The effects of the global microchip shortage are expected to remain throughout the first half of 2022, according to a new report from Automotive News.
The publication recently spoke to experts from the European semiconductor industry, including STMicroelectronics – a major French-Italian chip manufacturer that’s currently building a new chip manufacturing plant (referred to as ‘fabs’) near Milan, Italy. The company’s head of quality and manufacturing, Orio Bellezza, said the company began investing in the new plant back in 2018 as it anticipated an uptick in demand for semiconductor chips. The plant is just now beginning to receive machinery to produce silicon wafers and semiconductor chips, with the facility set to produce its first chips in the first quarter of next year. Automotive customers are not expected to receive chips from this facility until late 2023.
This long lead time on fabs is a driving factor behind the chip shortage. While a new automotive plant can go from an idea to reality in as little as six months, a fab takes about five years to be completed, AN reports. The complex nature of semiconductor chips also means it takes about five months for a fab to process and fulfill an automaker’s order, making it difficult for automakers to plan ahead amid rapidly changing market conditions. Most fabs also run for 24 hours a day, 365 days a year, which makes it impossible to ramp up production by simply adding overtime shifts.
The unique demands of the auto industry are another driving factor behind the shortage. While many chip makers focused on so-called ‘miniaturization’ in recent years as consumer electronics downsized, the auto industry instead places emphasis on longevity and reliability. For this reason, only certain chip fabs can supply the automotive industry. STM’s plants mainly produce chips for airbags, in-car navigation systems and keyless entry systems, AN says.
In short, the complicated and time-consuming nature of chip manufacturing makes it hard for the industry to rapidly respond to the sudden parts supply crunch it is currently facing. Chip shortages are therefore expected to remain throughout 2022, though GM expects a slight improvement in the New Year as more chip production comes online.
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Comments
Too bad they can’t take the chips from the Vettes in at bowling green plant. I know it cost too much to have somebody do that. Sad but true.
Funny how Italy is jumping ahead and building semiconductor plants. Meanwhile Brandon and his goons are slowing down USA companies trying desperately to build over here. It shouldn’t be this difficult if Italy can do it.
Come on man we are trying to fix the thing you know the thing.
When I was president we had lots of Chips: Lay’s, Ruffles, Doritos, Tostitos, exc. I’m a Cheetos guy myself. Can’t get enough of them, but the Orange dust gets everywhere.
I use to have chips around the White House but when I’m touching kids and they are eating it makes to much noise so now it’s apple sauce only
“Samsung will build an advanced chip plant in Texas in a win for Biden’s drive to increase U.S. production”
Ok, Jake.
When?
No time soon. No less than 5 countries have approached the administration, and the administration used the opportunity for a photo op, and made no investments, no move to change regulations and not only that, is slowing down the processes for approvals
Just getting out of the way would help
Companies, not countries
So what kind of semiconductors specifically is Italy producing? What’s there process technology capability? I’m not sure you have a clue how semiconductors are produced!
What the hell happen to gm and their chip factory… Mary talked about it but typical gm will end up at the tail end of the chip shortage and say no one wanted chips… likethe crappy electric cars it made for show and say no one buys our crappy small vehicles… we’re 5 yrs. Ahead of the industry, and everyone has 2, 3 ,4 electrics and more coming….
They shut it down and don’t intend to bring it back online. I believe it make chips for the old body control modules and the 4.8l V8. They sold off the equipment, but I see nothing wrong with that technology to be used in lower trims, saving chips for the higher trims.
The factory was building old tech, and upgrading was not worth the money. Its takes a lot for these factories to be built and upgrading is probably just as expensive. They were also led to believe like everyone else that there was enough chip manufacturing available. Apple, samsung and Intel all have new factories coming on line in the US. It takes time but since it seems taiwan is going to be under rule of China the US needs to become a leader in computer technology.
I am a recent Retire CBGC new car dealer that is asking.
How many chips are there in a Chev/GMC loaded, half ton, gas,4wd ,Crewcab? Ballpark the number please.
I believe there are about 1000 in gas vehicles and double that in electric???
A typical ICE car has 50-150 chips. EVs have up to 3,000 chips.
The interesting thing is that automakers only use about 10% of chips in the entire microchip market, yet there is certainly no shortage of TVs, smartphones, digital air fryers, Instant Pots, and other consumer products that need microchips. Our 18 month old LED flat panel TV suddenly stopped working a couple of weeks ago, and I was concerned about finding a replacement. One hour later I was back home with a replacement LED flat panel Smart TV. The store literally had 100s of TVs available.
So the industry using only 10% of the chips can’t make their products. Seems suspicious. And then for the “shortage” to potentially last 2-3 years seems even more suspicious.