Semiconductor crisis: shortages and defects jeopardize AI developments

The semiconductor crisis is having an impact on the IT industry. However, there are not only shortages, but also quality losses are on the rise. However: There have always been defects in semiconductors. But what if the extent is immense and almost half of the chip is basically non-functional? What if entire processing units (similar to: computational cores), which in the case of an HMP (Heterogeneous Multicore Processor) widely used in a certain application discipline, are unable to perform calculations or exchange data internally within the chip? So the chip only fulfills a fraction of the functions and performance that the manufacturer promises according to the data sheet? The German full-stack embedded AI solution provider AITAD is now sounding the alarm. Because it encountered this problem when using chips in hardware development for its AI solutions. "This then means not only a high expenditure of wasted development time, but also a high redevelopment effort with other chips. And even more far-reaching than a single, faulty semiconductor series, is the question of what problems and causes this raises for the semiconductor industry and thus the entire economy, according to AITAD CEO Viacheslav Gromov. 

Gray markets emerge and best sellers are prioritized

Increased consumption, especially of household appliances, IT and consumer electronics in the Corona years, and at the same time significantly reduced production capacity in Asia due to regulations and sick leave, created the current semiconductor crisis. Because process complexity means that production cannot be scaled up so easily and quickly, the crisis will reverberate for many years. As a result, not only have prices exploded, but gray markets have been created by so-called global brokers who often sell chips from unknown sources at up to 300 times the price - without the long delivery times of the original manufacturers or distributors.

Many semiconductor manufacturers have also already announced that they will concentrate on the production of well-known and easily producible bestsellers. This means that, depending on the semiconductor type, the more common, larger nanometer structures are used, for which there are higher-volume and more profitable production lines. So new, more complex, and structurally finer chips are prioritized less, if at all. "What's old news doesn't have to be old news. Stalling innovation in this field sets the whole industry and all industries behind it back several years in the medium term," Gromov comments.

How the semiconductor crisis affects

Specifically, the developments mentioned have already led to the following examples of decisions faced by companies that manufacture electronics for their products:

1. On gray markets, the necessary semiconductors are purchased from brokers from unknown sources at overpriced prices. However, standard QC (quality control) with functional tests or even X-ray images cannot completely rule out the associated quality hazards. 
2. The second option is to use copycat or noname manufacturers flooding the market, who imitate well-known products cheaply and almost identically or even bring out their own - also with unknown quality and reliability. 
3. The most costly but probably most resilient alternative is to redesign the software for the semiconductors available at the time. But this is again a challenge in view of the shortage of skilled workers and means that the manufacturer also usually has to involve all development partners.

Why do serious chip errors occur in the first place? 

The reasons for the occurrence of serious chip defects could stem from stock market pressure to bring out innovations and new portfolio expansions through new products for the megatrends such as IoT, artificial intelligence and wireless. However, due to Corona, this can hardly be fulfilled in purely technical terms and in terms of time while maintaining quality standards. Normally, microsystem development alone takes up to ten years from concept to approved production in special cases. 

This is forcing semiconductor manufacturers to launch chip innovations that have not been developed or tested to the end, or even to shorten the entire process (even out of the drawer). The extent of these trends probably won't be felt for several years. "There are obvious mistakes that are already noticed during development and are worked around before the product is launched on the market. But it's also conceivable that there will be errors that don't show up with consumers until much later, after delivery in the field. These can develop at least the same or even greater consequences," Gromov clarifies the situation. "The current situation is a foretaste of what can happen in the event of major crises in the future, such as the conflict with the world's largest semiconductor contract manufacturer TSMC, which is currently coming to a head in Taiwan," Gromov points out. One can therefore be curious about the further course of the semiconductor crisis, the effects on the Western quality suppliers and their image in the event of possible product returns or accidents.

Source: AITAD