“Chip Shortage” pressure of RFID industry increases sharply in 2021

From the end of 2020 to the half a year today, the most worrying problem for RFID industry is shortage of chip.

It is understood that for the upstream suppliers of RFID chips and modules, as soon as they receive a call in the near future, it is mostly a matter of expediting the delivery date. But under the present circumstances, it is impossible to give a satisfactory answer. For the projects that are being implemented or are ready to start, the progress of the project will be greatly affected due to the lack of chip guarantee.

A variety of factors intertwined, making it difficult to get rid of the core shortage dilemma

In fact, the shortage of chip in the RFID industry is only a part of the whole semiconductor industry. The shortage of chip capacity in the semiconductor industry has continued from the end of last year to now, and there is still no sign of getting rid of this dilemma.

Generally speaking, the current situation is the result of many factors:

1. First, because of the impact of COVID-19, most of the world has to stop production and reduce production, resulting in a marked decline in semiconductor production capacity, triggering changes in market supply and demand;
2. As the chip area of chip generation processing, Taiwan has suffered the most serious drought in 56 years, and the water supply crisis has restricted the chip production capacity of TSMC from a higher level;
3. The earthquake in Fukushima, Japan, affected the production of semiconductor upstream material manufacturers, making the operation of semiconductor supply chain more difficult;
4. At home, the man-made obstacles caused by Sino US trade disputes further aggravate the poor operation of the semiconductor industry chain;
5.  Recently, COVID-19 in Taiwan has warms up again for more than a hundred consecutive days. Novel coronavirus pneumonia cases in Taiwan were confirmed by 17 new epidemic command centers in Taiwan, which made it difficult for the global chip supply dilemma to be diagnosed, according to the new 335 cases of new crown pneumonia cases.

For RFID industry, in addition to the above mentioned reasons, there are also the influence of internal conduction of semiconductor industry.

Because the shortage of chip is a common situation in all walks of life, under the situation of the shortage of wafer substitute capacity, RFID chip production will also suffer from the run of production scheduling of chips such as automobile and consumer electronics, and the capacity is naturally more intense.

However, from the demand side, it is another scene: under the influence of COVID-19, the housing economy has accelerated the global digital transformation, and the demand for cloud services has increased in scale, which has further opened up the market demand.

In addition, with the help of 5g application, the information volume of global circulation has increased greatly, and more IC and memory entities are needed to support these growth.

In the case of tight chip supply, in order to ensure the normal operation of the company, the enterprises led by large manufacturers all started the chip “hoarding” mode, and then led the whole industry to hoard together, once again amplifying the market panic.

As one of the industries with the strongest collaborative effect of globalization, the semiconductor industry chain is too complex, and the external environment is full of variables, so there are too many unpredictable uncertainties. In addition, due to the short development history of domestic semiconductor industry and its strong external dependence, there is a serious risk of “chain breaking” in the chip supply chain, so we have to keep a high vigilance.

At the beginning of the year, the author had in-depth exchanges with several senior people in the R field on the problem of “core shortage”. At that time, the RFID industry was not greatly affected by the shortage of chips, and the expectation of getting rid of the chip shortage was relatively optimistic.

Now, we all think that the shortage of chips will not only happen in the next few months or half a year, but will probably last for about a year or even longer.  Not long ago, Wei Zhejia, CEO of TSMC, publicly said in the media that the global chip shortage may last until 2022.