For the first time in almost 40 years of record-keeping by the U.S. Bureau of Labor Statistics, the price of semiconductors or computer chips increased in 2022. The rise—about 3% above pre-pandemic prices when controlled for inflation—was modest compared to the soaring prices of seafood.
The FAO Fish Price Index initially declined in the first year of the pandemic, dropping 6 points from 2019 to 153, but has since soared to 181 in 2022, reaching a historic peak of 192 in June of last year. The Fish Price Index compares current seafood prices to 1990, which is indexed at 100. ThisFish Inc. publishes the Fish n’ Chips Index to compare the relative change in fish and technology costs.
Since 1990, technology costs—as measured by the Semiconductor Price Index—have declined by 46%, even though computer chips have become exponentially more powerful. At the same time, the Fish Price Index has increased by 81% over the same period. The Fish Price Index at 181 is now 3.3 times the Semiconductor Price Index at 54, the highest difference in history.
In 2022, seafood prices soared due to continuing supply chain issues, rising oil prices, disrupted trade due to the Ukraine war, soaring inflation, and a bounce back in consumer demand. In September, the Fish Price Index was still 20 points higher than the previous year. As inflation abates and supply chains normalize, prices are coming down.
The pandemic also affected technology costs. “In the simplest terms, the current chip shortage is due to strong demand and no supply,” states J.P. Morgan in an August research post. “This goes back to COVID-19 lockdowns in the second quarter of 2020, when demand for work-from-home technology increased exponentially, and automakers found themselves competing for the semiconductor capacity located in Asian foundries.” And it’s not just hardware technology costs.
Labour costs or tech salaries have soared. According to a report by Hired.com, the average software engineering salary in the United States is now $160k USD. However, as the venture capital market cools and with mass layoffs by Google, Facebook, Amazon, among others, upward salary pressures will lessen. While the last few years have seen wild swings in seafood and semiconductor price indices, the overall trend remains the same: fish is getting relatively more expensive than computer chips.