{"id":3187,"date":"2021-05-11T08:20:01","date_gmt":"2021-05-11T07:20:01","guid":{"rendered":"https:\/\/www.airtimecritical.com\/?p=3187"},"modified":"2022-01-05T14:18:17","modified_gmt":"2022-01-05T13:18:17","slug":"semiconductor-crisis-automotive-consequences","status":"publish","type":"post","link":"https:\/\/www.airtimecritical.com\/en\/semiconductor-crisis-automotive-consequences","title":{"rendered":"How is the semiconductor crisis impacting the automotive industry?"},"content":{"rendered":"<p style=\"text-align: justify;\">The worldwide, pandemic-related shortage of semiconductors has severely impacted vehicle production for the European automotive industry.<\/p>\n<p style=\"text-align: justify;\">What triggered this semiconductor crisis? Are we facing a long-term shortage of electronic chips?<\/p>\n<h2 style=\"text-align: justify;\"><span style=\"font-size: 18pt;\"><strong>What\u2019s a semiconductor anyway?<\/strong><\/span><\/h2>\n<p style=\"text-align: justify;\">What do the iPhone 12, the latest hybrid SUV and the Future Combat Air System (FCAS) have in common? The <strong>semiconductor<\/strong> \u2013 this powerful and complex electronic component so essential to their production. No data can flow through these devices without this millimetre-thin silicon piece of technology.<\/p>\n<h3 style=\"text-align: justify;\"><span style=\"font-size: 14pt;\"><strong>Who manufactures and supplies those electronic chips?<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\">Semiconductors are manufactured by various types of companies. Some, like <strong>Samsung, Intel, SK Hynix <\/strong>and<strong> Micron<\/strong>, design and manufacture them in their own factories, while others, like Apple\u2019s supplier<strong> Qualcomm<\/strong>, practise <strong>fabless<\/strong> manufacturing. This means they outsource the fabrication to semiconductor foundries, for example to Taiwanese giant and global market leader <strong>TSMC<\/strong>. \u00a080% of semiconductors are currently manufactured in Asia, mainly <a href=\"https:\/\/www.airtimecritical.com\/en\/taiwan-priority-freight\/\" target=\"_blank\" rel=\"noopener\">Taiwan<\/a> and <strong>South Korea<\/strong>.<\/p>\n<h3 style=\"text-align: justify;\"><span style=\"font-size: 14pt;\"><strong>What triggered this semiconductor crisis?<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\">The pandemic, the rising demand for electronic equipment and <strong>Taiwan\u2019s near monopoly<\/strong> all contributed to the semiconductor crisis currently bearing down on European manufacturers. A major cause is the <strong>significant surge in demand for IT hardware<\/strong> (smartphones, tablets, computers, game consoles, etc.), which resulted from consecutive lockdowns and the generalisation of home working. <a href=\"https:\/\/www.wsts.org\/76\/Recent-News-Release\" target=\"_blank\" rel=\"nofollow noopener noreferrer\"><strong>WSTS<\/strong><\/a> data indicate that the global market for micro and nanoelectronic integrated circuits <strong>skyrocketed by 40% in ten years<\/strong>, reaching 439 billion dollars in 2020. It may even <strong>grow by as much as 10.9% in 2021<\/strong>.<\/p>\n<p><img decoding=\"async\" class=\" wp-image-3204 aligncenter\" src=\"https:\/\/www.airtimecritical.com\/wp-content\/uploads\/2021\/05\/Semiconductor-graph-1-300x144.png\" alt=\"Evolution of the world market for micro and nanoelectronic integrated circuits in billions of dollars\" width=\"607\" height=\"291\" srcset=\"https:\/\/www.airtimecritical.com\/wp-content\/uploads\/2021\/05\/Semiconductor-graph-1-300x144.png 300w, https:\/\/www.airtimecritical.com\/wp-content\/uploads\/2021\/05\/Semiconductor-graph-1.png 706w\" sizes=\"(max-width: 607px) 100vw, 607px\" \/><\/p>\n<p style=\"text-align: justify;\">Another reason for this shortage is the instability of an industry relying on a product with a relatively short lifespan, which leads to competency and innovation challenges. Now production can no longer keep up with the booming demand. This impacts negatively on all industries using semiconductors, starting with vehicle manufacturing, which has slowed right down.<\/p>\n<h3 style=\"text-align: justify;\"><span style=\"font-size: 14pt;\"><strong>The automotive industry faces serious and immediate adverse consequences<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\">Foundries tend to prioritise <strong>more<\/strong> <strong>profitable sectors<\/strong>, such as IT, servers or telecoms. This places <strong>car and component manufacturers<\/strong> at a serious disadvantage, as they innovate by fabricating products increasingly reliant on electricity and electronics (intelligent vehicles, assisted driving). The industry\u2019s shortfall is estimated to reach billions of euros.<\/p>\n<p style=\"text-align: justify;\">First hit are purchasing and logistics departments, with their regular needs for imported goods. This leads to significant <strong>delivery delays<\/strong>, <strong>from a few weeks to several months<\/strong>, and to supply disruptions in many factories. So much so that Peugeot, for instance, had to stop the production of its latest 308 model for three whole weeks.<\/p>\n<h3 style=\"text-align: justify;\"><span style=\"font-size: 14pt;\"><strong>How does Europe tackle this shortage?<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\">The crisis is forcing the European Union to implement a strategy to reduce its dependency on Asia and thus empower itself in this innovation race.<\/p>\n<p style=\"text-align: justify;\">Europe does count a few leaders in the field, grown out of traditional corporations like Siemens, Thomson or Philips, namely <strong>Infineon Technologies<\/strong> (Germany), <strong>STMicroelectronics<\/strong> (France\/Italy), and <strong>NXP<\/strong> (Netherlands).<\/p>\n<p style=\"text-align: justify;\">However, European chips currently account for less than 10% of the semiconductors used in Europe; the rest comes from Asia or the United States.