09 June 2021
Chip shortage hitting auto jobs
The global semiconductor shortage is hitting automotive manufacturers where it hurts, which will inevitably lead to job cuts across the supply chain.
We are already starting to see this with Stellantis, the car company formed by the merger of Fiat and Peugeot, saying it will cut over 1,600 jobs at its Illinois Jeep plant.
Elsewhere, the first sign of job cuts will be found in production cuts. Ford Motor Co has outlined a series of plant shutdowns due to the chip shortage, with five facilities in the US and one in Turkey affected. They have also cut output in Europe.
Volkswagen AG has also sounded the horn, warning that chip shortages will curb output in the coming months of 2021. VW expects worsening production from the chip shortage and for it to affect all their cars groups, including SEAT and Audi.
Billions in losses
Job cuts appear to be inevitable across the automotive industry as manufacturers count the cost of production constraints caused by the chip shortage.
It is estimated the global auto industry will take an £80 billion hit in 2021. Several manufacturers have come forward with their own estimates. Ford says the chip shortage will cost them up to $2 billion in 2021 alone.
Unfortunately, it is ordinary workers who will be punished. With fewer cars to make, workers involved in the manufacturing of cars will be cut first. We have already seen this with Stellantis. Other manufacturers will likely follow.
Why the chip shortage?
Modern cars have more than 1,000 chips in them and the smartest, most connected models, such as those with ADAS systems, have over 3,000 chips. So, even a small supply constraint can set back production.
However, this is no small supply constraint.
It appears that no auto maker is immune to the chip shortage brought about by cancelled orders at the peak of the coronavirus pandemic.
When the coronavirus pandemic hit, auto makers cancelled chip orders. Electronics manufacturers filled this gap in demand with soaring sales. Now that auto makers need to ramp up chip orders again, they have nowhere to go because most chip makers are running at 98-100% capacity making chips for other booming sectors.
This has caused a global semiconductor shortage that has affected all industries and all players. Even Samsung, who make their own chips, are struggling. The shortage is predicted to last 1-2 years until new foundries become operational.
The semiconductor shortage won’t last forever, and people need cars. Production will accelerate in the years to come. However, jobs may still be at risk.
Sadly, the chip shortage could accelerate digital transformation in manufacturing facilities, with the displacement of human workers for machines.
This is commonplace, but traditional brands may now seek a permanent solution to job cuts through technology. Automated plants are inevitable.
In any case, the future of the automotive industry is bright so long as you extend your horizon. The chip shortage is likely to last for the next 2 years. If you work in the automotive sector, strap yourself in. There’s more drama to come.
02 June 2021
IBM says chip shortage could last two years
As technology has advanced, semiconductors have found their way into everything that requires computing power, from coffee machines to cars. But the manufacturing output for semiconductors has not kept up with this change.
The semiconductor industry has also been hit with an industry rotation in demand that it was never prepared to deal with.
This happened at the start of the coronavirus pandemic when automotive manufacturers scaled back semiconductor orders. Lockdowns meant they weren’t making enough cars, so they scaled down and battened the hatches.
Meanwhile, the demand for data centre, computing and home device semiconductors soared. Rather than finding themselves down on orders, semiconductor makers were all of a sudden making more semiconductors than ever before.
And then the automotive sector came roaring back.
Now, the semiconductor industry is in a state of disarray. Manufacturers are struggling to make enough chips in a situation we’ve called Chipageddon. This is compounded by the fact that silicon prices are soaring, making chips more expensive.
How long will the chip shortage last? The latest opinions don’t deliver good news - IBM says the chip shortage could last 2 years.
The president of IBM, Jim Whitehurst, has said that the current chip shortage could last another two years. Here’s what he said in an interview with the BBC:
“There's just a big lag between from when a technology is developed and when [a fabrication plant] goes into construction and when chips come out. So frankly, we are looking at couple of years… before we get enough incremental capacity online to alleviate all aspects of the chip shortage."
