Unnecessary Complexity: Why smart technology is really dumb
Semiconductor shortages highlight the vulnerabilities of global supply chains
Originally posted on my Power and Markets Substack, please feel free to share and subscribe to my newsletter to get these articles in your inbox!
Smart tech has infiltrated ours lives. From smartphones to smart refrigerators, it’s impossible to avoid. The goal of these devices is to simplify our day to day, even though they often come with more features than we’d care to learn about. In many instances our lives are made better; however, iterative creep is uprooting the most basic of tasks in rather annoying ways.
Take for instance physical buttons. These are endangered species on many electronics by substituting technology to simulate the real thing. Synthetic clicking through the use of haptic feedback blurs sensation into a mimicked reality. Many frustrated consumers are balking at these changes and simply yearn for the “real thing” that’s becoming harder to find.
Recently, I was in the market for a clothes dryer. Such a simple machine has been overloaded with complicated circuitry. Several models I glanced at came with WiFi. Those were easy passes to make. Consumers want reliability, and such over-teched features scream of breakage.
The issue of unnecessary complexity in all of our products is brought to light with the semiconductor shortage. Much of the world’s chips are manufactured by a handful of companies. Taiwan Semiconductor Manufacturing Company accounted for 54% of total foundry revenue in 2020. 1 When one company is responsible for over half of the globe’s entire semiconductor output, and we’re cramming WiFi into clothes dryers, it’s no surprise a shortage in chips created a logjam in supply chains.
These shortages were evidenced by the response to COVID-19. Durable goods manufacturers projected recession and canceled semiconductor orders accordingly. 2 Due to unprecedented stimulus from governments around the globe, demand quickly surged back. Unfortunately for appliance and car companies, the computer chip industry adjusted and moved on. Cell phones and PCs went through a boom as remote work took off. The reorientation shifted to fulfilling these pools of demand. As a result, corporations who pulled the plug early are still playing catch-up as they are having a difficult time sourcing semiconductors. New vehicle shortages are evident throughout the country.
Companies are making adjustments to the over-teched, over-engineered products they sell. BMW projects the shortages have resulted in 30,000 fewer of their vehicles produced this year. Some of their cars and SUVs are being built and foregoing features precisely because the lack of semiconductors available. 3
Ultimately, I believe there are markets where old tech can flourish. The lack of chips is nagging production lines globally, and this instance may be a time of product divergence. Technology will continue advancing and we’re better for it; however, going back to basics may not be the worst thing, either. There is a definite hunger among consumers like myself who prefer simplicity during our mundane chores. At the very least, don’t give me a toaster with an app, or require a system update on my refrigerator!
Originally published at https://powerandmarkets.substack.com on October 24, 2021.
