What is the origin of the global microchip crisis and how does it affect us?
They are mostly unseen, but computer chips are at the heart of all digital products around us. Y when supplies run out they can stop manufacturing.
There was a hint of the problem last year when video game players struggled to buy new graphics cards, Apple had to stagger the launch of its iPhone, and the latest Xbox and PlayStation consoles couldn’t keep up with demand.
Later, just before Christmas, it became known that the resurgent auto industry was facing what one insider called “chip Armageddon.”
New cars often include more than 100 microprocessors, and manufacturers just couldn’t get all of them.
Since then, One tech company after another has warned that they also face limitations.
Samsung has reported problems fulfilling orders for the memory chips it makes for its own products and those of others.
And Qualcomm, which makes the processors and modems that power many of the major smartphones and other consumer devices, has the same problem.
The impact of the pandemic
Like many other things that are wrong in the world, the coronavirus is partly to blame.
The locks boosted sales of computers and other devices so that people could work from home, and they also bought new devices to occupy their free time.
Meanwhile, the auto industry initially saw a big drop in demand and cut its orders.
As a result, chipmakers changed their production lines.
But then, in the third quarter of 2020, car sales rebounded faster than expected, while demand for consumer electronics continued unabated.
However, with existing foundries working at full capacity, building more is not a simple matter.
“It takes 18-24 months to open a plant after starting to build it“says analyst Richard Windsor.
“And even once you’ve built it, you have to adjust it to increase production, which also takes a bit of time,” he adds.
“This is not something that can just be turned on and off.”
The deployment of 5G infrastructure is also increasing demand.
And Huawei placed a large order to build up a reserve of chips before US trade restrictions prevented it from ordering more.
In contrast, the auto industry has a relatively low margin and tends not to accumulate supplies, which has now left it in a tight spot.
Recently, TSMC and Samsung, major chip makers spent billions of dollars to accelerate a highly complex new 5-nanometer chip manufacturing process to power the latest products of Vanguard.
But analysts say that, more broadly, the sector has suffered from underinvestment.
“Most Tier Two foundries have posted low profits, low margins, and high indebtedness in recent years,” says a recent report from Counterpoint Research.
“From a profitability perspective, it is difficult to consider building a new [planta de fabricación] for smaller foundries“.
And many of these chipmakers will respond to the additional demand by raising their prices instead.
Windsor doesn’t expect the chip shortage to be resolved until at least July.
Others suggest longer.
“We believe that the semiconductor industry supply constraints on both wafers and substrates will be only partially lifted in the second half of 2021, and that there will be some rigidity at the forefront (computing, 5G chips) extending through 2022.” says a Bank of America research paper.
And a chipmaker told The Wall Street Journal that The backlog of orders is so great that it would take up to 40 weeks to fulfill any order an automaker places today.
This could have costly side effects.
Consulting firm AlixPartners has predicted that the auto industry will lose $ 64 billion in sales because it has had to shut down or reduce production.
However, that sum must be viewed in the context of an industry that typically generates around $ 2 trillion in sales per year.
There are also geopolitical implications. The United States still leads in terms of component design development. But Taiwan and South Korea dominate the chip-making industry.
And TM Lombard economist Rory Green estimates that the two Asian nations account for 83% of the world’s production of processor chips and 70% of memory chips.
“As was OPEC for oil, Taiwan and South Korea are monopoly chip producers“he wrote, adding that its market share was going to grow even more.
That has raised concern in the United States, where a lobby group called the current crisis “the canary in the coal mine” for future shortages of supply lines.
And a group of 15 senators wrote to President Biden urging him to take steps to “encourage domestic semiconductor production in the future.”
But it could be said that the hardest hit country is China, which makes more cars than any other nation.
As a result, research firm IHS predicts that 250,000 fewer vehicles will be produced in the country during the first three months of the year.
Beijing has always wanted the country to be more self-sufficient in semiconductors.
But the United States has taken steps to block local companies that use American know-how to do so, with the argument that they also supply the Chinese military.
The current crisis will not only give China’s leaders reasons to redouble their efforts. It also exposes how disruptive it would be to carry out another of his ambitions: unification with Taiwan.
For now, Consumers planning a purchase need to keep a few things in mind.
Wait times for some car models will increase. And some devices might also be difficult to find.
The biggest players, like Samsung and Apple, have the purchasing power to ensure priority.
But smaller brands can be disproportionately affected.
“That means the products could become more expensive, or at least not go down in price over time as would normally be expected,” says Ben Wood of consultancy CCS Insight.
“And supplies will be limited,” he adds.
“Then, if there’s a device you really want to get, don’t think about waiting to see if there’s a better deal in a few months“.
Remember that you can receive notifications from BBC Mundo. Download the new version of our app and activate them so you don’t miss our best content.
BBC-NEWS-SRC: https://www.bbc.com/mundo/noticias-55955119, IMPORTING DATE: 2021-02-10 18:00:04