Intel to produce chips for automakers within six to nine months: CEO

(Reuters) – The chief executive of Intel Corp told Reuters on Monday the company is in talks to start producing chips for car makers to alleviate a shortage that has hobbled factories.

Chief Executive Officer Pat Gelsinger said the company is talking to companies that design chips for automakers about manufacturing those chips inside Intel’s factory network, with the goal of producing chips within six to nine months. Gelsinger earlier on Monday met with White House officials to discuss the semiconductor supply chain.

Reporting by Stephen Nellis in San Francisco; Editing by Chris Reese

Hyundai to suspend South Korea production on chip shortage: Yonhap

SEOUL (Reuters) – South Korea’s Hyundai Motor Co plans to suspend production for two days from Monday at its Asan plant because of a chip shortage, Yonhap news agency said, citing an unidentified company official.

The shortage had led to problems for Hyundai over powertrain control unit parts, the agency added.

The Asan factory turns out 300,000 vehicles each year, including the Sonata and Grandeur sedans.

Reporting by Heekyong Yang; Editing by Clarence Fernandez

Europe should invest in chip design, not a mega-fab: Think tank

BERLIN (Reuters) – Europe’s ambition to make the most powerful computer chips risks wasting billions of euros, a German think tank said in a report on Thursday, urging policy makers to focus instead on rebuilding the region’s chip design industry.

The EU executive’s new goal of doubling its global semiconductor share by 2030 is doomed to fail because the bloc lacks a meaningful market that any super-advanced chip foundry could sell into, author Jan-Peter Kleinhans said.

“For an EU foundry there is simply no business case at the moment in Europe, mainly for the lack of customers,” said Kleinhans, an analyst at the Stiftung Neue Verantwortung (SNV) think tank in Berlin.

The European Commission last month launched a 10-year plan, the Digital Compass, setting its sights on a 20% global semiconductor market share and building a fabrication plant, or fab, that can make superfast 2 nanometer chips.

The push has gained urgency due to supply-chain dislocations caused by a sharp recovery in demand for products ranging from smartphones to electric vehicles following a slump at the onset of the coronavirus pandemic a year ago.

The problem with the EU’s strategy is that, unlike the United States and Asia, Europe lacks a meaningful chip design industry that could justify the cost of a mega-fab, Kleinhans told Reuters in an interview.

“In terms of volume it’s simply not enough to fill a fab,” he said. “That would mean an EU foundry would need to attract foreign customers – this is extremely unlikely.”

Industry leaders TSMC and Samsung already plan investments in the United States to serve chip design leaders like Qualcomm or Nvidia that rely on contract manufacturers to produce their chips.

Plans by Intel to launch its own foundry service, or contract manufacturing operation, starting in the United States, would add to capacity and raise questions about the economics of expanding production in Europe, said Kleinhans.

Europe should instead focus on reviving its vestigial chip design industry, he said. Of its last two publicly listed “fabless” chipmakers one, Dialog, has just agreed to be bought for $6 billion by Japan’s Renesas.

Apple’s announcement that it will invest 1 billion euros ($1.2 billion) in a new chip design facility in Munich, Germany, shows where the EU should be focusing its efforts.

“Apple has single-handedly done more for European-based chip design than the Commission in the past 10 years,” said Kleinhans.

($1 = 0.8430 euros)

Reporting by Douglas Busvine; editing by David Evans

Exclusive: Apple’s MacBook, iPad production delays on chip shortage – Nikkei

(Reuters) – Production of some Apple Inc’s MacBooks and iPads has been postponed due to a global component shortage, the Nikkei reported on Thursday.

Chip shortages have caused delays in a key step in MacBook production, according to the report, which added that some iPad assembly was postponed because of a shortage of displays and display components. (s.nikkei.com/3uAZhI7)

Apple did not immediately respond to a Reuters request for comment.

U.S. Senate semiconductor chip legislation – Biden

WASHINGTON (Reuters) – U.S. Senate leaders are preparing to introduce legislation on semiconductors, U.S. President Joe Biden said on Wednesday as the nation wrestles with an ongoing shortage of the critical technology used in a range of devices from cars to computers.

“We’re working on that. (U.S. Senate Majority Leader) Chuck Schumer and, I think, (U.S. Senate Republican Leader Mitch) McConnell are about to introduce a bill along those lines,” Biden said amid remarks on his own plan to boost the nation’s infrastructure.

Intel aims for supply chain edge with new data center chip

(Reuters) – Intel Corp on Tuesday introduced its newest flagship data center microprocessor, hoping its in-house manufacturing operations will help it navigate a chip shortage to better compete against rival Advanced Micro Devices Inc’s (AMD) faster chips.

The new “Ice Lake” chip is designed to be used by cloud computing providers and others who run massive data centers, and Intel said it has already shipped about 200,000 test units.

Intel’s new chip will be slower than AMD’s new flagship data center server chip released last month. Intel years ago lost its speed lead because of fumbles with the in-house 10-nanometer manufacturing technology it uses to make the chip, while AMD outsources its server chip manufacturing to Taiwan Semiconductor Manufacturing Co Ltd and has gained market share against Intel.

