supply shortages Archives - Gizmochina

Apple iPad and MacBook production delayed due to supply shortage

Sean — Thu, 08 Apr 2021 07:35:32 +0000

The production of certain MacBook and iPad models has apparently been delayed due to the global shortage of crucial components. The shortage issue for key parts has now also affected Apple.

According to a NikkeiAsia report, the chip shortage has now been affecting an important part of the MacBook production process. This is the step of mounting the components on printed circuit boards just before the final assembly. As per sources close to the matter, the production of iPads has also been postponed due to the shortage of displays and display components. This has prompted the Cupertino based giant to push back a part of its component orders for both products from the first half of this year to the second half.

Sources from within the industry and other experts also believe that these delays are a sign that the chip shortage issue is growing more serious and could impact smaller tech firms even more adversely. Apple is one of the major tech giants in the world and boasts a vast and complex supply chain. Its influence and ability to mobilize suppliers is likely what helped it withstand the global component shortage, which has already affected various car makers and consumer electronics manufacturers as well.

As of right now, the production of its iPhones has not been affected by these shortages. However, certain sources have pointed that the supply of certain components for these devices has been “quite tight” as well. Currently, the shortage of components is only a supply chain issue for the company, and it has yet to affect product availability for consumers. Unfortunately, Apple has declined to comment on the matter.

Global chip shortage to last till 2022, causing bump in semiconductor stock value: Report

Sean — Fri, 26 Feb 2021 09:02:00 +0000

A shortage of semiconductor have affected various industries across the globe. However, despite the issue of supply, the stock value of chip makers have reached a record high during this time.

According to a MarketWatch report, analysts expect that the chips will continue to be in short supply for at least the end of this year. A major reason being Coronavirus pandemic pushing the world further into the digital realm, causing the industry to struggle to keep up with the demand. An example of an industry struggling due to the current chip shortage is the automobile industry, with auto makers struggling to continue production due to lack of chip supply.

As per Maribel Lopez, principal analyst at Lopez Research, the semiconductor industry is facing a “perfect storm” of demand and supply at the moment, which is unlikely to be resolved anytime soon. Lopez further added that “Unless we have a major economic meltdown, which is obviously possible, one of the things that’s happening right now is that almost anything you buy is going to have a chip in it. You can’t buy a dumb product.”

Furthermore, while the demand for mobile chipsets for smartphones were expected to rise last year, the surge in demand for PC based chips were not. In recent times, the semiconductor industry has been working to fit chips into areas they never fit before, so the manufacturing process became more complex over time. After which, the pandemic added new levels of volatility on the supply chains and even manufacturing practices while dealing with them.

An analyst stated that “We don’t see any major correction on the horizon, given ongoing supply constraints as well as continued optimism about improving demand in 2H21. We remain more concerned with continued supply disruptions, and increased materials costs, than we do an imminent multi-quarter inventory correction.”

PlayStation 5 to be in short supply till second half of 2021 due to chip shortage

Sean — Wed, 24 Feb 2021 08:08:59 +0000

Despite being launched last year, the Sony PlayStation 5 is still facing short supply. Since its launch, the newest console iteration has seen great demand across the globe, but this demand is met with short supply due to the global chip shortage.

According to a FinancialTimes report (Via MySmartPrice), Sony has been struggling to maintain the supply of the PS5 consoles. Previously, the company had stated that the shortage in supply is due to the manufacturing constraints that was being faced because of the pandemic. However now, Sony Interactive Entertainment President and CEO, Jim Ryan, has now stated that the PS5 supply will start picking up in the second half of this year.

For those unaware, Sony has been struggling to keep up with the rising demand for its latest generation of gaming console. Ryan further added that the demand for the PS5 was higher than what had been expected, and that the complexities of the supply chain issues resulted in a lower supply. But, the CEO believes that the supply will get better every month throughout 2021. He said that “The pace of the improvement in the supply chain will gather throughout the course of the year, so by the time we get to the second half of [2021], you’re going to be seeing really decent numbers indeed.”

Similar to Sony, Microsoft is also struggling to keep up with the demand for its own consoles. Microsoft’s Vice President of Gaming, Phil Spencer, said that the company is also pushing AMD to supply more chips. Although, the supply chain constraints are expected to last till April 2021.

