Semiconductor Chip Shortage Report
Refrigerators, computers, gaming consoles, and automobiles. What these different items have in common is one small, but crucial part. Semiconductor chips. These chips, no bigger than a quarter are the reason all these items are possible. The chips, made of silicone, help fuel everything from microwaves to cell phones, they are a critical component of the many technological advances we enjoy today.
Semiconductor chips are transistors (switches) that store data and memory through varying electronic currents. “Semi” meaning the chip is semiconductive, acting as both insulator and conductor.
Here is the problem, since 2015, the United States was the global leader in semiconductor chip manufacture, accountable for 51 percent of global production. Since then, the United States has decreased its production, letting countries like China, Japan, Taiwan, South Korea, and the Netherlands take a good portion of the market share. Of course, production of these chips also took a hit during the pandemic (COVID-19) forcing many countries to play catch-up.
“[On Covid-19] I’m sure everyone is aware of the manufacturing shortages, there is a concern in the supply chain, we were making less [during Covid-19] because demand was down and now, we are trying to ramp up [production] so it’s been difficult” James Chambers, Micron Technologies Process Engineer said during an interview.
Covid-19 drastically diminished production of semiconductor chips due to a lessened demand. Now that demand for more production has increased, many suppliers of raw materials, such as silicone, are flooded with orders leading to raw material shortages.
The auto industry suffered most noticeably due to the limited supply of semiconductors and the fact that the chip needed for the auto industry needs to rank high in quality. A slowed production along with raw material shortages has created long wait times for many needing new vehicles. New cars are scarce on many dealerships around the nation.
Chambers continued, “the lead times on getting a semiconductor wafer through the fab is a couple months. Then we test the conductors for quality assurance, packaging, and shipping. The process to reach delivery takes quite a while especially since production was borderline halted during Covid.”
For many, the shortage cannot come at a worse time, as Covid restrictions loosen many are aching to take to the road, go out in nature, socialize, and have some normalcy brought back. With many waiting almost two years for some products, it is unclear when the shortage will subside. Hope is on the horizon as companies manufacturing, distributing, and using semiconductors in their products, are pushing for an increase in production. The Ford Corporation Headquarters received over 90,000 orders for the new 2021 Ford Bronco and they are eager to deliver. Until then, the question on most auto enthusiasts’ minds is “when will I get mine?”
U.S. Semiconductor Manufacturing: Industry Trends, Global Competition, Federal Policy.