Employees are seen working on the final assembly of ASML’s TWINSCAN NXE:3400B semiconductor lithography tool with its panels removed, in Veldhoven, Netherlands, in this picture taken April 4, 2019. Bart van Overbeeke Fotografie/ASML/Handout via REUTERS
July 23 (Reuters) – The semiconductor shortage that has gripped the world could last well into 2022 and hit smartphone production next, foreshadowing deficient supply for a range of appliances and industrial equipment, industry executives and an economist said.
The automotive sector has suffered the most this year but supply to the sector could improve relatively soon, with China taking up some production demand that Taiwan could not meet, ING Greater China chief economist Iris Pang told Reuters Global Markets Forum this week.
Taiwanese semiconductor companies have boosted production in China as blackouts and ongoing COVID-19 social distancing measures disrupted factory output and port operations in Taiwan, she said.
“China gained 5% on the chip shortage in terms of GDP – Taiwan semiconductor companies have planned well and built large factories in mainland China,” Pang said, predicting that smartphone makers will be the next segment to face disruptions.
“Taiwanese semiconductor companies are tailoring making chips for autos, so the chip shortage should be solved for autos in a few weeks, but other electronics’ chip shortage problem persists,” Pang said, adding that could delay shipments of some new model smartphones.
Companies across industries globally have warned of an ongoing struggle to source chips.
ASML (ASML.AS), one of the world’s biggest suppliers to semiconductor makers, hiked its sales outlook this week on strong orders as chip giants such as TSMC (2330.TW) and Intel (INTC.O) raced to boost output.
The broader supply crunch could last until the second quarter of 2022, said Adam Khan, founder of AKHAN Semiconductor, although he noted this timeline was “aspirational.”
Andrew Feldman, CEO of chip startup Cerebras Systems, echoed that view, saying vendors were quoting lead times as long as 32 weeks for new chips and components.
ING’s Pang said even crypto miners are seeking ways to recycle “used” chips, which implies the shortage wasn’t going away.
Higher demand for chips, fuelled by one-off purchases to meet work-from-home needs and continuous demand for smartphones and other electronics, is expected to spur investment and growth in the sector.
The chips industry could grow between 21% to 25% in 2021, with “electronics having its best showing since 2010,” said Dan Hutcheson, CEO of chips-focused VLSI Research.
So far this year, the Philadelphia SE Semiconductor index (.SOX) has outpaced the tech-heavy Nasdaq Composite (.IXIC) with gains of over 16% versus 13%.
(These interviews were conducted in the Reuters Global Markets Forum chat room on Refinitiv Messenger. Join GMF: https://refini.tv/33uoFoQ)
Reporting by Aaron Saldanha and Lisa Mattackal in Bengaluru; Editing by Divya Chowdhury and Ana Nicolaci da Costa
Our Standards: The Thomson Reuters Trust Principles.
Biden administration officials say they’re starting to see signs of relief for the global semiconductor supply shortage, including commitments from manufacturers to make more automotive-grade chips for car companies that have had to idle production.
U.S. Commerce Secretary Gina Raimondo, who has led President Joe Biden’s efforts on chip supply, has brokered a series of meetings between semiconductor manufacturers, their suppliers, and their customers including automakers. Senior administration officials said the meetings helped ease mistrust between the sides related to the chipmakers’ production and allocation and automakers’ orders.
The result has been more transparency about the manufacturers’ production and shipments and a gradual increase in supply for automakers, Raimondo said in an interview. The administration has also recently pressed governments in Malaysia and Vietnam to ensure semiconductor plants would be deemed “critical” businesses and maintain some production following COVID-19 outbreaks, officials said.
“You’re starting to see some improvements,” Raimondo said, adding that in recent weeks, Ford Motor Co. CEO Jim Farley and General Motors CEO Mary Barra have told her that “they’re starting to get a little bit more of what they need” and the situation is “a little bit better.”
A Goldman Sachs analysis published last month said that the peak impact of the chip shortage was in the second quarter and auto production “should jump in July.” But U.S. automakers continue to struggle with the shortage, which is estimated to be taking a $110 billion toll on the industry.
