Chip crisis: despite new factories – the shortage remains

Chip crisis: despite new factories – the shortage remains

Manufacturers around the world are suffering from the shortage of computer chips. The United States now sees this as a national security risk. […]

The global shortage of semiconductor chips is also hitting the US hard. For example, the US Department of Commerce cites alarming figures in a recently published report: the average stock of semiconductor products has fallen from 40 days in 2019 to less than five days in 2021. In some key industries, stocks are even lower. A shortcoming that the US now considers a risk to national security.

So, just a week ago, US President Joe Biden appealed to the US Congress to approve the planned billion-dollar subsidies for the American semiconductor industry. Under the “CHIPS for America Act,” the government wants to subsidize the construction of new chip factories with $ 52 billion. By 2025, a total of almost $ 80 billion is to flow into new production facilities.

However, experts warn against the assumption that new chip factories – Intel had recently announced to build two new chip factories in Ohio for about 20 billion dollars – will solve the problem in the short term. Especially since the problems were deeper and started even before the corona crisis began. Corona has only increased the difficulties.

Older semiconductor factories had already reached their capacity limit before 2020, confirms Alan Priestley, vice president and analyst at Gartner Research. “Covid has exacerbated the problem, because all demand forecasts for the industry disappeared into smoke and mirrors overnight,” he explains. For example, last year the shortage of computer chips forced car manufacturers to stop production and throttle by almost 7.7 million cars. This, in turn, led to a massive shortage of vehicles when countries began to lift the widespread quarantines so that people could travel again.

Other industries also had to stop their production, although the consumer electronics market experienced an upswing during the pandemic. Companies and their employees increasingly invested in desktops and laptops for home use, and consumers bought a variety of devices such as televisions, gaming systems, headphones and other electronic devices.

As a result, all forecasts were thrown over the heap and the manufacturers had to shift their production capacities, according to Priestley. “When the economy started to recover in 2021, the industries that had not bought chips before asked for semiconductors again and the manufacturers had to tell them that they had to wait – because they were not producing these products at that time.” According to Priestley alone, it takes three to four months to start producing another chip, not to mention the delivery date.

In addition, the state-of-the-art chips, such as current CPUs and GPUs, which are manufactured in the 7nm process, are not the problem. Rather, there are bottlenecks in older chips that are used in electric vehicles and self-driving cars as well as intelligent technologies, such as sensors in production plants, buildings and products for data acquisition and automation. Other areas of application include computer screens, RF components of mobile phones, analog operations and the power management of systems. “The delivery of a new laptop is delayed today not because of a lack of CPUs, but because the display controllers are in short supply,” the analyst illustrates.

According to the Gartner analyst, there is no remedy in sight until further notice. The existing semiconductor factories are busy, Priestley said, and it is unlikely that they will produce more older chips in the foreseeable future. Especially since many factories would have switched their machines to the production of newer chips, so probably will not convert to the current demand for older processors.

On the contrary, the situation could even get worse, warns Priestley: many manufacturers have drastically increased their production capacities in view of the chip shortage and their plants have been more than 90 percent utilized. This leads to wear and tear, because the semiconductor machines would have to be serviced regularly.

*Jürgen Hill is Chief Reporter Future Technologies at COMPUTERWOCHE. The graduated journalist and computer scientist is currently dealing with current IT trend topics such as AI, quantum computing, digital twins, IoT, digitization, etc. In addition, he has a long-standing background in the field of communications with all its facets (TK, mobile, LAN, WAN).

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