When they hear about the shortage of semiconductors, most users think of microprocessors – the “brain” of personal computers. But the real culprit for the supply headaches is a miniature chip that costs $ 1, MarketWatch writes.
These chips are called LED backlight drivers for LCD displays and are used in monitors, laptops, cars, phones – all products that have a digital LCD panel, giving instructions on individual pixels. These small integrated circuits play a far greater role in the shortage that raises the prices of cars and computers than their more powerful and expensive counterparts.
Last week, the CEO of HP Inc. Enrique Lorez confirmed at a meeting with analysts that the problem lies there. “The biggest shortage is in the panels, not because of the glass, but because of the components used in them,” he said. He added that there is a problem with other cheap components, such as Wi-Fi controllers.
The factors behind the global shortage of semiconductors are many and range from the trade war between the United States and China, through the pandemic and the structure of the semiconductor industry. The result is a shortage and rising prices. The shortage of drivers has already affected the prices of TVs. “TV panels have risen up to 100%, prices have doubled in the last 12 months,” said Bob O’Brien, co-founder and chief financial officer of Display Supply Chain Consultants. But “during the pandemic, demand changed so much that regardless of the price, people were buying. “
PC prices are also rising, rising by about a fifth in April, according to US statistics. In May, the pace slowed, but analysts expect prices to continue to rise in the future. In their latest reports, giants such as HP and Dell also mentioned price increases.
These integrated circuits, which create problems throughout the industry, are also becoming more expensive, but their prices are still around $ 1 – in comparison, the CPU costs $ 50- $ 100 for an average model.
What caused the shortage?
No one could have predicted the huge increase in demand for computers, laptops and tablets, which was recorded last year and which was caused by health measures that made consumers study and work from home.
“Two years ago, when plans were being made for the LCD drivers to be produced, no one was planning a pandemic,” said Shane Rau, an IDC analyst. The health crisis also temporarily disrupted the production of semiconductors as well as raw materials. Separately, there were other factors: the explosions in two factories and the blockade of the Suez Canal, for example.
“We’ve never, never experienced anything like this, we’ve never seen it,” said Jordan Wu, CEO of Himax Technologies. The company is among the two largest manufacturers of LCD panels in Taiwan. Wu confirms that the chips needed for displays cause bigger problems than more expensive CPUs or GPUs or memory chips. The reason is that their production requires an older process, which most manufacturers are already abandoning in the struggle for supremacy over more expensive chips that require new technologies. By comparison, AMD and Intel processors are manufactured in a 10- or 7-nanometer process. While the Himax uses between 40 and 150 nanometers.
The nanometer is used in the semiconductor industry to measure the size of increasingly miniature transistors. The head of a pin is about one million nanometers.
Analysts point out that in the period 2015-2018, the personal computer market was particularly anemic. And no one planned to produce specific parts like LCD drivers on such a scale.
When will the situation return to normal? With the return to the offices, the demand for computers is expected to decrease and the supply to reach the demand in 2022 or 2023.
– .
