Over the past year, many people around the world have experimented with new ways of working, studying and communicating using video conferencing and other technologies for the exchange of data and messages over a distance. This change has been reflected on the demand for semiconductors and have a lasting impact in the long run. When the Covid-19 pandemic ends, new opportunities could open up for existing products and services. For example, increased online collaboration could lead to greater demand for semiconductors related to servers, connectivity and cloud storage.
Within companies, Covid-19 can become an accelerator of automation processes and push companies to adopt industry 4.0 solutions faster. Production control, maintenance and assistance are all activities that can be carried out remotely even through augmented reality. They could continue to be managed in this way even after the emergency has passed. In some sectors, smartworking has become a stable form of work for most workers.
The demand for semiconductors is also set to increase in other sectors:
In the automotive sector, the scenario is ambivalent. On the one hand, the insecurity and fear of contagion that many people experience using public transport could lead to the purchase of private cars and increase the demand for semiconductors in the automotive sector. On the other hand, if people stay at home more often and move less, carmakers’ revenues from new car sales will decrease and research funds will also decrease.
The pandemic has also led to increasing the costs of raw materials, such as metals and “rare earths”, widely used in the electronics industry, besides to problems in manufacturing management. Due to the reduced presence of personnel in the company, the production lines have been reduced with the consequent saturation of production capacities. In addition, transport difficulties make more difficult to supply by sea, due to the congestion of Chinese ports, and by air, where tariffs have increased due to the priority delivery assigned to particular types of goods, such as vaccines, and to the e-commerce sales.
The long wave of Covid-19 could have serious repercussions on the supply chain and lead to a blockage of supplies. Virtually all hi-tech components arrive in Europe from China, where production has slowed down over the past year. Added to this is the clogging of Chinese ports, due to the lack of empty containers and the slowness of the new sanitary procedures. If this situation were to continue, the availability on the market of components arriving from China would be jeopardized and we will face shortages for the entire year.
In the automotive sector this forecast is already taking place. The restart, faster than expected in the car market, has created a surge in demand for chips with too short notice. The semiconductor industry is unable to cope with the peak demand in the short term and delivery times have lengthened. Global supplies have entered a phase of severe shortage. Carmakers’ warehouses have emptied, forcing them to slow down and, in some cases, stop production lines. To return to normal, it could take from 5 to 6 months which could lead to important repercussions on the whole market.
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