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IC Demand Growth Causing Shortages in Chips for Displays
The COVID-19 pandemic triggered a surge in demand for PCs and other electronics as remote work and online learning became the new normal. Demand remains at highs. In December, the Semiconductor Industry Association said global chip sales would grow 8.4% in 2021 from 2020's total of $433B (up from 5.1% growth between 2019 and 2020). Other reasons include shifting semiconductor models that have created a bottleneck among outsourced chip factories, as well as effects from the years-long trade war with China. Many top semiconductor companies are now "fabless," meaning they only design the chips and the technology inside of them. Foundries like TSMC, and Samsung are completely contracted to make the chips, as the shift to outsourcing has had a big effect on structural changes and related capacity (i.e., if a company cut orders in the early days of the pandemic, they had to go to the back of the line).
Foundries are also prioritizing production based on chip value, putting a squeeze of DDICs and other ICs dedicated to the flat panel world. President Biden plans to sign an executive order in the coming weeks to authorize supply chain reviews for critical goods like semiconductors "to identify potential chokepoints in the supply chain and actively working alongside key stakeholders in industry and with our trading partners to do more now. In a letter a consortium of U.S. chip companies including Intel, Qualcomm, and Advanced Micro Devices asked Biden for "substantial funding for incentives for semiconductor manufacturing" as part of the economic recovery and infrastructure plans.
The COVID-19 pandemic triggered a surge in demand for PCs and other electronics as remote work and online learning became the new normal. Demand remains at highs. In December, the Semiconductor Industry Association said global chip sales would grow 8.4% in 2021 from 2020's total of $433B (up from 5.1% growth between 2019 and 2020). Other reasons include shifting semiconductor models that have created a bottleneck among outsourced chip factories, as well as effects from the years-long trade war with China. Many top semiconductor companies are now "fabless," meaning they only design the chips and the technology inside of them. Foundries like TSMC, and Samsung are completely contracted to make the chips, as the shift to outsourcing has had a big effect on structural changes and related capacity (i.e., if a company cut orders in the early days of the pandemic, they had to go to the back of the line).
Foundries are also prioritizing production based on chip value, putting a squeeze of DDICs and other ICs dedicated to the flat panel world. President Biden plans to sign an executive order in the coming weeks to authorize supply chain reviews for critical goods like semiconductors "to identify potential chokepoints in the supply chain and actively working alongside key stakeholders in industry and with our trading partners to do more now. In a letter a consortium of U.S. chip companies including Intel, Qualcomm, and Advanced Micro Devices asked Biden for "substantial funding for incentives for semiconductor manufacturing" as part of the economic recovery and infrastructure plans.
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