What is the impact of semiconductor shortages and rising transportation costs? Trends in the manufacturing industry after 2022 seen in the latest survey

By uavtechnology
02 Nov 22

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What is the impact of semiconductor shortages and increased transportation costs? Trends in the manufacturing industry after 2022 as seen in the latest survey

While the global manufacturing industry is in a state of ups and downs toward recovery from the damage caused by the new coronavirus infection (COVID-19) , US market research firm Interact Analysis conducted a study focused on a few specific issues. In this article, we will introduce the latest information on the company's subscription-type information provision service "Manufacturing Industry Output (MIO) Tracker" based on these survey results. Of the various factors that make MIO's information predictions particularly difficult, we focus on two factors: semiconductor chip shortages and transportation costs. I'll look.

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Semiconductor industry hit hard
Transportation costs five times higher than in 2020
Industrial machinery orders fall, but semiconductors and electronic equipment 8% growth
The global industrial machinery market grows to 2.1 trillion US dollars

Future outlook for the semiconductor industry that will be hit hard

Personal computers, etc. during the pandemic The strong sales of electronic equipment in Japan hindered the supply of semiconductors, and automobile manufacturers predicted a decline in demand for new cars and curtailed production, reducing orders for microchips. became a factor. As a result, demand for new cars did not fall, and automakers were unable to procure chips in time, and factories were flooded with cars that could not be loaded with chips.　In the semiconductor chip supply chain, it can take seven to eight months from order receipt to delivery, so I don't think these problems will be resolved anytime soon. It's a very thorny issue for an industry that has already been hit hard. While the approval of the COVID-19 vaccine is welcomed by many, there is a shortage of chips due to the need for large quantities of the same raw material silicon used in microchips to make vials for the vaccine. became even more serious. Due to the current rapid increase in demand for semiconductors, it is predicted that the market will stagnate in the second half of 2023 to the first half of 2024. This is because the build-up of chip inventories will inevitably reduce the over-ordering by manufacturers that is happening right now. In the long term, in the midst of this trend, governments in the United States and Europe began to speak loudly about the need to return some of their semiconductor production bases to their own countries. However, even if these trends are realized, they will take a lot of time and cannot be a solution to the immediate problem. However, companies have announced the relocation or new construction of production facilities one after another, for example, Intel announced that it will invest 20 billion US dollars in two new chip factories in Arizona, and TSMC also produces chips in the same state. We are investing US$12 billion in facilities.

Transportation costs five times higher than in 2020

　The cost of transporting a 40-foot container from China to the East Coast of the United States reached US$20,000 in July 2021. This is five times the price compared to July 2020. The Financial Times reported that the cost of transporting a single container from Asia to Europe rose by US$6,000 between April and August 2021 alone, increasing sea freight rates between East Asia and the West Coast of the United States. continues to rise at a rate of 20% month-on-month. In addition, there are reports that container shipping services are declining, and mistakes and delays such as containers being left behind on ships are occurring frequently, hindering the supply chain. Ship delays due to the spread of infection, outbreaks of infection at major manufacturing bases in China, product overloading due to the expansion of e-commerce at ports around the world, and labor shortages at ports due to the impact of infectious diseases, causing price hikes and confusion The root cause of this is, of course, the coronavirus pandemic. Furthermore, the blockade of the Suez Canal and the typhoons off China's south coast in July and August had a negative impact. These transportation-related issues are intertwined and have a significant impact on the performance of each manufacturer. For example, in the apparel sector, Nike reported lower sales due to shipping container shortages and shipping delays, not due to sluggish demand. This problem is expected to continue for the foreseeable future, and supply chains are likely to become fragmented as demand increases, mainly in the fields of clothing and electronic equipment. These transport problems will eventually affect the trend of outsourcing manufacturing to neighboring countries and increasing the return of overseas production bases to Japan. It will never be seriously considered. [Next page] Orders for industrial machinery fell, but semiconductors and electronic devices grew 8%