We’ve talked several times about the silicon shortage that started in 2020. The COVID-19 pandemic only put a clearer perspective on the already existing supply chain neck bottles of the semiconductor industry, which put silicon wafer manufacturing to a halt. However, we never covered in depth what these neck bottles were.
The biggest challenge for silicon manufacturers is how globalized the industry is. Developing a high-quality semiconductor requires several steps worldwide. However, which are the most critical points?
The silicon manufacturing supply chain is a complex economic network that involves the participation of many companies throughout the globe. However, there are certain points where most manufacturers depend on the same businesses.
According to a 2021 report from the Semiconductor Industry Association (SIA), globalization is not always a bad thing. This estimate suggests that establishing a self-sufficient local semiconductor supply chain could require ten years, cost a trillion dollars, and result in a 65% increase in semiconductor prices for the US.
The supply and demand of semiconductors have always fluctuated with the state of the world economy, causing gluts and shortages. In fact, there were indications that the market could not satisfy their needs even before the COVID-19 pandemic. This reflects their increasing desire for sophisticated, networked gadgets in every aspect of their lives.
At Wafer World, we believe that paying attention to this is crucial. If you’d like to learn more about semiconductor manufacturing, reach out!
