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Month: February 2023

Categories
Component Shortage

Australia’s semiconductor industry

Chip production

Australia is not a country known for its chip production, but it felt the shortages as much as the rest of us. Despite the shortages being less severe for the country, however it still mostly relies on imported semiconductors.

The current semiconductor industry is quite small, consisting of local companies and branches of some larger manufacturers.

One report from 2020 gave a blunt prognosis of how the Australian chip landscape looked, and how it could improve:

How it is

According to the report there are ‘pockets’ of talent all over Australia, and the potential for it to grow substantially. However, the report authors said the sector lacked the depth and coordination it needed to grow.

The ever-increasing need for electronic components globally means that every country needs to step up their game. Australia is no different. Although total self-sufficiency would be unattainable, that is the same for even semiconductor superpower countries. They do, however, need to increase their capacity for electronic component development and manufacturing.

Following establishing domestic sources of semiconductor components, Australia needs to tackle market sectors relevant to them domestically. This way, it is dealing with both the strategic and economic aspects of the shortages.

How to do it

The report details several steps to help the Australian semiconductor market grow and prosper. The first piece of advice is to attract established chip manufacturers to start setting up shop domestically. After that, home-grown chip companies need a boost to expand. The final recommendation is to establish new semiconductor companies.

Australia has been looking into all 3 of these methods, and some international companies have shown interest in recent years. But when it comes to the huge funding needed to finance the moves, international partners have been less keen.

Time and money

Because there’s currently such a lack of a domestic market, and other markets are so far removed for Australia, there’s some hesitation. This could change in the future, if Australia can garner more interest and, more importantly, funding.

The 2020 report recommended the Australian government invest $1.5 billion to establish domestic industry.

Australia faces many obstacles including financing, a lot of them time-sensitive. The next few years will be crucial for the country, and the world will be watching.

Choosing certainty

There are few things that are certain in this tumultuous industry, but there is one thing that’s reliable: Cyclops Electronics is there for you. We have a sales team here to solve all your stocking and sourcing needs. Not only that, but we have a broad range of stock ready for you, all you need to do is get in touch. Contact us at sales@cyclops-electronics.com or call us on +44 (0) 1904 415 415.

Categories
Component Shortage Electronic Components Supply Chain

Chinese New Year shipping delays

The earlier-than-usual Lunar New Year celebrations may cause more disruption than normal, according to shipping experts.

Lunar New Year took place between January 22nd and February 5th 2023. The festival is well-known for causing shipping delays and supply chain disruption. The effect this year, however, may be exacerbated.

Not only have factories been affected since early January, but there has also been several Covid outbreaks causing factory lockdowns.

Planning ahead

Normally staff begin taking leave a couple of weeks before so they can travel home. This means even late December saw a chaotic rush of exports and manufacturing. According to a survey of supply chain professionals, almost three quarters (73.5%) thought the festivities would cause delays.

The survey, conducted by Container xChange with 2,300 respondents, with 55% saying they had planned ahead for New Year.

The factory closures are predicted to continue for some time, well beyond the end of celebrations in China.

The previous decrease in demand meant there had been several blank sailings from Asia. This is when an ocean freight operator cancels or alters routes.

However, the combination of New Year, Covid and the already disrupted supply chain could limit shipments able to leave China.

A different climate

Compared to previous years there is a lot of inventory currently. This leads to a whole array of other issues, including port congestion and capacity management. Usually there is a small surge pre-empting New Year, which hasn’t really occurred this time around.

Freight rates are the lowest they have been since 2019, and
prices to the East Coast are 83% lower than last year.

Many supply chain professionals are concerned there will be a second wave of shutdowns after New Year. Since so many people are gathering and meeting, there could be enough infections to once again halt production.

Further down the line this would add to the workforce shortages affecting the already congested ports.

Much of the stock is sitting in the port for a prolonged time, and while plenty of containers are available, there are fewer transport trucks. 

Don’t worry…

When it comes to electronic components, Cyclops Electronics is an efficient and reliable provider. We have more than 30 years’ experience in this industry, and we’re sure we can provide what you need. Get in touch today at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415 415.

Categories
Electronic Components Supply Chain

Top car brands affected by semiconductor shortages

Semiconductor Shortage

The semiconductor shortages have had a significant impact across a lot of industries. One hit the hardest has been the new vehicle market. Here are a few of the companies that have been the worst-affected:

Jaguar Land Rover

Certain models have been almost discontinued by the brand, which apparently is to catch up with demand for other models. Waiting lists for popular Range Rovers are over a year long, with sales suspended in some markets. There will be some production decreased so more resources can be used for popular models.

Toyota

The company was forced to cut its annual output target since production was lower than expected in the second half of the year. Currently demand is still higher than supply, so factories have been forced to shut on certain days. Supplies of Corolla, RAV4, and Yaris are supposedly the most affected.

Ford

Similarly to Toyota, Ford was forced to cut production at several factories, and things haven’t improved much since. Ford’s CFO said he didn’t think any relief was coming. Ford’s CEO said both semiconductors and EV battery materials were in high demand, and would be for the next decade.

