CHIP SHORTAGE NEWS Global chip shortage 2023 - updates in May
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How are companies responding to the chip shortage and what are policymakers commenting? Here we sum up the most important events related to the global shortage of microchips. The article is updated continuously.

Germany’s chip production goals face energy and worker challenges
Jolted into action by the pandemic and resulting semiconductor shortages, the European Union is rolling out a plan to double the bloc’s share of global chip production to 20 percent by 2030, an effort that will see the mobilization of billions of euros in investment.
Industrial powerhouse Germany is hoping to lead the upcoming European chip renaissance, with major investments from the likes of TSMC, Intel, Infineon, and Bosch already announced. Though promising, these investments face several challenges ranging from high energy prices to worker shortages.
For example, Intel’s Magdeburg project, which was announced last year alongside a EUR17 billion investment package, has been delayed indefinitely after inflation surged following Russia’s invasion of Ukraine. Construction was supposed to start in the first half of this year. "Geopolitical challenges have become greater, semiconductor demand has declined, and disruptions in the global economy have resulted in increased costs, from construction materials to energy," Intel said in a statement.
Another challenge is finding enough workers. In occupations key to the chip industry, there’s a current shortage of 62,000 skilled workers according to a study from the German Economic Institute last year.
Europe has a lot of lost ground to make up in terms of global chipmaking share, and challenges like these will need to be overcome if the bloc has any hopes of meeting its lofty goals.
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Qualcomm to acquire Israeli chipmaker
Chip designer Qualcomm announced on Monday, May 22nd, that it intends to buy Autotalks Ltd, an Israeli-based company specializing in automotive chips. Autotalks makes chips used in so-called ‘vehicle-to-everything’ (V2X) communications technology for manned and driverless vehicles to improve road safety.
"We have been investing in V2X research, development, and deployment since 2017 and believe that as the automotive market matures, a standalone V2X safety architecture will be needed for enhanced road user safety, as well as smart transportation systems," Nakul Duggal, senior vice-president - automotive, Qualcomm Technologies, said in a statement.
Qualcomm said last year that its automotive business pipeline had increased to US$30 billion, up more than US$10 billion since an announcement made in July. The company intends to incorporate Autotalks’ solutions into the Snapdragon Digital Chassis product portfolio but did not elaborate on the financials of the deal.
TSMC and Bosch consider US$11bn microchip plant in Germany
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, is reportedly in talks with partners including Bosch to invest as much as €10 billion (US$11.04 billion) to build a chip fabrication plant in Germany, as reported by Bloomberg News in early May.
The planned venture between TSMC, NXP Semiconductors, Bosch, and Infineon will include state subsidies and a budget of at least €7 billion, with total investment likely to be around €10 billion. This is according to insiders who asked not to be identified because the information is privileged. According to them, a final decision has not yet been made and plans could still change.
The facility, if completed, would focus on producing 28-nanometer chips and be the company’s first plant in the European Union, which hopes to make up 20 percent of total global microchip production by 2030 under its own so-called ‘Chips Act’ plans.
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Applied Materials beats Q2 2023 financial estimates
Applied Materials has exceeded its second-quarter expectations, revealing in recent financial results that it achieved a revenue of US$6.63 billion, which comes ahead of analyst estimates of US$6.37 billion. Its adjusted earnings per share also beat expectations at $2 versus $1.83. Even more encouraging is the firm’s third-quarter guidance of around US$6.15 billion in net sales.
Chipmakers worldwide are ramping up their production efforts in a bid to overcome a global shortage that continues to keep automakers in a stranglehold. Despite a slowdown in consumer-driven markets, the company has said that it is experiencing a boost in demand from the automotive and artificial intelligence sectors.
“Our longer-term outlook is very positive as semiconductors become a larger and more strategically important market globally and major technology inflections are enabled by materials engineering, creating outsized growth opportunities for Applied,” said CEO Gary Dickerson in a brief to investors.
India renews pleas to chipmakers
India has made new calls to lure prospective chipmakers into the country as new projects, including billionaire Anil Agarwal’s US$19 billion plan, are taking time to get started.
