1. Global chip shortage could expand to include more advanced processors
The two-year chip drought has until now only really affected low-end chips. However, TSMC and Samsung are facing the problem of insufficient supply of manufacturing equipment, and the outside world is worried that the chip shortage will likely spread to Smartphones and Data Centers that require advanced process chips. According to Wall Street Journal reports, research institutions warn that the supply gap of advanced process chips may be as high as 20% in 2024.
It is reported that TSMC has issued an early warning to customers, saying that due to problems with the procurement of some manufacturing equipment, it may not be able to increase production as expected in the next two years. The lead time for some new orders has been stretched to 2 to 3 years.
Samsung is suffering from technical problems. People familiar with the matter said that Samsung's foundry's 4-nanometer process chip improvement progress is not as good as expected, resulting in this year's supply volume being unable to reach the scale promised to customers.
The Supply challenges facing TSMC and Samsung could affect the overall electronics supply chain as soon as next year. Handel Jones, CEO of research firm IBS, even warned that the supply gap for the most advanced process chips may reach 20% in 2024 and beyond. The rollout process, including high-performance computing, artificial intelligence and autonomous vehicles technologies, may be slowed as a result.
2. The prices of semiconductor materials of sumco and Showa Electric Co. in Japan rose
According to Nikkei Asian ReviewSumco, a silicon wafer supplier, intends to raise the price of its products by exactly the same 30% between 2022 and 2024. Prices for silicon wafers in the instant market have been rising for a long time, but Sumco intends to adjust the terms of long-term contracts, since it receives the main revenue from them. Sumco plans to spend $2.6 billion in profits from price hikes to build new facilities in Japan and Taiwan to boost product shipments.
Since January, Showa Denko has been forced to raise prices for technical gases used in the production of microcircuits by 20%. Rising prices for raw materials and increased transport costs were cited as reasons for this decision. Recall that the start of a special military operation on the territory of Ukraine has significantly reduced the supply of inert gases used in the semiconductor industry to the world market.
Sumitomo Bakelite has increased prices by 20% since last year for polymer compounds used in the packaging of microprocessor products. Even shipping containers for silicon wafers have risen in price by 20%, helped by the corresponding moves by their company, Shin-Etsu Chemical.
3. Hyundai's biggest auto plants output hit due to strike bySouth Korean truckers
Hyundai's production at its biggest manufacturing complex came down to half due to component shortages, a consequence of a strike by South Korea's truckers' Around 8,100 members of the Cargo Truckers Solidarity union called for a strike to protest against the rising cost of fuel. The move disrupted the production and slowed work at ports. lt is being feared that this might stress the already affected global supply chain.
According to a Reuters report, around 1,000 truckers started a strike at Hyundai's production facility located in UIsan on Friday. Hyundai's Ulsan factory. before the strike began, had been running at almost full capacity. Though Hyundaishared about the disruption caused by the strike, the automaker refused to provide details." There are some disruptions in our production due to the trucker strike, and we hope production would be normalized as soon as possible," said a Hyundai Motor's spokesperson.
South Korea is one of the major suppliers of semiconductors, smartphones, autos, batteries and electronics goods. This latest development can further rise the uncertainty and stress the global supply chain that has already been disrupted due to the pandemic and the Russian-Ukraine war. South Korean President Yoon Suk-yeol said the current labor conflicts should be handled by law and principle Kim Gyeong-dong, a trucker union official, mentioned that the union ran out of funds and hence will not be able to continue the strike for more than 10 more days. The truckers are demanding a pay hike and a pledge that an emergency measure guaranteeing freight rates would be extended.
4. AMD flags slow market for PCs in 2022
Advanced Micro Devices Inc (AMD) Chief Executive Officer Lisa Su on Thursday flagged a slowdown in personal computers (PC) this year after two years of a "very strong PC market".
Su, at the chip company's analyst day, said while the downturn was natural after a long period of high, the market for high performance and adaptive computing was "great".
Research firm Canalys said in a note last week that demand for consumer and education PC segments has further slowed due to market saturation and inflation concerns, after reporting first-quarter U.S. PC shipments underwent a third consecutive quarter of decline.
AMD said on Thursday it has seen a "tremendous" increase in demand for its cloud computing, data center chips and those used in artificial intelligence applications.
5. Samsung Electro-Mechanics to supply camera modules for Tesla's EV trucks
Yonhap reported on June 8 that Samsung Electro-Mechanics Co., a major electronics parts maker in South Korea, won a bid to supply camera modules for U.S. electric car maker Tesla, according to sources on the matter.
The company beat its bigger rival LG Innotek Co., but this isn’t the first time the Korean electronics maker has partnered with the American automaker to make vehicle components. In September 2021, Samsung was also awarded a contract to supply Tesla with the next-generation Full Self-Driving 4.0 chip, and in July it won a $436 million contract to supply camera modules for a new model which is rumored to be the Cybertruck.
LG Innotek will still supply 20 percent of the cameras for the system, but Samsung will supply the majority of 80 percent as per the agreement. The cameras will be used in every Tesla model, namely the Model S, Model 3, Model X, Model Y, and the upcoming Cybertruck.
6. Intel freezes hiring in PC chip division for at least two weeks
The prevailing uncertainties in the economy and global market have led to many companies pausing hiring. Intel is the latest to join the list. However, the Company intends to honor all the present job offers. Though hiring will slow down overall, Intel still plans to add 23,000 new hires over the next three months.
The American multinational tech firm has put on hold all hiring in the client computing (CCG) division, according to Reuters. Once it assesses the situation and re-examines its priorities, it may resume part of the hiring after two weeks.
This hiring pause is also part of Intel’s efforts to cut costs. That is why, it intends to reduce travel for members of the CCG division. To make this happen, it will encourage more virtual meetings and limit participation in industry seminars and conferences.
Employees have been informed about the two-week hiring freeze in the CCG, and have been told that the move will help Intel to better prepare for the uncertainties of the economy and the market.