Ford is closing or curtailing production at eight factories this month, including the plant manufacturing its new version of the iconic Bronco SUV. Five of GM’s North American plants will experience “downtime” due to “semiconductor production adjustments” this month and in August, according to GM spokesman David Barnas.
And tens of thousands of new cars remain sitting in lots outside U.S. factories, waiting for the chips that power their onboard computers.
A Ford spokeswoman declined to comment. Barnas confirmed the Barra conversation with Raimondo and provided a statement the company issued July 15.
GM’s “global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and make strides working with the supply base to maximize production of our highest-demand and capacity-constrained vehicles, including full-size trucks and SUVs for our customers,” the statement said.
The semiconductor shortage predated the Biden administration but emerged as a crisis for the new president earlier this year, when U.S. automakers were forced to begin curtailing production for lack of chips. Manufacturing of semiconductors is concentrated with a pair of Asian companies, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.
TSMC, a key partner to many of the world’s biggest carmakers, said last week the company will ramp up production of microcontrollers by close to 60 percent this year, a move expected to greatly boost supplies for its automobile clients starting this quarter.
Semiconductor manufacturers and auto companies generally don’t see eye-to-eye on the causes of the shortage and the solutions. Auto companies have complained about a lack of transparency in how
- A new survey conducted last month by Automotive News about the global chip shortage finds that almost everyone in the auto industry thinks it’s a big problem.
- Today, according to the survey, 53 percent of respondents said they source their chips from outside the U.S., and 55 percent are looking for alternative chip sources outside the country.
- Changes are happening, of course, from temporary production pauses and a shift to models that are either in high demand or require fewer chips.
The auto industry is fully aware just how bad the current chip shortage is. Anecdotally, this has been clear for a while. Ford CEO Jim Farley, for example, recently said that the chip shortage is “perhaps the greatest supply shock” he’s ever seen. Automotive News used that quote in a new survey of automakers and suppliers called Examining the Global Chip Shortage, which gives us plenty of survey data to back up the feeling that this is a big, big deal.
Perhaps the most surprising number in the survey is that only—yes, only—93 percent of respondents said that they think the chip shortage will have a severe impact on the auto industry. The survey was conducted a month ago, before recent estimates put the shortage’s impact on the auto industry at $110 billion in lost revenue this year. But even in January, the estimates were around $50 billion, which apparently wasn’t severe enough for 7 percent of respondents.
There’s also the feeling that the chip shortage will stretch out for most of the rest of the year. Almost three-quarters of respondents, 72 percent, said they expect the chip shortage crisis to impact the industry for at least six months.
Just a reminder that the shortage of the chips, used in cars, computers, and other products, was caused by worldwide demand for electronic goods that intensified because of the coronavirus pandemic, along with inadequate planning in the supply chain and weather problems. As the New York Times pointed out, a new vehicle can have up to 100 of these semiconductor chips on board; they’re used (and needed) in components from touchscreens to transmissions.
While there have been efforts to start making more semiconductors in the U.S., newly proposed plants will take time to build and start producing chips. The survey provides us with some insight into where automakers and suppliers are getting their chips now: 53 percent get them from outside the U.S. today and 55 percent are looking to source chips from outside the U.S. in the future. Forty-eight percent said they’d rather buy chips from domestic suppliers.
Survey respondents were somewhat uncertain about which segments of the industry will be most impacted by the shortage. Half (49 percent) said it will be the automakers, while 30 percent believe dealers and retailers will be hardest hit, and 23 percent said it will be the suppliers.
If there are bright spots to be found in the numbers, they lie in the way the industry is adapting to the situation.
A look back through the Old Trafford archives offers a striking masterclass from some of the greatest marksmen to have graced English football, with the likes of Mark Hughes, Andy Cole, Dwight Yorke and Ruud van Nistelrooy having plundered goals for the club.
Every United fan has their own favourite goal from the Premier League era, with unforgettable hits lighting up each of the 13 title triumphs achieved under Sir Alex Ferguson.
We’ve picked out eight of the very best, all of which came during the Ferguson era – a time when goals were easier to come by than they have been of late for Ole Gunnar Solskjaer’s side.
David Beckham v Wimbledon, August 17, 1996
It was the opening day of the 1996-97 season and Ferguson gave the number 10 shirt to the 21-year-old midfielder David Beckham.
