Why the global chip shortage is wreaking havoc on auto industry, major tech firms
Silicon Valley-based researcher Ray Wang says no one was expecting huge demand in auto, tech
Ray Wang, founder and principal analyst of Silicon Valley-based Constellation Research, joined FOX Business’ "Mornings with Maria" on Tuesday to discuss the wide-ranging impact of the global semiconductor chip shortage on the automotive industry and major tech firms.
WHITE HOUSE, INTEL TEAM UP ON SEMICONDUCTOR SHORTAGE AFFECTING AUTO INDUSTRY
RAY WANG: One of the big challenges here is the fact that there was a fire at Japanese chip-making factory called Renesas. And basically, they drive 30% of the global market for microcontroller units. And this is the stuff that goes into cars. And nobody was expecting a huge demand for 5G, gaming, computers. And, of course, what's happening with the pickup in cars. And this has created the flux in terms of what's happening in terms of the chip shortage. And this has been interesting because it's been going on for a lot longer than people needed and it's basically an impact on demand.
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Most of the chips that we have today are coming from Korea and Taiwan and we have to shore up domestic production to make up the difference. We are at risk because – just like we’re at risk with pharmaceutical production – we’re at risk in other areas. You know, this isn’t going to be easy with China pointing and saber-rattling at Taiwan, Korea also being at risk. [Semiconductor] plants aren't easy to do. They take 24 to 36 years to build and to ramp up.
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Of course, China is trying to get into that game as well because they are dependent on chips from the U.S., chips from Korea, just from Taiwan, which aren't necessarily what they want to be, is dependent on anybody else's on the chip manufacturing because they've seen the impact as well.
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