What Whitehurst means is it takes a long time to set up a chip fab before it can start producing chips. It takes 12-24 months typically, so you have a situation where even if a lot of fabs are being built, they won’t contribute for years.
The chip shortage is so severe that it has led IBM to look towards other ways to meet demand. “We're going to have to look at reusing, extending the life of certain types of computing technologies,” says Whitehurst, “as well as accelerating investment in these [fabricating plants], to be able to as quickly as possible get more capacity online."
IBM isn’t alone
There is a serious imbalance in the semiconductor industry, and this is a problem many companies are having to contend with.
For example, Ford cancelled shifts at two car plants earlier this year and said profits could be hit by up to $2.5bn due to chip shortages. Meanwhile, Apple announced it would take a $3 billion to $4 billion hit due to the global chip shortage.
However, the most telling story of the semiconductor shortage comes from Samsung.
Samsung is the world’s largest manufacturer of DRAM and the world’s fourth largest semiconductor manufacturer, and even they are experiencing shortages, having to delay the launch of the next-gen Galaxy Note until as late as 2022.
The fact that Samsung is experiencing a chip shortage when it manufactures its own chips tells us everything we need to know - the chip shortage is severe. It isn’t a small shortage at all - it’s an enormous shortage affecting everyone across the supply chain.
Unfortunately, it looks like the global semiconductor shortage will be around for a few years yet, and things could get worse before they get better.
The semiconductor shortage is the result of a catalogue of problems going back several years. Here are some of the highlights:
Intel is the world’s leading supplier of CPUs for PCs and data centres and in 2018 they caused a chip shortage with the troubled development of 10nm chips. Intel’s mistakes have led to a shortage in CPUs for computers.
Declining DRAM prices
DRAM is a computer’s main memory. In 2019 and 2020, prices for DRAM declined, causing the biggest players - Micron, Samsung and SK Hynix - to curb their output. This led to supply constraints when the coronavirus pandemic hit.
The global demand for chips has hit an all-time high. Data centres, computers, cloud services, augmented reality, 5G, connected devices and connected vehicles are fuelling demand. This is great for chip sales, but the industry can’t keep up.
The U.S. created a semiconductor shortage of its own making when they levied sanctions against several Chinese companies, including SMIC and Huawei. This exasperated the chip shortage, placing strain on domestic manufacturers.
Coronavirus pandemic and cancelled orders
During the coronavirus pandemic, demand for semiconductors soared in some industries (e.g. electronics) and dropped in others (e.g. automotive). When demand came back for “down” industries, demand didn’t drop for “up” industries, leading to a shortage.
We now have a situation where carmakers are battling the electronics industry for chips. There aren’t enough chips to go around and increasing manufacturing capacity is impossible without significant investment in new foundries.
The electronics super cycle is not going to end anytime soon because there are so many tailwinds, including self-driving cars, VR, AR, AI, 5G and space travel. So, we cannot expect demand to drop and the chip industry to catch up with itself.
To meet demand, we need new foundries. These take 12-24 months to set up. Many companies are already building new foundries, or they are boosting capacity at existing plants, which is good news for the long run.
In the here and now, manufacturers can meet demand for chips by partnering with an electronics component distributor like us. We specialise in the procurement and delivery of electronic components and parts (including semiconductors) for a wide variety of industries from the world's leading manufacturers.
The semiconductor shortage has affected the entire manufacturing supply chain but our close links in the industry mean we have better access to chips than most. No promises, but we have an excellent track record across all sectors.
Get in touch with us for a chat about your needs. We’re here to help.
Call: 01904 415 415
26 May 2021
Who are the biggest players in the semiconductor industry?
Over the next decade, demand for semiconductors is going to go supersonic thanks to secular and cyclical tailwinds.
Semiconductors are the building blocks of the information age; every device that will be ‘connected’ needs a semiconductor. The companies that manufacture semiconductors are the unsung heroes of the future. But who are they?
