The moves of Big Tech and car manufacturers to tackle the microchip crisis

Until 2024. The chip and semiconductor crisis could last, at least according to the words of Intel CEO Pat Gelsinger. Based on a series of internal estimates, the US multinational specialized in the production of semiconductors and microchips predicts that chip and semiconductor procurement issues go on for another two yearswhile until a few months ago many hypothesized an improvement in the situation by the beginning of 2023.

The uncertainties surrounding palladium and neon also weigh

In general, the CEO of the Santa Clara (California) giant explained, factories and equipment are severely tested by numerous external factors, including the conflict between Russia and Ukrainewhich has cast new doubts on the future of semiconductors due to the uncertainties about palladium and neon, raw materials in which that territory is rich.

In March, Intel presented an investment plan for the development and production of chips in Europe (80 billion in 10 years, 4 and a half in Italy). The first 17 billion euros will be used for the construction of a state-of-the-art mega-plant in Germany for semiconductor manufacturing, the creation of a new research and development (R&D) and design hub in France, and investments in R&D, manufacturing, foundry services and backend stages of production in Ireland, Italy, Poland and Spain.

One crisis, many causes

The global chip shortage was generated by a mix of factors which include the increased demand for technology during the pandemic, the COVID-related disruption of production, the growing demand for chips from automobile manufacturers. And now the international crisis following the Russian aggression against Ukraine. Intel’s concerns (and choices) are shared by the entire consumer electronics sector (from toasters to kettles to fighter jets to game consoles, obviously passing through smartphones, tablets and personal computers) and the automotive sector itself. forcing large companies to downsize (or recalibrate) their goals.

There is also a lack of machines for making chips

Not only are chips in short supply but also chips for chip making machines. Buying new chip-making machines was never a quick process, given their complexity and delicacy, but lead times before the pandemic were measured in months. Now, say Intel and TSMC (the company that makes Apple’s 5nm chips and produced the 7nm Qualcomm Snapdragon 865 last year), that time can last up to 2-3 years.

Here Cupertino. Luca Maestri’s analysis

Apple CEO Tim Cook reported last week in the release of quarterly data that the company is “not immune” to supply chain challenges, noting that the iPad business has had “very significant supply constraints. »During the last quarter. In particular, the analysis of Apple’s CFO, Luca Maestri, focused on the supply constraints linked to the Covid-19 emergency: according to Maestri they could damage sales for an amount between 4 and 8 billion dollars.

Nokia, a brake on growth

According to Nokia CEO Pekka Lundmark the Finnish telecommunications companies they would have grown faster in the last quarter had it not been for supply chain problems. However, Lundmark sees improvements by the end of the year.

Daimler and Volvo

Auto companies, which tend to use less advanced chips, are among those most affected by the impact of the chip crisis. Daimler CEO Ola Källenius said continuing supply shortages, particularly in semiconductors, are one of the top three challenges in the current economic environment. Källenius added that the new Covid blocks in China, one of Daimler’s largest markets, could affect supply chains around the world. Volvo Cars CEO Jim Rowan said the company will be affected by the problem in the second quarter.

By Editor

One thought on “The moves of Big Tech and car manufacturers to tackle the microchip crisis”

Leave a Reply