Volvo

In late 2022 Volvo announced the temporary closure of one of its factories. The company’s biggest shareholder has also been affected by shortages, with its profits allegedly falling by 55% in the first half of 2022.

Honda

Honda’s profits were mostly due to the weakening value of the yen, making its results seem more positive. These skewed results were mostly due to the chip shortage, with 3.8 million vehicles predicted to be cancelled in 2022. This is, however, a huge improvement on the 11.3 million cancelled in 2021.

The executive vice president of Honda said he doesn’t believe the worst of the shortages has passed. The American production of CR-V and Civic models were severely affected.

Stellantis

The amalgamation of Jeep, Dodge, Alfa Romeo and Fiat has been dealing with shortages since its inception. The company is currently overhauling the entire line-up to work towards a majority of low-emission vehicles.

Thanks to this, Stellantis is in need of more semiconductors than ever. However, apparently profits rose in Q3 2022, with sales of battery electric vehicles rising by 40%. If this continues, things may slowly begin to improve for the company.

Volkswagen

The company have said they have around 150,000 unfinished cars in need of semiconductors. Because of ‘geopolitical developments’, namely tensions between China and the US, it believes shortages will continue for a year minimum.

Nissan

Nissan went from predicting the sale of 4 million units to 3.7 million in 2022. This, they said, was down to China lockdowns and general semiconductor shortages. Production issues have been relatively localised, with China production falling by 23.5%. This balanced the gain in output at Nissan’s other factories.

Nissan has been trying to use alternative chips and dual sourcing to bypass some of the current shortages. If this is successful, there may be a positive outlook for the company again shortly.

Mazda

Mazda was reportedly struggling so much in November 2022 that they couldn’t even predict output for the following two weeks.

Things have not gotten much better, with predictions that supply will be limited until the end of 2023. It also predicted the lowest-priced car trims will see the strongest growth thanks to the looming recession. However, Mazda expects a rise in profits this year thanks to the struggling value of the yen.

GM

The American company has allegedly 95,000 unfinished vehicles waiting for semiconductors. This is harming its storage and sales, and will continue since the unfinished vehicles are those in high demand.

Despite not meeting demand, GM is still predicting strong sales and fewer supply disruptions in 2023.

Overall

Many companies expect the shortages and supply chain issues to continue throughout 2023. Some are hopeful, however, that as supply eases, so too will the financial pressures they currently face.

A reliable source

In the past Cyclops Electronics has helped several car companies source electronic components they couldn’t find elsewhere. We have a huge stocklist and a professional sales team that can find what you need at the best price. Contact us today at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415 415.

Disclaimer

The information in this article has come from various sources, including Slash Gear’s article, Car Companies That Were Impacted Most By The Semiconductor Shortage.

Categories
Electronic Components

EU Chips Act developed further

EU Chips Act

Following a vote on Tuesday 24th of January, the latest drafts of the EU Chips Act and the Chips Joint undertaking were adopted by The Industry and Energy Committee.

Proposals for the EU Chips Act were first published in February of 2022, and has since developed through committee discussions. The European Commission said the Act was developed in response to the industry chaos catalysed by the pandemic in 2020.

Now, after so long, the final vote is just around the corner.

There are three main elements to the Act:

The Chips for Europe Initiative is aimed at supporting capacity building and large-scale innovation. This is hoped to strengthen the EU as a player in the semiconductor manufacturing industry. It will increase funding for R&D, training and tech start-ups, among other things.

The Act also plans to secure the supply of semiconductors to the EU by way of investment. They also plan on increasing capacity in manufacturing, packaging and advanced testing. Alongside that, it hopes to enable the opening of integrated production facilities and open EU foundries.

Another purpose of the Act is to coordinate a crisis response between EU member states and monitor supply of semiconductors. If supply is watched, shortages and demand can be anticipated and trigger countermeasures.

Funding

The EU claims that the initiatives and funding within the Chips Act will aid it in its goal of doubling its global market share by 2030. Going from 10% market share to 20% is quite a leap, and the Act in total only mobilises €43 billion.

The European Commission said they hoped the Act’s funding would be boosted, or even ‘matched’  by private investment. This would immensely boost what the Act could be capable of, well beyond 2030.

Provisions

Article 11 of the Act details the concept of the new Open EU Foundries. These new ‘first-of-a-kind’ facilities will design and produce electronic components for other industry players. There will also be Integrated Production Facilities, which design and produce components for their own market. For these facilities to qualify for funding they have to fit certain criteria, including committing to innovation.

Something else the Act addresses is the training of industry staff. It has been a continuous challenge for the sector in Europe to attract highly-skilled persons to work in semiconductors. The Chips for Europe Initiative will support education, training and skilling, while also providing placements and apprenticeships.

The vote in plenary is due to take place in February. From there it would be the last step before European Commission, Parliament, and Council negotiations.

Why not act now?

Despite the electronics industry changing every day, Cyclops Electronics is a safe, reliable choice to source all your electronic components. We have a dedicated sales team and an extensive stocklist to make sure you get everything you want. Contact Cyclops today at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415415.

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