Tracking the ongoing semiconductor chip shortage and labor challenge is not for the weak of heart. It’s a constant barrage of both positive and negative reports. To illustrate the volatility of the semiconductor industry at this point in time, we tracked the latest updates for one week in the second quarter of 2022 — May 10 to 17. Here are snapshots of the reports we found on the challenges, progress, and solutions about the chip and labor shortages.
Tuesday, May 10
GameSpot.com reported that the semiconductor shortage that has impacted everything from car manufacturing to video games is still going strong. "There is no end in sight to the semiconductor shortage at this point," said Nintendo president Shuntaro Furukawa. He added that video game consoles could be difficult to find again this year.
Lawfair reported that semiconductor investments won’t pay off if congress doesn’t fix the talent bottleneck. The federal conference committee will begin hashing out the differences between the House and Senate versions of legislation this week: the Senate’s U.S. Innovation and Competition Act (USICA) and the House’s America Competes Act. Both bills appropriate $52 billion to fund the Chips for America Act. Only the House bill includes critical provisions to provide the talent necessary to make sure these federal investments actually pay off. “The talent shortage is the most critical issue confronting the semiconductor industry today,” stated industry insiders.
Wednesday, May 11
Automotive News reported that Toyota broke its annual profit records despite the ongoing pandemic and a global semiconductor shortage. Its operating profit climbed 36% reaching $24.61 billion. Per the report, “Toyota Motor Corp. smashed earnings records across the board in the latest fiscal year, racking up all-time highs for revenue, operating profit, and net income even as it battled the ongoing COVID-19 pandemic and global semiconductor shortage.”
Thursday, May 12
The Columbus Dispatch reported that Intel wants to add a new Licking County factory "every year or two," according to the CEO Pat Gelsinger. It’s part of the company’s $100 billion plan to turn Licking County into one of the world's biggest semiconductor operations. However, the project's full buildout is dependent on Congress enacting the $52 billion aid package for the industry that Gelsinger says is a must if semiconductor companies are going to manufacture more computer chips in the U.S.
Reuters reported that Nissan Motor Co. warns of flat profits as the chip shortage becomes “new normal.” Nissan expects flat operating profit this fiscal year, far below analysts' expectations, as Japan's third-biggest carmaker grapples with a global chip shortage, rising material costs, and China's COVID restrictions.
Tuesday, May 16
Deloitte analyzed key trends and strategic opportunities for the semiconductor industry in 2022. Among its findings:
- “We expect shortages and supply chain issues to remain front and center for the first half of the year, hopefully easing by the back half, but with longer lead times for some components stretching into 2023, possibly well into 2023.”
- “The ongoing talent shortage will be made even more severe by the addition of increased semiconductor manufacturing facilities outside Taiwan, China, and South Korea. The higher demand for software skills required to program and integrate chips into fast-growing markets will further exacerbate the shortage.”
Automotive News Europe reported that Jaguar Land Rover says it is getting an unexpected boost from the global chip shortage as its vehicles become more desirable than ever. While automakers have been forced to reduce production due to chip shortages, “the scarcity of new Jaguar models is massively boosting the company's brand image.”
Automotive News reported that for the first time in months, North American assembly plants did not add vehicles to their long list of production schedule cuts caused by the global microchip shortage.
Factories in Europe, China, South America, the Middle East, and Africa also held firm on their production plans. But the global total of vehicle cuts nonetheless rose by about 26,400 units because of chip shortages affecting assembly lines in Asia outside of China. “Despite the sudden leveling off, after a year and a half of production trims, the shortage is still widely expected to continue denting schedules for the remainder of the year — and beyond.”
Nasdaq’s Global X Research team published a report about the reasons for the underlying shortages and how securing semiconductor supply chains in the future will be critical to geopolitics and technological advancements. “The problem has escalated to the point where governments are getting involved, not only to help alleviate near-term bottlenecks but also to develop policies that protect the stability of the global semiconductor supply chains over the long run to avoid future disruptions … In many ways, chips are the new bricks, with a wide range of industries and products depending on semiconductors to provide innovative new features and take advantage of the latest technologies.”
Wednesday, May 17
In a special report, CEPro.com explained the smart chip shortage and gives context for impacts on custom electronics manufacturing. “While our dealers are very savvy and technologically adept, they have built their business models around the notion of orders, and ‘getting products within a week’ — so they didn’t have the inventory supplies to accommodate this kind of uncertainty,” said Brad Hintze, Executive Vice President of Marketing, Crestron. “It’s been a rude awakening for the entire industry.”
If you're looking for the right semiconductor talent to join your team, make sure you check out the candidates on our Talent 101 Circuit, or get in touch with us directly to talk about your staffing needs today.
