CHIP SHORTAGE COPING STRATEGIES
Chipping away at the semiconductor crisis
With no end to the semiconductor shortage in sight, the industrial vision industry has had to adapt to a new normal, finds Benjamin Skuse
W
hen US car makers like Ford and GM are making moves to bring computer chip production in-
house, you know the semiconductor crisis is much more than a temporary blip. Covid-19 hit during a natural downturn
in semiconductor demand. As worldwide lockdowns and virus outbreaks halted global production and supply throughout 2020, demand rebounded dramatically thanks in large part to people craving electronic entertainment and devices to help them work from home. Ten, 2021 saw a host of extreme weather
events and accidents affecting chip-making hubs in Japan, Taiwan and the US. Next, the Ukraine war began, placing further strains on the industry, given both Ukraine and Russia’s importance as trade routes and their role in supplying key substances in chip production – neon gas and palladium, respectively. When you add shortages in other key
materials like silicon and rare earths, continuing disruptions to global supply chains, and the effects of the ongoing geopolitical conflict between the US and
China, it is clear the semiconductor crisis will be with us for a long time to come.
Bullwhip effect Te mechanical manufacturing industry, including the industrial vision sector, has been hit hard by this worldwide imbroglio. Surveys conducted by VDMA – the mechanical engineering industry association, representing more than 3,400 German and European companies from the mechanical engineering sector – have found that almost all companies have suffered from the chip shortage. ‘Te current situation is partly explained
by the bullwhip effect as a result of the pandemic: the surprisingly sharp and rapid recovery of demand in some parts after the global slump, especially first in China, and later in the EU, and the general aim to bring supply chains back into operation and build up stocks,’ said VDMA’s Sandra Engle. Te bullwhip effect is where each party
in the supply chain gradually escalates an initially small spike in demand by adding additional products to their orders to act as a buffer. When – as has happened – the
14 IMAGING AND MACHINE VISION EUROPE VISION YEARBOOK 2022/23
spike is larger and everyone in the supply chain does this, inaccurate forecasting, stock hoarding and out-of-stock products follow. Speaking on the vision hardware
company’s blog, Phytec head of development, Marcus Lickes, delved into the consequences of this for semiconductor manufacturers: ‘It starts with raw materials, goes to wafers, and ends with manufacturing and test capacity,’ he said. ‘So even if semiconductor manufacturers get the base material, they have to find free manufacturing capacity. Manufacturers with their own fabs are better off, but even their fabs are completely overloaded. Tis explains why there are hardly any components that can really be procured without problems.’ Even now, over two years since the
pandemic began, VDMA reports that around 35 per cent of companies are still experiencing serious impairments in their supply chains, and 54 per cent see serious bottlenecks in electrical and electronic components. ‘Not surprisingly, supply shortages are impacting the price structure of purchased inputs,’ added Engle. ‘VDMA expects no short-term relief due to long lead times for pre- materials and complex processes in semiconductor manufacturing.’
FPGAs and CMOS components For companies working at the coalface, this situation has been a logistical
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