In this article, we will briefly cover the biggest players in the semiconductor industry.
Foundries concentrate on manufacturing and testing physical products for fabless companies. Some companies, like Intel, are both fabless and foundry, meaning they design and make their chips. Foundries often serve as a non-competitive manufacturing partner for fabless companies. The following list contains the biggest foundries:
TSMC (Taiwan Semiconductor Manufacturing Company) is the world’s largest semiconductor manufacturer by a significant margin. They are expected to capture 56% of the semiconductor market in 2021 (up from 54% in 2020).
UMC (United Microelectronics Corporation) is a Taiwanese company. They are the second largest semiconductor foundry in the world behind TSMC. UMC specialise in mature nodes, such as 40nm nodes and other speciality logic.
SMIC (Semiconductor Manufacturing International Corporation) is a Chinese company. They are the third largest semiconductor manufacturer in the world. They specialise in process nodes from 0.35 micron to 14 nanometres.
Samsung Electronics is a South Korean company. They are the world’s largest manufacturer of DRAM and the world’s fourth largest semiconductor manufacturer. They are expected to occupy 18% of the semiconductor market in 2021.
Micron is an American company. They are the second largest manufacturer of DRAM (dynamic random-access memory) behind Samsung. DRAM is semiconductor memory used in consumer electronics, computing equipment and IoT devices.
SK Hynix is a South Korean company. They are the world’s third largest manufacturer of DRAM and a leading manufacturer of NAND flash memory. In 2019, they developed HBM2E, the world’s fastest high bandwidth memory.
NXP Semiconductors is a Dutch-American company. They manufacture ARM-based processors, microprocessors and logic across 8, 16 and 32-bit platforms. Their products are used in automotive, consumer, and industrial markets.
Powerchip Technology Corporation is a Taiwanese company. They manufacture DRAM and memory chips, semiconductors and integrated circuits. They use a 300mm wafer production technology which can produce advanced and mature chips.
ON Semiconductor is an American company. They design and fabricate chips and microprocessors for automotive, aerospace, industrial, cloud and Internet of Things devices. They have over 45 years’ of experience in the foundry business.
“Fabless” means outsourced fabrication. Fabless companies concentrate on the research and development of chips and semiconductors. They then outsource the manufacturing of the product to a foundry. This relationship is non-competitive, and the foundry is normally a silent partner. The following list contains the biggest fabless companies:
MediaTek is a Taiwanese company. By market share, they are the world’s leading vendor of smartphone chipsets. They are also a leading vendor of chipsets for other consumer electronics including tablets and connected TVs.
Qualcomm is an American company. They are the world’s biggest fabless company. Their product catalogue includes processors, modems, RF systems, 5G, 4G and legacy connectivity solutions. They are best-known for Snapdragon Series processors.
Broadcom is an American company. Depending on which figures you read, they are either the first or second largest fabless company in the world. Broadcom's products serve the data centre, networking, software, broadband, wireless, and storage and industrial markets.
NVIDIA is an American company. They are the market leader for high-end graphics processing units (GPUs). In 2020, NVIDIA GeForce GPUs accounted for 82% of GPU market share. This is significantly more than AMD Radeon graphics cards, which accounted for 18%.
AMD is an American company. They design high-performance GPUs and processors for computers, where they command the second biggest market share behind Intel. Their GPUs compete against NVIDIA’s but are not considered as powerful.
Himax is a Taiwanese company. They are a leading vendor of automotive chips and semiconductors for connected devices. Their semiconductors are used in TVs, monitors, laptops, virtual reality headsets, cameras and much more.
Realtek is a Taiwanese company. They are a fabless semiconductor company focused on developing IC products (integrated circuits). They are best-known for SoCs (System-on-Chips) network (Ethernet) and wireless (Wi-Fi) interface controllers.
