With chip supply cut off, manufacturers’ transformation and future

Overnight, the “old-fashioned” equipment came back

  Not every manufacturer can use software adjustments like Tesla to reduce chip applications. The executives of some manufacturing plants said that they have been struggling with the shortage of semiconductor chips for nearly half a year, looking for solutions, redesigning products, delivering unfinished products, and finding ways to look back on the old and technological content. Lower model. After years of pushing to add digital features such as screens and wireless connections, home appliance and car manufacturers are temporarily turning to older technologies.
  Boss Products is a supplier of snowmobiles. The product uses a handheld controller with a computer chip to adjust the angle of the snow truck blades. In the era before the popularization of electronic products, such joysticks did not have a computer chip at all, and realized mechanical control. “The current solution is to get us back to the old-fashioned design.” said the company’s executive Rick Rodier. “Old-fashioned products can do the same. These products have been in operation for 30 years and are very reliable. They just refactor the production line, and it takes more trouble to build and assemble.”
  said Ed Winsing, who owns an electrical store in Lichfield, Illinois . , Due to a shortage of computer chips, a washing machine manufacturer he worked with is changing its production plan. They are suspending the production of their four Speed ​​Queen models to focus on increasing the output of other models. Wen Xin said that the company will continue to produce two washing machine models: a top model and a streamlined model with fewer electronic components. On the Speed ​​Queen website, the simpler model is described as “grandma’s classic washing machine” to highlight its retro The connotation.
  T3 Motion, which produces electric standing vehicles for airport and university security personnel, is currently redesigning its products to reduce the use of computer chips and electronic products. The company’s chief executive William Chupus said that the redesigned vehicle will use a centralized integrated board with a single processor to control all parts of the vehicle, instead of using multiple components to control the battery, lighting, alarms, etc. Features. This will eliminate the other five separate circuit boards. Although it is difficult to redesign, these improvements have an energy-saving effect, which will increase the vehicle’s mileage.
  BrightAI is a start-up company that develops equipment and software to help companies connect equipment and other devices to the Internet. Its co-founder Alex Hawkinson said that he redesigned a circuit board four times in six months to accommodate different chips. He said the company has also transferred some designers to China in order to modify products more quickly using the components obtained there.
  In addition, larger chip users such as automakers have begun to talk directly with manufacturers instead of following the typical practice of working through subcontractors. Last month, General Motors and Wolfspeed announced a strategic supplier agreement to develop and provide silicon carbide power device solutions for future electric vehicle projects. The products will be produced at Wolfspeed’s Mohawk Valley plant in Massey, New York.

Boss Products started to produce more joysticks (left) because they couldn’t find enough computer chips to make enough handheld controllers (right)

Speed ​​Queen washing machine launched a streamlined model with fewer electronic components, allowing consumers to dream back to their childhood
The awkwardness of first delivery

  The chaos in the global supply chain has evolved from a short-lived to a long-term tug of war, forcing some companies to redesign their products to cope with the problem of chip shortages. “This state will not disappear quickly overnight.” said Mark Bitzer, CEO of the home appliance manufacturer Whirlpool Corporation.
  A few days ago, the new domestic power ideal car submitted a finished car lacking a radar probe. Coincidentally, foreign car dealers also have such a magical operation. Recreational vehicle manufacturer Polaris recently handed over some snowmobiles without GPS screens to customers. Consumers received products that were not fully functional due to a shortage of components. Milton Beaver, who works in the aviation industry in Alaska, spent US$16,000 to book the 2022 Ski-Doo Expedition Xtreme, which is a snowmobile manufactured by BRP. He has been waiting for more than 18 months until this car When it was recently delivered, the electronic security system had not yet been installed.
  Robert, a distributor of Gott Powersports in Quincy, California, said that if the screen arrives in the future, after-sales service technicians can perform additional installations. He said that at present, manufacturers have sent him more vehicles equipped with traditional shock absorbers. These vehicles use less electronic equipment and are low-end versions for smooth riding. The actual situation is that the production of higher-end and complex vehicles cannot be mass-produced at all, and it is estimated that the chip problem will be solved in the next year.
  Even so, Beaver is happier than most bookers. It is very lucky to be able to get new snowmobiles from BRP in time in winter, even if the vehicle accessories are incomplete. “Now this car does not have electronic anti-theft, any plastic key can activate it.” But he is not too worried about the theft of the snowmobile. Because BRP’s after-sales service is very comprehensive, they provide physical locks for snowmobiles without safety functions to ensure that riders can park and pick up the car in time when it snows.

The delivery of snowmobiles lacking a GPS screen, consumers feel very lucky
A glimmer of hope for a chip shortage

  The new generation of game consoles, the PlayStation 5, is still scarce. Automakers are delivering cars that lack features. Apple may only produce 10 million iPhones in 2021. However, for some companies, the current supply chain dilemma is only temporary, and hope still exists in the long run.
  China’s integrated circuit output hit a record high of 32.1 billion in August, and chip output increased by 22.2% year-on-year. Although China’s IC statistics do not provide a detailed breakdown of product categories, overall output is a rough measure of efforts to reduce dependence on imports and promote domestic semiconductor production, which has become a self-sufficient national priority.
  Major semiconductor foundries in mainland China, including SMIC, are operating at almost full capacity this year to keep up with high demand during the shortage period. SMIC said in early November that its plans to expand production capacity are subject to logistics disruptions, extended delivery times, and US licensing requirements. Zhao Haijun, co-CEO of SMIC, said that as of September, the company’s overall production capacity has increased to 594,000 8-inch equivalent wafers, an increase of 32,000 from the previous quarter.
  The sales of traditional chips or microcontrollers (microcontrollers) have also seen a surge in sales of American manufacturers who have stocked more aging or second-hand equipment in China by “throwing their manufacturing plants overseas.” These components are cheap to manufacture, but they are key components of many devices, and with supply chain issues, large companies with advanced technology have a growing demand for basic chips.
  ”We may have sold more microcontrollers in the past year than in the past decade.” said Mark Barnhill, chief trading officer of Smith, a chip distributor in Houston. Some commonly used microcontrollers have been waiting for more than a year, and the prices of these products have risen 20 times among traders buying and selling chips.
  Large and medium-sized companies in semiconductor production have ushered in blowout opportunities: Texas Instruments (TI) began building a US$3.1 billion chip factory near its Dallas headquarters, and may soon finalize plans for another factory; Intel will spend more than $20 billion to build two new chip manufacturing plants in Arizona.
  Microchip Technology, a semiconductor supplier in Arizona, is investing in new equipment and increasing employees, and its profits tripled in the last quarter. GlobalFoundries, a chip manufacturer headquartered in Malta, New York, recently announced that it will build another chip factory nearby to double its production capacity. John Newffer, CEO of the Semiconductor Industry Association, believes: “This is to ensure that everyone has a more balanced supply chain in the future.”