Chip Manufacturing- An Unpredictable Future

News and Noteworthy

In a constant battle for technological leadership around the world, the US has had growing concern with relying too heavily on overseas suppliers.

After experiencing the severe supply chain issues brought on by Covid-19, the US has started to take action. Announced in March 2021, Intel set forth on a $20 billion construction of two new semiconductor factories in Arizona, soon to be up and running in 2024. In addition, The CHIPS and Science Act enacted in August 2022, would allocate $280 billion towards research and manufacturing of semiconductors in the US. This would boost the production and development of technology from automobiles to household appliances. With the US increasing domestic manufacturing, they lean a balance of technical power away from China.

The US is not the only one amping up their domestic semiconductor manufacturing. Europe is giving thought into passing its own version of the CHIPS Act in hopes to attract OCM’s and strengthen their own distribution network. A new chip manufacturing facility is being built in Germany which will boost their automobile industry immensely. India has also remained a top player in the supply chain. With the support of NXP Semiconductor’s CEO Kurt Sievers, India has made a commitment to reinforce their manufacturing ecosystem. With discussions on making India a future partner with NXP, they are projected to have a high growth in the semiconductor market.

So the chip shortage is over? Not exactly. The recent momentum for increased semiconductor production around the globe could take years to yield results. Until then, and even once that is in motion, supply and demand are unpredictable. New products are constantly emerging and can skyrocket the demand for certain chips that no one sees coming. We also can’t be certain that every investment made to boost chip production will be successful. The economics of chip manufacturing is rough and many countries won’t be able to keep up with not only the up front investment, but also the recurring costs. Let’s not forget the impact that natural disasters can have on these factories as well.

With so much uncertainty in the future of chip production, excess is crucial and provides the ability for companies to move forward with business. In the height of the Covid-19 pandemic, manufacturers hoarded chips that are now stockpiled in their possession. iBuyXS has access to these inventories and has the ability to supply your company with a large volume of electronic components.