The global semiconductor crisis directly affected different sectors of the industry and since then it has been a problem for basically everyone, several companies had to change the schemes or even paralyze production lines due to the shortage of components.
According to the Brazilian Association of Electrical and Electronics Industry (Abinee), 12% of manufacturers in various sectors had to stop part of their production in July 2021 due to lack of electronic components. This is the biggest record since, in February, the survey began to monitor the impact of the lack of inputs on the Brazilian market.
Today, semiconductors are estimated to be the fourth most traded product in the world, behind only automobiles, refined oil and crude oil.
What caused the semiconductor crisis?
The causes for this problem range from the trade war between the United States and China (geopolitical factors), through a miscalculation that led some manufacturers to stockpile production at the beginning of the pandemic, to the influence of weather conditions.
With the onset of the pandemic, the closure of factories and the slowdown in production that occurred in 2020, many automakers suspended orders for the semiconductors used in vehicles. The home office and distance education also boosted the sale of electronic devices, such as computers, cell phones and TVs, and, consequently, semiconductor production was redirected.
When the industry in general increased the pace of production, the demand for the components was already very high and, with that, the demand of the industries was “redirected to the end of the queue”. The problem is that the semiconductor industry is not planned in weeks, but in years.
As a geopolitical factor, it is important to note that in late 2020, the United States included Semiconductor Manufacturing International (SMIC) – China’s largest chip maker, in a list that restricts companies’ access to cutting-edge technologies developed in the US. The company claims that the action prevented it from maintaining its full production capacity.
As if that were not enough, still in October 2020 there was a fire in a factory of Asahi Kasei Microsystems (AKM) and in March 2021 another fire reached a part of the plant of Renesas Electronics, which further affected the production of semiconductors.
The China Semiconductor Industry Association (CSIA) called the missing components an “unprecedented” situation.
Consequences and Outlook
The lack of raw material for the production line is more serious among small companies. In October 2020, a survey revealed that 70% in this segment were affected by the lack of inputs, compared to 66% in the large ones. The percentage of smaller companies that say they face a lot of difficulty is higher, reaching 28% among small companies and 27% among medium companies.
To try to reduce the impacts of the crisis, companies have made investments to adapt production lines, but the process is slow and expensive. The way out is adapting production and reviewing the schedule due to rising prices and lack of components.
Initial expectations for 2020 were for signs of normalization still in 2021, however the production capacity planned for this year does not cover demand and there is no prospect of improvement before the second half of 2022.
Source: https://effortech.com.br
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