Semiconductor shortage How the chip shortage arose – and how it can be overcome
The economic recovery in the second year the pandemic could have been more convincing if the semiconductors needed in many industries had not been so scarce. No recovery is in sight for 2022.
Missing microprocessors not only hit the automotive industry badly this year. Consulting firm Goldman Sachs identified 169 industries that suffered from constant chip shortages this year. These include manufacturers of smartphones, computers, WiFi routers and medical devices. And experts do not yet expect a real turnaround in 2022. A number of problems that have significantly contributed to the global chip crisis still exist.
In order to better assess the future situation, it is worth taking a look back: At the beginning of 2020 the world was still looking rosy. The semiconductor industry had just come out of a protracted downturn and was on the verge of a strong economic upswing. But then Covid-19 emerged and the automotive industry in particular feared weaker demand. In fact, vehicle sales collapsed briefly in the spring of 2020. Almost in panic, the chief buyers of the automobile companies canceled their orders to large chip manufacturers such as TSMC in Taiwan. However, this should prove to be a serious misjudgment.
“Suddenly the demand for cars rose sharply again,” says Kota Yuzawa, automotive analyst at Goldman Sachs . The canceled production capacities in the chip industry were no longer available to the car companies. They had long since been passed on to the manufacturers of consumer electronics. “During this time we worked from home, did sports from home, went to school from home and talked at home,” says industry expert Julia Hess from the Berlin Foundation for New Responsibility. This has led to increased demand for smartphones, tablets, laptops and game consoles. The global chip stocks were quickly used up.
The situation was exacerbated by a chain of unfortunate events that perhaps only climate activists had foreseen. In February 2021, chip manufacturers such as Samsung , NXP and Infineon operate in Austin, Texas, stop. After heavy snowstorms, the power supply failed and the semiconductor factories, the so-called fabs, could no longer be shut down in a controlled manner. This not only damaged the production facilities, but also components of the works infrastructure.
There were also failures in Japan – here due to natural disasters and fires in chip factories. A production line of the chip manufacturer Renesas Electronics was damaged in a major fire in March 2021, which exacerbated the scarcity of microcontrollers. As if that weren’t enough, big politics also contributed to the global chip shortage. The then US President Donald Trump had resolved to reduce the global influence of Chinese high-tech companies such as Huawei and imposed sanctions in the field of chip technology, among other things. As a result, Chinese companies bought available chips and manufacturing equipment on a large scale.
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A simple solution is not in sight, especially since there are different bottlenecks in the various industries concerned. The automotive industry lacks the chips because the production of semiconductors in the fabs cannot meet demand and is thus proving to be a bottleneck. For game consoles like the Playstation 5 from
The US sanctions against China are exacerbating the chip crisis for car manufacturers. An expert explains the creative ideas the industry uses to deliver cars – and whether customers should wait to buy a new car.
There is only one manufacturer worldwide for the basic material of the so-called ABF film, the Japanese group Ajinomoto , which is better known to a wider audience as a producer of the flavor enhancer glutamate. Ajinomoto had hardly earned anything at ABF so far and therefore had little interest in expanding this area. “It’s very frustrating for chip manufacturers. The silicon wafer is exposed and actually finished. And then with ABF there is a lack of a comparatively cheap material to complete the last production step, ”says Jan-Peter Kleinhans, who together with Julia Hess has published a study on the causes of the chip crisis for the New Responsibility Foundation. “This problem will not be solved by more fabs.”
In response to pressure from customers, Ajinomoto is now expanding its ABF production. And also the big chip manufacturers like Intel and Infineon are increasing their production capacities so that the shortage will be alleviated next year and completely overcome in 2023. But even with billions in investments, you can’t turn the clock. “The expansion of our existing fabs in Ireland takes between 18 and 24 months,” says the Germany boss of Intel , Christin Eisenschmid. When building a new system, you have to reckon with four years. “Such a factory is highly complex, requires a huge investment volume so that the latest equipment can be purchased.”
But not only those involved in the production of semiconductors do their homework, but also the customers – for example in the automotive industry: In the Europe-wide partner network Catena-X, for example, the most important players – from BMW and Bosch over Mercedes Benz up to Volkswagen – make your supply chains more transparent. This should also enable chip manufacturers to better calculate whether there is only a short-term fire in the pan or whether an expansion in certain segments is worthwhile in the long term.
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In overcoming the chip crisis, all those involved also expect the state to take an active part. “We are ready to make an investment of several billion euros,” says Intel manager Eisenschmid. “But we can’t do it alone.” In other regions of the world, chip production is massively subsidized. “That is also the reason why production has shifted from Europe to Asia and.” Currently around 9 percent of global semiconductor production came from Europe. “That was 44 percent in the 90s.”
More on the subject: Largely unnoticed, the Darmstadt-based pharmaceutical and laboratory group Merck has crept into the top of the world in the semiconductor business. While others complain about a lack of chips, sales at Merck increase .
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