COVID-19 and geopolitics major contributors to global Semiconductor shortage

Over the past 4 or 5 months a situation has developed where we are seeing a significant increase in Semiconductor shortages. This is due to a fallout from the COVID-19 coronavirus pandemic. It continues to impact on manufacturing, trade and world economies as well as changing consumer buying habits. The industrial sector is not being spared and companies using machine vision and industrial cameras will need to plan carefully to avoid long lead time delays for cameras and other associated machine vision components.

The shortage is worldwide and affecting all industries. Audi and VW for example have stopped manufacturing some vehicles in Europe and employees are being asked to standby. US car manufacturers are doing the same.

The consensus is that this problem is not going to go away quickly. It will be here for at least the rest of 2021 and perhaps well into 2022.

With regards cameras, many if not most models and manufacturers are being affected in some way, but those with On Semi sensors have the longest lead times.

Why is this happening?

• Demand for semiconductors increased significantly with lockdowns caused by Covid-19. The demand for laptops, TV's and game consoles increased rapidly and significantly.

• Production and supply chains were affected during the worst peaks of the pandemic with factories closing, flights cancelled and world trade stifled.

• Geopolitics - Trump began to tighten and regulate sales of semiconductors to Chinese companies which led to mass stockpiling of semiconductors for smart phones and other products.

• In July 2020 a fire in a Japanese factory created a shortage of fibreglass used for printed circuit boards.

• In October another fire in a factory that manufactures microdevices stopped production which is still halted.

The list goes on with other smaller reasons which all compound to create the problem we have today.