As a result, India plans to re-open the application process for US$10 billion in incentives and assistance intended to encourage local chipmaking. It is also reportedly keeping the process open-ended, eliminating the previous 45-day requirement for submission. Last year, India’s initial effort only attracted three applicants, all of whom have made little progress so far.
India is joining countries including the U.S., China, and the European Union trading bloc in its attempt to boost chip output and reduce reliance on chips from Taiwan and China. To kick-start a domestic chip industry, Prime Minister Narendra Modi’s government originally gave companies just 45 days, beginning Jan 1, 2022, to apply for fiscal support. The state pledged to fund as much as half the cost of building a chip fabrication plant.
India now plans to allow companies to apply again and is reportedly set to accept applications until its budgeted US$10 billion in incentives is exhausted.
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AEM’s Q1 net profit falls amid semiconductor shortage
Semiconductor equipment maker AEM Holdings has reported a 61.8 percent drop in net profit to US$15.6 million for Q1 2023 ending March 31, a fall from the US$40.8 million the year prior. This report comes as the group’s revenue for the quarter fell by 41.7 percent to US$152.7 million compared to US$261.9 million reported the year prior. These figures were disclosed in a regulatory filing made Thursday, May 11th.
AEM noted that the “exceptionally high” revenue recorded last year was due to “volume ramp-up to support our key customer’s new platforms”. This began to taper off in the third quarter of last year. “The completion of this volume ramp-up, coupled with the slowdown in the semiconductor industry in general, resulted in the decrease in both Q1 2023 revenue and profit before tax,” the company added.
Chinese chip firm hopes to rival ASML, weighs IPO filing
Jingyuan Electron, a semiconductor software firm, is currently considering filing for an initial public offering (IPO) in China, according to sources familiar with the matter, as the country continues to battle with the U.S. and other developed democracies over access to chipmaking technology.
The Beijing-based chipmaker, which is currently valued at US$1.5 billion, is eyeing an IPO as early as next year and is currently in the early stages of preparing for a potential listing. Discussions are preliminary and no final decisions have been made, the source told Singapore’s The Business Times.
China is looking to support its domestic semiconductor technology companies to fight back against a US-led campaign to block its firms’ access to cutting-edge chip technologies. Jingyuan Electron is based in Dongfang, which in 2021 was designated as a “little giant”, a term used to refer to start-ups that have been selected under an ambitious government program aimed at growing a tech industry capable of competing with Silicon Valley.
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EU chief says Europe must boost semiconductor production
Europe must boost the production of vital semiconductors due to the worsening geopolitical risk associated with Asian chip-making centers, European Commission president Ursula von der Leyen said Tuesday, May 2nd. The comments were made at the ground-breaking of a US$5.5 billion chip factory in Dresden, one in a series of new semiconductor projects in Germany.
The EU chief said that while Europe is home to many leaders in the chip space, it has failed to treat the production of semiconductors as a priority in recent years. As a result, the EU is racing to reduce its reliance on semiconductors produced in Asia and last month struck an agreement that aims to double the bloc’s global market share to 20 % by 2030 through a series of huge investments.
The current global focus of chip production is on Taiwan and South Korea, which are prone to high tensions. "Any trade disturbance would immediately harm the strong industrial base of Europe and our strong internal market," she said. "For semiconductors, which are so important, we need more mass production here in Europe."
Latest chip shortage figures show that Europe is still struggling
40,055 vehicles were cut from production plans in the week commencing May 8th in Europe because of the ongoing microchip shortage, as automakers continue to battle with supply chain woes.
This figure comes from AutoForecast Solutions, which found that most of last week’s cuts were at European assembly plants, where roughly 29,300 vehicles were axed from factory schedules. There were also cuts at plants in North America, the Middle East, and Asia outside of China, while factories in China and South America had no cuts.
“With every passing week, additional capacity for automotive chips comes online, but digging out from the holes that were created almost three years ago takes time,” said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions in an email.
278,215 vehicles have been cut from production schedules in Europe so far this year while a staggering 590,161 have been cut in North America.
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Automotive chip start-up raises $64m as chip shortage continues
Automotive ethernet chip start-up Ethernovia has raised US$64 million amid analyst predictions that chip shortages will continue to disrupt the industry for the foreseeable future.
