Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Beyond bandwidth: FNOs should prioritise customer service

      15 July 2025

      South Africa’s telcos battle to monetise 5G as 4G suffices for most

      15 July 2025

      Meta to build Manhattan-scale, multi-gigawatt data centres

      15 July 2025

      Trump tariffs could wreck South Africa’s vehicle manufacturing industry

      14 July 2025

      Legislative overhaul on the cards for South Africa’s ICT sector

      14 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025
    • In-depth

      The 1940s visionary who imagined the Information Age

      14 July 2025

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025
    • TCS

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025

      TCS+ | First Distribution on the latest and greatest cloud technologies

      27 June 2025
    • Opinion

      A smarter approach to digital transformation in ICT distribution

      15 July 2025

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Electronics and hardware » Global chip shortage threatens production of laptops, phones and cars

    Global chip shortage threatens production of laptops, phones and cars

    By Agency Staff17 December 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    Inside a TSMC facility

    Makers of cars and electronic devices from TVs to smartphones are sounding alarm bells about a global shortage of chips, which is causing manufacturing delays as consumer demand bounces back from the coronavirus crisis.

    The problem has several causes, industry executives and analysts said, including bulk-buying by US sanctions-hit Huawei Technologies, a fire at a chip plant in Japan, coronavirus lockdowns in Southeast Asia and a strike in France.

    More fundamentally, however, there has been under-investment in eight-inch-chip manufacturing plants owned mostly by Asian firms, which means they have struggled to ramp up production as demand for 5G phones, laptops and cars picked up faster than expected.

    Business came back much faster than we expected. Many customers ordered too late. As a result, we are not able to keep up in some areas

    “For the whole electronics industry, we’ve been experiencing a shortage of components,” said Donny Zhang, CEO of Shenzhen-based sourcing company Sand and Wave, who said he faced delays in obtaining a microcontroller unit that was key to a smart headphones product he was working on.

    “We were originally planning to complete production in one month, but now it looks like we’ll need to do it in two.”

    A source at a Japanese electronics component supplier said it was seeing shortages of Wi-Fi and Bluetooth chips and was expecting delays of more than 10 weeks.

    Car makers affected

    The automotive industry in China, which flagged the issue earlier this month, is anticipating production at some Chinese car makers to be affected in the first quarter of next year, according to a senior industry association official.

    Consumer demand in China, especially for cars, has snapped back unexpectedly quickly from the coronavirus crisis, and orders for products such as laptops and mobile phones in regions still struggling with pandemic restrictions, such as Europe and the US, have also picked up.

    “Since (these products) all compete for the same fab (fabrication plant) resources, the shortage is across all of these sectors and others as well. These are just the most apparent right now,” said Kevin Anderson, a senior analyst at Omdia.

    Dutch automotive chip supplier NXP Semiconductors told customers earlier this month that it must raise prices on all products because of a “significant increase” in materials costs and a “severe shortage” of chips.

    “Business came back much faster than we expected,” NXP CEO Kurt Sievers told German business daily Handelsblatt in an interview on 11 December. “Many customers ordered too late. As a result, we are not able to keep up in some areas.”

    Other short-term triggers for the chip shortage include stockpiling by telecoms giant Huawei ahead of mid-September when its suppliers had to comply with US sanctions, CICC analyst Huang Leping said in a note on 11 December.

    The surge in demand has meant 8-inch plants, which tend to make older, less sophisticated chips, are under strain

    This was aggravated by Huawei’s rivals such as Xiaomi seeking to gain market share by stepping up orders of components, he added. Xiaomi and Huawei declined to comment.

    Electronics makers including Panasonic and Yamaha also warned they face some chip shortages that are slowing production of audio equipment and video cameras after a massive fire in October damaged a chip plant owned by Asahi Kasei Microdevices in southern Japan.

    Concerns have surfaced too over strikes in France at chip maker STMicroelectronics. Eric Potard, leader of the CFDT union at the group, said the strike resulted in a fall in activity of about 8%. STMicro, however, said it had no impact on production.

    Foundries

    The surge in demand has meant 8-inch plants, which tend to make older, less sophisticated chips, are under strain, analysts and industry sources said.

    Taiwan’s TSMC dominates the market for contract chip manufacturing, with Samsung trailing a distant second, followed by the likes of SMIC, GlobalFoundries and UMC, according to Trendforce data.

    “The problem seems chiefly to be at the foundries,” said a European semiconductor industry source, who said TSMC and GlobalFoundries in particular looked to be under pressure. “It looks like they are pretty much at the limit,” the source said, referring to TSMC.

    Image: TSMC

    TSMC, which counts Apple and Qualcomm among customers, declined to comment, but referred to comments its chairman made this week that described the firm’s capacity as “tight”.

    A GlobalFoundries spokesman said it was investing in “capacity growth to meet this unprecedented demand”. The firm is currently increasing its production levels and plans to double its yearly average capital expenditure next year to further expand capacity, he added.

    An official at South Korean foundry firm DB Hitek, which makes chips for the likes of Apple to use in its tablets, said its 8-inch plants were running at full capacity at least for the next six months, with tight supply anticipated until the second half of next year.

    The US has also curbed the ability of China’s top chip maker, SMIC, to get US-made equipment and raw materials, exacerbating the supply crunch. SMIC did not respond to a request for comment.

    Foundry firms like DB Hitek, UMC and SMIC said in recent company statements their factories were running at full capacity in the third quarter. “We expect our utilisation rates to remain solid for the time being,” DB Hitek said.  — Reported by Hyunjoo Jin, Douglas Busvine, David Kirton, Makiko Yamazaki, Maki Shiraki, Noriyuki Hirata, Mathieu Rosemain, Ben Blanchard and Brenda Goh, (c) 2020 Reuters



    Apple Huawei Kurt Sievers NXP Semiconductor Samsung top TSMC
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleBackspace: ‘Is this a hotspot?’
    Next Article Bytes demerger created R7-billion in shareholder value: Altron

    Related Posts

    Mental wellness at scale: how Mac fuels October Health’s mission

    15 July 2025

    Nvidia CEO to hold high-stakes media briefing in Beijing

    13 July 2025

    Apple plans product blitz to reignite growth

    11 July 2025
    Company News

    Mental wellness at scale: how Mac fuels October Health’s mission

    15 July 2025

    Banking on LEO: Q-KON transforms financial services connectivity

    14 July 2025

    The future of business calling: Voys brings your landline to the cloud

    14 July 2025
    Opinion

    A smarter approach to digital transformation in ICT distribution

    15 July 2025

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.