SEMICONDUCTOR AND NEON SHORTAGE
- March 14, 2022
- Posted by: admin1
- Category: DPN Topics
SEMICONDUCTOR AND NEON SHORTAGE
Section : Computer related
Context: Shortage of semiconductor chips and neon
Semiconductors are materials which have a conductivity between conductors and insulators. They can be pure elements, silicon or germanium or compounds; gallium, arsenide or cadmium selenide.
They are also known as integrated circuits or more commonly just chips, they may be the tiniest yet most exacting product ever manufactured on a global scale.
It’s an electric circuit with many components such as transistors and wiring formed on a semiconductor wafer. An electronic device comprising numerous of these components is called Integrated Circuit (IC).
They are used to power a wide range of devices – cars, laptops, smartphones, household appliances and gaming consoles. Although they are tiny, they perform a host of functions such as powering displays and transferring data.
Semiconductor manufacturing is led by Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan and Samsung Electronics in South Korea. Recently, American chipmaker Intel has also planned to build two new chip factories in Chandler, Arizona.
Basic Requirements for manufacturing semiconductor chips
Fabricating semiconductor chips is a task of precision. It requires more than three months and involves giant factories, dust-free rooms, multi-million-dollar machines, for manufacturing.
- 99% pure Neon Gas is used in a process called photolithography, which is the most common method for fabricating integrated circuits.
- Palladium is used to coat electrodes that help control flow of electricity and inplating of microprocessors and printed circuit boards.
- molten tin and lasers
- Huge working capital- Plants cost billions of dollars to build and equip, and they have to run flat-out 24/7 to recoup the investment..
- Huge infrastructure with uninterrupted and stable power supply.
- A clean environment, ie, low air particulate matter, abundant supply of clean. fresh water etc
- Quick access to an international airport or seaport.
- Close proximity to well-trained technical human capital.
Causes of shortage
- The tech war between the U.S. and China and sanctions exacerbated the shortage of advanced chips in China and resultant stockpiling.
- Pandemic and lockdowns across the world-
- forced shut chip-making facilities in countries including Japan, South Korea ,China and the US.
- increased the growth in sales of laptops, tablets and mobile phones to the highest in a decade, as everything from school to office became online due to lock down and shift to work from home.
- Disasters-Production plants in the US were affected by the cold and in Japan by wildfire.
- Expensive and long process of manufacturing-Fabricating advanced logic chips requires extraordinary precision, along with huge long-term bets in a field subject to rapid change.
- False Forecasts by the automakers by underestimating the rebound in the car sales led to rushed-up re-up orders late in 2020, increasing in demand of the medium-level chips used in the car manufacturing, unlike the small and tiny chips used in smartphones or laptops.
- Cascading effect-Its shortage causes cascading effects, given that the first one creates pent-up demand that becomes the cause for the follow-up famine.
- Ukraine war-Russia supplies over 40% of the world’s supply of palladium and Ukraine produces 70% of the global supply of neon.
- Supply chain disruption as being the building block of various commodities and followed cost push inflation
- Chip shortages are expected to wipe out USD 210 billion of sales for carmakers this year, with production of 7.7 million vehicles lost.
- Directly affect consumer demand and related large scale unemployment.
India’s Semiconductor Demand and Related Initiatives
- India currently imports all chips and the market is estimated to touch $100 billion by 2025 from $24 billion now. However,