United were already 2-0 up and heading for a straightforward victory at Selhurst Park when Beckham received the ball from Brian McClair and, from just inside his own half, launched it audaciously into the air, over the head of Dons goalkeeper Neil Sullivan and into the net.
It was one of the most memorable goals in Premier League history and one Beckham himself names as the pick of his career.
Eric Cantona v Sunderland, December 20, 1996
Four months after Beckham’s famous lob, United were 4-0 up against Sunderland at Old Trafford when Eric Cantona – in what was to be his final season at the club – collected the ball just inside the Black Cats’ half.
The enigmatic Frenchman drove forward in possession, exchanged passes with Brian McClair, and then produced an exquisite chip over the stranded Lionel Perez that clipped the inside of the post on the way in.
He then turned, flipped his collar, and spawned a celebration that would be imitated by United fans everywhere for years to come.
Paul Scholes v Bradford City, March 25, 2000
Paul Scholes has spoken about the understanding he shared with Beckham during their days at United, and that intuition paid off in spades at Valley Parade in 1999-2000.
Beckham sent a corner straight to the edge of the Bradford City penalty area where Scholes was waiting with his hammer of a right foot, which arrowed a volley into the Bradford net with scorching ferocity.
Ruud van Nistelrooy v Fulham, March 22, 2003
Given his reputation as a penalty-area predator, it is understandable that Fulham’s defenders might not have taken the threat of Van Nistelrooy running towards them from just inside his own half too seriously.
The Netherlands international had the last laugh, though, waltzing past a host of flat-footed Cottagers before tucking the ball past Maik Taylor with his customary composure.
Paul Scholes v Aston Villa, December 23, 2006
Israeli startup Arbe, which has raised $55 million to date to develop a 4D imaging radar chipset, has today announced exclusively through EE Times that it has now launched its imaging radar processor chip as part of the chipset.
The company said this is the first automotive grade (AEC-Q100) dedicated imaging radar processing chip. The patented chip is capable of processing the raw data generated by 48 receiving channels and 48 transmitting channels, generating 30 frames per second, meeting automotive power constraints. This, it said, is higher than has ever been achieved on an automotive radar processing chip, while doing so in an “efficient and cost-effective manner”.
Additionally, the processor can scale from high resolution to ultra-high resolution and support over 100,000 detections per frame. According to Arbe, this ability to process such a high channel count provides unparalleled performance and safety to the automotive market. The radar processing chip enables the integration of smart detection algorithms, clustering, post processing and SLAM (simultaneous localization and mapping) into the chip. The processor is designed in accordance with the international standard for functional safety (ISO 26262), and the processor enables ASIL B (Automotive Safety Integrity Level) qualification for the radar chip.
Arbe’s chipset produces detailed 4D images, separates, identifies, and tracks objects in high resolution in both azimuth and elevation on top of range and Doppler resolutions, in a long range and a wide field of view, and complemented by AI-based post-processing and SLAM. The company has also developed its own proprietary millimeter wave automotive grade radar RFIC chipset that includes a transmitter chip with 24 output channels and a receiver chip with 12 input channels. Using a 22FDX FDSOI CMOS process, Arbe’s RF chipset is designed to support TD-MIMO with strong performance characteristics for channel isolation, noise and transmit power.
The CEO of Arbe, Kobi Marenko, said, “The amount of processing capabilities that we incorporated on our radar chipset solution is one that has never been achieved before in automotive radar. Our technology will bring the safety of vehicles to a new level with low power and low cost. We are excited to ship the processer chip to Tier 1 customers as part of a chipset solution that supports their next gen radar system developments.”
The company said its processor provides more processing power, low latency, and low power while cutting the cost to implement a safe radar solution. We delved into these performance claims a little more to qualify them.
First, on processing power, Arbe said the processor is capable of processing 30 Gbps of data, representing a virtual array of over 2300 virtual channels. Today most radars are processing less than 10% of the bandwidth and usually up to 12 virtual channels. With regard to the latency claim, Arbe said 30 fps provides real-time frames every 33 ms, which enables a maximum latency from the end of a point cloud frame until it is received at the main ECU of 34ms.
What about power consumption? Arbe said the chip