UCC INDU GmbH Solve The Way Forward in the Global Chip Shortage

Posted June 29, 2022 by KaraJanney

How the global IC shortage affects and how UCC INDU GmbH can avoid it
UCC INDU GmbH new established in 2015, is an independent distributor of electronic components located in Ladenburg, Germany. As branch of Union Component Technology, UCC INDU GmbH achieved more than 20 years of experience in the market of electronic components purchase, research and development. As trading company, we know no limits to our range of products. UCC INDU GmbH have professional purchase team work with overseas official distributors, Avnet, Arrow, WPG, EBV Elektronik, Rutronik.

The entire world is suffering a shortage of chips found within almost every device we use today. Be it mobile phones, vacuum cleaners, or cars, manufacturers have had to idle their production schedules simply because the chips they need to build their products are not available.

Why the Shortage?
The recent pandemic has aggravated the problem of chips shortage. With COVID forcing people to remain indoors and work from home, there has been a quantum jump in the consumption of electronic equipment like computers and mobile phones. With factories forced to reduce their workforce to create safe working conditions, chip manufacturing has not been able to keep up with the demand, leading to an acute shortage.

Who Makes Chips?
Presently, there are only 25 companies making chips in the world. 75% of these companies are in Asia, and 12% in the US. Of them, TSMC in Taiwan and Intel in the US are the largest.

Intel, with their fab outside Phoenix, Arizona, presently concentrates more on electronic components for desktops and laptops than they do for controllers required by the automobile, mobile phone and IoT industry. TSMC supplies chips to carmakers in the US. They are the most sophisticated chip manufacturer, making chips that are 30% faster and more powerful than what Intel makes. But the pandemic has recently exposed the fragility of this supply chain.

The Supply Chain
When car sales in the US dipped due to the pandemic at the beginning of 2020, carmakers canceled their chip orders. That led TSMC to also scale down their chip production. When car sales in the US again took off at the end of the year, they had to wait for several months until TSMC could produce and start supplying them with chips.

This is because chip making is a complicated process, and it takes more than six months to produce chips that can finally go into cars or mobile phones. American industry that uses these chips do not have a choice at present but to import chips from Asia. Intel does not produce them and does not possess the technical expertise to fabricate the sophisticated chips that TSMC currently makes for mobile phones and cars. Intel concedes they will take about two years to catch up with the technical expertise of TSMC.

Reshoring Chip Making to the US
However, more people in the US are of the opinion that relying on chip manufacturers in Asia is risky, especially because the political situation there is rather unstable. Intel has been lobbying the US government for moving the supply chain to the US and reviving chip production here with tax breaks, incentives, and subsidies. The US government is responding with a proposal of US$50 billion as an infrastructure investment for the semiconductor industry.

Although the semiconductor industry is a lucrative business for manufacturers like Intel, the US government too has an interest in investing in this industry. It takes over US$10 billion to set up one fab. But setting up this critical industry will generate countless American jobs, provide long-term control over the technology in the future, and prevent disruptions in the supply chain.

Accordingly, Intel has announced investments of US$20 billion for two new fabs in Arizona, and another US$3.5 billion for upgrading their present fab in New Mexico. TSMC, itself worth over US$ 0.5 trillion, has also announced an investment of over US$100 billion on upgrades and R&D over the next three years. In addition, TSMC is also planning a new fab in Phoenix, Arizona, where they plan to make the chips the US industry needs so desperately.

The entire situation presents no immediate relief for supply of electronic components to industries in the US or elsewhere in the world. Everyone is likely staring at a shortage of electronic components, especially high-end chips, for at least two more years.


UCC INDU GmbH are able to help our customers maintain uninterrupted production schedules because we regularly schedule large orders of components, direct from the manufacturer, for warehousing throughout our global network of warehouses. We're the preferred vendor for many high-profile OEMs and EMS, but we are versatile enough to offer the same services to our smaller customers.

UCC INDU also employs a dynamic product team whose sole responsibility is to monitor our customers' most used products. As our product team sees manufacturers' lead times begin to increase, or as products approach obsolescence and end-of-life, they make strategic buys to ensure these products remain available to our customers when they need them most.

At UCC INDU, we pride ourselves on fast delivery, diverse product offerings and excellent customer service. You can count on UCC INDU for your electronic component needs.

Our Offical Website: https://uccindu.de
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Issued By kara janney
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Country Germany
Categories Electronics , Technology
Tags electronic components , electronic components distributor , integrated circuit distributor , integrated circuit suppliers , ucc indu , ucc indu gmbh
Last Updated June 29, 2022