Technology industry

The shortage of chips, a still dark tunnel for the technology industry

The shortage of chips, a still dark tunnel for the technology industry
Tech companies have warned they face limits / Photo GETTY IMAGES

When will the shortage of chips for high-tech products end? At the Mobile World Congress in Barcelona, ​​manufacturers and specialists are asking for patience as the war in Ukraine raises fears of new difficulties for an already strained market.

Logistical problems, depletion of stocks, saturated factories… “The situation continues to be very complicated for the sector, it will be necessary to be patient”, warns Ariane Bucaille, specialist in the semiconductor market at Deloitte.

The shortage of chips, resulting from the boom in global demand for electronic products and the disruption caused by the health crisis in supply chains, has shaken the entire world economy for a year.

The situation has fully affected the automotive industry and the IT sector, which are very dependent on these electronic components, but also the smartphone market, even if the latter is holding up better than other sectors.

According to analyst firm IDC, sales of mobile phones fell 3.2% in the fourth quarter, to 363.1 million units. In China, for their part, they fell by 11% over the same period, according to the Counterpoint study.

That hasn’t stopped smartphone giants like Apple and Samsung from posting record profits in 2021. The shortage, however, has led to long delays in product launches, clouding the outlook for the sector.

neon and palladium

How will the war in Ukraine affect an already disrupted market? For Marina Koytcheva, an analyst at CCS, it is “unlikely” that the smartphone sector “will not be affected by the impact of the crisis in Ukraine, given the economic and geographical importance of Russia and the Ukraine”.

Russia is a major supplier of palladium, a rare metal ubiquitous in electronics. Ukraine, for its part, has large reserves of neon, an essential gas for lasers used in the manufacture of semiconductors.

“Ukraine today supplies 70% of the world’s neon demand,” recalls the Taiwanese think tank TrendForce. “If the supply of these materials is cut, there will be an impact on the industry”, which will result in “increase in production costs”, she believes.

On the side of chip manufacturers, very present at the Mobile World Congress in Barcelona (MWC), they nevertheless send reassuring messages. “We do not anticipate any impact on our supply chain,” said the American manufacturer Intel, which claimed to have “diverse” sources.

“We only use a small amount of neon,” a spokesman for Dutch supplier ASML told AFP, who also said he was looking at alternative sources of supply.

A message similar to that conveyed by the Semiconductor Industry Association (SIA). “The semiconductor industry has a diverse range of suppliers of key materials and gases, so we don’t believe there are any immediate risks of supply disruptions,” he said in a statement. communicated.

‘Difficult times’

Whatever the impact of the Ukrainian crisis, it is unlikely that there will be a quick return to normal. “Semiconductor requirements are now very high (…) The market is still unbalanced”, insists Ariane Bucaille.

According to the American bank JP Morgan, the shortage of semiconductors will last throughout 2022, while for Deloitte the situation will only improve in 2024, despite efforts to increase production capacities.

In recent months, the giants of the sector have announced billions of investments in new factories, such as the Taiwanese TSMC or the Korean Samsung Electronics, which will inject 15 billion euros into a production line in Texas.

But these measures, which aim to diversify the production of chips, “will not bear fruit for two or three years”, because they are “complex technologies”, which involve finding “an extremely qualified workforce”, underlines Ariane Bucaille.

It seems that the manufacturers themselves share. “These are challenging times,” with “unprecedented demand,” Intel CEO Pat Gelsinger acknowledged at a recent conference. A situation which should continue, according to him, “until 2023, perhaps beyond”.

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