Qualcomm’s smartphone application processor (AP) semiconductor’Snapdragon 888′ that is commissioned through Samsung Electronics. Provided by Qualcomm
The semiconductor supply shock that has emerged since the beginning of the year is rapidly spreading to the entire industrial sector. Cars and computers (PCs), as well as smartphones that have recently been introduced, are suffering from a shortage of supply. Due to the nature of the semiconductor production process that requires considerable investment, it is difficult to expect an increase in supply in the short term, so it is predicted that shortage of semiconductors will continue for the time being.
Qualcomm chip shortage affects the entire smartphone industry
According to Trend Force, a Taiwanese market research firm, on the 14th, the total 5G (5G) mobile communication smartphone production in the second quarter is expected to decrease by 30% compared to expected. This is because Qualcomm, which produces application processors (APs), which are key components of smartphones, is experiencing a severe supply-demand imbalance in recent years.
Cristiano Amon, CEO of Qualcomm, said in an interview with foreign media earlier this month, “The semiconductor supply chain is not properly prepared for the increase in IT demand. This chip shortage will continue until the second half of this year.”
The causes of the shortage of semiconductors are complex. Basically, as the use of non-face-to-face services has increased significantly due to the spread of the novel coronavirus infection (Corona 19), the semiconductor famine in all industries is serious. In addition, the aftermath of the US-China trade dispute was added. In the second half of last year, as Huawei’s smartphone production decreased significantly due to export regulations to Huawei, the rest of the companies such as Samsung Electronics, Xiaomi, and Oppo greatly increased their semiconductor orders to Qualcomm. Huawei has been supplying 200 million units of semiconductors for smartphones annually through its subsidiary Hi Silicon. As Huawei’s smartphone production is expected to be 40 million this year, existing companies are in a position to produce APs, the remaining 160 million units.
As the situation is like this, it seems that the aftermath is also affecting smartphone makers such as Samsung Electronics and Xiaomi. In the case of Chinese smartphone maker RealMe, stocks of smartphone power chips and communication frequency (RF) chips have run out. Xiaomi Vice President Lu Weibing also explained at a new product presentation last month that “semiconductors this year are not just insufficient, but extremely scarce.” In the case of Samsung Electronics, it produces its own AP called’Exynos’, but about half of the total is dependent on Qualcomm. Currently, Qualcomm’s AP is known to take about 30 weeks from order to production, and about 33 weeks for short-range wireless communication (Bluetooth) chips.
Foundry production limit reached… Prolonged chip shortage
The problem is that the production capacity of TSMC and Samsung Electronics, which are consigned to producing semiconductors of Qualcomm, is already overloaded. Accordingly, both Samsung Electronics and TSMC plan to expand production facilities through astronomical investments, but it will take several years to start operation.
In the case of Samsung Electronics’ interruption of the consignment production (Foundry) plant of the Austin semiconductor in the US, production has been stopped due to an unexpected accident. As a result of a cold wave in the middle of last month, the supply of electricity in the Austin area of the US was disrupted, and the Austin line of Samsung Electronics was temporarily suspended for about a month. Here, it produces Qualcomm’s 5G RF chips.
The disruption in supply and demand is leading to soaring prices. As IT companies”semiconductor panic buying’ continues, the prices of some parts are skyrocketing. The price of a general-purpose microcontroller semiconductor produced by the Swiss semiconductor company STMicroelectronics usually traded at around $2, but has recently skyrocketed to $14.
An official in the semiconductor industry predicted, “Before the situation gets worse, even companies that’buy it and see’ are appearing,” and “it seems that the semiconductor shortage will continue for a considerable period of time.”
Inner sky reporter [email protected]
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