Shortage of Semiconductors and Demand in Used Cars

Semiconductors are substances with properties somewhere between a conductor and an insulator; conductors conduct electricity and insulators do not conduct electricity. Integrated circuits (ICs), diodes, transistors and other electronic discrete components are made of semiconductors, whereas the materials of semiconductors are gallium arsenide,indium antimonide,germanium and mainly silicon. Silicon forms most of ICs. (1)

 

Metals, semiconductors and insulators are distinguished from each others by their band structures. Their band structures are shown in the figure below.

In metals, the conduction band and the valence band are very closer to each other. In semiconductors and insulators, the valance band and conduction band are separated by a forbidden energy gap（Eg）of sufficient width. In semiconductors at room temperature, the band gap is small, electrons jump the gap fairly easily, given the semiconductor limited conductivity. Semiconductor crystal used for ICs is high purity single crystal silicon, but impurities are often added to modify the electrical properties. Depending on the added impurities, there are n-type and p-type semiconductors. For details, please review Reference 1. 

 A semiconductor chip is an electric circuit with many transistors and wiring formed on a semiconductor wafer. An IC comprises numerous these components. A semiconductor is made by two steps: wafer processing and front-end process and back-end process. Wafer processing is further divided into deposition, photoresist coating, and etching. For details, please review Reference 1. These steps are tedious process, requiring precision and skills. Semiconductors are in short supply because of big demand for electronics and effects from former President Donald Trump’s trade war. (2) 

Later, because of COVID-19, supply chains are disturbed. This worsens the situation. In the year 2021, semiconductor chip shortage costs the global automotive industry maybe up to USD200 billion or more in revenue. These shortages have slowed down several original equipment manufacturers (OEMs) in production; thus, further extending the waiting period of certain vehicle models. As a result (one of the results), used car sellers across markets, including India, are enjoying a boom in demand. (3) 

 Reference: (1) https://www.hitachi-hightech.com/global/products/device/semiconductor/about.html. (2) https://www.cnbc.com/2021/02/10/whats-causing-the-chip-shortage-affecting-ps5-cars-and-more.html#:~:text=Semiconductors%20are%20in%20short%20supply%20because%20of%20big,coming%20months%20as%20demand%20remains%20higher%20than%20ever. (3) https://home.kpmg/in/en/blogs/home/posts/2022/01/semiconductor-chip-shortage-manufacturers-suppliers-mantra.html