Happy are those who planned to open a semiconductor factory in 2021. This is the case for example of Infineon, which is preparing to start production in Austria. The CEO of the company rubs his hands and even explains that customers “snatch” the chips from the “hands” of the company even before the start of the festivities. A juicy business which should bring in around two billion euros in turnover for Infineon in the first year.
Among customers, car manufacturers and OEMs, of course. Since the economic recovery, customer orders are once again filling dealers’ books, but behind, the sector is often unable to deliver the vehicle within acceptable deadlines, which leads brands to make “choices” in production and to favor most profitable models.
The automobile, too geeky?
The shortage of semiconductors is not only the fault of the automobile, it is a global context of recovery, and factories which did not have the capacity to meet a general, sudden, and important demand. But somewhere, the automobile has shot itself in the foot a bit with electronic fuss.
Take for example the notes of the crash test organization Euro NCAP: a good part of the results are based on the presence, or not, of a large number of driving aids. Autonomous braking, lane keeping … their absence implies a bad rating on active safety, which has largely taken precedence over passive safety over the years. It is no longer a question of protecting the occupants of a vehicle, but of predicting accidents, avoiding them for the driver, communicating with the environment and analyzing.
And all this consumes semiconductor: cameras, sensors, radars, computers, sensors, screens …
Then comes entertainment, what is commonly referred to as “infotainment”. The increasing connectivity of vehicles is an important source of semiconductor consumption, especially in the deployment of remote updates, autonomous driving and on-board services. We should also mention the arrival of the 5G connection in certain vehicles.
The semiconductor is delicate
To produce semiconductors, you need very specific factories, which require enormous investment efforts. They do not come out of the earth as easily as a vehicle assembly plant: the atmosphere must be neutral (the air in the rooms of these factories contains about 100 times less particles than the purest high air mountain), and the installations must be designed in such a way as to avoid micro vibrations as much as possible.
Add to that a particularly long manufacturing time: between the start of the process and dispatch for delivery, the gestation of a semiconductor can take up to six months.
It is easy to understand then that the current shortage cannot be resolved in a few months. The inertia of this industry is so important that some CEOs of manufacturers do not see a return to normal before 2023. The problem is that by then these same car brands will have to sell as many electric vehicles as possible. and hybrids to monitor CO2 targets. Vehicles obviously greedy in semiconductors.
In the end, the semiconductor bill should be heavier than that of “Covid 2020”. Analysts speak of a loss of 80 billion euros, and 3.9 million vehicles for the global auto industry.