Integrated device manufacturers
Some companies have foundry and fabless arms. These companies often design and fabricate their own products or design and fabricate chips for others. These integrated device manufacturers (IDMs for short) blur the line between foundry and fabless with an in-house production process that utilises little if any outsourcing. IDMs include:
Intel is an American company. They design and manufacture their own chips which they package into CPUs. Intel’s market share in the CPU market has declined in recent years, but they remain one of the top semiconductor manufacturers.
Analog Devices is an American company. They have a 150mm wafer fab and a 200mm wafer fab. They have fabless production facilities and have made numerous fabless acquisitions over the years, such as OneTree Microdevices in 2017.
Texas Instruments is an American company. They have 14 manufacturing sites including silicon foundries. They specialise in the production and manufacture of wafers, digital signal processors, integrated circuits and embedded processors.
You may have noticed that the US and Taiwan dominate the semiconductor industry on the foundry and fabless side. Among the biggest semiconductor companies, the largest proportion are based in the United States. However, Taiwan is the foundry king, with the two biggest players based there (TSMC and UMC).
Semiconductors are used in all electronics that require computing power, including smartphones, PCs, and data centres and cars. A surge in demand for chip-based products will fuel the need for more semiconductors in the future. It will be up to the big players on this list to meet that demand and power our future.
19 May 2021
Wireless-to-DALI Gateway specification from DALI Alliance
The DALI Alliance (DiiA) has published specifications for linking wireless-to-DALI gateways to DALI wired products and Bluetooth mesh and Zigbee ecosystems.
The two new specifications published by the DALI Alliance are Part 341, covering Bluetooth Mesh to DALI Gateways, and Part 342, describing Zigbee to DALI Gateways. You can download the specifications you need for your project here.
Wireless-to-DALI gateways allow the incorporation of DALI luminaires and other DALI devices into wireless control networks.
The new specifications have well-defined parameters to enable consistent lighting behaviour, so that high-quality smart lighting control systems can be designed. Part of the specifications cover data and analytics, enabling DALI control gear to log and report energy and diagnostics data to a control interface.
Many lighting systems already leverage DALI lighting control. DALI permits the digital controlling of each lighting fixture in a given lighting system. It enables a two-way communication protocol so fixtures can communicate. These systems are flexible, scalable and built for the future with Internet of Things (IoT) compatibility.
Why publish specifications?
The new specifications have effectively standardised how to link wireless-to-DALI gateways with connectivity solutions. This provides greater flexibility and creative freedom for lighting designers and OEMs. It also enables a consistent quality in installations.
The DALI Alliance, Bluetooth SIG and Zigbee Alliance have collaborated on this effort and all parties are delighted to have created new standards.
Here’s what each party had to say on the announcement:
The DALI Alliance
“Publishing the specifications for Wireless to DALI Gateways is a major milestone that signals our intention to allow DALI to operate within wireless networks when the need arises,” said Paul Drosihn, general manager of the DALI Alliance. “The move extends choice, convenience and creative possibilities to the user base of DALI wired systems and to those implementing new wired and wireless lighting control systems.”
“The standardized gateway between DALI lighting products and Bluetooth mesh lighting control networks will further accelerate the adoption of advanced IoT-enabled intelligent lighting systems,” said Mark Powell, Bluetooth SIG chief executive officer. “Providing valuable energy efficiencies and a more comfortable and productive experience for occupants, these sensor-rich lighting systems will also enable more efficient operation of other building systems, including HVAC and security.”
“The Zigbee to DALI Gateway brings together the market-proven, cost-effective, low-power wireless Zigbee technology, with the internationally standardized and widely used wired DALI lighting protocol, to deliver optimized and expanded wireless lighting solutions to the IoT market. When it comes to lighting-control networks, many of our members are invested across categories and applications, especially in the commercial space,” said Chris LaPré, Technology Lead, Zigbee Alliance. “As they continue to lead the market and innovate in new directions afforded by the IoT, we support broadening lighting possibilities as manufacturers drive standards that matter and deliver lighting solutions that keep the world connected. ”
You can find out more about the new release of specifications for standardised wireless-to-DALI gateways and DALI-over-wireless devices here.
