Russia’s invasion of Ukraine this week is likely to mean an increased list of economic sanctions that affect everyone, including the technology supply chain that relies on Ukraine for some vital raw materials used in chip manufacturing .
Can Apple solve the supply chain challenge?
My heart goes out to all those affected by the plunder of any war, and like everyone this week we are watching the people of Ukraine. Poor people tend to tolerate what they have to endure, and recent history rarely shows that lasting victory comes from a single gun barrel. So, think of Kyiv-based technology developers in Ukraine, like the ones I spoke to recently from MacPaw and Setapp.
But, it’s not just development (and also wheat) originating in Ukraine; the nation is also rich in hard-to-find raw materials used in silicon chips and advanced sensors. This includes the neon gas used by chip-made lasers, palladium, and about 90% of US grade semiconductor neon. Referring to a US consulting firm, Teiccet, Reuters warning that if the conflict escalates, some of the world’s largest chipmakers could be affected. Intel, for example, gets half a neon from Eastern Europe.
Intel is probably not the only supplier that will be affected.
Can Apple be immune?
It is not just about core processor production. Even if the big tech firms succeed, how will any shortage of raw materials affect the supply of those hard-to-find materials that Apple CEO Tim Cook calls “heritage nodes?”
Arriving so soon after shortage of chip supplies due to pandemic, a shortage that is exacerbated by the huge growth in demand for processors as the internet goes into everything, this must be a headache. (And do not neglect the recent loss of a huge amount of global SSD supply).
these shortages have a real impact. Apple has, in our view, had to divert some components from iPad production for use in iPhones as part of its response to silicon shortages, which we also think may have contributed to weaker-than-expected iPad sales. travelling.
The industry was not blind to the threat. As mentioned, Teiccet he warned weeks ago. Many of the big companies, including Apple partner TSMC, may have already looked for another supply. However, with so much production concentrated in one geographical area, price increases are likely to lead the race to find alternatives.
These increases will also affect a global economy that is already facing the fiscal consequences of the ongoing COVID-19 crisis.
This crisis is escalating
The thing is, we are also experiencing high demand for technology products. We are used to chips inside computers, smartphones, tablets and games consoles. But the computer world we are building seems to be putting chips in kettles, crocodile pots, bread machines, garage doors and ticket gates. Cars, AR goggles, light switches, USB cables – all of these contraptions also contain chips.
Last year ‘s news was that automation was forced to reduce production of new vehicles due to chip sourcing problems. But as governments around the world try to convert entire populations to electric cars (which also contain chips) by 2030, and try to use the charging infrastructure to power them, it’s hard not to see the conflict creating a cascade of new problems.
Innovations like smart cities and Industry 4.0 are not innovative at all without the right silicon to drive them. However, COP26 saw governments push for technological solutions to climate change.
Apple has scale, but the impact will be felt
Apple, as we know, has scale power on its side. It produces hundreds of millions of devices, which is why when it calls to a component supplier, it typically finds large markets and prioritizes its needs. The one with the money (and the complete order book) cried the tune.
This may help the company secure supply for the devices we know it is currently working on, including iPhone SE 2022 and AR goggles. It must also be expected that he will not be affected by neon shortages while trying to design new processors. (Although I imagine the machines for the M2 series of chips are already ready to go.)
If TSMC is struggling to find alternative supplies of components, Apple is sure to wish them every success. It may even offer a short list of suggestions to TSMC, a analysts are currently looking for business intelligence“You are interested in shifting geopolitics and influential economic changes [the integrated circuit] industrial supply chain. “
It may be in Apple ‘s own interest to help TSMC find a good candidate for that role. Demand for all materials – and chips within devices – is expected to increase over 37% over the next four years.
Maybe this is it just another busy day into Apple Operations Team Leac #To do list. But as well as being a business crisis, what is happening in Ukraine (and all other areas of global conflict) – and perhaps failure – dialogue and humanity – is a crisis.
In other words, it can be a good time to donate some money to the Red Cross. And, like Cookhope for the safety of all ordinary people who are suffering so much but who have so little agency in such conflicts.
Copyright © 2022 IDG Communications, Inc.
Ukraine: Can Apple solve this new supply chain challenge?
Source link Ukraine: Can Apple solve this new supply chain challenge?