News


Step-function surge in demand was behind automotive IC shortage

24 November 2021 News

IC Insights has updated and released its comprehensive forecast and analysis of the worldwide semiconductor industry in its January 'Semiconductor Industry Flash Report, which is included as part of the 2022, 25th edition of The McClean Report service. The market research firm’s February quarterly update will include, among numerous other topics, an in-depth analysis of the automotive IC market, an excerpt from which is presented below.

The vast majority of the current headlines regarding the automotive industry revolve around the semiconductor device shortage that began in earnest in 2021 and has carried over into 2022. The commonly accepted reason for this shortage is as follows:

In March of 2020, in the very early stages of the Covid-19 pandemic, automotive demand plunged worldwide and automakers subsequently began to shut down plants and halt semiconductor orders from their suppliers. While this was happening, there was a surge in demand for cellphones, TVs, computers, games and home appliances from a global population that was sheltering in place and increasingly working from home. As a result, semiconductor suppliers switched their production capacity away from automotive devices to devices that were being used in the other electronic systems that were in higher demand.

When the automotive industry came back online in the latter half of 2020, it found that semiconductor suppliers, after having shifted production capacity away from automotive applications, couldn’t meet their renewed demand and a serious shortage ensued.


Figure 1. Motor vehicle IC unit shipment trends (2011-2021E).

However, IC Insights believes that the above scenario is not the primary reason for the IC shortage now impacting the automotive industry. In IC Insights’ opinion, the real reason behind the automotive IC shortage lies in the surge in demand for automotive ICs in 2021 and not from the semiconductor suppliers’ inability to ramp up production. In fact, device suppliers shipped 30% more IC units to the automotive industry in 2021 as compared to 2020 (Figure 1), which was much greater than the 22% increase in total worldwide IC unit shipments last year. Moreover, 27% more IC units were shipped to the automotive sector in 2021 as compared to the pre-pandemic year of 2019.

The 2021 jump in automotive IC unit shipments was by far the highest percentage increase since 2011, easily exceeding the 20% increase logged in 2017. As shown, the 52,4 billion in automotive IC shipments last year was three times the 17,6 billion registered in 2011. In comparison, total worldwide shipments of ICs in 2021 (394 billion) were about double what they were in 2011 (194 billion).

In IC Insights’ opinion, the IC suppliers should be recognised for the amazing accomplishment of ramping up and supplying a tremendous amount of IC devices to the automotive industry last year. However, when demand for ICs takes a ‘step-function’ jump, as it did in the auto industry in 2021, there is bound to be a temporary mismatch in the supply/demand situation, which is really what is behind the shortage of IC devices in the automotive electronics industry.




Share this article:
Share via emailShare via LinkedInPrint this page

Further reading:

Vicor Powering Innovation podcast
News
The episode explores electrification with Lightning Motorcycles, a company that produces the fastest electric motorcycle on the planet.

Read more...
ModusToolbox Workshop 3
News
This workshop will focus on enabling a PSoC development kit, connected over Wi-Fi and leveraging MQTT, to create the framework of an IoT application.

Read more...
Indium celebrates 90 years of innovation
Techmet News
The company’s innovative products, especially its advanced soldering solutions, are found in many common consumer electronics and high-reliability technologies.

Read more...
Revamped technical training centre in Welkom
News
Resolution Circle has announced the launch of its newly revamped training centre in Welkom, which will enhance technical education and foster industry partnerships.

Read more...
From the editor's desk: Funga: The unseen rulers of a new kingdom
Technews Publishing News
Up until a few weeks ago, our classification kingdoms were split into two parts; fauna and flora. I was amazed when I recently read that National Geographic has now changed this and has split the classification ...

Read more...
Hiconnex announces new partnership
Hiconnex News
With over 60 years of experience in the civil, military aeronautics, and space industries, Petercem offers robust solutions for position detection and human machine interfaces.

Read more...
Global semiconductor sales increase YoY
News
The Semiconductor Industry Alliance (SIA) has announced global semiconductor sales totalled $47,6 billion during the month of January, an increase of 15,2% compared to January 2023.

Read more...
Utility-scale solar development for local company
News
Teraco has announced that it has secured its first grid capacity allocation from Eskom, and will commence construction of a 120 MW utility-scale solar PV energy facility in the Free State province.

Read more...
Collab between Arrow and Infineon
Altron Arrow News
Arrow Electronics, represented by Altron Arrow in South Africa, and its engineering services company, eInfochips, are working with Infineon Technologies to help eInfochip’s customers accelerate the development of EV chargers.

Read more...
Printing as a subscription
News
HP has done the unthinkable and released its All-In Plan, a subscription-based printing solution that has many IT professionals and business users shaking their heads.

Read more...