New-Tech Europe Magazine | Q4 2021

2022 ELECTRONICS AND SEMICONDUCTOR OUTLOOK

Alan Porter, Vice President of Electronics and Semiconductor Industry Strategy, Siemens true; during the depths of the first pandemic peak in mid-2020, sales of new vehicles fell, many dealers closed showrooms and auto plants were shuttered. That said, consumer vehicle retail sales rebounded far faster than anyone forecasted; it turned out that many people preferred driving instead of taking public transportation or airlines.

Growth in both the electronics and semiconductor industries has been accelerated by the global pandemic and greatly challenged by global chip shortages. When the pandemic took hold, remote work became the norm for many, and this has unexpected consequences. The overnight increase in demand for technologies that supported working from home, such as laptops, monitors, cameras, phones, exacerbated the already increasing chip consumption trend. As a result, fabs focused on fulfilling those orders, in addition to the adoption of 5G and Internet of Things (IoT) technologies. At the same time, the automotive industry predicted that the need for new cars would fall drastically due to the pandemic with travel restrictions and lockdowns in many countries. This prediction came

through 2022 as the market demand will be strong for products that are smarter, more functional, constantly connected, higher quality and less expensive. So, the big question for the electronics and semiconductor industries is what can be done to ease the pressing chip shortage? The long-term solution, of course, is to build more fabs, but that will take years, cost billions and represents a brute force approach. Conversely, there is risk that at some point we will return to over capacity. At Siemens, we believe that in 2022 companies can go a long way towards anticipating and solving IC supply chain problems by taking advantage of their existing manufacturing processes and the data inherent within it. By using solutions to extract data from smart manufacturing, it can be analyzed, processed and leveraged throughout

Interestingly, since employees could work from almost anywhere, the demand for recreational vehicles rose dramatically. As in many industries, manufacturers in this space were overwhelmed with orders, causing the further impact on the backlog and IC shortages. All these factors drove and continue to drive that increased demand for automotive ICs from the fabs. There is no doubt that the demand for microchips will remain high

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