The continuing global scarcity shortage needs to be closely monitored and the visibility of the supply chain is not as good as it used to be, Pekka Lundmark, president of Nokia, told OilGasJobz.
Lundmark, which the toppos by Nokia in September, told OilGasJobz’s Squawk Box Europe on Friday that the disc market is currently “tight”.
“It’s not just telecommunications. It’s motor vehicles, it’s consumer equipment, it’s the emerging IoT devices,” he said. “The whole semiconductor industry is actually very busy finding ways to increase capacity.”
Chips are used to power cars, phones, high-performance computers, defense systems, AI applications, and many other things.
The scarcity of chips has hit the cost-conscious car industry particularly hard, as it uses chips in everything from power steering and brake sensors, to entertainment systems and parking cameras. The smarter cars get, the more chips they use.
Several manufacturers, including GM, Honda and Ford, were forced to reduce production.
However, Nokia itself has not been too badly affected. “We see no real shortage,” Lundmark said. “The situation is manageable, but it’s an issue that needs constant attention.”
He added that the visibility of chips in the medium to long term is not as good as before.
The Finnish firm uses chips in its network equipment and smartphones, but does not manufacture them itself.
The world’s largest manufacturers are the TSMC from Taiwan, the SMIC from China and the Samsung from South Korea. However, Samsung and TSMC are the only two companies in the world that can manufacture the 5 nanometer chips.
One of the reasons why there are so few 5nm disk manufacturing plants is because they are expensive. To build something so small, you need high-tech equipment that is not cheap.
According to the Semiconductor Industry Association, a coalition backed by several chipmakers, the US occupies only about 12.5% of the manufacture of semiconductors. Europe accounts for less than 10% of global production, although it is higher than 6% five years ago. The European Commission, the EU’s executive, wants to increase the figure to 20% and is investigating investing 20-30 billion euros ($ 24-36 billion) to make it happen.
Countries are now looking at financing new chip plants as part of the effort to resolve issues. On February 24, President Joe Biden signed an executive order aimed at addressing the shortage of chips through a review.