But Intel is hoping that greater control over its supply chain – in addition to a portfolio of data storage, networking and other chips designed to work well with the “Ice Lake” processor – will help make the chips competitive during the midst of a global chip supply crunch, in part by mitigating customer concerns about shortages.

“Nobody else in the industry has the intersection of (intellectual property), architecture, design and manufacturing. We think that’s a particularly important differentiator for the company at a time when demand is exploding and supply is short,” Navin Shenoy, executive vice president and general manager of the data platforms group at Intel, told Reuters.

To fight the loss of its speed title, Intel has focused on tailoring its chips and systems to optimize them for specific kinds of computing. One area of focus has been 5G networks, which are shifting from being built on proprietary systems such as those from Huawei Technologies Co Ltd toward using commodity parts like Intel chips. Shenoy said Verizon Communications Inc plans to use the new “Ice Lake” chips.

Verizon will appear at an event showcasing the chips, alongside Microsoft Corp, Oracle Corp and others.

Intel’s 5G push “gives economies that are worried about security issues or geopolitical tensions a lot more flexibility. They can lean on Western supply chains to build out their next-generation 5G infrastructure,” Shenoy said.

Acer sees global chip shortage gradually easing

TAIPEI (Reuters) – A global shortage of chips for mid-end consumer products is starting to ease and will be much better come the second half of the year, a senior executive at Taiwan’s Acer Inc, the world’s No. 5 PC vendor by shipments, said on Tuesday.

From delayed car deliveries to a supply shortfall in home appliances to costlier smartphones, businesses and consumers across the globe are facing the brunt of an unprecedented shortage in semiconductor microchips.

Originally concentrated in the auto industry, the shortage has now spread to a range of other consumer electronics, including smartphones, refrigerators and microwaves.

Andrew Hou, Acer’s president for Pan-Asia Pacific Operations, told reporters in Taipei that since the problem first became apparent in the fourth quarter of last year, the supply chain has “jumped into action” as suppliers worked to address the situation.

Hou said he expected better supplies in the second quarter compared with the first quarter of this year, and that the situation in the second half will be better than the second quarter.

“That’s what we are seeing at the moment,” he added.

The shortage stems from a confluence of factors as carmakers, which shut plants during the COVID-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies.

Consumers have stocked up on laptops, gaming consoles and other electronic products during the pandemic, leading to tighter inventory. They also bought more cars than industry officials expected last spring, further straining supplies.

Hou said that sales in his region, which excludes China, are booming, as companies and governments seek laptop computers to help people study and work from home.

“What is lacking is not the high end chips – it’s the ones people have for a long time not cared about.”

Subaru to temporarily shut Yajima plant: Chip shortage

TOKYO (Reuters) – Japan’s Subaru Corp said on Monday that the automaker will halt its Yajima plant between April 10 and 27 to adjust production plans due to a chip shortage.

Subaru will restart all production lines at the Yajima plant in Gunma Prefecture from May 10, it said in a statement. It added that the impact on the group’s financial results is uncertain.

Global chip supply chain vulnerable to massive disruption – Research finds

(Reuters) – A new study from a U.S. industry group found that the global semiconductor supply chain has become increasingly vulnerable to natural disasters and geopolitical disruptions because suppliers have become more concentrated in distinct regions.

The report comes amid a global chip shortage that started with overbooked factories in Taiwan late last year, but has since been exacerbated by a fire at a plant in Japan, a freeze that knocked out electricity in the U.S. state of Texas and a worsening drought in Taiwan this year. The shortage has idled some production lines at automobile factories in the United States, Europe and Asia.

Modern chipmaking involves more than a thousand steps and requires complex intellectual property, tools and chemicals from around the world. But the Semiconductor Industry Association, representing most U.S. chipmakers, on Thursday said it found more than 50 places in the supply chain where a single region has more than 65% market share.

Intellectual property and software to design cutting-edge chips, for example, is dominated by the United States, while special gases key to fabricating chips come from Europe. And the manufacturing of the most advanced chips is completely located in Asia – 92% of it in Taiwan.

If Taiwan were unable to make chips for a year, it would cost the global electronics industry almost half a trillion dollars in revenue, the report found: “The global electronics supply chain would come to a halt.”

Still, the study warned, a go-it-alone approach in which governments try to replicate the supply chain domestically is infeasible because it would cost $1.2 trillion globally – with up to $450 billion of that cost in United States alone – causing the price of chips to skyrocket.

In some cases, though, it called for incentives to create “minimum viable capacity” in regions that lack any part of the supply chain.

In the case of the United States and Europe, that would mean new advanced chip factories to balance concentration in Taiwan and South Korea.

“We don’t have enough semiconductor manufacturing in the United States … And it’s got to be fixed with the assistance of the U.S. government,” John Neuffer, chief executive officer of the association, told Reuters.

Exclusive: Hyundai Motor to suspend South Korea production – Chip shortage

SEOUL (Reuters) – South Korea’s Hyundai Motor Co said on Tuesday it would suspend production at its Ulsan No.1 plant in South Korea from April 7-14 because of a shortage of semiconductor chips and supply issues with electrical components.

It said there were supply problems with semiconductor parts for the front view camera system of its Kona sport utility vehicle (SUV) and power electric modules for the IONIQ 5