Persistent semiconductor shortages will induce half the world’s top 10 automotive OEMs to design their own chips for vehicle electrification and autonomy by 2025, giving them better control over their product road maps and supply chains, reported Gartner Tuesday. Ford foreshadowed the trend last month when it struck a nonbinding agreement with GlobalFoundries to collaborate on R&D for future “feature-rich” chips (see 2111180016). Automotive semiconductor supply chains “are complex,” said Gartner Vice President-Research Gaurav Gupta. “In most cases, chip makers are traditionally Tier 3 or Tier 4 suppliers to automakers, which means it usually takes a while until they adapt to the changes affecting automotive market demand. This lack of visibility in the supply chain has increased automotive OEMs' desire to have greater control over their semiconductor supply.” The chip crunch is especially acute among mature semiconductor technology nodes where capacity expansion is difficult, said Gupta. “That the automotive industry has been conservative in qualifying older devices on larger wafer sizes has also hurt them and will likely motivate them to take chip design in-house.” NXP Semiconductors CEO Kurt Sievers described the “enormous depth and complexity” of the automotive supply chain when he told analysts on a quarterly call last month that it takes coordinated timing and delivery “of up to 30,000 parts and up to 1,500 different semiconductors from hundreds of suppliers to build just one single car” (see 2111020032).
Intel hasn't decided on the conditions, pricing and timing of a mid-2022 initial public offering to take Mobileye public through newly issued stock, said the chip maker Monday. Intel will remain Mobileye’s majority owner after the IPO is complete, it said. Intel expects Mobileye to deliver 40% or more of revenue growth this year on 41 new “program wins” with 30 global automotive OEMs, it said. “We see a lot of value creation over the next four or five years for Mobileye from being part of the Intel asset,” CEO Pat Gelsinger told a Credit Suisse investor conference last week. Intel bought Mobileye in 2017 for $15.3 billion in an all-cash transaction under then-CEO Brian Krzanich (see 1708010051).
The U.S. needs to work with global trading allies to find long-term fixes to the supply chain crisis that will transcend future American administrations, Matt Murray, senior bureau official in the State Department’s Bureau of Economic and Business Affairs, told the Global Trade and Innovation Policy Alliance summit in a keynote Thursday. “We can’t just look at supply chain issues and say we need to fix it by Christmas because there are these short-term disruptions,” he said.
Congress should take “prompt action” to fund the Creating Helpful Incentives for the Production of Semiconductors Act and enact a stronger version of the Facilitating American Built Semiconductors Act to include an investment tax credit for semiconductor design and manufacturing, nearly five dozen tech companies and automakers wrote the House and Senate leadership Wednesday. “Demand for critical components has outstripped supply, creating a global chip shortage and resulting in lost growth and jobs in the economy,” said the companies. “The shortage has exposed vulnerabilities in the semiconductor supply chain and highlighted the need for increased domestic manufacturing capacity.” The Senate already approved Chips Act funding on a bipartisan basis, and the House “must now move forward to approve the funding,” they said. “The chip shortage poses risks to our entire economy and time is of the essence.”
Tejasi Thatte, ex-chief of staff to Rep. Tony Cardenas and ex-NCTA, joins NBCUniversal federal affairs team ... USTelecom names Diana Eisner, ex-Frontier Communications, vice president-policy and advocacy, and Nicole Henry, ex-office of Sen. Gary Peters, D-Mich., senior director-government affairs; also promotes Hawley Stanton to senior director-government affairs ... John Howes, ex-Wireless Infrastructure Association, becomes counsel and senior policy adviser to Rep. Marcy Kaptur, D-Ohio, with responsibilities including telecom and tech ... New Jersey Gov. Phil Murphy (D) appoints Brian Lipman as director-Division of Rate Counsel; he had led it on acting basis after Stefanie Brand retired in September.
It’s “imperative” that the U.S. reinvests in the “critical” semiconductor industry to “ensure that more chips are made here at home,” Commerce Secretary Gina Raimondo told a business roundtable group Monday in Taylor, Michigan. She urged the House and Senate to “reach agreement quickly” on the U.S. Innovation and Competition Act (S-1260), which includes $52 billion in funding for domestic semiconductor production and R&D. The U.S. “was once a leader in the production of semiconductor chips, which power our smartphones, medical equipment, and automobiles,” said Raimondo. The U.S. today generates only 12% of global production and produces “zero percent of the most advanced chips,” she said. Rep. Debbie Dingell, D-Mich., told the group that Michigan is "ground zero for where the chip shortage is devastating autoworkers and auto companies."
Revenue generated from 5G services will reach $600 billion globally by 2026, representing 77% of global operator-billed volume, says a Juniper Research report being released Tuesday. Adoption of 5G services in consumer and IoT sectors is being driven by a strong uptake of 5G-capable devices, “coupled with attractive 5G subscription pricing models, despite the semiconductor crisis caused by the COVID-19 pandemic,” it says. Multi-device subscriptions will be key to maximizing 5G revenue growth the next five years, says Juniper: “As geographical 5G coverage expands, operators will capitalise on revenue streams beyond smartphones.” There will emerge an opportunity for “bundling multiple device subscriptions under a single recurring payment to enable operators to benefit from connectivity revenue from other consumer devices,” says the report.
NAB and board member Byron Allen appeared to be partially at odds Monday on FCC nominee Gigi Sohn, before her Wednesday Senate Commerce Committee confirmation hearing (see 2111230066). NAB wants Sohn to submit an amended ethics agreement with more information on her association with broadcast programming streaming service Locast, but Allen declared his strong support for her confirmation. Newsmax CEO Christopher Ruddy and a group of five Republican current and former elected officials said Monday they support Sohn, whose nomination has already drawn strong GOP pushback (see 2111170071). Sohn and NTIA administrator nominee Alan Davidson, who’s also to appear before the Senate Commerce panel, highlighted improving U.S. broadband access and affordability, in responses to prehearing questionnaires.
The House Science Committee has been ready to go to conference on science and tech legislation since passing its bills in June, but members are waiting for Democratic leadership to take action on the U.S. Innovation and Competition Act (S-1260), House Science Committee ranking member Frank Lucas, R-Okla., told us last week.
“Organic supply” at Analog Devices was affected from some of the COVID-19 factory shutdowns in Southeast Asia “that affected much of the industry,” said CEO Vincent Roche on a call Tuesday with analysts for fiscal Q4 ended Oct. 30. Revenue in the quarter still grew 33% sequentially from fiscal Q3 ended July 31, he said. “But as we've been talking about it for the last couple of quarters, our supply has been limited and revenue really is a function of supply. So that hiccup did put a little bit of pressure on the revenue line, and you'll see that correct itself as we go forward.” The company’s fiscal 2021 “truly demonstrated the vital importance of semiconductors to the modern digital age,” said Roche. “As we enter 2022, our backlog and bookings remain robust and we continue to invest in manufacturing capacity.” The chipmaker took “decisive action to add capacity throughout the year with more than $340 million in capital expenditures,” said the CEO. “This is enabling us to better navigate the near-term supply/demand imbalance while achieving our long-term growth objectives.” In the company’s communications sector, fiscal 2021 “was an uneven year, as strength in wired was offset by weakness in the China wireless market,” said Roche. “Encouragingly, as we look to 2022, the proliferation of 5G is gaining momentum globally, especially in North America.” The company this past year introduced the industry's first software-defined radio transceiver “that includes a fully integrated digital front end,” he said. “This next generation transceiver platform enables us to defend and extend our position in traditional 5G” and emerging open radio access networks, he said.