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Chip Industry Facing Global Supply Chain Problems


There has never been a worse situation in the chip industry. The head of the supervisory board of the largest Chinese contract manufacturer summarized the situation and called on the industry to cooperate more closely.

As important as the competition among manufacturers maybe, at the moment it is actually more important for the semiconductor industry to be able to meet demand again in order to keep customer trust high. Zhou Zixue, who heads the Semiconductor Manufacturing International Company (SMIC), argued in this direction at the Chinese chip trade fair SEMICON.

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Global cooperation and openness to one another are the order of the day, he said, according to a report by the register out. At the moment, semiconductor manufacturers must primarily be concerned with getting the market as comprehensively as possible again. Because the bottleneck is affecting more and more sectors. In the beginning, it was the automakers who had to shut down their production in a row because they couldn’t get enough chips for the vehicle electronics; now it is the tech companies themselves who are feeling the effects. The latest example here is Samsung: The South Koreans are themselves a heavyweight in the chip industry and have nevertheless cancelled the release of a Galaxy Note model for this year.

Sanctions create more problems

And when it comes to the situation in the chip industry, you quickly end up with the general political weather situation. The SMIC manager himself did not have to go into the US embargo against Chinese manufacturers. Representatives of various companies from the USA, Europe and Japan had sent recorded statements for the SEMICON opening, in which they made it clear how urgently they are dependent on chips from China.

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In principle, most semiconductor products can still be produced outside of China, but the manufacturing capacities located there are currently practically indispensable if you want to overcome the global bottleneck. In addition, the situation in other regions is sometimes difficult. In addition to the restrictions caused by the corona crisis, other factors are also at work here. A good part of US chip production is still affected by the consequences of the massive cold snap in Texas, for which no one was prepared there.