kill the guard and take his eyeball out and stick it in front of the scanner, right? With facial recognition, they may be able to do the same thing or something similar, the same concept, right? So we're gonna have to figure that one out.
Botond Seres 35:15
It's an interesting question with biometrics. So this has been a debate for as long as I can remember, like, how do you tell if the person you're trying to authorize for entry is alive or not? So in the case of fingerprint sensors, this is usually done by measuring heat and pulse, these two things. And I think the eyes, I'm not sure how it's done, maybe it's a pupillary response, but I'm not entirely sure. Facial recognition should be relatively simple. I mean, the solution that we've seen hit the market is just eye tracking. So if you are actually looking at the device, then it's able to be unlocked or authorized.
Dave Erickson 36:07
Well, we will see where this future goes. Well, that was fun.
Dave Erickson 36:15
Well, thank you very much for taking this journey with us. Join us for our next exciting exploration of technology and business on the first week of every month and for our next podcast. Please subscribe, like and follow us on whichever platform you're listening or watching us on. We hope you enjoyed this podcast, and please let us know any subjects, topics, or anything else you'd like us to discuss in the next podcast on the comment sections or in a Twitter DM. Until next time, please stay happy and healthy.