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Semiconductor bottleneck chips shortage.

Semiconductor Bottleneck: Chips in Short Supply

A world without semiconductors? Hardly imaginable nowadays. Without programmable logics, microprocessors and controllers, nothing would work in our digital and engineered world. And it will stay that way. In recent years, however, it has become clear that microchips and the like are not a dime a dozen. What are the reasons for the acute semiconductor shortage? And: Where are the sought-after components still available?

Posted by Redaktion Elektronik Kompetenz | | 4 min read

What are the causes of semiconductor shortage?

There are several reasons why there is currently a shortage of semiconductor components.

In general, it can be stated that Semiconductor products have already been in increasing demand in recent years. More and more industries and product developers are investing in technical innovations based on semiconductor technology. Think, for example, of medicine, the entertainment or automotive industry, or the emerging fields of AI or E-Mobility.

During the Corona pandemic, however, even well-known manufacturers could no longer keep up with the production of semiconductor components. And this has different causes.

For one thing: The demand for semiconductor components increased abruptly, especially in entertainment technology. The reason: Due to the imposed lockdowns, many people’s lives took place exclusively at home: Home office equipment and various home entertainment systems were increasingly in demand during this period. The result: higher demand for the chips needed for computers, smartphones and game consoles.

At the same time, all industrial sectors – including the semiconductor sector – experienced increased production downtime and delivery problems due to the pandemic. Some large plants in Texas and Japan were also hit by natural disasters: Both the production facilities and the infrastructure of the plants were permanently damaged, which is why the machines were at a standstill for a long time.

Production losses like these would not be a problem if semiconductors could be stored in larger quantities. But this is not possible due to their nature. Semiconductors have a clear expiration date during production. And that means they cannot be produced in stock.

Raw material shortages are also making the situation increasingly complex. Among the raw materials affected were those that are indispensable for chip production, such as aluminum, zinc, silicon and copper. But the supply of basic materials for the production of wafers also caused problems. For example, there was a shortage of a special insulating film for the production of various game consoles, which is needed for the production of carrier plates for chips that have already been manufactured. The reason: Only one manufacturer worldwide produces these ABF foils, and he in turn had shut down production due to the manageable earnings prospects in this area.

And last but not least: Various global political factors also played a role as causes of the current semiconductor crisis. For example, the then U.S. President Donald Trump had threatened sanctions against China in the area of chip technology. The result: Chinese companies acquired available chips and manufacturing equipment in veritable hoarding purchases – with far-reaching consequences for the international corporations, which now had to watch where they could obtain their semiconductors.

Particularly affected: the automotive industry

Passenger cars are now virtually large computers on wheels. Various driving assistance systems, on-board computers or battery management systems in the e-mobility sector: the production of modern automobiles is dependent on semiconductor technology.

Until 2020, the rising demand for semiconductors did not cause any problems in this sector either. Then the pandemic set in – and the challenges for the economy began.

The lockdowns imposed shifted many people’s daily lives into their own four walls – demand for consumer electronics increased. The creation of home office jobs also pushed demand for semiconductor-based home electronics, 5G smartphones, laptops and the like. At the same time, production in the automotive industry was halted due to a lack of demand and semiconductor purchases were canceled.

As a result, global semiconductor inventories were mainly used for the production of consumer electronics. When demand in the automotive sector picked up again, the responsible purchasers were left out in the cold: The supply of semiconductor material and products was depleted.

No improvement in sight

An improvement of the situation is currently not foreseeable. Although large investment projects are also planned in Europe and Germany, new chip factories are expensive and increasingly dependent on subsidies.

In addition, the construction of the new production facilities will take some time. Up to five years have to be calculated until completion – so short- and medium-term relief is not to be expected as a result.

Companies that had already made strategic purchases before the crisis clearly emerge as winners in times of semiconductor shortage. Apple, for example, had already stocked up on semiconductor components in good time before the pandemic. But the US giant is and remains an exception in this area.

And important distributors in the electronics sector are also struggling with the semiconductor crisis. Those who did not react quickly and replenish their stocks in time can currently guarantee neither prices nor delivery times.

Semiconductor products available from Bürklin Elektronik

Semiconductor components are increasingly in demand from both industry and private customers. Bürklin Elektronik has a wide range of semiconductors: from diodes and power semiconductors to various memory ICs, logic ICs, sensor ICs and much more.

Individual products and models can be found easily in the online store and ordered immediately. If you have any questions about Bürklin Elektronik semiconductor products, please  contact the experts at any time!

Posted by Redaktion Elektronik Kompetenz, The editorial team of the online magazine Blickpunkt Elektronik Kompetenz always has its finger on the pulse of what's happening in the world of electronics. It follows all developments in detail and regularly takes a look at the latest products, innovative approaches to solutions, trends, and tips and tricks for dealing with electronic components.