The semiconductor crisis has been the talk of the town lately. Who knew the dearth of such a tiny component in the manufacturing process will jolt industries; influence their decision-making and hamper their ability to pick up revved up demand?
Let’s navigate through various aspects of this crisis and find out the underlying reasons for the above events.
Semiconductor chip found in computers, gaming hardwares, smartphones, automobiles etc. is a component which conducts electricity. A smartphone has nearly 460 billion of these. Its main function is to amplify signals and convert energy. US-based Intel Inc., Nvidia Corp and Qualcomm Technologies Inc are the three leading chip makers apart from South Korea’s Samsung and SK Hynix.
What led to the Crisis?
These chips have been in paucity since last November. Unequivocally, the Covid-19 pandemic is to blame for the shortage, since lockdowns across various countries caused crucial chip-making factories in China, the US, South Korea to halt operations.
As people started preferring personal cars to public transport, the demand for cars swelled and the chipmakers were unable to meet the rising orders.
US-China tensions are also part of the story. Last year, the US banned foreign companies whose chips use American technology from selling to the Chinese tech giant Huawei which then began to stockpile chips, along with other companies thus, further straining supplies.
According to a Bloomberg report, which quoted research by Susquehanna Financial Group, the chip lead time increased to 17 weeks in April, from around 12 weeks in the beginning of 2020. (Chip lead time is the gap between when a chip is ordered and when it is delivered.)
Moreover, it is not something whose production units can be set up overnight in a new place. It’s a capital-intensive process (setting up a new plant would cost about 5-10 billion USD) and takes weeks to set up and roll out the production smoothly.
What has been the Impact of the Crisis?
The famine of these chips has dealt a huge blow to industries who are its primary users, namely, car manufacturers and commercial electronic device manufacturers. The crisis has catapulted car manufacturers into a situation where they have to delay vehicle launches. For instance, Mahindra & Mahindra is factoring some delays in the launch of its flagship Mahindra XUV500 and new Scorpio.
Carmakers have also started discarding some high-end features ad interim. Japanese carmaker Nissan is leaving navigation systems out of thousands of vehicles, while French company Renault has stopped offering a larger digital screen behind the steering wheel on its Arkana SUV.
Production processes are also being curtailed by many makers. Suzuki Motor Corp has already announced production cuts at its Gujarat plant and limited the work to one shift. Among global carmakers, Ford Motor Co said in a conference call in April that it is likely to lose about half its second-quarter production to the chip shortage.
Even though sales were on the rise after the lockdown and the festive season round the corner will further soar the demand, manufacturers still may not be able to meet the demand.
Analysts also point that continuing the squeeze could lead to higher prices for customers. SEB, a French maker of kitchen equipment such as blenders, has reported that it is being forced to hike its prices.
How is it being dealt with?
In India, the Ministry of Electronics and Information Technology is seeking out foreign capital to set up semiconductor manufacturing factories in India and has received more than 20 Expression of Interests (EoIs). The GoI has also announced a $1 billion incentive for chip-makers who manufacture in India. Tata group is also looking forward to seizing this opportunity.
The European Union, which currently accounts for less than 10% of the global production, has aimed to ramp it up to 20%. Intel has come forward to invest $20 billion towards building a semiconductor factory in Europe.
The South Korean government has also announced a whopping $450 billion investment in its bid to become a semiconductor giant globally.
It is predicted that the crisis could stretch upto 2022 and even to some parts of 2023!
Many countries are eyeing this lucrative opportunity but it will certainly take time to show results. We hope that the crisis is resolved as soon as possible. Till then read our other publications!
