THE SUPPLY CHAIN


may see book-to-bill ratios closer to 1 (and not 1.7 like at the moment), which will be a relief to everyone and allow much better planning. In other words, 2022 is not really what we


are talking about. You could argue that 2022 is already done, what remains to be answered if we would see another 20% growth (like the order books suggest) or if it would be a bit more moderate, like 10%, depending both on the availability of key components currently in short supply and a catch-up in the actual end markets of customers that were stalled by Covid-19 and subsequent supply chain fallouts. For Europe, this would mainly, but not exclusively, be Automotive and Industrial, and within industrial hopefully a wave of investment into renewable energy technology. The bigger question beyond 2022 is if this


crisis of components supply has implications beyond next year? If you look at two simple facts without


judging, you will see what is meant by the opening statement of two-class society: Infineon just opened a 300mm Wafer Fab in Villach/Austria that is supposed to produce power devices (for Automotive et al.). Investment roughly 1.8 Billion US-$. TSMC seems to have completed its Fab18 in Southern Tainan, which is set to produce leading-edge logic and processors at 3nm geometries. Rumoured Investment - 18 Billion US-$. Such fabs normally produce super-high-


density and high-performance components like microprocessors, graphics processors and system-on chips – which are likely to be used in big volumes only by data centre giants, computer and smartphone giants and last but not least manufacturers of game consoles.


This is the top class Then there are the other semiconductor components: discretes, power devices, sensors, analogue components, speciality memories, opto devices and less complex


logic like smaller microcontrollers for industrial and automotive. They also need much less complex but still cost-efficient production, where different parameters than node geometries play a role. This is the other class. Don’t get me wrong, these are extremely


important components and used in a million applications of all sizes and scopes. And the return on investment is probably extremely high, given the ongoing consolidations of manufacturers of these components. Very often, they are not driving any shortage or over-supply cycles but are sucked into the Vortex of what happens at the global giants game in Computer, Consumer and Communications. The 2020ff supply chain crisis is a very good


example of what happens if the big guys are paying the price for (supposedly) constant supply of all components they need – the rest of the components customer world chokes. Availability of components is what drives customers’ growth, so securing availability for future growth is what procurement and management have to


work towards, unless they want to feel treated as second class customers time and again. The technical and commercial rift


mentioned in the beginning and described above in detail is accompanied by a geostrategic one: the huge concentration of production capacity and capabilities in a few hands (at least for the leading-edge 5nm technologies and below) is seen with concern both by the EU and the USA, each, however, coming from a different perspective. The US has many world-leading


semiconductor companies with huge IP wealth, which they want to protect by bringing the semiconductor manufacturing of leading foundries like TSMC back home. Producing US IP on US soil is more secure than doing this 50 miles from mainland China. And many huge customers also reside in the US, who may have a similar vested interest. The EU on the other hand has – nothing. The


little leading-edge IP from European semiconductor companies does not fill entire fabs. And the typical European customers do not use devices designed for performance in Internet giant’s data centres – at least not in a number that makes commercial sense to a producer like TSMC. The German car industry has learned that in a hard way in 2020. How can Europe stay in a game that will


Electronic components distribution market in Q3/2021 (in Million Euro)


see a market of 1 Trillion US-$ in 2030 or earlier, where semiconductor IP ownership will determine success? As the IP game cannot be won, at least not at a short-term level (it would require a 20 to 30 year-long educational program and favourable start- up environment), the question is how to help secure supply for the industry we have today and the next few years? Can this be solved at a political level? Highly unlikely! It is also not really a matter of production subsidies, as they would make everything much more expensive. The market has to solve it by a less opportunistic and more predictable planning and behaviour. Politics can contribute by reducing the overall bureaucracy and regulation fervor.


DECEMBER/JANUARY 2022 | ELECTRONICS TODAY 17


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42