Dr Anosh Ahmed on the Ongoing Semiconductor Shortage
From our phones, tablets phones and tablets, computers, cars, and even home appliances, much of our life now requires the use of semiconductors to make sure it runs efficiently. Dr. Anosh Ahmed said, starting at the beginning of the Covid-19 pandemic and continuing till now, there has been a shortage of semiconductors that is beginning to impact our lives, our safety, and quite possibly much of the global economy and even our safety. Today, I’ll answer your questions about what happened and what it means going forward.
Why did the Semiconductor Shortage Happen?
For a brief foundation, Semiconductors are just silicon with tiny transistors built into them, put into nearly all modern electronic products (medical equipment, thermostats, radios, etc).
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The current chip industry is broken into two parts: the designers and the builders (contract manufacturers) like TWSC and Samsung. ; some companies, like Intel, design, outsource their production to contract manufacturers, and build their chips;. The US has 47% of total global chip sales but only 12% of its production.
With the COVID-19 pandemic and workers moving to home offices, technology was upgraded to serve the "new normal" needs (better home and cloud infrastructure and a touchless life). Homes were turned "smart" and digital entertainment facilities were added on.
These changes where this change was combined with an extended tech industry company supply chain disruption, Dr. Anosh Ahmed said, mainly due to Chinese factory closures. When reopenings occurred, production was accelerated, but the demand has not slowed. Chinese manufacturers have even resorted to hoarding chips when they can. There was $439b in semiconductors sold in 2020, a 6.5% increase over 2019 while sales in, and December 2020 were up 8.9% over the prior December. Even with these increases, demand will likely continue to rise further with things such as the expansion of 5G telecom networks, smart devices, and the IOT (internet of things) all relying on more and more chips.
We are especially seeing this shortage play out, with automakers (Ford, Volkswagen, Valtswagon Daimler, and GM) expecting the chip shortage to hurt the bottom line and continue through 2022, with Tesla even choosing to rewrite software, allowing it to change its chip sources. This industry has had to shut down lines waiting for new chips, which will further increase as the world shifts to more electric vehicles, which are even more reliant on semiconductors. The automakers are mainly to blame for their problems, as they canceled many orders when the pandemic first started and are now suffering the repercussions.
Dr. Anosh Ahmed, what does this mean for me?
Not only do semiconductors run the electronic products that are central to our lives, but they also play a large part in the machines that make and run the electric and non-electronic things that surround us; everything. Everything from toasters to dog washing businesses has already been affected. Transportation and utility grids rely heavily on semiconductors to make sure that traffic lights work, trains and planes run on time, and the electricity and gas that is produced gets distributed to our homes when we need it.
Newer computers and electronics may not be available, or will be more expensive, for an extended period. AutomobilesAutos, especially all-electric, will likely be more expensive in the short term as well. The military is even concerned about the shortage and its security implications; the. The most significant risk is a potential war with China over Taiwan, which sits in the south china sea., A war in that part of the world would significantly impact chip manufacturing, and Taiwan's TWSC is responsible for 54% of all chips manufactured.
Data courtesy of trendforce
Dr. Ahmed, what is being done, and when will the shortage end?
The Biden administration is trying to solve the supply chain crisis by working with its allies and bringing chip production to the US, but TWSC is already planning a $12B facility located in the Phoenix, Arizona facility.
China is also trying to become chip self-sufficient, earmarking $1.4 trillion for their semiconductor industry by 2025, with a goal of 70% of the needed supply created locally. According to India’s Head of China Semiconductor Research, Hui He, China has an additional goal of producing a 28nm chip line this year and, next year, 14nm chips next year because China currently imports most of its semiconductors as well.
The current estimates say that the end of the chip shortage will happen as the supply finally catches up with demand. Many expect this to be 2022; chipmaker STMicroelectronics' CEO, Jean-Marc Chery, said the deficit would probably last at least two years. The, and the German chipmaker Infineon Infineon CEO, Reinhard Ploss, also told CNBC's Street Signs Europe that they are in " uncharted territory" which he has never seen before. "I think two years is too long,….(however) we will definitely see it (the shortage) reaching out to 2022,"
Dr. Anosh Ahmed is an avid writer with interests in real estate, telecommunications, and the ever-growing med-tech world and their impact on our daily lives.
