EDACafe Industry Predictions for 2022 – Thalia – DA

2022 Outlook: Chip shortage continues and drives opportunities to tier 2 fabs

It won’t come as a surprise when I predict that the current chip shortage will continue to affect the industry throughout 2022. The shortage is there and it’s real. Most foundries are at or near maximum capacity and since consumer or OEM demand is not backing off, the supply shortage is set to continue throughout 2022, at least.

This won’t just affect when you get to upgrade your smartphones and tablets – the chip shortage is having a significant impact on the automotive market and that also is set to continue as the industry’s ‘chip needs’ expands.

Automotive systems may have accounted for a small percentage of chips manufactured by the tier 1 manufacturers (3-4% at TSMC for example, compared to close to 50% for consumer electronics) but the fact is the car industry’s needs are growing exponentially and inexorably.

The trends in vehicle electronics and systems – including the shift to electric vehicles in a race to meet global emissions targets – plus the move to a future of connected and autonomous vehicles (CAVs) – all lead to an increased demand for sensors. Today, an ‘average’ car might have 100 sensors, that number is set to rocket as vehicles become more automated and as functional safety requirements in CAVs necessitate increased volumes of sensors.

Industry watchers such as S&P are even scaling back their forecasts on car production based purely on the chip supply issue in 2022.

In the face of these supply issues, product manufacturers are scrambling to secure chip manufacturing capacity wherever they can: but that’s not always straightforward.

Manufacturers themselves are attempting to adapt: In some countries, the building of new fabs is being seen as a national growth opportunity or strategic requirement, with grants or incentives to encourage investment. India is one such example.

Geopolitics can restrict some customers moving their chip production to different parts of the world. This has made some of the wafer fabs rethink their own strategies as they seek to expand rapidly, particularly into ‘less politically sensitive’ parts of the world. But even with these plans and ambitions, fabs simply cannot be constructed and fully operational in weeks or months – they typically take at least three years.

TSMC is being bullish and believes the demand is a long term upward trend and is even committing $100Bn in investments to expand its own capacity and research facilities.

But with no wafer fab about to appear overnight, the reality is that, in the near term, OEMs may be forced to move existing designs to alternative manufacturing facilities to guarantee supplies; possibly to second or third tier fabs. Tier 2 fabs appear to be rising to the challenge to seize the opportunity in 2022 – they can offer more attractive costs and potentially can be responsive and adaptable to customer needs.

In moving between fabs, the task of migration is not a simple cut and paste job. IP migration can be complex and, itself, time-consuming (hence costly) unless it’s done using the right tools – which is exactly where we at Thalia can help. For 2022 we are looking forward to helping our customers reduce cost in IP migration through our innovative IP reuse platform, and keeping their growth strategies on track.

Biography

Sowmyan Rajagopalan, Founder and CEO, Thalia Design Automation

Sowmyan founded Thalia in 2011. He is responsible for business strategy and leads the company’s development of disruptive EDA solutions, algorithms and methodologies targeting analog migration, design variants and “IP on-demand”. He has 18+ years of experience in the design and development of analog IP, IP strategy, analog EDA solutions and design methodologies. He has been awarded multiple patents in EDA design and applications.

https://www.thalia-da.com/

Thalia CEO, Sowmyan Rajagopalan

Tags: Predictions

This entry was posted on Thursday, January 20th, 2022 at 5:32 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.