The chip conundrum: All you need to know

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Semiconductors 5 Min Read Apr 09, 2021

Little can take our focus away from the ongoing pandemic, whose second wave is now upon us in full force. COVID19 disrupted multiple aspects of business and continues to hamper any sense of normalcy organisations and industries strive to return to. In particular, the shortage in availability of semiconductor chips, which many say was brewing for a long time, has been exacerbated by COVID19. This has triggered world leaders to act fast and try to find alternatives to stave off the shortage, which many believe will extend well into 2022.

Published By : Sindhuja Balaji

Here's a quick recap of the top developments in this space:

Global pandemic in 2020. Global chip shortage in 2021 - A Perfect Storm of Demand & Supply

At this point, pretty much any entity in consumer electronics and automobile production are in a rough spot. Samsung is not only among the world's largest consumer of semiconductors, but is also a major exporter - and even the South Korean company is expected to postpone the launch of its high end smartphone due to the ongoing shortage. Apple, the world's biggest buyer of semiconductors, spending nearly $58bn annually, delayed the launch of the iPhone 12 last year. Production of smartphones by Lava and Micromax have come to a near halt as their chipset supplier MediaTek has run out of stock. Sony too stated that it may not hit sales targets this year for the new PlayStation5, while Microsoft expects sales of Xbox to be affected atleast until the second half of 2021. But it appears car makers are the worst hit. Globally, automakers cumulatively spend $37bn worth of chips. But with consumer electronics and appliances taking a bigger share of the semiconductor purchasing pie, automakers are finding themselves scaling back production as chips become dearer and largely unavailable now.

From Lab To Fab: Applied Materials & IISc Show The Way

Applied Materials India and IISc's CeNSE will work towards researching new applications and solutions with advanced materials by leveraging Applied Materials' expertise in materials engineering and IISc's scientific research abilities and world-class infrastructure. The team will work towards solutions that can be transformed from 'Lab to Fab' and give a push to the semiconductor technology and manufacturing in the country. The alliance will make scalable solutions with semiconductor technology and manufacturing

A $1 Billion Reward Awaits

Multiple government officials have stated that India is willing to offer upto $1 billion in cash to semiconductor companies to set up manufacturing units in India, in a bid to locally manage the demand for semiconductor chips. This comes at a time when the world is reeling from a shortage of semiconductor chips, which has impacted India's auto sector as well. Following PM Modi's clarion call Make in India, the country has become the world's second biggest mobile manufacturer after China. Now, government officials believe it is high time for chip manufacturers to set up shop in India, limit reliance on Taiwan and establish reliable suppliers for electronics and telecom. Chips made locally will be designated as "trusted sources" and can be used in products ranging from CCTV cameras to 5G equipment.

Semiconductor Incubation Program in India

NXP India, which is among the biggest R&D centres for NXP Semiconductors, announced the launch of the first ‘Semiconductor Startup Incubation and Acceleration Program’ in collaboration with the Ministry of Electronics and Information Technology (MeitY) and Fabless Chip Design Incubator (FabCI), IIT-Hyderabad. The aim is to find, facilitate, and mentor semiconductor and IP design start-ups across India in technological as well as business aspects. The programme will support India’s vision of becoming a self-reliant nation as it creates a ready platform to support start-ups who wish to design semiconductor chips in India.

US Senate Working On Semiconductor Legislation

US President Joe Biden stated that Senate leaders are working on a legislation on semiconductors, after leading car manufacturers urged the government to help allay the shortage and set aside some funds for chip production.

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Intel Announces Vision for Integrated Device Manufacturing

At a time when there is a global shortage of semiconductor chips and countries trying to consolidate their strengths to limit reliance on a handful of players, Intel CEO Pat Gelsinger had announced his vision for Intel's IDM2. During the “Intel Unleashed: Engineering the Future” webcast, Gelsinger shared his vision for “IDM 2.0,” a major evolution of Intel’s integrated device manufacturing (IDM) model entailing a significant exapnsion of manufacturing, a $20bn investment to build two fabs in Arizona, USA and enhance USA's foundry capacity in the USA and Europe.

Taiwan Semiconductor Manufacturing (TSMC) to Invest $100bn in Chip Manufacturing

After Intel's announcement to build fabs in Arizona, USA, the world's leading chip maker TSMC has announced its plans to invest $100bn over the next three years to increase production capacity in the wake of surging demand. In a statement, TSMC attributed these expansion plans to higher growth with HPC, 5G and accelerated digitisation due to COVID19.

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