12 May 2021
Equivalents keep the supply chain moving in uncertain markets
In uncertain markets, the demand for specific, branded components tends to outstrip supply. We have seen this recently with the semiconductor shortage, where specific chips are hard to come by at a time when they are needed.
Equivalent components, also known as equivalents in the industry, provide an immediate solution. These ‘generic’ parts can be specified when specific parts can’t be sourced and in cases where parts no longer need to be from one brand.
Successive cycles of electronic component shortages (especially in the semiconductor sector) has led to manufacturers specifying equivalents on their order sheets. Outside of sectors that have precise specifications for safety, like aerospace and biotechnology, these equivalents are helping to keep supply chains moving.
Equivalent in quality and specification
One of the common misconceptions about equivalent components is that they are somehow castoffs or second-best components. This is untrue. They are simply equivalent components from a different brand/maker/OEM.
The term ‘equivalent’ is used to describe components that can be used as substitutes for specific components. They meet the size, power, specification and design standards set by design teams. They are ‘like-for-like’ on the spec sheet.
The quality aspect of equivalents is only a concern when the electronic component distributor cannot verify the provenance of the components. At Cyclops, we only source genuine, verifiable components. We would rather expand our supplier base than source a batch of equivalents that we cannot be sure of.
A pragmatic approach to managing supply
Companies that are fixated on using specific components run the risk of running into roadblocks. There is a global shortage for chip passives and discrete semiconductors and this problem is expected to last through 2021.
Specifying equivalents is a pragmatic approach to managing supply chains in uncertain markets for several reasons. For the customer, generic specification reduces supply chain risk. It allows the customer to meet demand requirements without the risk of backorders, supply constraints, or being outbid by other companies.
The biggest benefit is flexibility. Rather than be tied to what is in stock and what you can source from an OEM, you can specify a value and chip size for passives, or a generic diode designation, and let your distributor source equivalents.
If you want to give yourself the best chance of meeting demand for scarce electronic components, equivalents will need to form part of your supply chain. Otherwise you run the risk of disruption and higher procurement costs.
How we can help you
Cyclops specialises in the procurement and delivery of electronic components and parts for a wide variety of industries from the world's leading manufacturers.
We can source equivalent components for you from our global network. All we need is a value and chip size for passives or a generic diode designation for actives. We will work with your spec sheets and source high-quality, equivalent components.
If you are currently experiencing an electronic component shortage, we can help. Email us if you have any questions or call us on 01904 415 415 for a chat with our team.
06 May 2021
Top Manufacturer Lead Time Update
Click the image below to view our full top manufacturers' lead time update.
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05 May 2021
Keeping pace with high power terminal block demand
High power terminal block demand is soaring with the buildout of EV charging infrastructure. The reason is simple - high current requires high power terminal blocks, making these components essential for EV charging stations.
The rapid growth in the adoption of electric vehicles is fuelling demand for high power terminal blocks beyond what most people expected.
The UK Government’s decision to ban petrol and diesel cars from 2030 has accelerated the buildout of EV chargers, leading to significant new investment by leading companies like Tesla and BP Chargemaster. There are now more than 35,000 charge points across the UK, a figure that is expected to increase by 10,000 in 2021.
The big barrier to purchase with electric vehicles is a lack of charging infrastructure and slow charge times. Building more charging stations is the simple solution to this problem, but bigger, better high power terminal blocks are also needed for the next generation of rapid chargers that will provide power up to 350 kW.
What is ‘high power’?
Anything above 40 amps is classed as high power. All public electric charging stations significantly exceed this amount. High power terminal blocks are typically available up to 125 amps and higher for custom applications.
We need terminal blocks capable of handling higher currents when the charging speed demand increases for the station. EV chargers are classified in three categories: Level 1, Level 2 and direct current. Whether a charger is AC or DC, the higher the current, the higher the power draw, so the more robust the terminal needs to be.
