When Will the Semiconductor Chip Shortage End?
The production of cars is once again teetering thanks to the semiconductor shortage. Also known as the chip shortage, this lack of necessary components has been a significant issue for months now. Unfortunately, despite things looking up a bit relating to the shortage, it seems they’re only going to get worse. The shortage was initially a result of stopped production in China due to the Covid-19 Pandemic. However, the ongoing conflict between Ukraine and Russia is now setting things back even further. That begs the question, when will the shortage end?
What’s causing the chip shortage?
Initially, the chip shortage came from the Covid-19 pandemic. The majority of these semiconductor chips are produced in China. So, with China closing down to stop the spread of the virus, the production of semiconductor chips got put months behind schedule.
As automotive manufacturers and other users of semiconductor chips in the US went back into a full production pace, the lack of back-stocked chips eventually became an issue. The production of semiconductors was getting back to normal. However, a new source of the chip shortage emerged—Russia’s invasion of Ukraine.
According to Vox, Ukraine is one of the largest suppliers of neon gas. Among other things, neon is imperative for producing these semiconductor chips. Unfortunately, the Russian invasion is having an obvious impact on production.
Ingas and Cryoin, two major suppliers of neon, are based out of Ukrainian cities Mariupol and Odesa. Russia has repeatedly bombed Mariupol. Furthermore, NPR reports that Russia bombed Odesa recently in an effort to destroy an oil processing plant.
In the production of these chips, neon is used for lasers. The lasers engrave silicon, the primary material these chips are made of. The lithography step is when the lasers etch the silicon into tiny circuits found on circuit boards. Because the chips are so small, the exact wavelength of the laser needs controlling, which is what the neon is used for during its production. So, without neon, there is no semiconductor production. Unfortunately, the devastation in Ukraine is resulting in a massive worldwide shortage of neon
Nobody can say when the chip shortage will end
Unfortunately, the truth is that the shortage can only end when the conflict in Ukraine does. However, that’s not to say that it will come to an end as soon as the war does. Considering the destruction, it will likely be months and perhaps even years before Ukrainian infrastructure fully recovers.
Earlier this year, AutoEvolution stated that Hyundai expects to have its chip supply back in order by the second half of 2022. Additionally, the report noted that chip availability would make a return to pre-2020 levels in 2023, optimistically. However, this was in February before the attack on Ukraine.
Sadly, the chip shortage is hardly the worst of the events taking place in Ukraine. Thousands upon thousands of innocent people are facing warzone conditions in their own homes. So, while it may be a bit unfortunate that you can’t get that new car within six months or your BMW doesn’t have a touchscreen, it’s worth keeping in mind that we don’t have the worst of it.
All the world can do now is wait.