Tag: chip shortages

  • Cars, 5G telephones boosted world semiconductor gross sales to $595 bn in 2021: Gartner

    NEW DELHI: Higher common promoting costs of chips boosted world semiconductor income 26.3% year-on-year (YoY) in 2021. Chipmakers earned a complete of $595 billion by means of final 12 months, in response to US-based market analysis agency Gartner, up from $471 billion in 2020.

    The automotive business largely drove the expansion in semiconductor gross sales, with Gartner saying {that a} sturdy interval of restoration in automobile gross sales all over the world by means of 2021 helped semiconductor revenues from auto authentic gear producers (OEMs) develop 34.9% final 12 months.

    Memory is the opposite sector that outpaced the general business development in semiconductor gross sales, with a 33.2% development in semiconductor revenues for producers in 2021. It was additionally the strongest total contributor to world semiconductor gross sales, and continued to revenue from folks working from residence, in addition to enterprise and data expertise (IT) infrastructure suppliers upgrading or organising new servers to facilitate distant work.

    5G smartphones additionally contributed to the expansion in income from semiconductor gross sales. According to Gartner, over 556 million 5G telephones had been offered by means of 2021, up from about 251 million in 2020. This two instances enhance was a key contributor to semiconductor gross sales within the wi-fi community connectivity phase, which grew 24.6% in 2021.

    In phrases of the distribution amongst world semiconductor distributors, Samsung Electronics was the best earner accounting for 12.3% of the general business income. The firm overtook Intel, with 28% income development, due to a lift in demand for reminiscence chips. Intel, which had a transparent lead within the semiconductor business in 2020, noticed a 0.3% income decline by means of 2020, and ranked second behind Samsung with 12.2% of the income share.

    SK Hynix, Qualcomm, MediaTek, and AMD had been among the many highest rising world semiconductor distributors within the prime 10 checklist, with AMD seeing the best income development of 68.6%.

    However, Huawei’s HiSilicon was the best loser globally, with revenues dropping lmost 81%. Explaining this, Andrew Norwood, analysis vice-president at Gartner, mentioned, “This was a direct results of US sanctions towards the corporate and its mum or dad, Huawei. This additionally impacted China’s share of the semiconductor market, because it declined from 6.7% in 2020 to six.5% in 2021.”

    Norwood added that the excessive demand for reminiscence chips noticed South Korea, by means of Samsung, see 19.3% development in semiconductor revenues.

    In February this 12 months, John Neuffer, chief government of Semiconductor Industry Association (SIA), mentioned 2021 was the primary 12 months since 2018 when greater than 1 trillion chips had been shipped by means of the 12 months. However, whereas he anticipated sturdy demand to persist within the world semiconductor business, he solely gave a forecast of 8.8% YoY development in semiconductor revenues in 2022.

    Explaining his conservative forecast for the business, Neuffer mentioned, “It’s nonetheless actually trending very strongly in direction of elevated demand. We’re simply not going to get this sort of slingshot impact that we had within the pandemic.”

    However, he additionally mentioned that digitalisation of companies all over the world, boosted by the covid-19 pandemic, would proceed to make sure that the demand for semiconductor globally stays sturdy.

    Looking for a share within the world semiconductor pie, the Indian authorities authorized a ₹76,000 crore production-linked incentive (PLI) scheme for chip makers in December 2021. In February this 12 months, the Centre mentioned that 5 corporations had submitted purposes for organising show and semiconductor vegetation within the nation, with deliberate investments of as much as ₹1.53 lakh crore.

    “The purposes have been obtained for organising 28nm to 65 nm semiconductor fabs, with capability of roughly 120,000 wafers per thirty days,” the assertion had affirmed.

    Among the candidates had been India’s Vedanta and China’s Foxconn for a three way partnership, ISMC (a partnership between UAE’s NextOrbit Ventures and Israel’s Tower Semiconductor, now owned by Intel), and others. Prior to the announcement of the PLI scheme, the Tatas had been additionally mentioned to be in talks for a $300 million semiconductor testing and meeting unit within the nation.

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  • How shortages of a $1 chip sparked a disaster within the international economic system

    Hundreds of various sorts of chips make up the worldwide silicon trade, with the flashiest ones from Qualcomm Inc. and Intel Corp. going for $100 apiece to greater than $1,000. Those run highly effective computer systems or the shiny smartphone in your pocket. A show driver is mundane in contrast: Its sole function is to convey fundamental directions for illuminating the display screen in your telephone, monitor or navigation system.

    The hassle for the chip trade — and more and more firms past tech, like automakers — is that there aren’t sufficient show drivers to go round. Firms that make them can’t sustain with surging demand so costs are spiking. That’s contributing to brief provides and rising prices for liquid crystal show panels, important elements for making televisions and laptops, in addition to automobiles, airplanes and high-end fridges.

    “It’s not like you’ll be able to simply make do. If you will have every thing else, however you don’t have a show driver, then you’ll be able to’t construct your product,” says Stacy Rasgon, who covers the semiconductor trade for Sanford C. Bernstein.

    Now the crunch in a handful of such seemingly insignificant components — energy administration chips are additionally briefly provide, for instance — is cascading by way of the worldwide economic system. Automakers like Ford Motor Co., Nissan Motor Co. and Volkswagen AG have already scaled again manufacturing, resulting in estimates for greater than $60 billion in misplaced income for the trade this 12 months.

