The semiconductor industry lives on the pulse of technological progress. So why can’t it come out enough crisps to keep the world moving?
Nearly two years after the disruption caused by a pandemic, a severe shortage of computer chips – the components that make up the heart of smartphones, laptops, and countless other products – continues to affect manufacturers across the global economy.
The automakers have been forced to stop production in the past few months, since Decline in sales because they can’t build enough cars. The shortage has branches of. affected Game console and Network equipment to medical equipment. In October, Apple accused Chip shortage to cut its financial results, and Intel warned that the drought is expected to extend through 2023.
In short, the semiconductor supply chain has expanded in new ways that are ingrained and difficult to resolve. Demand is growing faster than chipmakers can react, especially for simple but widespread components that are subject to large fluctuations in demand that make investments risky.
“It is absolutely amazing that it took so long for the supply chain to recover after the global economy stalled during Covid,” said Brian Matas, vice president of market research at IC insights, an analyst firm that tracks the semiconductor industry.
For one thing, the sheer demand is surprising. In 2020 how Covid began to turn business operations inside out, the chip industry was already expecting an upturn. Global chip sales fell 12 percent in 2019, according to the Association of the Semiconductor Industry. But in December 2019 the group predicted that Global sales would grow 5.9 percent in 2020 and 6.3 percent in 2021.
Indeed it is latest numbers show that sales increased by 29.7 percent between August 2020 and August 2021. Demand is driven by technologies such as Cloud computing and 5G, along with the increasing use of chips in all types of products from automobiles to home appliances.
At the same time, the sanctions imposed by the US on Chinese companies such as Huawei, a leading manufacturer of smartphones and network devices, prompted some Chinese companies to start hoarding as much as you can.
The surge in demand for high-tech products sparked by working from home, the boredom of lockdown, and the shift to e-commerce has only continued and surprised many, says David Yoffie, a professor at Harvard Business School who previously served on Intel’s board of directors.
Chipmakers didn’t realize the magnitude of the sustained demand until about a year ago, Yoffie says, but they can’t turn a dime. New chip manufacturing factories cost billions of dollars and take years to build and equip. “It takes about two years to build a new factory,” says Yoffie. “And the factories have become much bigger, much more expensive and also much more complicated.”
This week, Sony and Taiwan Semiconductor Manufacturing Company, the world’s largest contract manufacturer of chips, called They’d invest $ 7 billion to build a factory that could make older components, but they won’t start making chips until late 2024. Intel is also investing in several state-of-the-art new fabs, but these too won’t go online until 2024.
Yoffie notes that only one company, ASML from the Netherlands, does the Extreme ultraviolet lithography machines needed for state-of-the-art chip manufacturing, and ASML cannot produce the machines fast enough to meet demand.
Another problem is that not all chips are created equal.
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