The scarcity of semiconductors has not yet become a major fear for the average family. However, the scarcity of some items for everyday life has already been a fact of life for US families.
Such scarcity seems to have begun when the Covid-19 Pandemic shut down our economy. You might still be noticing an empty area on the store shelf where your favorite brand of bread previously resided.
However, the average person might not yet understand the seriousness of semiconductor scarcity. It looms large over our industry, the economy, and prosperity in the US.
The Big Backstory on Semiconductors
The Semiconductor is a Vital Component in Our Electronic World. The Scarcity Threatens Our Economy and the Way We Live.
As we have explained in a previous blog, the semiconductor is integral to the manufacture of all technology you love. Without semiconductors, you would not have your cell phone or your electric car.
Let’s face it; we heavily depend on our electronics for life in the 21st century. Semiconductors are the tiny brains created on Silicon chips.
And they are the heart of all our technological tools. Semiconductors run everything, from modern washing machines to computers. Yet we are faced with a scarcity of semiconductors.
Immediately we want to demand how and why this happened. (We also might want to know how we can fix this scarcity.) Thus, we present our two-part blog concerning the scarcity of semiconductors.
Facing a Scarcity of Semiconductors: Why?
Of course, as mentioned above, there was a pandemic. And then, came the economic shutdown. Most experts have stated that the current scarcity of semiconductors is directly due to those two factors.
Now, experts in medicine and the economy tell us the worst is over. However, the ramifications of that deadly time and shut-down still haunt us, economically as well as medically.
- To be succinct, experts state, “These ongoing issues are numerous…”
- And they add, “One of the most pressing of them all is the shortage of semiconductor chips.”
The Supply Chain Effect on Semiconductor Scarcity
Now, there is another point we must make. When we began to restart the economy, we fell into a freighter’s nightmare of demand. Every American has watched the shipping snarl at strategic ports in the US.
How terrible this must be for manufacturing companies that need semiconductors! They paid for semiconductors. But, can’t get them from China, India, or other exotic places. Why? Because of our snarled ports plus shipping and trucking difficulties. This might be a little simplistic. However, we know the supply chain crisis is another factor affecting the scarcity of these vital parts that make technology work.
Taking a Deep Dive into the Semiconductor Problem
We Depend on Devices Like Our Computers and Cell Phones on a Daily Basis. Without Semiconductors, We Might Have to Learn to Do Without Them.
Here at ER Optics where we make the silicon chips that form the base of semiconductors. Of course, we knew our readers would be concerned about this scarcity of semiconductors. That’s why we now are beginning a two-part blog series to explain the problem and solutions.
We still stand back in awe that this happened, but let’s calmly examine the situation.
1. The Semiconductor Industry Association has stated that Global semiconductor sales increased 6.5 percent in 2020.
2. Why? The demand came from automakers and tech giants. (But, keep in mind, we are not blaming consumers.)
Are There Solutions Out There?
A problem that is this deep and interconnected at global and economic levels must have some answers. Given the pandemic circumstances, perhaps the shortage of semiconductors was unavoidable.
3. And the answer from most experts sounds so glib and easy. They agree the situation can be fixed, “By building a resilient, flexible workforce model and a strong, reliable network of suppliers.” And they add optimistically, “Crises like this can be not only managed but capitalized on.”
4. Meanwhile, Ford Motor Co and GM expect to each lose over $2 billion in earnings, due to the scarcity of semiconductors. In answer to that, they might put the brakes on auto production by as much as 20 %.
Let’s Talk about Cars and Semiconductors
In the first place, Toyota, and Tesla, began making chips in-house some time ago. However, they still expect the manufacture of them to cause inevitable slow-downs.
Hyundai tried to solve the problem by stockpiling chips months ago. However, they are beginning to worry about how long the scarcity might last
We know you want that new electric vehicle and the shiny tax break that might come with it. But how is this possible, given the scarcity of chips? Read on, to see why the answer is not simple.
An Unspoken Cause Behind the Scarcity of Semiconductors
We can’t punish Automakers for underestimating consumers’ demand for cars in the second quarter of 2020. Nor can we punish them for decreasing production.
There is another factor in this problem seldom discussed. The average American would never guess it. It has two basically simple parts.
- “The cost of silicon has risen substantially due to the mass production of the COVID-19 vaccines…”
- Most of us probably barely noticed the silicon vials that hold vaccines.
The average American would never give a second thought to those special vaccine vials. They are made of silicon. And that is the “same as the silicon used to manufacture chips and personal computers.” And this is just one example of the rising use of silicon.
Thus, you see the increased use and the rising price of silicon is another factor in the scarcity of semiconductors.
Why Don’t We Just Make More Semiconductors?
Auto Drive Vehicles Without Semiconductors? Not Likely! We Could Make Automobiles Go Without Semiconductors. But, They Would Be Very Different From the Car We Use Today.
This idea is brilliant in both its simplicity and in its complexity. It’s not an easy feat to make the silicon chip. And then there is the making of the chip into the semiconductor.
The making of semiconductors is an extremely complex and meticulously clean process. It consumes time, training, and tons of expensive equipment. That is why we will explain the process in its intricate steps, to you in our next blog.
Then, you will see why we can’t rush the delicate process of creating more semiconductors. “In spite of the intricacies of creating them, that might be our best recourse.”
In part II of our coverage of the scarcity of semiconductors topic, we take you into the heart of the creation of a semiconductor. Until then, thank you for reading our blog.
