04 Feb 2021 -
 General

How bad is the semiconductor shortage?

When BBC radio’s 6Music channel starts reporting news of semiconductor chip shortages halting car production, you know the story has gone mainstream.

Since we rolled over into 2021, reports of semiconductor shortages have become part of everyday news – at least within the electronics press. Does this mean the situation is bad? And how bad is bad?

Qualcomm Inc, the world’s largest smartphone chip maker, told the South China Morning Post, it is struggling to meet demand, signaling that a global semiconductor shortage is spreading.

“The shortage in the semiconductor industry is across the board,” said incoming Chief Executive Officer Cristiano Amon.

Apple Inc, a major Qualcomm customer, said last week that sales of high-end iPhone 12 models were limited by the availability of some components. Earlier on Wednesday, General Motors Co warned that a global semiconductor shortage will reduce production this year as the carmaker plans downtime at three plants.

Forbes reports that chip prices for automotive companies will “rise in the near term”. “Volkswagen will be hit the hardest by the shortage, while Toyota looks like being the least scathed. Hyundai/Kia of Korea and BMW have secured good long-term access to chip requirements and will also ride out the storm with ease,” it reported.

However, economic forecasters, Fitch Solutions, believe the shortages could run for years, “It is difficult to say exactly how long the semiconductor shortage will last, however, by our estimates we believe the shortage could continue until the beginning of 2023.”

The industry is reponding. TSMC (Taiwan Semi Manufacturing Co) recently announced that it is redeploying production capacity into the automotive chip supply. Industry sources said that TSMC will bring in “super hot runners” to give priority to the production of automotive chips. However, it may take up to three months before delivery, or even longer.

It is rumored that other companies like AMD are also looking at running some production through TSMC/Samsung.

Samsung Electronics’ chief financial officer officially announced that the company plans to actively conduct mergers and acquisitions and will focus on the automotive semiconductor industry.

To avoid electronics supply-chain disruptions, you may also wish to consult an expert in electronics component supply. With more than three decades of supply-chain expertise, Astute Electronics is ideally placed to work with you on your daily component requirements.

Either through the hundreds of manufacturers we purchase directly from, or the international network of component supply-partners offering full product traceability, Astute Safe-Supply, run by sourcing experts and offers a deeper insight into the global components markets.

With real-time access to the latest listings and prices cultivated through several decades of close supplier partnerships, we are able to spot price disparities and leverage product price variances to deliver cost-effective solutions to customers, whilst ensuring a quality, risk-free supply.

For more help with looking at supply chain options, contact Astute Electronics here

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