Nikkei News reported that Asia’s semiconductor exports, which now account for 80% of the world; however, the concentration of production bases, large semiconductor plants and other factors make it difficult to eliminate the risks in the semiconductor supply chain, but also prompted some major countries to begin to promote the return of semiconductor production to domestic.
Since this year, the United States Texas blizzard, Japan Renesas Electronics factory fire, have led to the shutdown of semiconductor plants, coupled with the recovery of automobile production, so that the chip shortage is slow to eliminate. Some analysts predict that the number of cars forced to reduce production due to chip shortages may reach 2.4 million, accounting for 3% of the expected global production this year.
In addition to automobiles, semiconductors are also widely used in a number of products, once the supply chain disruption will cause a huge impact. However, some specific factors have led to the semiconductor supply chain is extremely vulnerable to trauma.
The first factor is the concentration of production sites. As of 2019, 20 years, Taiwan, South Korea and China and other places of semiconductor exports accounted for the global export volume ratio, has increased from fifty percent to eighty percent; production base is too concentrated, natural disasters and geopolitical risks will reduce the ability to respond.
The horizontal division of labor in the semiconductor industry also makes the production base concentrated in Asia; the United States, Europe and Japan’s chip industry outsourcing foundry to reduce the burden of investment, outsourcing manufacturing operations to TSMC and other companies; currently, Taiwan, South Korea and the mainland, in the semiconductor foundry market share of up to 80%.
Another risk factor is the large-scale semiconductor plant; Taiwan and South Korea’s single semiconductor plant capacity is currently about twice as large as in 2009, and Japan is about 1.4 times larger.
The reason for the expansion of semiconductor plants is the increase in supply and corporate mergers and acquisitions; for example, the current Renesas Electronics, which is integrated by the semiconductor divisions of NEC, Hitachi, and Mitsubishi Electric.
Growing concerns about the risks of semiconductor supply are prompting some countries to seek ways to reduce their dependence on imports; Intel CEO Kissinger said, “The production of state-of-the-art semiconductors is skewed toward East Asia and must be balanced.” Intel’s plan to build a new plant in Arizona is a sign that the U.S. is bringing back semiconductor production.
In addition, Europe is also ready to increase its market share in the field of next-generation semiconductors, and Japan intends to set up advanced semiconductor plants in the country. Mainland China also plans to increase its semiconductor self-sufficiency rate, with the goal of raising it to 70% by 2025.
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