Why is there a global chip shortage?

With the development of 5g technology and artificial intelligence, as well as the trend of automobile intelligence, the demand for 5g radio frequency, PC, fingerprint recognition, car control, sensors and other chips is also growing rapidly. However, with the resumption of work, the rebound in car sales, and the increase in various demands, the pressure on the wafer factory has been transferred to the factory, but the supply cannot be increased immediately, which will inevitably lead to a shortage of cores.

From the second half of 2020, the global semiconductor industry of B32-1610 began to be out of stock, and chips of individual models and uses have gradually spread to the complete shortage of various products. According to media reports, in December 2020, SAIC Volkswagen, FAW-Volkswagen and other automakers will suspend production due to insufficient supply of chips. Although the responses of both companies were not affected, according to follow-up interviews by the media, the shortage of automotive chips has become a common phenomenon in the industry. In the first quarter of this year, Xiaomi, Samsung and other mobile phone brands all reported a severe shortage of chips, and production of the mid-to-low-end model is expected to be affected, and even some flagship chips will be out of stock.

So, why is there a chip shortage in the world?

First, the root cause is an imbalance between supply and demand. Studying at home and working from home reduced demand for cars and increased demand for computers and cell phones, replacing the production of chips for cars. However, with the resumption of work, the rebound in car sales, and the increase in various demands, the pressure on the wafer factory has been transferred to the factory, but the supply cannot be increased immediately, which will inevitably lead to a shortage of cores.

Multiple factors are predisposing factors. The 8-inch silicon wafer production line has low cost and mature technology, but its profitability is not as good as that of the 12-inch silicon wafer production line, and the number of 8-inch silicon wafer factories is gradually decreasing. In addition, many related manufacturers stopped production, the earthquake in Japan caused a shortage of material supply, and the cold wave in the United States caused the closure of chip factories. Various factors combined to cause core shortages.

The third is the lack of production capacity. With the development of 5g technology and artificial intelligence, as well as the trend of automobile intelligence, the demand for 5g radio frequency, PC, fingerprint recognition, car control, sensors and other chips is also growing rapidly. However, chip OEMs are special. It is difficult to solve the problem of insufficient production capacity in the short term by building new production lines and expanding production capacity.

The global shortage of chips will be a long-term problem, but may ease in the second half of the year. Chips are an industry that requires long-term investment in human, material, and financial resources. Therefore, in order to completely solve this problem, we must make up our minds, continue to increase investment, be down-to-earth, and earnestly push forward.