The shortage of automotive chips highlights the global shortage of semiconductors, manufacturing overdependence on Asia’s long-term problems, has set off a reflection in the U.S. industry, government and academia, and from the perspective of national defense security and sound supply chain to formulate policies and seek solutions.
In 2020, the global economy was greatly affected by the Epidemic, and the follow-up effect of supply chain disruptions has continued into this year, with a major shortage of automotive chips, the United States, Japan, Germany and other major automotive manufacturing countries have turned to Taiwan for assistance, and in the midst of chaos, the importance of TSMC, the leading foundry, has become more apparent.
At the same Time, the U.S. semiconductor industry over-reliance on Asia, such as Taiwan’s TSMC, South Korea’s Samsung Electronics and other wafer foundry manufacturing chips, the phenomenon has once again become the focus. Bloomberg (Bloomberg) reported in January, the global reliance on Taiwan foundry chips has reached a “dangerous” degree.
Modern Life, large and small electronic products need chips, especially in the epidemic, remote work, Home entertainment demand soaring, promoting the growth of personal computer sales, semiconductor manufacturers to shift production lines to computers, tablets, video equipment and other devices, crowding out the production of automotive chips.
At the beginning of the epidemic, car manufacturers expected a sharp decline in sales, coupled with the reasons for epidemic prevention, the major car manufacturers have reduced production, and even once shut down for several months, but at the end of last year, the car market rebounded, the industry was caught off guard, wanting to resume the car production line, but less important parts indispensable to the car.
Headquartered in Southern California, artificial intelligence (AI) chip design company Kneron CEO Liu Juncheng said to the Central News Agency reporter, in the semiconductor industry for so many years, the first time to see this situation, design a chip to ask the foundry manufacturing, it takes more than six months to get the product, it can be seen that the supply is tight.
It’s not hard to get orders, it’s hard to get capacity. Liu Juncheng said, in the past from the fab to get the product time of about 1 and a half to 2 months, the middle of last year into 4 months, in the third quarter lengthened to 6 months, now have to wait until 9 months later.
Liu Juncheng pointed out that one of the reasons for the shortage of chips is the 5G replacement tide. 5G telecom equipment using chips, more than 10 times larger than 4G chips, so a wafer can be cut out of the 5G chip, more than 10 times less than the original production, making the supply of fabs is limited.
Global chip shortage phenomenon, on the one hand, highlights Taiwan’s pivotal position in the semiconductor industry, on the other hand, both the United States, Japan or China want to increase the proportion of self-sufficient chip manufacturing. Semiconductor Industry Association (Semiconductor Industry Association) statistics, the U.S. manufactured chips from 37% in 1990, to only 12% today!
Semiconductor Association CEO John Neuffer (John Neuffer) pointed out: “The overall global economic environment affected by the epidemic, but in 2020, semiconductor sales grew slightly. Global demand for semiconductors has increased, but the U.S. chip manufacturing from 37% of the global total in 1990 to 12% today. If the U.S. government does not take action, the situation will only get worse.
Over the past 20 years, a number of U.S. chip design companies to reduce investment in local production lines, semiconductor production moved to Asia, earning billions of dollars, the market valuation of these companies to several trillion dollars.
In business, chip production outsourcing to TSMC, Samsung and other Asian companies with advanced technology is a reasonable decision. But at the same time, overdependence also reached a dangerous level. About 70% of the world’s advanced chip manufacturing in Taiwan, foreign media analysis, which is why the United States sent an aircraft carrier to pass by when the Chinese Communist Party military aircraft frequently advancing.
Scholars analyze the potential risks of geopolitics, typhoons and earthquakes, cramming chip production and manufacturing in the same place must bear the relative consequences. As under the epidemic, the United States lacks the ability to produce epidemic prevention equipment and masks, and a crisis will occur once Asian supplies are interrupted.
Former President Trump‘s term, the U.S. Congress proposed the “Chip Made in America Act” (CHIPS for America Act) is to improve the domestic production capacity of independent chip manufacturing.
In January this year, Congress passed the “National Defense Authorization Act”, has listed incentives for semiconductor manufacturing, may help Intel, Grosvenor, Samsung and TSMC, etc. to obtain government funding to build local plants in the United States, so as to further reduce costs, and thus make the United States in the global semiconductor market profit.
In addition to a sound supply chain, reduce the risk of high-tech industries, national security is another important issue, the U.S. government in the past few years in the defense chip security invested a lot of effort. A few years ago, Liu Juncheng participated in the U.S. government’s Intelligence Advanced Research Projects Agency (IARPA) Trusted Integrated Chip (TIC) research program as a scholar.
Liu Juncheng pointed out that at that time, when participating in internal meetings, but also need to enter the heavy metal-clad confined space meeting, the purpose is to help the United States to develop safe military, aviation chips, reduce the risk of manufacturing in Asia, and the Department of Defense Advanced Research and Development Projects Agency (DARPA) electronic renaissance program.
The U.S. government has used national resources to invest in secure chip research and development for more than 10 years, and DARPA has proposed in recent years to revitalize the Electronic Renaissance Initiative (ERI) for “local production,” in line with the Department of Defense’s 2018 announcement of “Assessing and Strengthening the U.S. Manufacturing and Defense Industrial Base and Supply Chain Resilience” to ensure the security of military electronics.
Both the Trump Administration and the incoming Biden administration want to improve the ability to produce chips in-house to ensure U.S. leadership in the technology industry. The same trend can be seen from the Chip Made in America Act of 2020 to the National Defense Authorization Act of 2021, which proposes measures to incentivize local semiconductor manufacturing.
However, TSMC’s dominant position in the field of foundry can not be replaced in the short term, the expansion of U.S. domestic chip manufacturing is still difficult. Harvard Business School professor Shi Zhaowei (Willy Shih) pointed out in a Bloomberg interview, the semiconductor industry design and production division of labor is the result of long-term development, can not be reversed overnight.
The problem will take as long as it takes to solve. Shi Zhaowei analysis, such as TSMC has been established in the 1980s, several decades of hard work down the advantages will not easily disappear.
Shi Zhaowei said, foundry is a capital-intensive industry, must invest a lot of money, Qualcomm, Apple and other technology companies are satisfied with such cooperation model, because it can bring maximum benefits.
From the demand side, the U.S. production of chips if the high cost, expensive, produced and not competitive; coupled with the production process has a lot of industry hidden knowledge, these are difficult to transfer to the United States in a short period of time.
Recent Comments