How China’s energy crisis is making the global computer chip shortage even worse


Attempts in China to meet strict energy quotas have caused a silicon shortage, plunging already overloaded production of computer chips into chaos.

It was previously reported that businesses are struggling to return to the office due to a massive shortage of microchips and that companies are desperately trying to stock up on electronic equipment but have to wait until December.

And the problem now appears to be exacerbated by a drastic reduction in Chinese production of silicon – the second most abundant element on Earth.

The substance is essential to the production of a multitude of everyday technologies used around the world, including smartphones, cars and laptops.

Attempts in China to meet strict energy quotas have caused a silicon shortage – plunging already overloaded production of computer chips into chaos (stock image)

China’s efforts to meet strict new energy quotas aimed at reducing greenhouse gas emissions amid rising production demand overseas have meant that many factories have stopped refining the material, and its price inflated 300% in less than two months according to China Nonferrous Metals Association.

This surprising lack of generally abundant materials has prompted companies around the world to halt sales of silicon-based products and left companies like auto makers and smartphone makers scrambling to secure their production lines.

Considering the use of silicon in the construction of semiconductors for computer and smartphone chips, the tech and automotive industries are expected to be among the hardest hit by the shortage.

Seda Memik, professor of electrical and computer engineering and computer science at Northwestern University, told the BBC: “It will take several years to achieve a better balance,” and said that growing demand amid a pandemic global and energy crises meant a silicon shortage was always going to be “inevitable.”

According to Asian newspaper Nikkei, Apple’s main chip supplier TSMC is believed to be raising manufacturing prices amid the silicon shortage, which means production of a wide range of Apple products will be delayed to 2022 and potentially force Apple to pass on the costs. on customers.

A drastic cut in Chinese silicon production has triggered a price spike and seriously exacerbated the global shortage of the vital material (stock image)

A drastic cut in Chinese silicon production has triggered a surge in prices and seriously exacerbated the global shortage of the vital material (stock image)

Industrial manufacturers and customers will likely face significant delays for their products - or pay a huge premium to secure them (stock image)

Industrial manufacturers and customers will likely face significant delays for their products – or pay a huge premium to secure them (stock image)

Glenn O’Donnell, vice president and research director at research organization Forrester, said the chip shortage could persist for years and is already being felt in the auto industry.

“Thousands of 2021 vehicles are inactive while waiting for chips,” he said.

“The 2022 models should now arrive. Will the 2021 models now be renamed to 2022 models?

“I’m trying to find the answer to this question, but automakers are largely silent on this subject.”

Meanwhile, Porsche boss Oliver Blume told CNBC: “We have the semiconductor situation and therefore the wait time is longer than normal.”

For several months now, there has been growing concern about the global silicon shortage, as factors such as the pandemic and the ever-increasing demand for technologies that depend on silicon semiconductors to function have placed intolerable pressure on companies. global production lines.

Silicon is one of the most diverse materials in the world and is used in the production of everything from smartphones and cars to breast implants (stock image)

Silicon is one of the most diverse materials in the world and is used in the production of everything from smartphones and cars to breast implants (stock image)

Almost 60% of the Chinese economy is fueled by coal, but the supply of the world's largest coal importer has been disrupted by the pandemic and many factories have closed in an attempt to reduce carbon emissions (stock image )

Almost 60% of the Chinese economy is fueled by coal, but the supply of the world’s largest coal importer has been disrupted by the pandemic and many factories have closed in an attempt to reduce carbon emissions (stock image )

But China, the world’s largest producer of silicon, was recently forced to shut down several of its massive production plants and factories in a desperate attempt to meet tough energy quotas amid record-breaking coal prices, severely exacerbating the shortage.

The country has been hit by widespread power cuts that crippled both industrial production lines and residential energy supply, and more more than a dozen Chinese provinces and regions have been forced to impose restrictions on energy consumption in recent months.

Almost 60% of China’s economy is fueled by coal, but supplies to the world’s largest coal importer have been disrupted by the pandemic.

Meanwhile, the country’s environmental agenda further exacerbates the crisis, after President Xi Jinping pledged his country would become carbon neutral by 2060 and has since imposed extreme energy restrictions.

Blume said some customers are waiting six months or more, while Herbet Deiss, CEO of Volkswagen, Europe’s largest automaker, said: “We are relatively weak due to semiconductor shortages.”

What is silicon and where is it used?

Silicon is a naturally occurring element, number 14 on the periodic table, and is the second most abundant element on Earth.

Elemental silicon was first isolated and described as an element in 1824 by Swedish chemist Jöns Jacob Berzelius.

The metalloid makes up almost 28% of the earth’s crust by weight and is one of the most diverse materials known to man.

It is used in everything from computer chips to concrete, glass and auto parts, and can be made into silicone – a water and heat resistant substance that is used in oven mitts, oven mitts, gloves. deodorants, medical implants and much more.

Today, silicon is mainly used in semiconductors in the electronics and technology sectors, and is also essential in the production of photovoltaic panels used to generate solar energy.

Source: Encyclopedia Britannica, Bloomberg

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