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Top Dog in the Semiconductor Supply Chain

By Matt Geissler - Global Market Manager for Semiconductor

March 1, 2022

What’s Going on in Semiconductor?

The Semiconductor Industry is one of the hottest industries in the world right now. It’s all about producing the processor and memory chips that power all of the electronic devices you love and so many of the essential products and services that we take for granted in our 21st century lives. The most sophisticated chips in the world are being used for national security, in smartphones and gaming PC’s, while less sophisticated chips are being put into everyday objects to make them “smart” (think cars, refrigerators, doorbells, thermostats, and so much more). Both businesses and consumers benefit from chip-rich products, and they have become the backbone of modern society. 

In 2022, demand for these chips has never been stronger. There is currently a global chip shortage that is affecting companies around the world. That is because global demand far exceeds global supply capacity.  This WSJ article explains that US Companies are “dangerously low on semiconductors”. Car companies have had to cut production by as much as 40%. Stocks are falling for some major companies because output has fallen, revenues have shrunk, and recovery is slow. Businesses, consumers, and investors are all affected.  Why did this chip shortage happen? Several macroeconomic factors are contributing: the electrification (and automation) of vehicles, the rise of artificial intelligence, the construction of large data centers, the installation of 5G mobile networks, and the expanded adoption of the Industrial Internet of Things (IIoT). These factors tell a story about sustainable year over year growth for the next 5 years, but those factors alone didn’t predict a chip shortage. What was the key variable? The COVID-19 pandemic.  The pandemic accelerated demand for consumer electronics because of the immediate need for work and school from home resources for hundreds of millions of global citizens. This kind of demand shock had never been seen before for these products, and the supply chain was not ready to support the new demand. Increasing production capacity is a slow endeavor because production facilities take years and billions of dollars to build. Many projects are underway – dozens of new fabs and hundreds of billions of dollars are committed to the cause over the next decade, but those are of little help in the short term.  Some experts believe the chip shortage will persist through 2023.  This is a serious problem for chip users, but a huge opportunity for chip suppliers. 

How Does Deublin Fit in?

Deublin is part  of the global semiconductor supply chain. We help make the chips. There are five major types of players in the supply chain: Chip Designers, Chip Fabrication Plants (Fabs), Wafer Fabrication Equipment Manufacturers, Component Suppliers, and Raw Material Suppliers. We are a Component Supplier that designs, manufactures, and assembles mission-critical and performance defining rotary  unions and slip rings for the semiconductor market. Our products go into machines that are delivered to world leading fabs like Samsung, TSMC, Global Foundries, and Intel. Without our product, the chip making equipment couldn’t function properly, causing disruption to the global supply chain. Without Deublin, Apple couldn’t make the next generation iPhone, Dell couldn’t build your next PC, and Ford couldn’t complete assembly of their new F-150! Our components are designed to exacting specifications, and our in-house machining centers are specially programmed to produce these parts. We complete the process with clean room compatible packaging to keep out unwanted particles. We like to control all aspects of our products – from ideation, to design, production, component storage, assembly, testing, packaging, and shipment. We have expert teams at each phase to ensure industry leading performance. 

Deublin is proud to be a part of the global semiconductor supply chain. We pride ourselves on supplying the best rotary unions and slip rings in the world. We look forward to the challenges ahead in navigating this chip shortage and optimizing our own processes so we can continue to be a reliable partner to the market.