From Cars to Solar Power and Aluminum?…Rising Concerns Over Semiconductor Shortage Crisis Expanding

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Concerns are growing that the global shortage of automotive semiconductors could expand beyond mobile phones and game consoles to encompass solar products, aluminum, and manufacturing industries as a whole. Due to the nature of semiconductors, which makes it difficult to suddenly increase supply, global supply disruptions are expected to continue until the third quarter of this year, prompting the market to closely monitor how far the impact of the semiconductor shortage will extend.

According to Bloomberg News on the 12th (local time), Enphase Energy, a U.S. solar power company, recently announced in its earnings report that it is experiencing supply difficulties due to the global semiconductor supply chain. The company stated that demand for its microinverter systems, which convert solar power from direct current to alternating current, has surged significantly, but it is facing challenges due to a shortage of the necessary power semiconductors. Badri Kothandaraman, CEO of Enphase Energy, explained, "We expect this issue to ease within the next two months."

The aluminum industry is also closely watching the automotive semiconductor shortage. Since aluminum is used in automobile production, if the global automotive industry halts factory operations due to semiconductor supply issues, the aluminum sector will inevitably be affected in a chain reaction. Paul Kildemo, CFO of Norwegian aluminum company Norsk Hydro, told Bloomberg, "If the automotive industry is impacted, our company could face demand shocks," but added, "So far, we have not received any contact from our customers (automakers)." This suggests that while there is no immediate direct impact, the industry is monitoring the situation in case of prolonged effects.

The automotive semiconductor shortage is showing signs of spreading to other sectors as well. It has already affected markets beyond automobiles, including mobile phones and game consoles. Apple recently revealed that some high-end iPhone sales are limited due to parts shortages, and game console manufacturers such as Nintendo, Sony, and Microsoft (MS) have stated that meeting the surge in demand is challenging. Nintendo and other game console producers are reportedly working to increase supply in time for the next holiday season demand.

Niall Morten, an analyst at market research firm Strategy Analytics (SA), said, "The COVID-19 pandemic, social distancing measures in factories, and intensified competition for tablets, laptops, and electric vehicles have placed smartphone component supplies under severe strain," forecasting that prices for key smartphone components such as chipsets and displays will rise by about 15% over the next 3 to 6 months.

The automotive semiconductor shortage that began last year continues into this year. According to market research firm IHS Markit, automotive semiconductor shortages are expected to reduce automobile production by 672,000 units in the first quarter alone. Considering the lead time for MCUs (microcontroller units), which are central to the supply disruption, is 26 to 38 weeks from order to delivery, global supply disruptions are expected to persist through the third quarter. Mario Morales, an analyst at market research firm IDC, warned that the semiconductor shortage could bring the global market back to the near shutdown levels seen in the second quarter of last year, and predicted that market conditions are unlikely to improve until the second half of this year.

This content was produced with the assistance of AI translation services.