Commenting on the current gap between chip demand and supply, Dr. Peter Buchholz, head of “Deutsche Rohstoffagentur” (an offshoot of Federal Ministry for Economic Affairs and Energy), told the German newspaper „Die Zeit“: „The current shortage is a mix of several factors, of which we don't know exactly which is causal ..."
Market experts frequently name:
- Global increase in demand for consumer electronics, phones and laptops for home office
- Strong growth in car sales, especially in China
- Expanding 5G network buildup
- U.S. sanctions threatened against China led to hoarding by major Chinese customers; in this context, particularly Huawei is mentioned.
- China produces 70% of raw silicon. Floods on one hand and drought on the other (both of them leading to hydropower plant shutdowns) provoked electricity shortages. Temporary, up to 20 production sites had to be shut down simultaneously due to climate reasons.
- Supply and demand of chips are subject to different time scales. Development and construction of new chip factories (“fabs”) is much slower than demand peaks stand.
- A single new fab costs thereabout a 2-digit billion-dollar amount, and is profitable only from 80% workload: this means a high investment risk.
- In near future, there will be no significant expansion of European chip production, because Europe’s technology gap accounts for 10-15 years.
These and probably many other causes are interacting in a complex market, that furthermore is liable to partly uncontrollable external influences.
Photo: As a newcomer to Texas Instruments in 1958, Jack Kilby didn’t get a summer vacation. Lonesome in the lab, he invented the chip, revolutionized the world and received the Nobel Prize in Physics in 2000. It’s not known when the photo with him and one of the first chips was taken. Today, antiquarians pay high prices for original historical chips.