IEEE Circuits and Systems Magazine - Q3 2022 - 43

China's chip manufacturing capacity, as the U.S. does not
want state-of-the-art equipment installed anywhere in China.
Finally, the recovery in the automotive market started
earlier than expected. Figure 2 shows monthly year-overyear
sales of application-specific chips used in the automotive
sector which clearly shows the rapid recovery in
sales after the sudden drop in February and March 2020
[7]. Chips are here used to help ensuring safety and providing
an enhanced driving experience, from high-performance
satellite navigation systems to advanced driver
assistance and infotainment systems. Intel CEO Pat Gelsinger
predicted that chips would make up 20% of the cost
of an auto in 2030, compared with 4% in 2019.
The resulting huge demand for electronic components
has displaced manufacturers who are receiving
more orders than they are able to fulfill, even with factories
working well above the normal utilization level of
80%. Figure 3 depicts the year-over-year percent monthly
chip sales growth in the period between January 2020
and June 2021 for three main sectors, namely consumer,
communication, and computer (other relevant ones are
industrial and automotive) highlighting a rapid increase
for both communication and computer sectors.
Overall semiconductor shipments reached all-time
highs in the third quarter of 2021. On a regional basis, the
year-over-year increase was: Americas (33.5%), Europe
(32.3%), Asia Pacific/All Other (27.2%), Japan (24.5%), and
China (24.0%) [8]. In 2020, the worldwide semiconductor
market reached $446.1 billion, up 8.34% over 2019. In 2021,
the growth of the semiconductor market was 26.3%.
The chip shortage problem is so significant that
prices of several high-tech products are rising and/
or their fabrication severely delayed. For example,
Fig. 4 shows the price index of the top 20 best-selling
microprocessors which has clearly increased sharply
since March 2021, [9]. Sony slowed the production of
the PlayStation 5, Microsoft of its Xbox series X, and
Qualcomm of its 4G and 5G wireless devices. General
Motors, Honda, Volkswagen, Ford, Toyota, Nissan and
Tesla, just to cite a few, have had to revise their business
plans and likely postpone the release of new car
models [10]-[12]. FCA also delayed the restart of the
Toluca (Mexico) plants, where the Jeep Compass is
produced, and the Brampton plants in Ontario [13].
Against this backdrop, the shortage has also greatly
strengthened the influence of chip makers who are now
increasingly able to choose which customers to get how
many of their scarce chips [14]. This way, they can also
filter out some of the customers who just want to make
safety reservations and provide supplies to those who
need the chips most. Chip stocks are very likely to be
very limited at the moment. This comes in a completely
new scenario in which not only the most advanced
THIRD QUARTER 2022
technology nodes are profitable and in demand, but
also mature ones driven by automotive and IoT manufacturing,
as most of these applications require more
established technologies, which have better yields, costs
and, above all, reliability.
10
20
-40
-30
-20
-10
Figure 2. Year-over-year monthly sales growth percent change
in automotive ICs, 2020-2019, [7].
60
50
40
30
20
10
-10
Consumer
Communication
Computer
Figure 3. Year-over-year monthly chip sales growth percent
change in three main areas [1].
100
105
80
85
90
95
Figure 4. Price index of top 20 bestselling microcontrollers.
Source: Supplyframe, [9].
IEEE CIRCUITS AND SYSTEMS MAGAZINE
43
Price Index
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IEEE Circuits and Systems Magazine - Q3 2022

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