When the chips are down

Applied Materials will play a key part in enabling semiconductor companies to drag us out of the global silicon shortage.

21 July 2021

The world is facing a shortage of silicon chips, and it’s expected to last until early next year, at least. According to an article published by Nikkei Asia in June, there are three main reasons for the global semiconductor drought. Unsurprisingly, the Covid-19 pandemic is the first listed factor. As demand ebbed in early 2020, manufacturers operating on just-in-time strategies reduced their output, but a stronger- than-expected recovery left them unprepared and struggling to meet demand. Trade tensions between the US and China are identified as the second factor, with American companies increasingly looking to onshore production facilities and Chinese companies also looking to strengthen their own capabilities. And finally, the article notes increased demand for semiconductors resulting from the more chip-intensive 5G mobile standard, but we must also consider how we increasingly need chips for everything from smartphones to IoT devices, cloud computing, autonomous vehicles to cryptocurrency mining, and, of course, the trusty PC. The global demand for silicon chips is only going to keep growing.

Given that backdrop, the company I’d like to bring to your attention this month is Applied Materials. This column isn’t going to end with me telling you how the company could grow its footprint in South Africa, or indeed the continent. Operating in over 110 locations in 19 countries, Applied Materials’ footprint is strong in Asia, US and Europe, and for good reason. It’s the global leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Its expertise in modifying materials at atomic levels and on an industrial scale enables its clients, like Intel, Samsung and Taiwan Semiconductor Manufacturing Company, to produce silicon chips.

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