The expert council’s forecasts for the further course of the COVID 19 pandemic give trade and industry reason to be positive. And the conditions for this are also in place: The order books of mechanical engineering companies in particular are full to bursting. If there were not one problem: there is a shortage of materials. In particular, the coveted semiconductors from East Asia often cannot be delivered on time or in used quantities. Read on to find out how the semiconductor shortage is affecting the local economy, the reasons behind it and what further developments can be expected.
Schwerwiegende finanzielle Folgen über die gesamte Branche hinweg
Every day – every hour that machines are idle costs companies immense sums in production. The automotive industry in particular is complaining about sales losses in the millions. However, the problem is far more far-reaching and all-encompassing. A Survey showed that 94% of the companies surveyed are affected by production stoppages due to supply bottlenecks.
Every day that machines are at a standstill causes immense costs to these companies. Small businesses with up to 50 employees had to contend with a loss of just under €100,000 on average, while medium-sized businesses (50-250 employees) already had to compensate for a loss of turnover of well over half a million euros. Across all business sizes, the survey revealed that the European businesses surveyed have recorded losses since January 2020 averaging €924,000 in Germany, €939,000 in Austria, €1,000,000 in Switzerland, €757,000 in the Netherlands, €111,000 in Italy, and €938,000 in France.
Abhängigkeit von Asien
The local industry’s great dependence on foreign countries – especially on East Asia – for the procurement of pre-production is becoming its undoing. According to the ZVEI, just eight percent of global semiconductor production capacity is located in Europe. In the early 1990s, the European share was still more than 20 percent.
However, this dependence also means that companies are less able to react in any crisis situations, as their hands are tied. Smaller companies with lower purchase volumes are particularly hard hit by this.
Europäische Produktion vorerst nicht realistisch
But what provides a remedy for this dilemma? A number of measures are currently being taken to increase production of the coveted semiconductors. For example, manufacturers are expanding their capacities. In addition, further factories are under construction or in planning, including some in Europe.
Diese Fabriken werden das Problem jedoch nicht kurzfristig lösen können, denn bis sie an den Start gehen, wird es noch dauern. Die Chip-Produktion ist komplex und braucht besondere Voraussetzungen wie etwa eine staubfreie Umgebung. Diese müssen erst aufwendig geschaffen werden. The recent EU IPCEI project is therefore a long-awaited support, but it comes too late for current semiconductor shortages.
Wie geht es weiter?
At the moment, there is only one thing left for companies to do: think long-term and don’t panic. “Stocking up is and remains the only way to gain some security in the current volatile situation,” advises Christian Reinwald, Head of Product Management & Marketing at reichelt elektronik. “Panic buying, on the other hand, is not expedient. They only aggravate the situation in an already tense market.” Likewise, one is not well advised to prematurely cancel orders, as often happened at the beginning of the pandemic in the automotive industry. Long-term purchase agreements with suppliers – if legally possible – help companies stabilize their planning.
Wie lange wird der Chipmangel anhalten?
There are indicators that speak for an easing on the chip market in the near future. For example, it is assumed that every home office is now equipped with a laptop and that the enormous demand in this area is decreasing. This alone creates capacities that can be used for the production of other goods. In addition, the additional production in factories that have already expanded capacities will contribute to the relaxation – as will the first newly built factories.
In addition, there have also been changes in planning and communication within companies. Until recently, buyers and manufacturers hardly spoke to each other. Today, car companies in particular contact suppliers directly and negotiate guaranteed purchase and delivery quantities. Previously, this task was often handed over to suppliers. And last but not least, in a market that is not so much characterized by bottlenecks, companies will also normalize their order volumes again so that over-orders are no longer placed.
However, all these factors will not have an immediate impact. Experts do not expect the supply situation to ease until mid-2022 at the earliest, if not until 2023. So staying power is called for. In addition, not all chips are the same. The newly built factories were already planned before the pandemic, and for many the foundation stone was laid well before March 2020. They are primarily designed for high-performance chips or highly integrated chips. Conventional semiconductors, on the other hand, remain in short supply.
Wird es in Zukunft sogar ein Überangebot an Chips geben?
Currently, the industry is doing everything it can to expand production capacities for semiconductors. Dozens of factories are being planned or even already under construction. The technology is also being promoted in Europe. However, it is uncertain whether demand for semiconductors will steadily increase as it has this year. Could there therefore even be overproduction?
This development cannot be ruled out for a short time, as the industry association WSTS is already predicting sales growth of only ten percent for 2022 – ten percentage points less than last year. Nevertheless, it is unlikely that the expanded production capacities will have to remain unused for long. E-mobility and the associated charging infrastructure, grid feed-in from renewable energies, engine control units, infotainment in cars, storage and sensors for Industry 4.0, game consoles or medical high-tech – all these products and features rely on semiconductors. The ZVEI also predicts that demand for semiconductors will triple by 2030.
Europäische Chips im Zukunfts-Check
The question will then be how competitive European semiconductor production is. Currently, Europeans are lagging behind in both production and design. In addition, they do not have the raw materials they need here and must first import this scarce commodity. Higher electricity prices and labor costs in Europe will ensure that chips produced there cannot compete in price with rival products from East Asia. Their advantage could lie solely in their carbon footprint and reliable delivery.
Images: Adobe Stock, reichelt elektronik
