A Pandemic, A War, and A Huge Crisis

You might wonder why there is so much buzz around the #semiconductorindustry. Why is there a crisis? Will it have a #global impact? Mainly?

“ WHY ARE SEMICONDUCTORS SO IMPORTANT? “

Semiconductors (I.e. in simple words are materials that possess conductivity between a conductor and a non-conductor). Devices using semiconductors are called semiconductor devices, most common devices include IC or #integratedcircuit.? Silicon and germanium are popular semiconductor materials used in various devices that play essential roles in our lives, from mobile phones and PCs to refrigerators and washing machines.

So why the scarcity? Who are the largest manufacturers of semiconductors?

The semiconductor market has been in the hands of #intel, #tsm, and #qualcomm to name a few.? In 2020, China represented 53.7% of worldwide #chip sales, China has housed many manufacturers from IDMs(Integrated device manufacturers) to pure-play foundries(only manufacture devices for other companies, without designing them) and fabless semiconductor companies(only design devices) and leads the primary production of semiconductor chips.?

How did this crisis begin?

Although this isn’t the first crisis for the semiconductor industry, this one had a bigger impact

Pandemic

Let's rewind back to late 2019, the #pandemic hit the world physically, mentally, and #economically (in this case). The #automotiveindustry saw a dip in #sales and the demand for semiconductors reduced accordingly.

Many #factories had to shut down or reduce sales to operate in accordance with the lockdown. But as soon as the situation got better, there was a sudden boom and this created a higher demand for semiconductors.

Manufacturing a chip typically takes more than three months, it involves million-dollar #machinery, factories that take about 3-5 years to build, and dust-free rooms. The gap between production time and demand couldn't be bridged resulting in a crisis. What other factors worsened the ongoing crisis??

Dependency on the Asian industry?

It’s been more than 18 months since the crisis started and one of the reasons is the extreme dependency on the #asian semiconductor industry.

#taiwan, #china, #japan, and #southkorea are the 4 biggies of the industry, Taiwan holds about 65% of the world’s production share in semiconductors, and the ongoing tension between China and Taiwan has impacted the global crisis of semiconductors.

Russia-Ukraine War

Let us understand a little about semiconductor manufacturing, Semiconductors need adhesion, and #palladium is primarily utilized as one component of a multilayer metallization structure, improving adhesion to the semiconductor,?

How is palladium related to the crisis??

The #russian company Nornickel occupied the largest share of palladium production worldwide, at 44 percent in 2020, and the ongoing war between Russia and Ukraine can further disrupt the supply chain of semiconductors across the world.?

Future of semiconductors??

In 2021, automakers were obliged to cancel plans to build ten million cars. We forecast that they will cancel a further seven or eight million in 2022 and four million in 2023, as demand for semiconductors outstrips supply by 10 percent. - Hardware business review?

One way to deal with this crisis is to #diversify production and work on building a stronger #supplychain of materials critical to manufacturing. The core of any material holds as much importance as the whole, hence a connection or close communication must be established with the suppliers of these materials to strengthen the #globalsupplychain to beat any such crisis in the future.?

Although it’s predicted that the crisis will not abate before 2023, this crisis has awakened the world to focus more on the choke points to avoid any such catastrophes.