Buying a new car? Maybe wait for the chip shortage to end first
How does the semiconductor chip shortage affect you?
What exactly are semiconductor chips?
No idea? No worries, I askedIEEEFellow Tom Coughlin, who explained that:
Alright, simple enough. But what makes them so important? According to Nir Kshetri, a Professor at the University of North Carolina–Greensboro, and a research fellow at Kobe University,as many as 169 industries in the US rely on access to semiconductors to make their products.
New industries such as 5G, self-driving vehicles, artificial intelligence, and IoT are rapidly increasing worldwide, relying heavily on chips.
So, how did we get here?
There’s a bunch of different opinions as to the cause of the problem. Kshetri points out that COVID-19 shutdowns lead to a drop in car sales. Consequently, the auto industry reduced semiconductor purchases.
At the same time, demand for PCs and gaming devices increased due to the shift to online education and working from home.
When the demands for cars rebounded, automobile manufacturers discovered that the semiconductor manufacturers had readjusted their productions to fulfill the orders from those other industries that experienced a boom during the pandemic.
In addition, the auto industry was badly affected by afire at Japan’s Renesas Semiconductor Manufacturing. The company usually produces about one-third of microcontroller chips embedded in cars globally.
But the problem is also indicative of a bigger industry problem, says Christian Lanng, CEO ofTradeshift.He contends the shortage is not a once-in-a-century event, but rather, that COVID-19 has revealed the inherent fragility of overextended supply chains. The next crisis isn’t far off in the future: it is happening now:
What exactly is the demand for chips in vehicles?
Automakers use about 10% of the chips on the semiconductor market. A typical car (the Earth-killing type) uses between 50 and 150 semiconductors. However, a modern electric vehicle can use up to3,000 chips.Oof.
So what does this all mean for Electic Vehicle production?
Burke Files, Advisor to the Board atUnicus Research,sees a significant delay to market as companiesmaking motorcycles, tractors, electric bikes, and delivery vans have substantial inventories of completed vehicles… except for their computers and processors.
EvenElon Musk alludes to the problemon Twitter, stating, “2021 has been the year of super crazy supply chain shortages, so it wouldn’t matter if we had 17 new products, as none would ship.”
Further, there’s tension within big car manufacturers on how to use the few chips they do have. Should they be used in Internal Combustion Engine vehicles, or is it better to reserve them for their EV fleets?
Files explained the dilemma facing chipmakers:
Will the semiconductor chip shortage speed up other innovations?
Semiconductor chips have long been the poster child of Moore’s Law, where the number of transistors on a microchip doubles every two years, while the cost of computers is halved.
But aside from the shortage,environmental concerns aboutongoing electrical consumption and rare earth minerals are an industry challenge.
Traditional semiconductor chips might be getting a competitor throughgallium nitride (GaN). GaN’s can conduct electrons better than silicon at a lower manufacturing cost.
In effect, this would allowelectric cars to charge fasterand save more energy by using up less carbon dioxide than usual.
Another innovation is in photonics (optics).Photonic materialsuse light instead of electricity to run chip processes and other components in computing and networking, and it applies to any computing process, including automobiles.
Compared to semiconductor chips, chips from photonics are smaller in chip size, run three to ten times faster, use less power, and no rare earth minerals (which is great). While photonics has primarily been proved and applied in academia (20+ years history), recently, photonic materials have been put into commercially available devices directly.
Erica McGillivray, from theNonlinear Materials Corporation, explained that:
So… what is the impact on consumers?
Overall,you should prepare to pay more and wait longer for the cars you want.
Matt Pressman, President ofEVANNEX Teslaaccessories, says a lot of their customers are experiencing delays with their Tesla’s delivery dates. “Many have told us they’ve had deliveries pushed back from 3Q or 4Q 2021 to 1Q 2022.”
David Yang, the Director of Innovation Consulting atR/GA, suggests that in the short term, consumers should continue to expect less negotiating power at the point of sales — electric vehicles or otherwise.
So long story short, you will wait a while for your new car while the manufacturers play catch up.
Do EVs excite your electrons? Do ebikes get your wheels spinning? Do self-driving cars get you all charged up?
Then you need the weekly SHIFT newsletter in your life. Click here to sign up.
Story byCate Lawrence
Cate Lawrence is an Australian tech journo living in Berlin. She focuses on all things mobility: ebikes, autonomous vehicles, VTOL, smart ci(show all)Cate Lawrence is an Australian tech journo living in Berlin. She focuses on all things mobility: ebikes, autonomous vehicles, VTOL, smart cities, and the future of alternative energy sources like electric batteries, solar, and hydrogen.
Get the TNW newsletter
Get the most important tech news in your inbox each week.
