Memories of 2018's market crash.
Wɪᴛh tʜᴇ pᴀɴdemic havɪɴg sᴇɴᴛ tʜᴇ wᴏʀld ɪɴᴛᴏ a tech ʙᴜʏɪɴg frenzy, tʜᴇ chips ɪɴsɪᴅᴇ ᴏᴜʀ PC compᴏɴents ʜᴀᴠᴇ ᴀʟʟ ʙᴜᴛ pᴀssed ɪɴᴛᴏ ᴍʏth. And ᴀs mᴀɴufᴀᴄᴛurers scramble ᴛᴏ ꜰɪʟʟ tʜᴇ gap ɪɴ sᴜᴘᴘʟʏ, Jᴏɴ Pedᴅɪᴇ Resᴇᴀʀch hᴀs ɪssued a ᴡᴀʀnɪɴg ᴀʙᴏᴜᴛ tʜᴇ dᴀɴgers ᴏꜰ ᴏᴠᴇʀcompensᴀᴛiᴏɴ.
“The risk," says Peddie, "is that semiconductor suppliers will be lured into over-reaction and believe that suddenly 100s of millions of new users have appeared and the demand will stay high. That’s not only not realistic, it’s also not true—where are they coming from—not this planet?”
This may be a pessimistic outlook, but it is grounded in experience.
While this may be the first time a global pandemic has impacted a chip shortage, it's not the first time we've seen an overreaction to increased demand. Back in 2018 we witnessed Nvidia stock (among others) plummet due to sales falling short of expectation and a crash in cryptocurrency-related GPU sales.Race on
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Now, we're just coming out of a similar spike—this time thanks to a host of intermingling factors that toppled the market to form the tragic state of PC building we're in today—and investors are all aflutter in the fallout.
But Jon Peddie and company are convinced that pandering to the increased demand is a bit of a trap. Nvidia and AMD certainly appear to be a little more hesitant to throw their lot in with cryptocurrency demand than they once were, so perhaps they're already well-aware of the potential dangers ahead.