Mgogoro wa semiconductor umekuwa mazungumzo ya mji hivi karibuni. Ni nani angejua kwamba upungufu wa kipengele kidogo kama hicho katika mchakato wa utengenezaji utaathiri viwanda, kuathiri maamuzi yao na kuzuia uwezo wao wa kuchukua mahitaji ya kuongezeka? Hebu tuangalie mambo mbalimbali ya mgogoro huu na tujue sababu za matukio yaliyotajwa hapo juu. Semiconductor chip kupatikana katika kompyuta, michezo ya kubahatisha hardware, smartphones, magari nk. Ni sehemu ya umeme ambayo huongoza umeme. Simu ya mkononi ina karibu bilioni 460 za hizi. Kazi yake kuu ni kuimarisha ishara na kubadilisha nishati. Intel, Nvidia na Qualcomm ni makampuni matatu ya kuongoza ya kutengeneza chips, pamoja na Samsung na SK Hynix. Ni nini kilichosababisha Mgogoro huo? Vipande hivi vimekuwa vikififia tangu Novemba mwaka jana. Kwa kweli, janga la COVID-19 linawajibika kwa upungufu huo, kwani kufungwa kwa nchi mbalimbali kulisababisha viwanda muhimu vya kutengeneza chips nchini China, Marekani, Korea Kusini na Korea Kusini kusimamisha shughuli. Wakati watu walipoanza kupendelea magari ya kibinafsi kwa usafiri wa umma, mahitaji ya magari yaliongezeka na watengenezaji wa chips hawakuweza kukidhi maagizo yanayoongezeka. Mvutano kati ya Marekani na China pia ni sehemu ya hadithi hiyo. Mwaka jana, Marekani ilikataza makampuni ya kigeni ambayo chips zao hutumia teknolojia ya Marekani kuuza kwa kampuni kubwa ya teknolojia ya China Huawei, ambayo kisha ilianza kuhifadhi chips pamoja na makampuni mengine, hivyo kuongeza usambazaji. Kulingana na ripoti ya Bloomberg, ambayo ilinukuu utafiti wa Susquehanna Financial Group, wakati wa kuongoza chip uliongezeka hadi wiki 17 mnamo Aprili, kutoka karibu wiki 12 mwanzoni mwa 2020. Wakati wa kuongoza chip ni muda kati ya wakati chip imepangwa na wakati inapatikana. Kwa kuongezea, si kitu ambacho vitengo vya uzalishaji vinaweza kuanzishwa usiku mmoja katika mahali jipya. Ni mchakato wa mtaji (kuanzisha kiwanda kipya ingekuwa gharama kuhusu 5-10 bilioni USD) na inachukua wiki kuanzisha na kuzindua uzalishaji vizuri. Mgogoro huo umekuwa na matokeo gani? "Kukosa kwa chips hizi kumesababisha mgogoro mkubwa kwa viwanda ambavyo ni watumiaji wake wa msingi, yaani, watengenezaji wa magari na watengenezaji wa vifaa vya elektroniki vya kibiashara.""" Mgogoro huo umesababisha watengenezaji wa magari kuhamia katika hali ambapo wanalazimika kuchelewesha uzinduzi wa magari. Mahindra & Mahindra inaongeza muda wa kutolewa kwa XUV500 na Scorpio Watengenezaji wa magari pia wameanza kuondoa baadhi ya vipengele vya hali ya juu kwa muda. Kampuni ya magari ya Japan Nissan imeacha kutumia mfumo wa urambazaji kwenye magari yake, huku kampuni ya Ufaransa ya Renault ikiacha kutumia skrini kubwa ya dijiti kwenye gari lake la aina ya Arkana. Utaratibu wa uzalishaji pia unapunguzwa na watengenezaji wengi. Kampuni ya Suzuki Motor Corp imetoa taarifa ya kupunguza uzalishaji katika kiwanda chake cha Gujarat na kupunguza kazi kwa zamu moja. Kampuni ya magari ya Ford Motor Co. ilisema katika mkutano wa simu mwezi Aprili kwamba inawezekana kupoteza karibu nusu ya uzalishaji wake wa robo ya pili kwa ukosefu wa chip. Ingawa mauzo yalikuwa yakiongezeka baada ya kufungwa na msimu wa sherehe karibu na kona utaongeza mahitaji, watengenezaji bado hawawezi kukidhi mahitaji. Wachambuzi pia wanasema kwamba kuendelea na shinikizo hilo kunaweza kusababisha bei za juu kwa wateja. SEB, mtengenezaji wa vifaa vya jikoni nchini Ufaransa, amesema kuwa bei ya bidhaa hizo imepanda. Inashughulikiwaje? India: Wizara ya Teknolojia ya Habari na Elektroniki inatafuta mtaji wa kigeni kuanzisha viwanda vya kutengeneza semiconductor nchini India na imepokea zaidi ya maonyesho ya maslahi 20 (EoI). Serikali ya India pia ilitangaza mpango wa $ 1 bilioni kwa watengenezaji wa chip ambao hutengeneza nchini India. Kikundi cha Tata pia kinatazamia kutumia fursa hii. Umoja wa Ulaya, ambao kwa sasa unashiriki chini ya 10% ya uzalishaji wa dunia, umekusudia kuiongeza hadi 20%. Intel imetoa mpango wa kuwekeza dola bilioni 20 katika ujenzi wa kiwanda cha kutengeneza vifaa vya semiconductor barani Ulaya. Serikali ya Korea Kusini imetoa taarifa ya uwekezaji wa dola bilioni 450 katika mradi wake wa kuwa kampuni kubwa ya semiconductor duniani. Inatarajiwa kuwa mgogoro huo utaendelea hadi mwaka 2022 na hata katika sehemu fulani za mwaka 2023. Nchi nyingi zinaangalia fursa hii yenye faida lakini bila shaka itachukua muda kuonyesha matokeo. Tunatumaini kwamba mgogoro huo utatatuliwa haraka iwezekanavyo. Kabla ya wakati huo soma vichapo vyetu vingine!