Terminal block specifications
Terminal blocks serve as a routing tool for wiring. They are simple components, used to connect circuits together and provide an electrical ground for the circuit.
Screw terminal, push button and push-in terminal block styles are available. These accommodate different types of circuit design. The module type can be interlocking or single-piece with a plug or receptacle housing.
Terminal blocks for EV charging stations are optimised for this specific purpose and they are normally rated for at least 150% of the max current.
Meeting the soaring demand for high power terminal blocks
Unlike semiconductors, there is no immediate shortage of high power terminal blocks. They are available in the tens of thousands per order.
There is competition between the EV and renewable energy industry for high power terminal blocks though. Both industries are significant consumers of these components and demand is increasing with new electrical installations.
Other in-demand components for electric vehicle charging infrastructure include battery connectors and high voltage connectors designed to handle the heat of EV charging. These connections need to be small but also thermally efficient.
Do you need help sourcing terminal blocks?
Cyclops is a leading supplier of high power terminal blocks and connectors to the electric vehicle and renewable energy markets. We are a global distributor with access to the widest range of electronic components for all applications.
28 April 2021
Electronics Counterfeiters Capitalize on Component Shortages
The electronics industry is experiencing a components shortage which is bad news for everyone except counterfeiters who are seeing greater demand than ever.
The total available market for counterfeit electronic components is billions of pounds, so it makes no wonder this illegal activity is seeing rapid growth.
What is a counterfeit part?
A counterfeit part is an unauthorised copy, imitation, substitute, or modification of an original component. Counterfeit components are a misrepresentation of the real thing but can be extremely convincing they are legitimate.
Giveaways that components are counterfeits include:
- Colour variances
- Misspellings and incorrect labelling
- Mismatched date codes
- Duplicate date codes and labels
- Missing items
- Poor packaging and quality control
- Font variances
- Country of origin problems
- Signs of “resurfacing”
- Failure in tests and performance issues
How are counterfeiters capitalising on component shortages?
Electronics counterfeiters are capitalising on component shortages by penetrating weakened supply chains, taking advantage of inadequate quality control processes and taking advantage of inadequate reporting.
Demand is exceeding supply for many electronic components, exasperating the issue. The semiconductor shortage is the current big one.
As lead times get pushed out, buyers are faced with a dilemma: should they stick with trusted suppliers and put up with delays or look for another supplier? The risk is the ‘other supplier’ being a counterfeiter or not having the necessary controls in place to ensure that shipments do not get intercepted and changed.
This dilemma is when counterfeiters strike to take advantage. The wrong decision can have significant financial and economic consequences.
Another area of focus for counterfeiters is the scarcity of parts caused by end-of-life designations. There is significant demand for end-of-life components, but they can be very hard to find. Counterfeiters pray on this weakness with illegitimate copies.
There’s also a grey market for used electronic components that are refurbished or reconditioned and sold as new. The danger with this is using components that are spent and not repaired properly. When you buy “new” the components should be exactly that. Buying used is never a good idea, unless you want used parts.
How can I protect myself from counterfeiters?
First of all, you should read our 8 Step Guide To Buying Electronic Components With Confidence and Avoiding Counterfeits.
Secondly, you should only work with electronic component suppliers who have a compliance program in place. A good benchmark is suppliers who are ERAI (Electronic Resellers Association International) members. We are ERAI members, so we are on the ERAI database and use ERAI supply chain risk mitigation solutions.
Secondly, it’s really important that you have adequate inspection and testing processes in place to verify the components you receive. If your supplier tests components for you, what testing facilities do they use, and which services are performed?
Electronics counterfeiters are capitalising on component shortages by taking advantage of inadequate quality control and reporting processes and weakened supply chains.
A robust supply chain and trusted parts suppliers are the two keys to protecting your organisation. If you are concerned about counterfeit components in your supply chain we’re happy to provide advice. Call us on 01904 415 415 for a chat.
