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Fighting “Chipageddon”

by Lucian Corduneanu

(T)here are shortages. So many. Chip shortage is the one we’ll address in this blog post. Yes, the Covid-19 pandemic has something to do with it, but not all (to do with).

Why?

Why is there a chip shortage? In short, because the demand exceeds the supply. In not so short, semiconductor manufacturers, aka chipmakers, produce less than the end-product manufacturers demand. (That’s why entire production lines of vehicles, for example, are put on hold because there is no way to source a particular $1 chip for the computer board. It is also hard to find replacement parts, because this chip shortage is global and affects all semiconductor suppliers.)

How?

The global Covid-19 pandemic started it. One theory is that since most of the semiconductor manufacturers are located in Asia, and that was the very first place to halt their production during the early days of the pandemic, they introduced, at first, small disruption in the supply chain, which was getting worse with every day of lockdown. Since the demand for electronics increased (because everybody worked from home - needed new gear - PCs, tablets, peripherals, etc), it quickly snowballed.

Another theory is that the auto manufacturers canceled all the orders in the early pandemic days, expecting a decrease in sales and now the supply chain takes a while to adjust, mainly because the chips are very complex to produce and there is an upfront time-consuming process while starting new automated-production lines for a particular part.

Here’s another answer to this question, if you want to dig deeper.

What about Sensix?

This “Chipageddon” affects not only Toyota, Ford, Volvo, Apple, Sony (sorry, guys, but Sony estimates they will not be able to meet the demand for the PS5 until 2022-2023), but it also affects us. Currently, we are working on our new three-phase power analyzer device, and since we are in the prototyping phase it is very difficult to source small quantities of specialized chips like analog frontend (AFE) chips.

What to do, what to do? We go where the supply meets the demand, meaning we go with very popular/mainstream chips (like ESP32). We also got as far as buying the end products off the shelf and disassembling them to get what we need for our prototype. Recently, we decided to build our own AFE (using a daisy-chain ADC capable of sampling at 100 Ksps). Yes, we go above and beyond for our products!

With a little help, at the end of 2021, we’ll be able to start producing the new series of our air quality and energy concentrator devices. Godspeed!

Where to?

Probably the major real-world consequences are/will be:

  • delays in delivery or even entire orders canceled - we actually found ourselves in this situation at the beginning of 2020 with a factory from China;
  • an increase in price for electronic parts (in general);
  • governments worried about national security or national economy;
  • some manufacturers will react and implement production approaches that are more resilient in the face of shortages;
  • opportunities for new players/innovators/investors to fill the gap by building new factories;
  • fab houses in the EU and USA, and once complete they will bring further stability to the industry but that will take several years, they are not short-term solutions.

Everything will be fine

We plan ahead and buy stock at the right-ish time. Just in time manufacturing, especially for a startup, is not without merit. However, given the shortages, we do stock up when we find components are available and try to maintain a balance, order just enough to fulfill device orders but not enough to be wasteful.

Primary defense is good design. By employing very popular components in our designs we can at the very least increase the number of options we have when sourcing the components. By designing with more “generic” components, if one becomes unavailable we can simply tweak the design to accommodate equivalent components and in some cases, we can use drop-in alternatives.

Experts do not expect chip scarcity to be resolved any time soon, but we stay sharp, and always look for alternative solutions. Unfortunately, we cannot build our own chips. Or can we?

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