As the Global Chip Shortage continues, companies are constantly reminded of the invaluable need for these tiny players. While the primary purpose is to compute power, semiconductors act as the brain in our cars, game consoles, medical devices, and other products. One significant change the industry has seen is the power shift from chip buyers to chip sellers, especially for those who own semiconductors factories.
Microchip Technology has been supplying microcontrollers since 1989. According to The New York Times, Demand for their products is currently running more than 50% higher than they can deliver. This supply chain issue is causing companies to ask clients to share their need for chips much earlier, as far as five years out. However, as the shortage continues, new power players are establishing themselves in the industry.
Even so, the power shift has been unmistakable. “Today, there is no leverage” for buyers, said Mark Adams, chief executive of Smart Global Holdings states. These circumstances are causing companies to respond with new tactics to continue producing their product. Automakers, which are significant chip users, have begun to talk directly with manufacturers instead of following the traditional practice of subcontractors.