SMIC struggles with client demands amid chip shortage and impacts of US sanction

Sean — Fri, 05 Feb 2021 08:00:29 +0000

The Semiconductor Manufacturing International Corp (SMIC) recently stated that it is facing troubles in meeting client demands. These orders are for mature technologies in plants that have been running at full capacity for several quarters now.

According to a Reuters report, the company’s CEO, Zhao Haijun, made the statement last week during a conference call after reporting its latest quarterly result. At the moment, SMIC is China’s largest chipmaker but is facing pressure due to US sanctions, which are affecting its operations that impact its revenue growth as well. In the fourth hand final quarter of last year, the company reported sales worth 981 million US Dollars, which marked a 16.9 percent rise year on year.

However, despite its notable growth during this period, the company only expects a revenue increase in the “mid to high” single digits this year. As per the CEO, “SMIC could have maintained last year’s record growth momentum,” if not for its current predicament. Zhao further added that “Although we cannot control external forces, we will cultivate new possibilities and opportunities in the face of crisis and changes.” Since it is a notable figure in China’s semiconductor market, the local government is also banking on the firm for the development and growth of the local semiconductor industry.

At the moment, the company is in talks with its suppliers and the US government, hoping to obtain licenses, which would enable it to purchase equipment to boost its production capacities. SMIC is currently aiming at expanding its capacity in its 12 inch fabrication plants by 10,000 wafers per month and by 45,000 wafers for its 8 inch fab plants. But, the company is expecting delays in its plans due to longer lead times in procuring equipment for this move.

Germany seeks Taiwan’s help for its automobile chip shortages

Sean — Tue, 26 Jan 2021 09:01:19 +0000

Germany has been facing a shortage of auto chip supply and has asked Taiwan to urge its local manufacturers to help in easing this issue. Apparently, the shortage of semiconductor chips has affected the former’s automobile industry.

According to a Reuters report, the shortage has hampered the economic recovery of Germany after the Coronavirus pandemic. At the moment, automobile manufacturers across the globe have been shutting down their assembly lines due to issues with the delivery of semiconductors. A few of the cases seem to have stemmed from the actions of the former US President Donald Trump’s administration, and their efforts against the Chinese chip factories.

As per the report, the shortages have affected automobile giants like Volkswagen, Ford Motors, Toyota Motor Corp, Nissan Motor, Fiat Chrysler, and even other car manufacturers as well. In a letter, the German Economy Minister, Peter Altmaier asked his Taiwanese counterpart Wang Mei-hua regarding this issue. The letter was to address the current issue that also included the Taiwan Semiconductor Company (TSMC), the world’s largest contract chipmaker, in the talks.

For those unaware, TSMC is also one of Germany’s largest chip supplier. Altmaier stated that “I would be pleased if you could take on this matter and underline the importance of additional semiconductor capacities for the German automotive industry to TSMC.” The letter aims at getting additional capacities at TSMC to deliver semiconductors in both the short and medium terms. Furthermore, the German automobile is already in talks with TSMC about raising deliveries, which have been “very constructive” so far.

Mini LED demand spike causes LED Chip prices to surge: Report

Sean — Mon, 25 Jan 2021 11:37:52 +0000

With various companies gearing up to launch their own offerings of laptops, tablets, monitors, and TVs with the new Mini LED backlighting, suppliers have been pushing production capacities to meet the surge in demand. However, this has also led to the rise in the price of conventional LED chips as well.

According to a TrendForce report (Via EETAsia), multiple firms in the LED supply chains had started manufacturing LED chips ahead of time, in the fourth quarter of last year. But despite this, the explosive growth in demand for Mini LED chips has led to crowding in their production capacities that have also affected other mainstream LED chips. Due to this, the global supply chain has been witnessing a shortage of LED chips, which has led to certain suppliers raising the quotes on chips supplied to their non core clients that bring relatively low gross margins.

These price hikes are generally around 5 to 10 percent. Furthermore, the report adds that the companies in the LED supply chain have also begun aggressively procuring components in other to mitigate these upcoming price hikes on raw materials and the shortage of components. This is primarily due to tight production capacities for manufacturers after the Chinese New Year. These shortages have already affected certain serial numbers or specifications.

