Autonomous driving, advanced driver assistance systems (ADAS) and battery power management all require logic and computing power, driving a growing industry-wide dependence on semiconductors. The industry is expecting chip demand to expand dramatically over the next five years as the automobile industry adds electric vehicles (EVs) to fleets, which can require more than 3000 chips per EV.
The growing popularity of cloud-based services has fueled a great need for the construction, maintenance and updating of data centers throughout the country. Data centers thrive on servers, memory, storage and network equipment. An economy hungry for compute-heavy applications will require data centers to keep up with cutting edge advances in computer hardware to remain competitive.
Connectivity and computing — and therefore, semiconductors — are essential to IIoT, which refers to the large number of machines and devices that are connected to the Internet used in the manufacturing, logistical and agricultural sectors. When we consider increasing demand from these commercial and industrial segments, near-term global chip demand projections stemming from IIoT applications will soon tally in the hundreds of billions.
Although the semiconductor chip shortage feels like a novel event, the emergence of bottlenecks did not occur in a vacuum or overnight, the paper points out. We believe that while the pandemic certainly accelerated the conditions for the present shortage, the semiconductor supply chain contains a variety of systemic issues that will make any quick resolution of the shortage a difficult challenge. These longer-term issues include order lead times, new factory build times, investment costs, geopolitical impacts on supply chains and environmental factors.