Standards & Regulations


Learning from the global chip shortage


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n increasing number of consumers are being impacted by the global chip shortage that currently plagues the electronics manufacturing sector. The


semiconductor supply chain is unique, but there are lessons that all manufacturers can learn from its shortcomings. Here Neil Ballinger, head of EMEA at automation parts supplier EU Automation, discusses how the global chip shortage can teach us a valuable lesson in resource management The chip crisis that has impacted industries worldwide since the start of 2020 is bound to persist at least until the second quarter of 2022, according to research firm Gartner. The time it takes to produce a single semiconductor might increase by six months, with more complex ones requiring up to a year to be completed. This will continue to have disastrous consequences in the production and supply of devices containing touch screens, fingerprint sensors and microcontrollers, impacting sectors as diverse as gaming, security, home appliances and automotive.


A unique supply chain


There are several socio-political issues that contributed to the chip shortage. An escalation of tensions between the US and Chinese Governments led the latter to stockpile record amounts of chips, as well as the equipment used to produce them. Meanwhile, major semiconductor manufacturers have had to suspend production due to unforeseen circumstances. The Samsung production plant in Austin, Texas, has been impacted by recent power outages resulting from unusually cold weather, while the Renesas plant in Japan paused activities after a fi re.


This happened while the COVID-19 pandemic prompted consumers and businesses worldwide to invest in technology to stay connected. The result is that demand soon surpassed supply, leading to the current situation.


The abovementioned episodes led to the exacerbation of issues that were already present well before 2020, and that have to do with the unsustainable nature of chip production. While some companies, such as Intel, design and manufacture their own chips, the cost and complexity of the process means that the sector relies on a few


chip manufacturing facilities, also called foundries or fabs.


These are predominantly located in South- East Asia, with about three quarters of all global chips coming from China, Japan, South Korea and Taiwan. When it comes to more complex and advanced semiconductors, the entire global production is virtually confi ned to South Korea and Taiwan.


Geographical specialisation has historically led to technological excellence and has helped minimise costs for consumers, but when supply chains are so incredibly dependent on a handful of companies located in just one area, problems inevitably arise.


Diversifying


The good news is that with every challenge comes a lesson. Governments worldwide are spurring initiatives to increase semiconductor self-suffi ciency and diversify the supply chain. In the US, manufacturing giants such as Amazon, Google, Apple and Microsoft have founded the Semiconductors in America Coalition (SIAC), while the EU is heavily investing in new facilities and equipment, aiming to produce 20 per cent of the global chip supply by 2030.


Manufacturers worldwide can also learn from the global chip crisis. In times of socioeconomical instability, diversifying the supply chain is key. In this sense, manufacturers might want to consider adding regional and local companies to their offi cial supplier lists to minimise risks in case of adversities in one location.


Another good strategy is that of investing in technology that increases visibility across all nodes of the supply chain, so that when one node is impacted, manufacturers might have time to react before a dangerous domino effect occurs.


At EU Automation, we are fi rm believers in the diversifi cation of supply chains. With sites in four strategic locations — the UK, the US, Germany and Singapore — and a global network of reliable partner suppliers, we can dispatch a huge variety of automation components worldwide in record times. This has allowed us to successfully navigate the pandemic without impacting our ability to help manufacturers when critical equipment breaks and downtime looms.


euautomation.com


myenergi redesigns products in response to global chip shortage


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yenergi has today completed a major product redesign project in response to the challenges


caused by the global silicon shortage. With lead times for some microprocessors now exceeding 52 weeks, the silicon shortage is causing signifi cant production issues for companies across the globe. At the same time, myenergi is experiencing growing demand for its energy control products as the world races towards Net Zero Carbon,


30 June 2021


Electric Vehicle (EV) adoption gains momentum and consumers become more conscious of their energy use at home. To future-proof the business and ensure that demand would not outstrip supply over the long term, myenergi’s team of engineers tackled the impending supply issue head on and the updated designs operate on a new, more powerful microprocessor which is not affected by the silicon shortage.


Components in Electronics


Dr Chris Horne, chief technology offi cer of myenergi, comments: “The global silicon shortage has caused diffi culties for numerous sectors globally, with ever growing lead times for critical microchips leading to car production being halted, a shortage of consumer goods and massive price rises in computer components, to name just a few. As a key component for our products, we had been building stock to offset the shortage and cover our plans to boost output, but


we knew this problem would persist for the foreseeable future. In light of this, we moved quickly to change our operating platform, completing the project in just three months. We’re now in a strong position to meet the increasing demand for our range of effi cient energy control products, which continues to grow as the global push towards Net Zero Carbon gains momentum.”


myenergi.com www.cieonline.co.uk


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