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Add Smartphones, Monitors, Game Players & PCs to IC Shortages
The great semiconductor shortage of 2021 impacted automakers, which now rely heavily on low cost chips to build cars. The U.S. is currently reviewing its supply of the technology, following a landmark executive order from President Joe Biden. The president pledged $37 billion to cover the short-term costs of rebuilding and securing America’s supply of semiconductors. Ford is predicting a 20% slump in production, and Tesla shut down its Model 3 assembly line for two weeks. In the U.K., Honda was forced to temporarily shut its plant. It appears that no company, big or small, tech or non-tech, is safe from the wide-ranging impact of the great semiconductor famine of 2021. Taiwan's PC monitor shipments are expected to fall 8.2% sequentially in the first quarter of 2021, after registering a 3.7% sequential increase in the prior quarter, according to Digitimes Research. Taiwanese makers produced 25.69 million PC monitors in the fourth quarter of 2020. The makers, out of concern about component shortages, expanded their component inventory and shipments in the fourth quarter. Although the volumes will slip more than 8% sequentially in the first quarter of 2021 because of seasonal factors, the volume still represents a 27.4% Y/Y increase, due to the low volume in Q120.
Qualcomm has confirmed that smartphones are also affected by the situation. Qualcomm president and incoming CEO Cristiano Amon said the semiconductor shortage is “impacting everything, and of course (is) impacting phones.” He added that the shortage could continue until late 2021 as a drop in demand during the pandemic followed by a major spike in demand shortly thereafter was a key reason for the shortfall. Amon also suggested that Qualcomm is under more pressure from smartphone makers as Huawei’s US-induced decline is presenting an opportunity for rivals, but the supply chain wasn’t ready for the increased component demand as a result. When the coronavirus pandemic hit last year, people stayed at home and stopped shopping. Factories closed, and companies pared back orders. But then demand roared back faster than anyone expected, especially for devices to help people work and attend classes from home. Apple couldn't meet the demand for its iPhones, computers and webcams sold out virtually everywhere, and schools couldn't get devices they needed for at-home instruction. Amon described it as a "V-shaped recovery:" a huge drop-off in purchases, followed by a rapid return of demand. But component manufacturers couldn't keep up with the surge. Automakers' just-in-time manufacturing strategy, which has long benefited them, backfired. When the pandemic hit, they canceled orders, only to find the supply wasn't available when demand returned.
Reuters reports even Samsung is affected, citing sources at Samsung suppliers. Quotes:
There also are shortages in chips for Sony PlayStation 5 and Microsoft Xbox Series X consoles, and people have been camping out -- during a pandemic -- to buy Nvidia's graphics processors. Monitor makers are severely cutting back on production due to a lack of driver ICs.
The great semiconductor shortage of 2021 impacted automakers, which now rely heavily on low cost chips to build cars. The U.S. is currently reviewing its supply of the technology, following a landmark executive order from President Joe Biden. The president pledged $37 billion to cover the short-term costs of rebuilding and securing America’s supply of semiconductors. Ford is predicting a 20% slump in production, and Tesla shut down its Model 3 assembly line for two weeks. In the U.K., Honda was forced to temporarily shut its plant. It appears that no company, big or small, tech or non-tech, is safe from the wide-ranging impact of the great semiconductor famine of 2021. Taiwan's PC monitor shipments are expected to fall 8.2% sequentially in the first quarter of 2021, after registering a 3.7% sequential increase in the prior quarter, according to Digitimes Research. Taiwanese makers produced 25.69 million PC monitors in the fourth quarter of 2020. The makers, out of concern about component shortages, expanded their component inventory and shipments in the fourth quarter. Although the volumes will slip more than 8% sequentially in the first quarter of 2021 because of seasonal factors, the volume still represents a 27.4% Y/Y increase, due to the low volume in Q120.
Qualcomm has confirmed that smartphones are also affected by the situation. Qualcomm president and incoming CEO Cristiano Amon said the semiconductor shortage is “impacting everything, and of course (is) impacting phones.” He added that the shortage could continue until late 2021 as a drop in demand during the pandemic followed by a major spike in demand shortly thereafter was a key reason for the shortfall. Amon also suggested that Qualcomm is under more pressure from smartphone makers as Huawei’s US-induced decline is presenting an opportunity for rivals, but the supply chain wasn’t ready for the increased component demand as a result. When the coronavirus pandemic hit last year, people stayed at home and stopped shopping. Factories closed, and companies pared back orders. But then demand roared back faster than anyone expected, especially for devices to help people work and attend classes from home. Apple couldn't meet the demand for its iPhones, computers and webcams sold out virtually everywhere, and schools couldn't get devices they needed for at-home instruction. Amon described it as a "V-shaped recovery:" a huge drop-off in purchases, followed by a rapid return of demand. But component manufacturers couldn't keep up with the surge. Automakers' just-in-time manufacturing strategy, which has long benefited them, backfired. When the pandemic hit, they canceled orders, only to find the supply wasn't available when demand returned.
Reuters reports even Samsung is affected, citing sources at Samsung suppliers. Quotes:
- “Samsung Electronics Co Ltd, the world’s largest smartphone maker, is experiencing a shortage of Qualcomm’s application processors. Demand for Qualcomm’s chips has soared in the past months as Android phone makers seek to win over customers abandoning phones produced by Huawei Technologies Co Ltd due to U.S. sanctions.
- One Samsung supplier said a Qualcomm chip shortage was hitting production of mid- and low-end Samsung models. Another supplier, said there was a shortage of Qualcomm’s new flagship chip, the Snapdragon 888.
- A contract manufacturer said it would cut handset shipments for a range of “major smartphone brands”.
- Xiaomi’s Lu Weibing, prolific on Weibo, said “It’s not a shortage, it’s an extreme shortage,” back a few weeks.
- Add in water shortages in Taiwan affecting TSMC (Nikkei), power outages and winter weather keeping Samsung Foundry, Infineon Technologies, and NXP Semiconductors offline in Texas (Tom's Hardware), and a stretched supply chain starts to break.
There also are shortages in chips for Sony PlayStation 5 and Microsoft Xbox Series X consoles, and people have been camping out -- during a pandemic -- to buy Nvidia's graphics processors. Monitor makers are severely cutting back on production due to a lack of driver ICs.
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