Russia’s invasion of Ukraine this week will likely mean an increased list of economic sanctions that affect everyone, including tech supply chains that depend on Ukraine for some raw materials. important used in chip manufacturing.
Can Apple solve the supply chain challenge?
My heart goes out to everyone suffering the ravages of any war, and like everyone this week, our thoughts go out to the people of Ukraine. The poor tend to suffer what they suffer, and recent history shows that enduring victory rarely emerges from the barrel of a gun. So give a thought to tech developers based in Kyiv in Ukraine, such as the people I spoke to recently from MacPaw and Setapp.
But, it’s not just growth (and also wheat) from Ukraine; The country is also rich in hard-to-find raw materials used in silicon chips and advanced sensors. This includes neon gas used by chip-making lasers, palladium and about 90% of semiconductor neon in the United States. Citing US-based consulting firm, Techcet, Reuters warned that if the conflict escalates, some of the world’s biggest chipmakers could be affected. For example, Intel can its half neon from Eastern Europe.
Intel is unlikely to be the only supplier affected.
Can Apple be immune?
It’s not just about core processor manufacturing. Even if the larger tech companies pull through, what impact will any shortage of raw materials have on delivering the hard-to-find things Apple CEO Tim Cook calls “legacy nodes?”
Arrived very soon after a shortage of chip supplies caused by the pandemic, the shortage plus the huge increase in demand for microprocessors as the internet soars inside everything, this must be a headache. (And don’t miss it recently lost a large amount of global SSD supply).
This The shortage has a real impact. In our opinion, Apple had to move some components from manufacturing iPads to use for iPhones as part of a response to silicon shortages, which we believe may have contributed to sales. iPad is weaker than expected.
Industry not blind to threat. As mentioned, Techcet sounded the alarm last week. Many larger companies, including Apple’s partner TSMC, may have sought alternative sources of supply. However, with so much production concentrated in one geographical area, the race for alternative sources is likely to lead to price increases.
These spikes will hit the global economy, which is already grappling with the lingering fiscal consequences of the COVID-19 crisis.
This growing crisis
The problem is, we also have a huge demand for technology products. We’re used to the chips inside computers, smartphones, tablets, and game consoles. But the computer world that we seem to be involved in building also puts chips in kettles, kettles, bread machines, garage doors, and ticket gates. Cars, AR glasses, light switches, USB cables – all these devices also have chips inside.
Last year’s news was that automakers were forced to scale back new vehicle production due to chip sourcing problems. But as governments around the world also try to shift the entire population to electric cars (which also contain chips) by 2030 and try to deploy the charging infrastructure to power them, it is difficult to can see that the conflict is creating a whole new set of problems.
Innovations like smart cities and Industry 4.0 are not innovative at all without the right silicon to drive them. However, COP26 saw governments rely heavily on technological solutions to climate change.
Apple has the scale, but the impact will be felt
As we all know, Apple has the power to scale. It manufactures hundreds of millions of devices, which is why when it calls a component supplier, it often gets great deals and prioritizes its needs. People with money (and the entire order book) call the tune.
This could also help the company secure supplies for the devices we know it’s currently developing, including the 2022 iPhone SE and AR glasses. It must also hope it is not affected by the shortage of neon lights as it tries to design new processors. (Though I imagine it already has the machines for the M2 series of chips ready to go.)
If TSMC is trying to secure a supply of replacement parts, then Apple must definitely wish them luck. It may even have a short list of recommendations for providing TSMC, currently looking for a business intelligence analyst“Concerned with geopolitical shifts and economic changes to influence [the integrated circuit] industry supply chain. “
Helping TSMC find a good candidate for that role could be in Apple’s own interest. Demand for all materials – and for the chips inside devices – is expected to grow over 37% in the next four years.
Maybe this is just another busy day in Apple Operations Team Slack #Do list. But as well as a business crisis, what is happening in Ukraine (and in every other region of global conflict) is a crisis – and perhaps a failure – of dialogue and of humanity.
In other words, it might be a good time to donate some cash to Red Cross. And, like Cookhope for the safety of all ordinary people who are suffering so much but have so little self-determination in conflicts of this kind.
Copyright © 2022 IDG Communications, Inc.
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