Global chip shortage threatens electronics production – 12/17/2020 – market

Automobile and electronic device manufacturers, from televisions to smartphones, warn of a global chip shortage causing production delays as consumer demand rebounds from the coronavirus crisis.

The problem has multiple origins, say executives and industry analysts, including the massive purchase of Huawei Technologies, a fire in a chip factory in Japan, coronavirus shutdowns in Southeast Asia and a strike in France.

In addition, little investment has been made in 8-inch chip factories, mainly owned by Asian companies. This means they have struggled to ramp up production as the demand for 5G phones, notebooks, and cars grew faster than expected. .

“There is a shortage of components across the electronics industry,” said Donny Zhang, general manager of Sand and Wave, the company that supplies the parts, and said he had experienced delays in sourcing a microcontroller unit that was key. to a smart headset you’ve been working on.

“We originally planned to finish production in a month, but now we have to do it in two steps.”

A source for a Japanese electronics supplier said it had noticed a shortage of WiFi and Bluetooth chips and expected delays of more than 10 weeks.

Dutch automotive chip supplier NXP Semiconductors told customers it should raise prices on all products due to a “significant increase” in material costs and a “severe shortage” of chips, Reuters reported this month.

“Business has returned much faster than expected,” said NXP boss Kurt Sievers on December 11th in an interview with the German Handelsblatt.

“Many customers ordered too late. As a result, we couldn’t keep up in some areas.”

Other short-term triggers for the chip shortage are Huawei’s inventories before mid-September, when suppliers had to comply with the sanctions imposed by the US, said CICC analyst Huang Leping in a statement on December 11.

Then there were Huawei competitors like Xiaomi, who wanted to gain market share by increasing component orders, he added.

Xiaomi and Huawei did not comment on the case.

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