https://safirsoft.com The shortage of chips led to an unexpected increase in the production of weak chips

Why it matters: Global chip sales rose 28 percent to $144.8 billion in the third quarter, according to the Semiconductor Industry Association. There are no signs that this growth will slow for the foreseeable future, but a particularly interesting side effect is that companies that make chips that rely on outdated processing technology are in a strong position to choose their customers based on who they have. I think a long term partner would be great.

By now, everyone is aware of the constant shortage of chips and how they affect almost everything electronically. The auto industry has been hardest hit by the crisis, with analysts forecasting $210 billion in losses by the end of this year. The most optimistic forecast as to when we can expect the situation to improve is that supply may be needed in the second half of 2022.

Beyond the supply crunch, certain companies are already in the market. The shadows of giants such as TSMC, Samsung and Intel are in the spotlight thanks to their ability to rapidly adapt their business practices to the rapidly changing semiconductor landscape.

https://safirsoft.com Chip shortage led to unexpected increase in production of weak chips

One such company is a chip known for building microcontrollers that add low-power computing capabilities for automobiles, appliances, security systems, medical devices, industrial equipment, etc. In fact, the device you're currently using contains many of these chips that are dedicated to small tasks such as power management, reading data from sensors, translating inputs from a touch maker or keyboard and mouse/trackpad, and more.P>

This year, demand for microchip products has soared that they have been difficult to maintain, and Arizona-based Chandler can The company only met two-thirds of that demand, and that's the result of a specific business decision made earlier this year.

Microchips are used to allow customers to cancel chip orders.90 days from delivery, but this year it's starting to prioritize customers who have signed contracts of 12 months or more that cannot be canceled or rescheduled.

https://safirsoft.com Chip shortage led to an unexpected increase in production of weak chips

Interestingly, this strategy has worked so well that Microchip customers, and now the company can move forward by investing in increased production capacity, spurred by the constant flow of feedback from customers acting like partners.

Other lesser-known chip makers such as STMicroelectronics, Onsemi, Infineon and NXP Semiconductors have seen similar increases in demand for their products, including bing on mature process nodes manufactured using outdated equipment.

Companies like Intel have suggested helping automakers and other customers transition to newer processing nodes, but we're still not seeing any progress in that direction. Reliability and cost savings are reluctant to take such a step, because the systems they build must perform well in a wide variety of situations, regardless of temperature, vibration, humidity and road debris. This is why they prefer old technology that has already been proven to stand the test of time. The use of modern technology can also have a domino effect on the design of the car, which must be adapted to work with more advanced chips.

Photo: Lithographic Machine | ASML

In competition to build More advanced process technology, foundries like TSMC have been forced to optimize costs and focus on building new capabilities at the bleeding edge, opening up new opportunities for chip makers like Microchip, who are now in a position to move from the automotive industry to more advanced chips. money.

The only thing stopping that is the brutal reality: you have to wait 12-18 months to buy the expensive lithographic machines needed to meet the extra demand.

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The shortage of chips led to an unexpected increase in the production of weak chips
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