Tel 01904 415 415

Fax 01904 436 540

Cyclops Electronics uses cookies to ensure that we give you the best experience on our website. For optimal performance please accept cookies. For more information please visit our cookies policy.

Accept and close

Component Search

Blog

RSS Feed

Showing posts tagged 'ibm'


02 June 2021

IBM says chip shortage could last two years

pexels-photo-1105379

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.

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.

Semiconductor woes

The semiconductor shortage is the result of a catalogue of problems going back several years. Here are some of the highlights:

Intel’s woes

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.

Super cycle

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.

Tech war

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.

Fierce competition

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.

Meeting demand

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

Email: sales@cyclops-electronics.com 

Tags: ibm chip shortage electronic components semiconductors


14 July 2015

IBM Chip Breakthrough. Taking Computers to the Next Level

The future of computer chips has taken a bold step thanks to IBM. The company have announced they have been working on high capacity chips which have 4 times the capacity of anything else available today. Collaborating with Global Foundries, Samsung and SUNY Polytechnic Institute on the project, this is a big deal for the computer and electronics industry as a whole.

The technology they have showcased is of particular significance as there were questions about Moore’s Law and whether transistor density can keep doubling. Currently the industry is switching from 14nm to 10nm but IBM’s latest chip is an absolutely tiny 7nm.

Each new generation usually reduces the area required for components and circuits by about 50%, speeding up the time between switching currents. This latest development from IBM suggests the technology could keep shrinking until at least 2018. These advancements in speed and reduction in size have been made possible by the use of silicon-germanium rather than pure silicon.

After IBM’s manufacturing arm was acquired very recently by Global Foundries, they will be licensing their technology to make chips for Qualcomm and AMD, amongst others. Whether the industry decides to enter the future using silicon-germanium is still up for debate. Whilst it does allow for these ‘super chips,’ it is unknown whether it can be used viably in a manufacturing facility. The wafer that IBM have shown is not a working part or even a prototype, they are test chips with functioning transistors. Even though they have made this big announcement, it is just experimental at this stage.

The race is now on for other manufacturers to catch up with IBM. The big competitor is Intel who have already said they will be working towards 7nm production, but have not specified a date for production or development.

As always we will keep you up to date with the latest developments in the industry as a whole! Subscribe to the blog, follow us on Twitter or connect on LinkedIn.

Tags: ibm computer chips high capacity chips


Component Search

Step 1

Enter Electronic Component part number below.

Step 2

Click the button below.
It’s that easy.

Cyclops Electronics Ltd, Reg. No. SC128862, VAT No. GB561633447

Registered Office: Allan House, 25 Bothwell Street, Glasgow G2 6NL

(Registered in the United Kingdom)

© 2021 Cyclops Electronics

Website by See Green