In 2020, the price value of automotive cars reached the skies due to no supply of automobiles from the initial stage.
Due to the pandemic back then and lockdown, people were not driving their automobiles, it saved a lot of mileage and maintenance.
These resulted in a decrease in the purchase of Automotive cars.
Moreover, due to lockdown, many young ones and elders who love gaming bought consoles. The thing is, consoles comprise a chip that is under the utilization in automobiles of the modern category.
These chips started to be in the manufacturing of consoles rather than automobiles.
These caused a shortage in the automotive sector comprising Japan Motors, Volkswagen, BMW, and many more industries unable to manufacture up to the required rate in 2020.
Now, the shortage has entered the year 2021. And now a prediction is being made that it will hit the mobile industry also in 2022.
This semiconductor chip shortage might hit the smartphone industry. Keeping in vision, the decrease in the supply of used cars mainly used Honda cars.
Toyota also observed the decline in the graph of production and purchase of used Toyota cars.
Nvidia’s CFO and executive vice president, Colette Kress stated earlier, “ The demand at the current moment is quite strong and expected to continue to increase. The inventories still face fluctuations. But we are expecting the supply to exceed this year.”
Kress said that the company hopes to contain a sufficient amount of graphic processing units and also chips.
These chips and GPUs got used in consoles and gaming processors. Robotics and cars also utilize these chips and GPU.
The automotive sector includes the European Automotive cars exporter, Japanese cars exporter, and American cars exporter has suffered a lot this year.
But, one thing promises to improve this downfall. China has made a promise to take up some of the production that Taiwan failed to meet recently.
On Tuesday, CEO of Intel, Pat Gelsinger stated, “ This chip shortage is about to last a few years.”
The semiconductor companies are playing their role fortunately and working on short-termed solutions to boost the production and manufacturing of chips and GPUs. But this shortage obviously will take up to several years to cover.
CEO Wei stated, “The acquisition of land and equipment has reached completion by us. The construction of facilities has already begun. Thousands of employees are under the umbrella of employment & multiple sites are under expansion.”
Taiwan’s industries due to shortage in their country have now increased production and manufacturing in the country of China, due to lockdown and Covid-19 SOPs, resulting in decreased output in Taiwan.
Pang stated,” Concerning GDP, China was successful in gaining a 5% chip shortage. Taiwan companies have a proper structure and planning and have built big firms in China currently.”
Peng predicted that smartphone industries are the next target of lack of supply of chips and GPUs.
Furthermore Peng stated, “ Taiwanese companies are manufacturing chips for automobiles to decrease the shortage of chips in automobiles but the shortage in mobile phones remains a question.”
Companies in many countries around the globe have initiated an alarm of the struggle of finding chips and sourcing these for automobiles and smartphones.
TSMC and Intel are now racing to increase their output. These giants supplying semiconductors chips are looking forward to big orders from various companies around the globe to boost their sales.
Due to the shortage of semiconductor chips, game consoles manufacturing companies like Xbox, Playstation, and Valve are facing harsh conditions to step up their gaming setups versions.
Sony also blamed this shortage of chips since the supply of consoles was less.
According to the survey of rating agencies, this shortage of chips may hurt the growth of a few PC and mobile manufacturers may decrease the production of PCs and smartphones in the upcoming months and years.
It says, “ Rising costs must come under the management of Semiconductor chips vendors. As the increased price is causing a decrease in demand.”
S&P added more, “ The higher costs from the chip vendors must pass on to the customers. OEM (Original equipment manufacturers) are unable to produce sufficient amounts of chips to meet the rising demands and orders and will feel much disaster and pain.”
“This supply of chips can be fluctuating till the 2nd quarter of 2022,” stated Adm Khan, AKHAN founder.
The CEO of Cerebral Systems gave his view on the situation, stating, “ Vendors of semiconductor chips are stating the lead time of 32 weeks for production of new chips.”
ING’s Pang stated, “ Crypto miners are finding ways to reuse “utilized” chips, which would result in the decrease in shortage.”
Due to work from home, and online setups for businesses and schools. Demand for chips is higher now as compared to before the pandemic.
Danger To Smartphone Industries
If we keep the usage in consoles, not in our interest, then the usage in smartphones and laptops, etc would also have affected the supply of semiconductor chips easily.
The usage of chips in consoles has played a role in decreasing the supply of chips. While the former used chips, the automobile industry was left stranded with the lack of supply of chips for future car manufacturing in 2022.
“In 2021, the semiconductor chip sector could have grown between 20% to 25%, since the performance of electronics is at its best since 2010.” As stated by Dan Hutcheson, CEO of VLSI research (chips-focused).
This story of a decrease in supply will continue as long as the usage of consoles, smartphones, and PCs will grow in the pandemic.
If there is another pandemic, the Delta variant of Covid-19 is spreading faster around the globe.
The supply of chips would go into negative, & the automobile sector, which is worthy of the chips left deserted due to a shortage of semiconductor chips.
We are looking for a better future for the smartphone industry if China starts manufacturing chips to their full potential this year and in 2022.