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According to a new report by an accounting and consulting firm, if no $ 1 chip is available, it can hinder the shipment and sale of much more valuable devices, appliances, or vehicles. Deloitte..
With the COVID-19 pandemic and soaring demand for recovery, the semiconductor industry experienced one of the longest shortfalls from the spring of 2020 to the fall of 2021. Time out due to shipment of some components in 2023.
The impact is still felt in PCs, smartphones, data centers, game consoles and other consumer goods, especially in the automotive sector as a whole. The cumulative revenue impact of the shortfall could result in a global revenue loss of over $ 500 billion between 2020 and 2022.
The next semiconductor shortage can be the same or better. Given the ever-increasing importance of chips to multiple industries, the company said the economic losses could be even greater. So we looked at what semiconductor manufacturers, distributors, customers (semiconductor supply chains), and governments can do to avoid another potential catastrophe. The problem is so great that a single company, or even an industry, cannot make a difference on its own.
Some may think that today’s shortage is a one-off event. Unless there is a once-in-a-century global epidemic, a major fire in Japan’s major chip factories, a freeze in Texas, and a stagnation of ships on the Suez Canal, all are in agreement, but the next shortfall is possible. did not. Probably just as strict?
However, Deloitte could have several combinations of events, such as a global recession, major weather events, and turmoil near critical seaports and straits, all at about the same time over the next decade. He said that was almost certain. Chip manufacturing and supply chains, as they exist today, are inherently vulnerable to disruption and shortages are inevitable.
Over the last 30 years, we have seen six shortages of the same duration or scale as today. It can be shortages or exacerbated by external shocks such as the technology bubble and the 2009 recession, but it can also “just happen”.
Adding capacity in the chip industry has always been costly and chunky. This occurs in a wave driven by both technology and market power, deciding to build a fab (or semiconductor manufacturing plant), and then that fab produces the first output (finished wafer). The lead time to is longer. So the real question is not whether there is another shortage, but when and how serious it is.
Break the whip
Bullwhip is a seesaw of sales when supply and demand are out of sync due to poor supply chain communication.
All of the different players need to do all the parts, work together, and not overproduce at the same time. Deloitte said companies need to choose specific actions or combinations of actions depending on their role in the broader semiconductor ecosystem and value chain.
The entire chip industry is committed to increasing overall output capacity at unprecedented levels. Capital investment from the three major players could exceed $ 200 billion from 2021 to 2023 and reach $ 400 billion by 2025.
The government has committed hundreds of billions more. Deloitte will increase the number of global wafer launches of 200 mm wafers (processed at the chip factory and sliced into individual chips) from approximately 20 million in 2020 to 30 million by the end of 2023. I predict that.
Capacity increases at about the same rate for both 200mm and 300mm wafer sizes. To be clear, the 200mm growth is primarily due to the increased capacity of existing fabs, rather than the construction of a completely new plant that will account for nearly $ 12 billion in capital investment between 2020 and 2022.
From a technology perspective, the capacity of mainstream nodes and more advanced 300mm process nodes (less than 10nm, mainly 3nm, 5nm, and 7nm-nm are nanometers, or width between circuits) is greater than the capacity of more mature process nodes. It will increase rapidly. .. It is worth noting that demand is increasing not only for cutting-edge products, but also for wafer sizes and all process nodes.
A significant 50% increase in capacity in just three years will make up for future shortfalls. The answer is not so obvious.
In addition to increasing the overall capacity, the chip industry needs to build local capacity. Chip manufacturing is geographically clustered and needs to be distributed across more regions. The concentration in East Asia (nearly 60% including Japan and China) in 2020 has attracted government attention from the United States, Europe and China, and plans to build new factories in these countries and regions are already underway. It’s inside. Israel, Singapore and others.
It is difficult to move the needle to the geographical concentration of chip supply. With over 400 semiconductor manufacturing facilities worldwide, plans have been announced to add 24 new 300mm fabs by 2022, but only 10 new 200mm fabs will be added over the same period.
Some of them are in the South Korea and Taiwan regions. It may be helpful to add a few dozen new locations outside these clusters. Deloitte said the new location would reduce concentration in East Asia by only a few points and would produce more than half of all chips by 2023.
The industry also needs to be strategically lean. Chip buyers, distributors, and retailers need to decide what level of waste to choose. Sometimes it’s too thin.
We need to break the whip on the demand side. Destination brand suppliers (systems), distributors / suppliers, and customers are affected by the Bullwhip effect, where delays in communication between stakeholders at each level of the supply chain are amplified by judgments on demand signals. You need to change this.
Smart operations capabilities are inherently complex, sensitive, largely automated, and essential for semiconductor manufacturing enabled by capital-intensive factories. With features that facilitate digital process modeling (such as digital twins), operational monitoring, factory operations synchronized with material availability, and responsive factory scheduling coordination, factory operations teams can operate efficiently and with high asset utilization. increase.
Deloitte also said that many manufacturers have started digital transformation by the spring of 2021. Continued innovation is needed to further adapt to future supply chain-led business disruptions. All of this requires close communication.
Demand is growing at about the same rate (or more) as planned capacity growth. Demand drivers include 5G, artificial intelligence and machine learning (AI / ML), intelligent edges, and the Internet of Things (IoT). Some of these are about providing increasingly powerful chips to products that already use a lot of chips, but others about adding chips to products that previously didn’t have chips.
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Deloitte: Why Chip Shortages Prolong
https://venturebeat.com/2021/12/06/deloitte-why-the-chip-shortage-is-lasting-so-long/ Deloitte: Why Chip Shortages Prolong