Consultant Insight: Brighter days may be ahead for automotive supply chain

The electronics and automotive manufacturing industries have been plagued for months by shipping issues and production shortages of semiconductors — an important component in the production of a range of products. Airfreight routes and charters have been added to support capacity for the supply chain, but more substantial relief cannot come soon enoughfor the automotive and other industries that depend on semiconductors. [caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] However, many manufacturers will have to wait for supply chain recovery, despite President Joe Biden signing an executive order , “to help create more resilient and secure supply chains for critical and essential goods,” semiconductors among them. The Semiconductor Industry Association welcomed the news by noting that the U.S.'s share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today. “This decline is largely due to substantial subsidies offered by the governments of our global competitors, which have placed the U.S. at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities,” according to a statement from the association. The U.S. government has also kept federal investment in semiconductor research relatively flat as a share of GDP compared with other governments that have prioritized semiconductor research, the association said. Even with more effort on the federal level to secure semiconductor supply chains, availability will not improve overnight. Industries that depend on semiconductors will continue to struggle with parts shortages for the foreseeable future. See also: Pax-freighter charters relieve automotive industry chip shortage There may be an alternative solution to the traditional supply chain: 3D printing. Commercially available 3D printers are becoming sufficiently advanced to handle such items. NanoDimension , an additive manufacturing firm, notes that 3D-printed integrated circuits can be cost-competitive for low-volume production compared to devices produced on semiconductor wafers with standard processes. However, challenges still exist with this approach, such as finding rigid semiconducting materials for adaption to a standard 3D-printing process, optimizing these materials for different frequency bands, and bringing printing resolution closer to the nanometer level according to the additive manufacturing firm. Other companies are also looking into the possibility of 3D printing semiconductors, including VELO3D and Lam Research Corporation . They are collaborating to develop 3D-printing materials, and to design new applications for the semiconductor industry. Semiconductor manufacturers, including STMicroelectronics, Intel and Texas Instruments, have long embraced 3D printing via tests within their manufacturing and for sale to customers. Still, perhaps the time is ripe to take 3D-printing even more seriously and consider it as a means to help solve the semiconductor shortage. 3D printing as a manufacturing option will likely impact global trade, including that of airfreight needs. It could also mean new opportunities, such as for airports, as noted in a previous column published in November 2019. But according to analysts, the shortage is expected to last through at least this year. Manufacturers are already in the process of building out their capacity to address the need. For example, Taiwan Semiconductor Manufacturing, whose customers include Apple, plans to spend $28 billion to build out its facilities this year. IHS Markit expects the semiconductor supply chain to remain constrained until the third quarter of 2021, after hitting a low point around the end of March.

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