<\/p>\n<p style=\"text-align: justify;\">In a bid to achieve technological sovereignty, in particular vis-\u00e0-vis the US and China, Europe is planning to double its current production and <strong>secure a 20% share of the world\u2019s integrated circuit market by 2030<\/strong>. How? Through an ambitious investment programme (up to 30 billion euros) seeking both to diversify supplies and support local development. While this response may be beneficial, it does not offer an immediate solution.<\/p>\n<h2 style=\"text-align: justify;\"><span style=\"font-size: 18pt;\"><strong>Are we<\/strong> facing<strong> a long-term shortage of electronic chips?<\/strong><\/span><\/h2>\n<p style=\"text-align: justify;\">As the <strong>effects of the shortage will continue to be felt into 2022 and even 2023<\/strong>, the semiconductor war is only just starting.<\/p>\n<p style=\"text-align: justify;\">Car and component manufacturers will have to redouble efforts in the next two years and establish <strong>reactive supply chain processes<\/strong> that can withstand shortages of Asian components. This is their only chance of avoiding line stoppages or disruptions to their new model launches.<\/p>\n<h2 style=\"text-align: justify;\"><span style=\"font-size: 18pt;\"><strong>About the author:<\/strong><\/span><\/h2>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.airtimecritical.com\/en\/about\/\" target=\"_blank\" rel=\"noopener\">Air Time Critical\u00ae<\/a> is a European forwarder specialising in emergency air freight from Asia to Europe. <strong>Air Time Critical\u00ae<\/strong> played a frontline role in the <strong>semiconductor <\/strong>and the <strong>Suez canal<\/strong> <strong>crises<\/strong> by enabling our European customers to fly in their essential component supplies from Taiwan, Singapore, Japan or China. Specialist solutions like <a href=\"https:\/\/www.airtimecritical.com\/en\/priority-air-freight\/\" target=\"_blank\" rel=\"noopener\">NFO or priority air freight<\/a> <strong>cut down door-to-door delivery times for ATC\u00ae customers by 1 or 5 days<\/strong> compared with regular express air freight in the current climate. To find out more, read about our <strong><a href=\"https:\/\/www.airtimecritical.com\/en\/#services\" target=\"_blank\" rel=\"noopener\">emergency shipment solutions<\/a> <\/strong>or <strong><a href=\"https:\/\/www.airtimecritical.com\/en\/contact-us\/\" target=\"_blank\" rel=\"noopener\">give us a call<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The global semiconductor shortage associated with the pandemic has severely affected the European automotive industry. What caused this crisis? Are we facing a long term flea shortage? Read more with Air Time Critical\u00ae.<\/p>\n","protected":false},"author":2,"featured_media":4101,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-3187","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-airfreight-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How is the semiconductor crisis impacting the automotive industry? - Air Time Critical\u00ae - ATC\u00ae<\/title>\n<meta name=\"description\" content=\"Semiconductor crisis: what consequences on the automotive and aviation industries?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.airtimecritical.com\/en\/semiconductor-crisis-automotive-consequences\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How is the semiconductor crisis impacting the automotive industry?\" \/>\n<meta property=\"og:description\" content=\"Semiconductor crisis: what consequences on the automotive and aviation industries?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.airtimecritical.com\/en\/semiconductor-crisis-automotive-consequences\" \/>\n<meta property=\"og:site_name\" content=\"Air Time Critical\u00ae - ATC\u00ae\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AirTimeCritical.Atc.airfreight\" \/>\n<meta property=\"article:published_time\" content=\"2021-05-11T07:20:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-05T13:18:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.airtimecritical.com\/wp-content\/uploads\/2021\/05\/Semiconductor-crisis-Automotive-industry.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"848\" \/>\n\t<meta property=\"og:image:height\" content=\"565\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"ATC\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@AirTimeCritical\" \/>\n<meta name=\"twitter:site\" content=\"@AirTimeCritical\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ATC\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en\\\/semiconductor-crisis-automotive-consequences#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en\\\/semiconductor-crisis-automotive-consequences\"},\"author\":{\"name\":\"ATC\",\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en#\\\/schema\\\/person\\\/22eeefeab161c4125b4632ddb66eaf9b\"},\"headline\":\"How is the semiconductor crisis impacting the automotive industry?\",\"datePublished\":\"2021-05-11T07:20:01+00:00\",\"dateModified\":\"2022-01-05T13:18:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en\\\/semiconductor-crisis-automotive-consequences\"},\"wordCount\":738,\"publisher\":{\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en\\\/semiconductor-crisis-automotive-consequences#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.airtimecritical.com\\\/wp-content\\\/uploads\\\/2021\\\/05\\\/Semiconductor-crisis-Automotive-industry.jpg\",\"articleSection\":[\"Airfreight news\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.airtimecritical.com\\\/en\\\/semiconductor-crisis-automotive-consequences\",\"url\":\"https:\\\/\\\/www.airtimecritical.com\\\/en\\\/semiconductor-crisis-automotive-consequences\",\"name\":\"How is the semiconductor crisis impacting the automotive industry? 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