The Silicon Valley start-up company is working on a streamlined hardware and software system that’s designed to fulfill the growing demand for more driver assistance functions without the need for several different microchips. The company’s Series A funding round included Porsche Automobile Holding SE and VentureTech Alliance.
Ramin Shirani, Ethernovia’s co-founder and CEO, said: “We are extremely grateful for the vote of confidence this group of industry-leading investors has given Ethernovia’s technology and vision for the future of the connected car. We take great pride in developing the cutting-edge network architecture to power the car of the future.”
Ethernovia was founded in 2018 with the goal of developing a single ethernet chip network that simplifies vehicle electronic architecture.
Maruti Suzuki says chip shortage will ease this quarter
An executive at Maruti Suzuki India has said that they expect a recovery in chip shortages in the second quarter of 2023. The ongoing chip shortage, which affected the company’s April production, will continue throughout May and June, the executive said.
"Chip shortage will continue in Q1, but we are expecting some recovery in Q2, although visibility on semiconductor supply remains limited," Shashank Srivastava, a senior executive of marketing and sales, said on a call with Reuters.
Maruti’s total sales for April rose by 6.5% to 160,529 units, the automaker said in an exchange filing. The company raised its prices across models in April as it faced mounting pressure from high domestic inflation and new emission norms.
The company has also seen rising SUV sales, which made up more than half of India’s 4 million passenger vehicle sales for the year 2022-23.
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Toyota targets a 10% profit bump
Toyota said on Wednesday, May 10th, that it expects its operating profit to climb by 10% this business year, with a five-fold jump in pure electric vehicle (EV) sales.
The growth plan was unveiled by new CEO Koji Sato, who took the reins last month and signals a more aggressive push towards electrification by the Japanese automaker that has previously held back its approach to all-electric cars, arguing its strategy would provide more consumer choice.
Toyota, which is the world’s biggest automaker by sales, forecast that battery EV sales would reach 202,000 this business year through March 2024, up more than fivefold from 38,000 units last year. Toyota forecast operating profit would rise to 3.0 trillion yen ($22.2 billion) this business year, in line with analysts’ average forecast of 3.02 trillion yen.
That target came after operating profit for the fiscal fourth quarter through March surged more than a third to 626.9 billion yen, well ahead of the average 553.46 billion yen profit estimated by analysts.
Chipmaking giant Arm files for US share listing
UK chipmaking giant Arm has filed to sell its shares in the US in what could be the largest stock market listing of 2023. The Cambridge-based company hopes to raise up to US$10 billion in what could represent a major blow to the UK economy; Arm said in March that it did not plan to list its shares in London.
Arm, which was bought in 2016 by Japan’s Softbank, designs the technology behind processors that power everything from smartphones to game consoles. Its designs are used by major chip manufacturers including Taiwan Semiconductor Manufacturing Co (TSMC) and household brands like Apple to build their own processors.
Softbank said it had "confidentially submitted a draft registration statement" for the listing to the US Securities and Exchange Commission (SEC) but did not reveal how much it planned to raise or when the share sale might take place.
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Nissan and Honda see major profit gain as chip shortage eases
Nissan Motor and Honda Motor have stated that they expect double-digit growth in net profit for the year ending March 2024 as the chip shortage begins to ease. "It's a tough environment, but production volume will grow from our new models and the recovery in the semiconductor supply chain," Nissan President and CEO Makoto Uchida said Thursday, May 11, at an online earnings event.
Nissan states that it projects a 42 % rise in group net profit to 315 billion yen (US$2.33 billion) for this fiscal year on a 17 % increase in revenue. The profit forecast has outpaced the average projection of 310 billion yen among market analysts.
While a global semiconductor shortage hit auto production last year, many automakers are adopting bigger "We expect global sales to increase 18% to 4.35 million vehicles" for the year ending March 2024, Honda Executive Vice President Shinji Aoyama said during the earnings event, predicting that semiconductor supply will recover toward the second half.
You have missed some chip shortage news? This is what happened before:
- Global chip shortage 2023 - updates in April - click here for reading!
- Global chip shortage 2023 - updates in March - click here for reading!
- Global chip shortage 2023 - updates in February - click here for reading!
- Global chip shortage 2023 - updates in January - click here for reading!
- Global chip shortage - outlook for 2023 - click here for reading!
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