    The state of affairs is more likely to worsen earlier than it will get higher. A uncommon winter storm in Texas knocked out swaths of U.S. manufacturing. A fireplace at a key Japan manufacturing unit will shut the ability for a month. Samsung Electronics Co. warned of a “severe imbalance” within the trade, whereas Taiwan Semiconductor Manufacturing Co. mentioned it may possibly’t sustain with demand regardless of operating factories at greater than 100% of capability.

    “I’ve by no means seen something like this up to now 20 years since our firm’s founding,” said Jordan Wu, co-founder and chief executive officer of Himax Technologies Co., a leading supplier of display drivers. “Every application is short of chips.”

    The chip crunch was born out of an comprehensible miscalculation because the coronavirus pandemic hit final 12 months. When Covid-19 started spreading from China to the remainder of the world, many firms anticipated folks would reduce as instances received powerful.

    “I slashed all my projections. I used to be utilizing the monetary disaster because the mannequin,” says Rasgon. “But demand was just really resilient.”

    People caught at residence began shopping for expertise — after which stored shopping for. They bought higher computer systems and greater shows so they might work remotely. They received their youngsters new laptops for distance studying. They scooped up 4K televisions, recreation consoles, milk frothers, air fryers and immersion blenders to make life beneath quarantine extra palatable. The pandemic became an prolonged Black Friday onlinepalooza.

    Automakers had been blindsided. They shut factories through the lockdown whereas demand crashed as a result of nobody may get to showrooms. They instructed suppliers to cease transport elements, together with the chips which might be more and more important for automobiles.

    Then late final 12 months, demand started to choose up. People wished to get out and so they didn’t wish to use public transportation. Automakers reopened factories and went hat in hand to chipmakers like TSMC and Samsung. Their response? Back of the road. They couldn’t make chips quick sufficient for his or her still-loyal prospects.

    Himax’s Jordan Wu is in the course of the tech trade’s tempest. On a current March morning, the bespectacled 61-year-old agreed to fulfill at his Taipei workplace to debate the shortages and why they’re so difficult to resolve. He was keen sufficient to speak that interview was scheduled for a similar morning Bloomberg News requested it, with two of his workers becoming a member of in particular person and one other two dialing in by telephone. He wore a masks all through the interview, talking rigorously and articulately.

    Wu based Himax in 2001 together with his brother Biing-seng, now the corporate’s chairman. They began out making driver ICs (for built-in circuits), as they’re recognized within the trade, for pocket book computer systems and displays. They went public in 2006 and grew with the pc trade, increasing into smartphones, tablets and contact screens. Their chips at the moment are utilized in scores of merchandise, from telephones and televisions to vehicles.

    Wu defined that he can’t make extra show drivers by pushing his workforce tougher. Himax designs show drivers after which has them manufactured at a foundry like TSMC or United Microelectronics Corp. His chips are made on what’s artfully known as “mature node” expertise, tools a minimum of a pair generations behind the cutting-edge processes. These machines etch traces in silicon at a width of 16 nanometers or extra, in contrast with 5 nanometers for high-end chips.​

    ​The bottleneck is that these mature chip-making traces are operating flat out. Wu says the pandemic drove such robust demand that manufacturing companions can’t make sufficient show drivers for all of the panels that go into computer systems, televisions and recreation consoles — plus all the brand new merchandise that firms are placing screens into, like fridges, sensible thermometers and car-entertainment techniques.

    There’s been a selected squeeze in driver ICs for automotive techniques as a result of they’re normally made on 8-inch silicon wafers, quite than extra superior 12-inch wafers. Sumco Corp., one of many main wafer producers, reported manufacturing capability for 8-inch tools traces was about 5,000 wafers a month in 2020 — lower than it was in 2017.

    No one is constructing extra mature-node manufacturing traces as a result of it doesn’t make financial sense. The present traces are totally depreciated and fine-tuned for nearly excellent yields, which means fundamental show drivers could be made for lower than a greenback and extra superior variations for not far more. Buying new tools and beginning off at decrease yields would imply a lot increased bills.

    “Building new capability is just too costly,” Wu says. Peers like Novatek Microelectronics Corp., additionally based mostly in Taiwan, have the identical constraints.

    That shortfall is exhibiting up in a spike in LCD costs. A 50-inch LCD panel for televisions doubled in worth between January 2020 and this March. Bloomberg Intelligence’s Matthew Kanterman initiatives that LCD costs will maintain rising a minimum of till the third quarter. There is a “a dire scarcity” of show driver chips, he mentioned.

    Aggravating the state of affairs is a scarcity of glass. Major glass makers reported accidents at their manufacturing websites, together with a blackout at a Nippon Electric Glass Co.’s manufacturing unit in December and an explosion at AGC Fine Techno Korea’s manufacturing unit in January. Production will doubtless stay constrained a minimum of by way of summer time this 12 months, show consultancy DSCC Co-founder Yoshio Tamura mentioned.

    On April 1, I-O Data Device Inc., a serious Japanese laptop peripherals maker, raised the value of their 26 LCD displays by 5,000 yen on common, the largest improve since they started promoting the displays 20 years in the past. A spokeswoman mentioned the corporate can’t make any revenue with out the will increase because of rising prices for elements.

    All of this has been a boon to Himax’s enterprise. Sales are surging and its inventory worth has tripled since November.

    But the CEO isn’t celebrating. His complete enterprise is constructed round giving prospects what they need, so his lack of ability to fulfill their requests at such a important time is irritating. He doesn’t anticipate the crunch, particularly for automotive elements, to finish any time quickly.

    “We haven’t reached a place the place we are able to see the sunshine on the finish of tunnel but,” Wu mentioned.

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