22 April 2021
Why We're Facing a Global Semiconductor Shortage
The world is experiencing a semiconductor shortage at a time when demand for semiconductors is at an all-time high. Manufacturers can’t make enough of them and we’re now seeing this affect the availability of products.
You probably remember last year Sony released the PlayStation 5 and Microsoft released the Xbox Series X. AMD released the Big Navi GPU (RX 6000) and Apple released the iPhone 12 range. What all these products have in common is they were all directly affected by the semiconductor shortage. Demand well and truly exceeded supply.
What’s causing the shortage?
A perfect storm has hit the semiconductor market. It isn’t one thing but a combination of different things that’s causing the shortage today.
The COVID-19 pandemic
When the COVID-19 pandemic hit, car and commercial vehicle sales took a hit. Estimates suggest that sales fell by 50% or more within a single month. In response, car manufacturers scaled back orders for semiconductors and other parts.
At the same time, demand for electronics chips soared as more people spent time working from home and on furlough.
Laptops, smartphones, drones, smartwatches, tablets, kitchen appliances - everything has a semiconductor nowadays. Then you have IT, data centres, internet infrastructure and cloud and edge computing. All are powered by semiconductors.
And so, the factories that were at capacity making semiconductors for cars switched to making semiconductors for electronics. This was a blessing in disguise for factories because semiconductors for electronics have a higher margin. However, it has caused a problem for car manufacturers who now need to ramp up production.
The situation now is this - car sales are picking up and car manufacturers are fighting for orders against electronics manufacturers. Factories are at capacity and can’t make enough to go around. This is feeding through to nearly every sector.
Ultimately, this is the result of poor planning from car makers who cut orders too deeply last year at the beginning of the COVID-19 pandemic.
Even before the COVID-19 pandemic hit, there weren’t enough factories to meet semiconductor demand. There were long lead times in 2019 because semiconductor demand outpaced the ability of factories to make them. This problem has persisted through to 2021 and has been compounded by the COVID-19 pandemic.
With most factories running at 99-100% capacity, there is very little room for boosted output. You would think that the solution is to build more factories, but this would not solve the problem today or even a year from now because semiconductor fabs take at least a year to build with another 6-12 months in setup time.
Semiconductor manufacturers are investing in new factories, expansion and more efficient technologies, but short-term solutions these are not.
The US is attempting to bring semiconductor manufacturing to US soil to remedy this or at least reduce dependency on foreign suppliers.
US and China trade war
Calls for domestic manufacturing are heating up in the US and China, the result of a trade war brought about mostly by supply chain disruptions related to the COVID-19 pandemic.
Reports in May 2020 that the Trump administration was in talks with Intel, TSMC, and Samsung about building US chip factories proved true. In 2021, with a new president and Biden administration, these talks are persisting.
The reason a technology trade war broke out between the US and China is because the US imposed a 25 per cent tariff on $34 billion of Chinese imports in 2018. There has been bad blood ever since with threats and action on both sides.
This eventually affected the semiconductor supply chain because in 2020 the US turned to export restrictions targeting the semiconductor supply chain to safeguard critical infrastructure in the telecommunications sector. This followed a 2019 ban on the Chinese company Huawei for “national security reasons”.
For example, one of the consequences of export restrictions was that American firms were cut off from chips made by China's Semiconductor Manufacturing International Corporation - the third largest chip maker in the world with 11% market share.
Local production problems
Factory shutdowns due to natural disasters, bad weather and the COVID-19 pandemic have caused semiconductor supply chain issues.
Most of the world’s semiconductors are manufactured in Taiwan. Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, has a 28% market share. The second largest, UMC, also based in Taiwan, has a 13% market share.
Taiwan is experiencing serious water droughts in 2021. Millions of tonnes of water are required to manufacture semiconductors every week. Taiwan Semiconductor Manufacturing is having to bring water in on trucks and UMC are doing the same. This has caused significant drops in manufacturing efficiency.
