For several months
now, the world has been experiencing a shortage of electronic chips.
Surprisingly, the field where it is felt the most is not the computer industry,
but the automotive sector. The latter is also apparently the first to blame,
because of its high demand for chips, as modern vehicle designs use these
components everywhere, from the dashboard panel to engine management, smart
braking system, and more.
اضافة اعلان
The shortage started with the pandemic, which
dramatically increased shipping costs globally because of the initial lockdown
and the cancellation of orders; because of complex business and shipping
mechanisms, it is still felt today in industry and in trading, even though the
impact of the pandemic has significantly abated. The shortage is affecting
sales all over the world, including Jordan.
Hardly limited to cars and computers, chips are
found in most manufactured devices and appliances today, from audio amplifiers
to washing machines, TV sets, medical equipment, telecommunications, and
security systems, to name some.
Ghul Electrical and Electronic Equipment, a
well-established and major supplier of electronic and digital goods in Amman,
is complaining about unusual delays in the delivery of orders from abroad,
precisely because of the global chip shortages, as explained by its general
manager, Abdulnasser Ghul.
Retail stores that sell laptop computers in Jordan
express the same concern. Ghul mentioned the case of manufacturers, some of
whom were so affected by the shortage that they went bankrupt; others reverted
to older analog design.
Using digital computer technology involves a large
number of elements and components. This goes from software applications to
networks and devices such as computers and smartphones.
Just like in any system that has a chain structure,
drop one link and the whole chain is broken, and nothing works anymore,
regardless of the size or the importance of the missing link.
One of these links, however, is truly unique, for
one simple reason: very few players in the industry can manufacture it. It is
the microchip, sometimes also referred to as chip or semiconductor.
Just like in any system that has a chain structure, drop one link and the whole chain is broken, and nothing works anymore, regardless of the size or the importance of the missing link.
Its role is critical because it is the brain or the
heart of the machine, but this is not the reason why it is unique, for, as
said, it is only one link in the chain. It is unique because it can
only be made in a limited number of countries and produced by a limited number
of manufacturers. It is, therefore, its strategic and economic role in the
world market that makes it different.
Some of the elements that are part of the digital
chain do not involve microchips. Software, for instance, is by far the most
common element in an IT system, but everybody can develop, market, and sell it.
The same applies to cabled networks. Countless countries and plants make
network cables. As trivial and obvious as it may sound, even electric power is
one of the IT chain links. Indeed, how would one run any device without
electricity?
Fortunately, electricity is generated everywhere in
the world.
Apart from the above exceptions, virtually every
digital device, from the smallest and simplest to the largest and most complex,
requires chips. This is just about every device of any kind you can buy and use
these days.
What makes the matter particularly critical is that
microchips are made by a handful of countries: China, Taiwan, and South Korea
are the main manufacturers, followed by the US and Japan. Needless, therefore,
to stress the politico-economic stakes involved in microchips.
It is important to make the difference between
designing chips and manufacturing them. Whereas both activities,
understandably, involve sophisticated technology, advanced science, and know
how, the former can be executed in a large number of countries and facilities,
whereas the latter is another story altogether.
Two months ago, Nathan Reiff wrote on
investopedia.com: “The modern economy runs on semiconductors.” It says it all.
Other analysts consider that “microchips are so crucial that some call them the
‘new oil’ of the 21st century.” (shiphub.co).
Top manufacturers are Intel, Qualcomm, TSM, Micron
Technology, Broadcom, Foxconn, Nvidia, and Texas Instruments.
Two weeks ago, it was announced that Foxconn and
Vedanta had agreed to build the first large manufacturing plant of microchips
in India, with an initial investment of $20 billion, strongly supported by the
Indian government.
Even bigger news, just two days ago, on October 4:
“Micron announces historic investment of $100 billion to build megafab in
central New York.” (rs.micron).
Reuters added: “… Micron claims [this] will be the
world’s largest semiconductor fabrication facility.”
The market will no doubt be helped and the stress in
the digital world will be relieved when these two plants enter the actual
production phase.
Jean-Claude Elias is a computer engineer and a classically
trained pianist and guitarist. He has been regularly writing IT articles,
reviewing music albums, and covering concerts for more than 30 years.
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