The tech industry has been forced to weather more than its fair share of storms over the past few years, but one of the most troublesome to navigate has been the ongoing issues in the semiconductor supply chain. The situation has resulted in delays, shortages and missed revenue targets for companies across a range of industries, and has prompted government intervention across the globe.
There are a number of factors behind the disruptions to the chip supply chain, and although measures are being taken to mitigate their impact, the crunch is set to continue. We’re joined on this week’s podcast by Ondrej Burkacky, Senior Partner at McKinsey’s semiconductor practice, to explain some of the reasons behind the crisis, as well as what’s being done to resolve the situation.
Highlights
“I think the one mistake that people typically do is they say it's all the same, which is not true. For example, we have almost no shortage on leading edge technology; the CPUs and server chips… but we have a significant - meaning 30-plus percent - shortage of generic compute MCUs, that are there, for example, to do the power management, that are there to operate the motor control in a dishwasher, in the washing machine, but also they are the ones that go into many, many cars to do motor control, airbag control, and all these all these things.”
“Our prediction says that 2022 is going to be the same as 2021, almost; only in 2023 we see the first sites that start going online piece by piece, that were basically built on top of the beginning of a shortage situation, which in the end means that by then we might get more chips that can be immediately used. It doesn't mean necessarily that only in 2023, all these disruptions in the supply chain are gonna go away, because it will take some time that restocking happens… So this can take well into 2024 or even 2025 until this gets fully sorted out.”
“What caused the biggest headache for the server and PC OEMs were not the highest value semiconductors, typically; there was some shortage on the GPU side, but it was really this power management ICs, some of the power conversion ICs, some of the connectivity ICs. And it is like when you don't have this piece, you just can't ship the whole unit.”
Read the full transcript here.
Footnotes
- US and EU thrash out plans to avert chip production “subsidy race”
- US companies have less than a five-day supply of semiconductors
- Incoming disaster or overblown: How will the semiconductor chip shortage affect enterprise IT?
- US and Japan double down on joint semiconductor research
- Western Digital and Kioxia to get £562 million funding in Japan
- Intel to acquire Tower Semiconductor for $5.4 billion
- China to establish chipmaking platform to secure domestic chip supply chain
- Chipmakers should brace for 'oversupply' in 2023 with crisis set to clear
- Texas winter storm halts semiconductor production
- Short circuit: Will the chip shortage end this year?
- Intel to invest €33 billion in EU chip manufacturing
- Europe proposes €43 billion Chips Act to tackle semiconductor shortage
- Intel pauses Ohio chip site development, citing delays in US CHIPS act subsidies
- Why India wants to become a chipmaking powerhouse
- Intel strikes $30 billion private equity partnership to fund Arizona plant expansion
- Intel warns customers to expect price hike for certain chips
- Can the UK semiconductor industry help solve the global chip shortage?
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