The US is also experiencing shutdowns. NXP Semiconductors had to shut its plant in Austin, Texas, due to winter weather in February 2021.
Factory shutdowns cause order backlogs and extended lead times. Orders persist and pile in whether a factory is down or not. This squeezes supply chains, causing a shortage.
How long will the semiconductor shortage persist?
We expect the semiconductor shortage to persist through 2021 but ease towards the end of the year as demand for electronics chips decreases as COVID-19 lockdowns end. This will cause a shift in supply from electronics semiconductors to automotive semiconductors which will provide the industry with a much-needed equilibrium.
The world’s largest semiconductor manufacturers - TSMC, UMC, SMIC, Samsung, Intel, SK Hynix - are investing in increased output. Many investments were in the pipeline as early as 2019 and are expected to yield results at the end of 2021.
Right now, there is a serious imbalance in the demand for semiconductors, one that our existing infrastructure is not built to cope with. This imbalance will ease over time.
How can supply chains continue to meet demand?
If you have been impacted by the semiconductor shortage you can meet demand by partnering with an electronics components distributor like us.
We specialise in the procurement and delivery of semiconductors and parts for a wide variety of industries from the world's leading manufacturers. You can find out more about what we do here. Email us if you have any questions.
14 April 2021
Anglia goes solar with new photovoltaic cell range
Anglia Components has announced a new PCB-mounted photovoltaic solar cell line for electronics applications in collaboration with Anysolar, offering a new way for electronics manufacturers to harness light energy.
The Anysolar PCB-mounted photovoltaic solar cell range can replace battery and mains power for low-power applications. It can be reflow soldered onto PCBs and parts compatible with traditional hand soldering processes.
The advantages of using Anglia’s photovoltaic cells include:
- Clean energy for sensors
- Low cost
- Long lifespan
- No cell degradation
- No emissions from energy production
- Replaces batteries and mains
- Discreet design
- Powered by indoor and outdoor light energy
The technology is based on monocrystalline silicon free from impurities, so the cells do not degrade like traditional solar cells do. This enables a longer lifespan and peak performance, to reduce recycling rates and keep electronics in service.
Anglia has invested in a profile of all the most popular cell sizes and formats of Anysolar’s Gen 3 solar cells. The cells offer a viable alternative power source to battery and mains power for simple sensors. The cell range offers power from 5.5 mA to 1.02 A so is suited to a variety of low-power sensor applications.
Commenting on the partnership, David Pearson, Technical Director at Anglia said, “Anglia is delighted to partner with Anysolar for this new product range which complements many of our established lines, such as low power MCU’s and sensors.”
“Anysolar provides a viable alternative power source for many of our customers applications such as remote IoT sensor nodes.”
KY Choi, President of Anysolar, added, “We are delighted to partner with a distributor that is so well-respected in the UK and Ireland industry. We really value our relationships with our customers and look for partners that share that value. Our solar modules offer Anglia customers an environmentally friendly new power source for their designs.”
How it works
A photovoltaic (PV) cell, also known as a solar cell, generates electricity when exposed to light particles (photons). The Anysolar PCB-mounted photovoltaic solar cell line optimises this process with a large surface area and monocrystalline silicon.
The photovoltaic effect is a physical and chemical phenomenon. When applied to electronics, it can be used to power low-power sensors. This reduces energy draw on a device’s core power source to optimise performance and efficiency.
For devices to become autonomous, PCB-mounted photovoltaic solar cells will also be necessary for energy. IoT devices are a good example. These devices require a self-sufficient power source to run separately from the grid.
In the future, it’s expected that IoT devices will be able to run without wires or batteries and light energy provides the best possible solution.
Anglia’s PCB-mounted photovoltaic solar cell line is capable of powering a wide range of sensors in IoT devices, including robots, drones and consumer electronics. Remote IoT sensor nodes (nodes that collect data and information related to objects passing by, such as in autonomous cars) are a good example of components prime for PV cells.
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