SHANGHAI: The world is going through an unprecedented chip shortage, Zhou Zixue, a senior official with the China Semiconductor Industry Association, said on Wednesday, after semiconductor sales grew 18% last year.
“If you are an experienced player, you will remember that in 1999 there was a similar crisis in this industry, but it was way smaller,“ Zhou, chairman of Semiconductor Manufacturing International Corp, said in remarks at Semicon China.
“We have to deepen our cooperation, we have to give more attention to innovation. Only by doing that our industry can control the challenges facing us.”
China is the world's largest buyer of semiconductors, but domestic production is marginal. Sales in China grew 17.8% in 2020 from a year earlier to 891 billion yuan (RM564.8 billion), according to CSIA.
China's need to cut dependence on overseas chip companies became evident last year when US sanctions on Shenzhen-based hardware maker Huawei Technologies Co Ltd prevented it from sourcing components, crippling a once-booming smartphone business.
Not long after that, the spread of Covid-19 disrupted supply chains and eventually caused a chip shortage. Once concentrated in the automotive industry, the crunch has now spread to a wide range of electronics and reached the uppermost parts of the chip supply chain.
In another development, Taiwan's Delta Electronics Inc, a supplier of power components to companies such as Apple Inc, said on Wednesday it had put its orders in early and so was not seeing much impact from global tightness in chip supplies.
A surge in demand for consumer electronics has driven a global chip shortage that has idled car factories in particular, and earlier this month Taiwan computer maker Acer Inc said the problem could damage the PC industry.
The chip shortage, which has prompted panic buying, is further squeezing capacity and driving up costs of even the cheapest components of nearly all microchips, according to industry experts.
But Delta Chairman Yancey Hai said they had planned early.
“We’re not affected at the moment. Our orders went to chipmakers very early. So the impact for us is so-so,“ he told reporters on the sidelines of a company event in Taipei.
Delta, whose shareholders include Singapore's sovereign wealth fund GIC, makes devices that control the flow of electricity in a range of products such as smartphones, gaming devices, personal computers and servers.
Taiwan's tech firms, a key part of the global supply chain, have boomed on the back of demand for tablets, laptops and other equipment during the Covid-19 pandemic, which has forced millions to work and study from home.
Delta, which produces around 65% of its products in China, saw its third-quarter net profit rise an on-year 63.6% to NT$8.39 billion (RM1.22 billion).
