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“We are facing a situation where demand exceeds supply, but the pressure is increasing due to the shortage of parts.” (Jason Chun Acer Chief Executive Officer)
“The problem of unbalanced supply and demand for semiconductor-related parts is very serious. It is expected that production will be affected from the second quarter.” (Dong-jin Ko, President, IM Division, Samsung Electronics)
“It’s not just a shortage of semiconductors, but a really fatal shortage.” (Lu Waving, Vice President, Xiaomi)
“I can’t sleep these days because of the supply chain crisis. Because of the crisis we’re experiencing in the semiconductor industry.” (Christiano Amon, CEO of Qualcomm)
Over the’shortage of semiconductor supply (Shortage),’ which began in earnest from the beginning of this year, management of global manufacturers are expressing concerns in public. The situation is showing signs of a prolonged situation, starting with car semiconductors, and a chain shock wave due to shortage of semiconductors continues to other industries such as mobile and PC.
In an unprecedented crisis, global manufacturers are seeking countermeasures in various ways, such as stopping production of old models, expanding outsourcing of semiconductors, and changing suppliers, while paying attention to the movements of large semiconductor manufacturers such as Samsung Electronics and TSMC.
According to a recent report by market research firm IHS Markit on the 19th, about 75% of global semiconductor components this year have seen an increase in lead time (the time from order to procurement) compared to the previous year.
In particular, some chips used in automobiles, smartphones, and flat displays have a lead time of 52 weeks. Even without a single general-purpose semiconductor chip, it is inevitable to disrupt the production of finished products, but even if a manufacturer orders a chip, there is a situation in which parts can be obtained only after a year.
The representative industry that is disrupting supply is automobiles. Most global automakers, such as Toyota General Motors (GM), Nissan Ford, have already started to cut production and shut down some factories due to a shortage of semiconductors. The smartphone industry has also caught an emergency. Qualcomm, the global No. 1 mobile application processor (AP) that acts as the brain of a smartphone, suffers a setback in semiconductor production. Not only Chinese manufacturers such as OVX (Opo, Vivo, Xiaomi), which have a high proportion of Qualcomm adoption, but also Samsung Electronics, which is building the world’s number one semiconductor infrastructure, acknowledged the shock.
Samsung Electronics CEO Vice Chairman Kim Ki-nam attends the 52nd Samsung Electronics regular shareholders’ meeting held at the Suwon Convention Center in Yeongtong-gu, Suwon-si, Gyeonggi-do on the morning of the 17th and gives a greeting./Photo = News 1
The supply-demand shortage of semiconductors is not limited to this, but is affecting the entire industry in a chain such as TV, bitcoin, and games. An official in the semiconductor industry explained that the ranks of semiconductor suppliers have recently shifted to producing semiconductors for smartphones, PCs, data centers, and vehicles first, and their ranking is naturally falling due to limited production capacity (CAPA).
The shortage of semiconductors has resulted in demand for pent-ups (repressed) due to the novel coronavirus infection (Corona 19) from the end of last year, and the demand in the finished product industry has exploded, and semiconductor manufacturers invested in expansion after the’semiconductor super boom’ in 2017-2018. It is an evaluation that the reduction of the value was a boomerang and returned.
Orders from all over the world have suddenly increased, but it is difficult for semiconductor suppliers to increase their production capacity in a short period of time. It takes at least 2-3 years to build a semiconductor production line and start mass-producing products. This is why there is a prediction that the semiconductor shortage will not be limited to a’short-term issue’ in the semiconductor industry.
In addition, the shutdown of some production lines and production disruptions due to abnormal climates such as the recent cold wave in Texas, where the Samsung Electronics foundry (semiconductor consignment production) plant is located, and the water shortage in Taiwan, where foundry companies are concentrated, also had a certain impact. Considering the close relationship between semiconductors and the production of finished products, the supply chain situation is highly likely to lead to product price hikes and competitiveness disruptions.
Japan’s Nikkei Asia said, “It is impossible to increase chip manufacturing facilities in the short term when companies such as automobiles and home appliances have failed to manage their chip inventory.” “I looked out.
The attention is focused on the investment of semiconductor suppliers. IC Insights, a market research firm, predicted that Samsung Electronics’ semiconductor facility investment this year is the largest in the world at about 31.5 trillion won ($28 billion). In particular, there is a high possibility that investment will expand in the foundry sector, which has a vision to achieve the world’s No. 1 goal by 2030.
TSMC, the No. 1 foundry, is expected to invest about 3093 trillion won ($27.5 billion). Combined, Samsung Electronics and TSMC account for 43% of global semiconductor facility investment. Bloomberg News reported that TSMC is considering the construction of six mega fabs that will triple its production line in Arizona, the US, which is currently being expanded. According to this report, about 40 trillion won (about 35 billion dollars) will be poured into the Arizona plant alone.
Countries around the world are also putting emphasis on securing semiconductors recently. U.S. President Joe Biden emphasized the need to reduce its dependence on semiconductors abroad, and emphasized the inspection of the supply chain, and the European Union (EU) announced that it would increase its semiconductor market share, which is currently 10%, to 20% by 2030. China is investing in its own companies by pushing for a’semiconductor rollout’, which is said to raise its domestic semiconductor self-sufficiency rate to 70% by 2025.
Seongsu Bae, reporter Hankyung.com [email protected]