Why Chips Matter: 5 key findings of 2021


Many people like to look back on the previous year on New Year’s Eve. Analyzing the outgoing year makes it easier to plan for the next.

Here are the 5 most important events in the semiconductor industry in 2021 that will help you catch the major trends and understand what to expect in 2022:

  1. COVID-19 has raised the cost of technology, but accelerated digital transformation.

  • Sonos has raised prices. Now they’re asking consumers to pay $100 more for some of their devices.
  • Taiwan Semiconductor Manufacturing Co., whose biggest customer is Apple, raised prices for its more advanced chips by around 10 percent due to a lack of semiconductors.
  • In early 2021, the pandemic led to an increase in sales of PCs by more than 50% on an annualized basis.

According to a survey by KPMG Global Semiconductor Outlook in conjunction with the Global Semiconductor Alliance, 50% of global semiconductor industry leaders believe COVID-19 has accelerated their digital transformation.

2. Companies began making their own chips.

  • Apple introduced the M1 Pro and M1 Max, a technology with chips of their own production. 
  • Google announced their newest flagship phones — the Pixel 6 and Pixel 6 Pro, which are powered by a custom-built processor named Tensor.
  • Tesla revealed a custom AI chip called D1 to train the machine learning algorithm at the heart of the Autopilot autonomous driving system. 

The manufacturers preferred that you create yourself, not rely on supplies.

3. The auto industry is cutting production.

  • Toyota has cut global car production by 40% in September due to a global microchip shortage. But also has announced it will be back to full global production capacity in December.
  • Ford stopped producing pickups at its Kansas City assembly plant. It also cut shifts at two truck factories in Dearborn, Michigan, and Louisville, Kentucky.
  • Renault predicts that its car production could decline by about 100,000 this year.
  • Audi, Subaru’s Gunma factory in Japan, General Motors, Nissan, Daimler and BMW have already cut production in the face of global chip shortages.

Several analysts predict that the microchip shortage in the automotive industry will be over by the summer of 2021. Unfortunately, 2021 will still see a longer production time and this will cause problems for automakers.

4. The use of AI is increasing.

  • In June 2021, the journal Nature published an article where Google Brain researchers introduced a deep reinforcement learning technique for floorplanning, the process of arranging the placement of different components of computer chips.
  • Nvidia after making graphics cards for gamers saw the potential of their chips for running powerful machine-learning algorithms. Now it is one of the leading makers of high-end AI chips.

5. Business grows.

  • Taiwanese chip manufacturer TSMC will spend $100 billion to expand production by 2024, according to the BBC
  • Samsung will allocate $116 billion by the end of the decade for new chip factories. 
  • Intel, spends $20 billion on the construction of two plants in Arizona.
  • The European Union announced plans to increase its chip manufacturing capacity by 20% by 2030. The EU also wants to invest $160 billion in technological development, including supply chain infrastructure and semiconductor manufacturing.

As a result, now is the right time to look for new chips development solutions, including those that use artificial intelligence or smart manufacturing.

ABC Assembly will be glad to share our experience and help you do it faster and better, not only in 2022, but always.