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Labor Shortages Threaten Recovery as Chip Shortage Eases

A new report from the International Data Corporation (IDC) sees semiconductors slowly flowing back into the automotive manufacturing supply chain and predicts that the current situation of “uneven shortages and tight supply” will begin to ease starting later this year.

However, IDC points to the omicron variant of COVID-19 as “the real concern” as semiconductor production begins to meet demand, especially in 40nm and up processes:

One of the key supply constraints for the semiconductor market was in mature process nodes. While the automotive semiconductor market largely depends on these older processes, many other semiconductors are made on these mature manufacturing process technologies at 40nm and above, such as LCD drivers, power management ICs, power, Auto ICs, and microcontrollers. […] IDC estimates that 67 percent of semiconductors were manufactured at mature process nodes in 2021.

Nina Turner, research manager at IDC, said: "Automotive semiconductors will continue to be a limiting constraint on the automotive market through the first half of 2022, but barring any unforeseen shutdowns or semiconductor manufacturing issues, supply should gradually improve through the second half of the year. Adding in the time to manufacture the vehicle, this means the automotive market will begin to improve towards the end of 2022 and into 2023 if there are no other supply chain shocks."

Read More: idc.com

China Competition Bill Includes Provisions to Boost Semiconductor Production

If it passes the U.S. Congress and is signed into law, the America Competes Act of 2022 would include among its many provisions billions of dollars in funding for domestic semiconductor production, according to a report in the South China Morning Post.

Analysts warn that the proposed legislation will increase tensions with mainland China because of measures that would build a closer U.S. relationship with Taiwan. From the report:

[The bill’s announcement] also comes on the same day that the Commerce Department warned of an “urgent” need to pass legislation that would fund the US semiconductor industry amid a global chip shortage. “The semiconductor supply chain remains fragile, and it is essential that Congress pass chips funding as soon as possible,” said Secretary of Commerce Gina Raimondo earlier on Tuesday.

While the Senate passed its own comprehensive China bill in June with broad bipartisan support, it is unclear if both parties will support the bill in the House. The U.S. competition with China is a rare issue with widespread bipartisan support in both chambers of Congress, and various House committees had already passed their own China bills that touched on many of the subjects covered in the new America Competes Act, from science research funding to relations with Taiwan.

Read More: scmp.com

U.S. Manufacturing Growth Slowed in January, But Remains Positive Overall

Barbara Jorgensen reports in EPSNews that growth in domestic manufacturing slowed in January, though in general manufacturing is on a positive track.

The Institute for Supply Management (ISM) manufacturing index, the PMI, fell by 1.7 percent to 57.6 in January, which despite being at its lowest level since November 2021 is still in growth territory, Jorgensen writes. January also saw continued improvements in supplier delivery and labor resources, according to ISM’s Tim Fiore, who was quoted as saying that “shortages of critical intermediate materials, difficulties in transporting products and lack of direct labor on factory floors due to the COVID-19 omicron variant” are the biggest threats to recovery in manufacturing at present.

Jorgensen also notes that the ISM prices index grew for the 20th consecutive month, up 7.9 percent to 76.1, “indicating that supplier pricing power continues to rise” as the new year begins and supplier price increases are announced.

Read More: epsnews.com

Qatar Airways Inks “Record Launch Order” with Boeing for 777X, 737 Max Aircraft

Recovery in commercial air has been impacted by the global pandemic and other factors. Monday’s announcement of a $30 billion-plus order from Qatar Airways for Boeing 777X freighters and 737 MAX passenger airliners was hailed as a landmark deal for both the aircraft manufacturer and for Qatar’s partnership with the United States, according to a Reuters report.

According to Reuters correspondents David Shepardson, Eric M. Johnson and Tim Hepher, the deal was signed at a special ceremony near the White House, with Boeing Commercial Airplanes President and CEO Stan Deal and Qatar Airlines CEO Akbar Al Baker joined by other dignitaries.

The order comes as positive news for Boeing following issues with the 737 MAX passenger jet that led to the model being grounded for 20 months following highly-publicized crashes, and other constraints which had previously impacted production.

Read More: reuters.com

JEITA 2021 Data: Electronic Device, Component Exports Up 18.5%

The Japan Electronics and Information Technologies Industries Association (JEITA) reported December 2021 export data on Thursday, which includes full-year 2021 figures. Combined exports of electronic components and electronic devices from Japan increased 19.5 percent year-over-year in December 2021, bringing the full-year total to an increase of 18.5 percent over 2020.

In December, exports of electronic components totaled 213.1 billion yen, or approximately USD $1.85 billion – an increase of 9.7 percent over December 2020. For the full year, electronic components exports totaled over 2.3 trillion yen, or about USD $19.97 billion for a year-over-year increase of 20 percent over 2020.

For 2021 as a whole, by category, exports of passives were up 23.7 percent; connector exports were up 19.4 percent; and PCB exports increased by 11.7 percent.

Read More: jeita.or.jp

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