Microsoft: Component Shortages Not Going Away Any Time Soon

An anonymous reader quotes a report from ZDNet: In reporting its Q4 FY21 earnings, Microsoft disclosed that both its Surface and Windows revenues were affected negatively by supply-chain constraints. While remote work has continued to fuel PC demand, Microsoft and its OEM partners have had problems getting enough components, including chips, power cords and other electronic components that are required for new PCs. In Q4, Microsoft's Surface revenue fell 20 percent, to $1.38 billion in the quarter. The year-ago quarter comparison was tough because Surface and other Windows PCs saw lots of demand as people needed to buy PCs to enable them to work from home. Chief Financial Officer Amy Hood told analysts on the earnings call that Microsoft anticipated that Surface revenues would continue to fall next quarter due to supply-chain constraints.

Supply-chain pressures also will continue to impact Microsoft's Xbox gaming consoles and PCs made by its partners, company officials conceded. Hood told analysts to expect Windows OEM revenues in Q1 FY22 to decline mid to high single digits and Surface revenue to decline by low teens. The Q4 numbers released today had Windows OEM Pro revenues down two percent compared to the year-ago quarter and non-Pro (consumer) OEM growth off by four percent. Supply-chain constraints don't seem to be impacting how quickly Microsoft can continue to build out its cloud footprint, however. Hood and other officials expect Microsoft to continue to grow its commercial cloud businesses, including Azure, Office 365 and Dynamics 365. Azure was up 51 percent (from some undisclosed base number) for the quarter and Dynamics 365 was up 49 percent from some undisclosed base -- its third consecutive quarter of growth.

This is my big chance

[marcle]

I've got a bunch of old IEC power cords sitting around -- I could sell them for big bucks and make a killing!

Think of the little guys

[labnet]

We are in the SME manufacturing segment ($15M/annum)
It hell for the little guys when the big guys use their muscle to buy up everything in sight!
Chips we have have been buying for 15 years with no problem have now gone on 52 week allocation..
Try buying anything by Microchip Semi... nada it nuts out there.

Re:

[Archtech]

So much for the "free market"...

Re:

[Linux Torvalds]

The chips in question only exist because of the "free market," but don't let the facts interrupt a good howling, gibbering anticapitalist rant.

I suspect covet is still hitting really hard

[rsilvergun]

And China just isn't talking about it. Even if you don't care if people live or die if they're too sick to get out of bed and go to work that's going to delay production. Sure would be nice if we had a functional government that would build out the infrastructure needed so that we weren't dependent on Chinese manufacturing. but at least we preserve the filibuster right?

Re:

[Your Average Joe]

for 3 decades we knew it would be better to run fiber to the home and it still is not done. It took over 5 decades to get copper to every square mile in the USA so we could do morse code or an analog phone call.

The telephone oligarchs said you rural Americans mean nothing until you have a million customers for ISDN, DSL or whatever they want to deny rural America. This is how capitalism works when we feed the same companies with federal grants or loans.

The COVID stay at home pandemic was proof that ALL Amer

Windows 11

[ChunderDownunder]

Which makes the spec bump for Windows 10 21H2, aka Windows 11 all the more puzzling.

None of my three Windows 10 capable x86 machines meet the requirements and I have no intention of buying brand new hardware at inflated prices in the next 30 months during a shortage.

Re:

[Gavino]

Windows 10 is good for another 5 years. I'm sure the compoent shortages will all be worked out by 2026.

of course...

[xlsior]

...Windows 11 will only make this worse, by artificially limiting the systems that it will deem worthy of running it, forcing people to upgrade their existing hardware

You have a 7th gen Core CPU that can run circles around many 10th gen ones? Sorry, buy a new one.

And of course, the worst part is that Intel has stated that the chip shortages will likely continue for the next couple of years. If Microsoft truly will end up yanking security updates for windows 10 in 2025, expect there to still be hundreds of million computers out there running Win10, just waiting to become part of a botnet.

This is getting stupid.

[aaarrrgggh]

I start to wonder if this is how our civilization will collapse. I delayed a few purchases back in March to not be part of the problem, and expecting most things to be resolved by September. That is starting to look like a big mistake.

I get it that some things are hard to make internally, and many others are uneconomical to make internally. At some point though the pendulum needs to swing back towards sane supply chains and putting production close to consumption. Unfortunately, this will tend to eliminate jobs as smaller scale manufacturing will need to be almost fully automated to be cost-effective.

Re:

[aaarrrgggh]

JIT isn’t the primary problem right now though; you aren’t going to go from 4 weeks lead-time to 52 weeks without impact. I did know one company that ordered a batch of some components only once per year they would get the new delivery about 3 weeks before the exhausted the previous one. What the hell are they supposed to do when 12 weeks before their order date lead times suddenly jump from 4 to 52 weeks? (Due to revision control and lot tracking and product revisions it is uneconomical to s

A "component shortage"?

[Archtech]

Always something new under the sun... a shortage of Windows components.

Are the software elves suffering from Covid too?

Depends on the company and application

[TVmisGuided]

The shortage will have different effects on different companies. [marketwatch.com]

Always have to dig a little deeper.

Or it could also be

[Draconis183]

That Surface sucks and people are slowly realizing they the premium price doesnâ(TM)t equate to the experience they have with it. That after years of refreshes, basic things like thermals are still an issue.