TrendForce believes that the structural shortage that is affecting the LED industry is primarily due to the market’s underestimation of production capacity that was necessary for key parts of the supply chain. Thus, suppliers are currently enjoying an increased bargaining power in price negotiations of LED chips due to the rise in material costs and limited material supplies as well.

Shortages of Laptops and PCs caused by high demand to last till 2022

Sean — Fri, 25 Dec 2020 06:34:45 +0000

As the world got hit with the viral outbreak earlier this year, the demand for various electronic products like laptops and desktop PCs rose immensely. This apparently has left manufacturers still being months away to fulfill existing orders with the shortge possibly lasting till 2022, as per analysts and hardware industry executives.

According to a Reuters report, one of the primary reasons for this sudden rise in demand was caused by the growing remote working or work from home requirements in the professional sense; whilst education was also shifted to the online digital realms due to the ongoing Coronavirus pandemic. The outbreak saw smartphone sales decline while devices with larger displays saw an increase in popularity and demand.

Gregg Prendergast, Pan-America president at hardware maker Acer Inc stated that “The whole supply chain has been strained like never before.” Furthermore, the annual shipments of PCs, including desktops and laptops, had topped out at about 300 million in 2008 and has since been on a steady decline, with only a few predicting such a resurgence in demand. At the moment, projections from analysts note that shipments in 2020 could reach around 300 million as well, which would be up by 15 percent over last year.

Another large screen gadget that has seen impressive sales are tablets. The report also adds that the number of installed tablets and PCs will reach about 1.77 billion. This is up from 1.64 billion in 2019. With various government enforcing local lockdowns, many families had looked to install at least one PC, for children and students in their homes. Notably, even the gaming industry grew as the number of gamers and related hardware also saw growth.

At the moment, many companies and manufacturers are struggling to stock up inventory to keep up with the high demand. A few brands had teased better models and supply through improved shipping, although, whether or not this is true remains to be seen. So stay tuned for more updates regarding the matter.

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Indian Govt intervenes to solve supply issues of local companies with MediaTek: Report

Balaji S — Wed, 02 Dec 2020 15:24:58 +0000

The Indian Government has reached out to MediaTek to mediate discriminatory allegations by Indian companies. A report says the company has been diverting the majority of its supplies to Chinese vendors. As a result, companies like Micromax and Lava are reportedly facing shortages of chipsets.

Citing its sources, ET reports that the Indian Govt’s intervention to solve the issue is to avoid further complications. Pankaj Mohindroo, Chairman of ICEA(India Cellular and Electronics Association) says the govt is reaching out through proper channels to MediaTek. Apparently, it is doing this to negotiate the issue that has resulted in about 95% shortage of components for Indian companies.

However, MediaTek denies these allegations. It says the entire industry is experiencing shortages globally. It adds that the main reason is the supply chain disruption due to COVID-19 in addition to demand, 5G rollout. After the outbreak of the virus, companies faced a lot of issues and even started importing devices from China. Although reports predict a revival in 2021, the market is still yet to balance the demand and supply crisis.

Anyway, while the seriousness of the allegations isn’t clear, experts believe that it could also be due to Huawei stockpiling MediaTek’s chipsets in Q2. Back in May, after realizing the extension of the US ban, it reportedly increased orders to MediaTek by 300%. Later, as the September 15 deadline was approaching, it entered survival mode by stockpiling chipsets for the next 2 years.

Coming back, the report says that if Govt doesn’t intervene, it will affect Indian companies’ goals for the PLI scheme. Previously, the govt announced incentives worth ₹50,000 crores ($6.6 billion) including PLI, SPECS, EMC 2.0 schemes. Out of this PLI(Production Linked Incentive) requires companies to manufacture high-end phones for a period of 5 years locally and achieve yearly goals to get 4-6% incentive.

That said, experts say that Indian companies will be able to reach the first-year target of the PLI scheme only if they get supplies till March 2021. And if the issue persists, it isn’t going to be a smooth ride for them. Let’s wait and see how the situation pans out after the involvement of the govt.

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