Monday, April 15th, 2024

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Computer chip crisis getting worse as manufacturing slows and wait times increase amid insane demand

Computer chip crisis getting worse as manufacturing slows and wait times increase amid insane demand

(Natural News) The global shutdown over COVID-19 affected every aspect of the world economy and those reverberations will be felt for years to come in the way of shortages and delays.

And in no industry is this being felt more than the manufacture of computer chips — components that are vital in literally every aspect of our modern lives.

According to a report from Bloomberg News, wait times for the delivery of semiconductor chips rose again in March following new COVID lockdowns in China as well as an earthquake in Japan that hampered manufacturing and strained already tight supplies.

Lead times, which are defined by the period between when the chip is ordered and when it is actually delivered — went up by two days last month to 26.6 weeks, or roughly six months, research by the Susquehanna Financial Group indicated.

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Six months lead time is already too high, so any increase in that figure is significant.

Bloomberg News added:

While chip users are facing longer wait times again, the lead times are growing much slower than in 2021, when many industries were forced to slash their production because of a lack of the critical components.

Lead times increased for most chip types, including power management, microcontrollers, analog and memory, according to a report by Susquehanna analyst Chris Rolland.

The pandemic lockdowns in parts of China, the quake in Japan and the new war in Ukraine all “will have a short-term impact in the first quarter but may have lingering effects on the severely constrained supply chain through the year,” he said.

The severe disruptions in semiconductor production and delivery have had a major impact on economies around the world but especially first-world economies like those in the U.S., Europe and Asia, as all modern devices from cellphones to appliances to vehicles are dependent upon them.

The global chip shortage began during the first half of 2020 as countries around the world shut down their economies in an unprecedented way for a virus that had a 99 percent survival rate and mostly affected those who were not in the workforce, to begin with — older, sicker people and those with other preexisting health conditions.

“Semiconductor producers had pared invested in increasing output from their factories, and the sudden scarcity of chips disrupted production of everything from smartphones to pickup trucks. It also contributed to inflation by boosting supply costs,” Bloomberg News added.

And now, chip industry executives and experts are warning that the ongoing supply shortage will continue to affect economies throughout this year and into 2023 at least. That’s because the large increase in building semiconductor manufacturing facilities by top makers such as Intel and Samsung will not add to overall production at least until next year.

But even new plants may struggle to bolster production because major disruptions of vital chipmaking components will remain in short supply.

For example, as Natural News has reported, 90 percent of the neon gas used in U.S. chip manufacturing comes from Ukraine, which is currently fighting for its survival following Russia’s invasion:

About 90 percent of the semiconductor-grade neon used by the United States to produce chips comes from Ukraine, it turns out. And with Ukraine already cutting off exports of wheat, some worry that neon could be next.

Supply disruptions of palladium are also a concern. According to research firm Techcet, about 35 percent of America’s palladium supply, a rare earth metal used in the production of semiconductors, comes from Russia.

The Semiconductor Industry Association (SIA) has also said that “the semiconductor industry has a diverse set of key materials and gases, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine.”

One more even semi-large disruption in the current global semiconductor supply chain could result in longer delays, perhaps years.

Sources include:


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