THE YEAR OF THE MICROCHIP…But where does this leave Africa?

Forbes Africa
Published 7 months ago
Screenshot 2022-06-06 at 17.43.26

BY TIANA CLINE

According to the Semiconductor Industry Association, microchips are the world’s most complex, costly, and research- intensive product humankind has ever manufactured. Microchips, also known as chips or semiconductors, are packed with tens of billions of transistors on a piece of silicon real estate the size of a fingernail. As technology advances and the Internet of Things (IoT) grows, more chips are needed. Because of the chip shortage, 7.1 million fewer cars were built last year at a $210 billion loss in profits for automakers.

“We often refer to semiconductors as if there were homogenous but there are many different types of semiconductors and over time, they become smaller and smaller,” explains Paul Lee. “The latest technology goes into smartphones and is a few nanometers thick. There’s also old generation technology and that’s where a lot of the shortages are. That’s why there is a lack of supply in cars – lots of elements require screen and you don’t need the latest, smallest technology because cars are big.” There has also been a shift in demand in the car market. Global electric car sales more than doubled in 2021 to 6.6 million and these vehicles have more semiconductors inside, not only because of their electrification, but for digital displays and other high-tech features.

Because of the chip shortage, 7.1 million fewer cars were built last year at a $210 billion loss in profits for automakers.

Crosscall, a French specialist of waterproof and rugged devices, managed to avoid the chip shortage by optimizing their product line. While many technology brands have complex ranges with endless product variations (many of which are built to order), Crosscall’s focus was on durability. If a device doesn’t break easily, there’s no need to replace it and all the components that go with it. “Of course we are seeing the impact – the chip shortage is a huge problem, especially when it comes to price increases,” says Crosscall South Africa Sales Director Julien Fouriot.

“From components to transport, the overall cost of everything is increasing. We managed to secure components at the right time and created stock but lead times of getting new supplies in at the moment is crazy – what once took four to six weeks, can now be up to six months.”

Read more here (FORBES AFRICA)