Experts explained why electronics manufacturers are \"swimming\" in chips, while automakers suffer from chip shortages

Recently, news about a total chip shortage has been replaced by information about a mitigation of the situation.
What's more, some reports suggest that TSMC is asking its employees to take a leave of absence as computer makers have noticeably reduced orders, and orders from smartphone makers have declined even further, a trend that will continue into 2023.
Meanwhile, while some manufacturers are not experiencing any shortage of semiconductors, many companies are still suffering from acute shortages.Image source: МicronAs Forbes reports, while TSMC's leading customers - Apple, AMD, Intel, MediaTek, NVIDIA, and Qualcomm are constantly developing more and more advanced processors, they are currently very \"conservative\" about sales forecasts and, therefore, production orders.
In other words, the leading electronics component vendors do not need many chips yet.This is not surprising, because in this sector demand is largely determined by demand for PCs, which, according to Gartner, in April 2021 rose to record levels, sales of the top six PC manufacturers grew at a double-digit percentage rate, and for some time, even triple-digit sales of Chromebooks.
This trend could not last forever, and figures have already appeared on the sale of certain models of Chromebooks for literally $79 (in the US) - even components for them cost more, but the market is already crowded, and demand is satisfied for almost years to come.
At the same time for the release of new models manufacturers have to free up their warehouses from old and expect high demand for components in this segment in the foreseeable future is not necessary.
For example, in its latest earnings report Micron Tecnology reported that demand in the calendar year 2022 will on average be lower than supply, which will lead to a build-up of large stocks in the warehouses of suppliers.
Scarcity typically initiates massive investments in building new capacity and mastering new process technologies, resulting in the occasional oversupply crisis.
Surplus is observed in many industries-but not in all.
In particular, there is no abundance on the market of chips for cars.
The point is that most of the semiconductors for cars are produced according to the so-called \"mature\" process technologies, and most of the demand is for 90-nm semiconductors.
These were considered the most advanced solution around 2002, 20 years ago.
Nevertheless, they are quite in demand, since many components simply do not need ultra-modern technology, and the process of transition to it is costly and long.Image source: BMWFactories continue to use the old tools for production and, since this segment is not the most profitable, for most manufacturers there was no need to invest in new capacity.
Such semiconductors weren't quite enough already by the beginning of the pandemic, and 2020 recorded about an eight-week period in which most auto factories had to partially or completely suspend operations due to sanitary restrictions, after which they withdrew their semiconductor orders.Meanwhile, explosive growth in other sectors requiring chips has put \"obsolete\" production capacity to full use, and as Forbes reports, when automakers tried to restart orders, delivery times for them catast

Arm has separated automotive chip development into a separate division

In late September, the British holding Arm appointed a new CFO and added two members to the board of directors, which can be taken as a sign of preparation for a public offering, but the changes did not stop there.
The division that developed solutions for the automotive industry has been separated, and there was rotation among the heads of all major divisions.Source image: Getty ImagesAbout this on the pages of the corporate blog said Arm CEO Rene Haas.
According to him, so far the solutions for the automotive industry and the Internet of Things have been developed by one unit, but progress in both areas pushes the company to separate them.
In total, Arm will now have four main areas of activity: automotive, customer (responsible for technology for the consumer market), infrastructure and the Internet of Things.From the previously unified division of automotive solutions and the Internet of Things is Dipti Vachani (Dipti Vachani), he will now oversee the automotive business Arm in the post of senior vice president.
Paul Williamson, who previously headed the customer division, will move to head the IoT business, also taking the position of senior vice president.
The client business will be led by Chris Bergey, who was previously in charge of Arm's infrastructure solutions.
Finally, Mohamed Awad, who held the top IoT position, will head the infrastructure business, also as senior vice president.
According to the CEO, \"the change is critical to our success,\" which is why management sees this shift as the key to Arm's success.

Chinese automakers complained of chip costs rising more than 100-fold

As the global chip shortage continues to persist, it is also affecting car production in China.
Local automakers are seeing multiple times the cost of semiconductors.Image source: XPengIn a recent speech, XPeng CEO He Xiaopeng complained that the cost of chips has increased by more than 100 times due to likely price manipulation.
According to Digitimes, the information was confirmed by Richard Yu, head of Huawei Consumer Business Group and Intelligent Automotive Solution BU.
According to his words in automobile industry the chips earlier costing about $1.5-2.99 have grown in price up to about $375.According to AFS analysts, only in May 1.69 million fewer cars were produced in the world because of chip deficit.
Because of the imbalance of supply and demand, some vendors are attempting to manipulate prices.
In particular, Bosch is rumored to be negotiating a price hike for car chips, and industry experts warn that other industry players may follow suit.As prices for minerals used in traction batteries also continue to rise, some Chinese automakers have already raised prices for their cars in 2022.
At the same time, WM Motor head Freeman Shen (Freeman Shen) said that car chip prices have also risen and now the cost of car semiconductors exceeds the cost of traction batteries.Although vehicle production in China has slowed due to the COVID-19 outbreak, demand for car chips should remain high in the medium to long term.
As a result, the world's leading semiconductor manufacturers are planning to expand their capacity.
For example, Infineon has declared its intention to invest in numerous large projects of the corresponding orientation.Meanwhile, China is trying to ensure its independence from chip supplies, but many experts believe that the country has yet to obtain in one way or another some key technologies for their production.
As the world's largest car market, China is particularly short of the semiconductors needed to produce cars.
Nevertheless, 95% of the total volume of relevant products come from abroad.
So far, according to experts, the country has no companies capable of offering products with stable characteristics, so the Celestial Empire still continues to rely on imported components.