It’s been a cold month in Texas–an Arctic front covered most of the middle and southern American states in snow. Some parts of the southernmost state received over a foot of icy accumulation, and temperatures fell to single digits. While areas of the US can handle those conditions, Texas’s infrastructure was drastically unsuited to the task. When you combine houses with little to no insulation, a lack of snowplows, and a failing electrical grid, you get the kind of tragedy that Texas is slowly recovering from. So much of the damage done has been to the state’s citizens. However, the continual power outages and shutdowns are also impacting technology-focused businesses around the world in unexpected ways.
First, some background: a large proportion of the world’s technology requires semiconductors in order to operate. These are substances that help form most modern circuits, including those in everything from cars to iPhones to refrigerators. Without semiconductor chips, most modern technology cannot function. Because they are so important to modern manufacturing, a shortage of semiconductors can transform from a supply issue to a national crisis. In 2020, experts predicted that a such a shortage was imminent as consumer demand for products like cars outpaced corporate expectations. By January 2021, that shortage was fully realized. Then, the blizzard hit Texas.
Texas hosts the largest amount of semiconductor manufacturing facilities in the country, each of which relies on Texas’s energy grid in order to function. When the blizzard began disabling power plants, several of these manufacturers were forced to halt production indefinitely. For some companies, the uncertainty surrounding the power grid made work impossible. Others shut down voluntarily so that power could be redirected to nearby hospitals and residential areas. Either way, the gap in production represents another blow to semiconductor supply.
As of now, the ultimate impact of the semiconductor deficit is unknown. More important than the immediate supply chain failure is what the situation signifies: uncontrollable physical disasters can have major ripple effects. Whether your business is a semiconductor manufacturing firm or a small local bakery, our modern economy requires some degree of interdependence. You cannot predict everything, which is why a disaster recovery plan is a crucial aspect of any business. If you don’t currently have a disaster recovery plan for your business, consider reaching out to us at email@example.com–we’re always happy to help!