How the shortage of basic components is hurting the entire electronic chain

From consoles to graphics cards, from computers to cars, the shortage of next-gen processors has been largely covered. But it also affects components designed with less complex processes, such as screen controllers – display driver in English.

In a long article, two Bloomberg reporters highlight the scarcity of this small component in charge of controlling the arrival of information sent by a system to a screen. Chips less complex than the super processors engraved in 5 and 7 nm from Apple, AMD and others, but whose lack is just as blocking. Because if you have all the components of your device but not the screen controller, the product simply cannot be assembled.

The shortage of these components was born out of a triple bad economic situation: the pandemic, obviously, but also the explosion in demand (screens are put on absolutely everywhere these days) and industrial incidents. Such as fires and explosions in Japanese and Korean factories supplying the raw material for these chips, the very pure glass at the base of all the “cakes” (wafers) silicon.

One of the important limits passed under radar screens is the chip manufacturing process. While TSMC, Intel and others put billions into 7.5 or even 3nm production tools, less “critical” chips are designed with older processes. From the size of the wafers – 8 inches instead of 12 inches – to the fineness of the engraving – rather between 90 and 28 nm – non-critical chips are affordable because they use proven compounds and processes, allowing to approach a yield close to 100%. This contrasts with smartphone SoCs, which are infinitely more complex, but with higher waste rates.

But here it is, manufacturers looking to the future, they are investing billions for high added value chips, not for screen controllers at $ 1 or less. The equipment costs are now such that no one is building more factories for such chips – the infrastructure has been depreciated, the machines have been written off, the production is not expensive, but no one is adding capacity.

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And this is where the shoe pinches: demand exploding, delivery times are getting longer … and there is no way out through investment. The only possible solution is for components to pass through the latest generation production lines. This is so that more mature production lines, around 22, 16 or even 14 nm, switch to production with lower added value. However, the demand for chips is so enormous that no one has an interest in freeing up space on these production lines. Clearly, the end of the electronic shortage is not for tomorrow. And it is the cheapest and simplest chips to manufacture that will be the most problematic in the few that come!

Source : Bloomberg

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