This period marks a significant time for the semiconductor industry. The impact of COVID-19 has led to a shortage of chips, particularly affecting the automotive sector. The shortage stems from a decrease in chip orders for vehicles due to reduced demand for cars, prompting chip manufacturers to focus on producing chips for electronics and gadgets, which saw increased demand as people spent more time at home. The growth of work from home and cloud systems has severely impacted the automotive industry, leading companies like Honda, Ford, and GM in the United States to announce a month-long production halt in January 2021.

In the chip manufacturing sector, growth continues steadily, with projections indicating that the semiconductor industry will grow by 7.7% compared to 2020. The segment expected to see the highest growth is that of chips used in smartphones, which is anticipated to grow by 11.4% due to the transition to 5G communication technology. The majority of revenue from smartphone and telecommunications chips in 2021 is expected to come from products supporting 5G.

Source: www.information-age.com

                  Another reason for the chip shortage is the trade war between the United States and China, which has hindered major Chinese chip manufacturers like SMIC and Huawei from accessing patents and technologies needed to produce advanced, miniaturized chips. This has left only a few companies, such as TSMC, a major foundry from Taiwan, and Samsung, capable of producing very small chips. Combined with rising demand, this has resulted in a chip shortage.

The chip shortage reflects how essential chips have become for various countries, especially as they transition to digital formats and increase their demand for gadgets and computer systems. This growing reliance on chips has initiated a reshuffling of the supply chain, with countries relocating their foundries to reduce dependence on foreign chips. For instance, U.S. President Joe Biden signed an executive order to support domestic chip production to mitigate future shortages. TSMC has announced plans to build a new factory in Phoenix, Arizona, while Samsung is reportedly planning a chip manufacturing facility in Texas. The European Union is also working on plans to establish chip manufacturing in Europe.

Source: bbc.com

China, as a major power, still lags behind others due to a lack of access to patents resulting from the trade war. This has limited Chinese foundry giant SMIC to producing chips at only 13 nm, while TSMC can produce down to 5 nm. The lack of patents is not the only issue; the inability to access production equipment due to the trade war has also hindered China's technological capabilities. Consequently, leading Chinese electronics companies are collaborating to develop chips to reduce their reliance on Western technology, with significant support from the Chinese government.

Source: asiatimes.com

 Many companies are now designing chips for their own software and outsourcing production to foundries, such as Apple's A14 Bionic chip designed by Apple and manufactured by TSMC, or Nvidia and Qualcomm using Samsung for chip production. This trend indicates the growth of the chip manufacturing industry, where companies are becoming systems companies that design software and utilize their own chips for processing, rather than focusing solely on software or hardware as in the past.

In Thailand, entering the high-level chip production cycle like Taiwan and the U.S. poses challenges. A feasible approach is to become part of the regional supply chain or to focus on producing chips for other industries or tools that do not require the most advanced technology. While this may not seem cutting-edge or exciting, there are still many applications in the world that do not require high-performance chips. For instance, many household appliances do not need highly sophisticated chips, and the hard drive business continues to see steady demand. Although this may not be the focal point for creating disruption in the industry, it still provides an avenue for countries that are not leaders in chip manufacturing technology to compete and move forward.