Auto chip shortage may have domino effect in smartphone industry

Samsung Electronics has warned that the global chip shortage that brought the automobile industry to a standstill could also disrupt orders for the memory chips used in smartphones, as semiconductor companies rush to address the ongoing crisis.

The world’s biggest smartphone and memory chip maker warns as companies and governments grow increasingly concerned that the severe chip shortage in the auto industry could pummel countries’ economic recoveries to the ground.

Major automakers across the world are shutting assembly lines due to hurdles in the delivery of semiconductors. The current shortage has affected Fiat Chrysler Automobiles, Ford Motor Co., Nissan Motor Co Ltd., Toyota Motor Corp., Volkswagen and other manufacturers.

Executives from several semiconductor foundries have agreed to provide priority to auto chips to meet demand. But many are in a conundrum as this could slow deliveries of smartphone chips. Even while operating at full capacity these foundries will have to limit their ability to take on new orders.

The ripple effect of global chip shortage 

Samsung Electronics on Thursday said this pinch could slowdown manufacturing of DRAM and NAND memory chips, which enable smartphones and tablets to perform multiple tasks at a time.

“Because of the foundry supply shortages that have become an issue globally, the supply issue of other semiconductor parts could affect mobile demand, so we are closely watching the implications,” said Han Jinman, executive vice-president of Samsung’s memory chip business.

Global semiconductor companies are already hard at work to address the ongoing auto chip shortage. According to Taiwan’s economics minister Wang Mei-Hua, executives from Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics Corp (UMC), Powerchip Semiconductor Manufacturing Corp and Vanguard International Semicondcutor Corp have agreed to give priority to auto chips.

“Chipmakers are willing to follow the government’s request and try to support auto chips as much as they can to support their production in the U.S., Europe and Japan,” Wang told reporters.

The Taiwan Semiconductor Manufacturing Company, which is the world’s largest semiconductor foundry, said on Thursday that it was expediting auto chips in an attempt to meet the global shortage.

“While our capacity is fully utilized with demand from every sector, TSMC is reallocating our wafer capacity to support the worldwide automotive industry,” the company said.

According to C.C. Wei, TSMC’s chief executive, the company had converted some manufacturing capacity to respond to the demand for automobile chips at the end of last year. The group’s increased attention came after global carmakers pushed governments to campaign on their behalf.

Major automakers in Japan, Europe and the U.S. have engaged in direct talks with chipmakers as well lobbied via industry associations’ diplomatic channels to Taiwan’s government. According to people familiar with the matter.

Subscribe to the nation’s fastest-growing business magazine to get the latest business news delivered to your inbox.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Leave a Reply

Your email address will not be published.

Recent Posts

Broadcom bought VMware to Expand Its Footprint in Software

Broadcom bought VMware to Expand Its Footprint in Software

After the deal is finalized, VMware shareholders will elect to receive either $142.50 in cash or 0.252 Broadcom stock for each VMware share. Under the deal, Broadcom will also take
4 hours ago
Epic Games CEO Tim Sweeney Condemns App Store

Epic Games CEO Tim Sweeney Condemns App Store

Sweeney adds, “The problem here is a classic monopoly tie. You start with hardware. Apple makes smartphones and they profit from their smartphones — and they deserve to. But th
8 hours ago
An Unexpected Bolt: Fintech Unicorn Bolt Issues Lay off Notice

An Unexpected Bolt: Fintech Unicorn Bolt Issues Lay off Notice

The New York Post reported that the Bolt layoff will see restructuring across US, Canada and Europe. They expect that roughly one-third of the entire workforce will be impacted by
8 hours ago
Beeple Getting Hacked Resulted in His Followers Losing Over $438,000 in Crypto

Beeple Getting Hacked Resulted in His Followers Losing Over $438,000 in Crypto

Two tweets were posted using NFT artist Beeple’s account. The first one promoted an exclusive collection with Louis Vuitton. The second tweet announced that Beeple would soon rel
1 day ago
Microsoft Selling Metaverse to Kawasaki: It’s A Whole New World

Microsoft Selling Metaverse to Kawasaki: It’s A Whole New World

Microsoft’s corporate vice president of mixed reality, Jessica Hawk, recently told CNBC that the metaverse will change how people function across a variety of devices and platfor
1 day ago
Cryptocurrency Market Updates: Bitcoin Could Hit $500,000 Per Coin

Cryptocurrency Market Updates: Bitcoin Could Hit $500,000 Per Coin

On March 15, Novogratz went so far as to predict that the Bitcoin future price will reach half a million dollars per coin by 2027. He made this statement at the Bitcoin 2022 confer
2 days ago