MICROEJ VEE software container enables chip double-sourcing at no extra cost to support supply chain flexibility
Many manufacturers are facing incredible pressure to contain their electronic costs to the minimum. While just-in-time manufacturing and minimal inventory work great in a controlled environment, the current chip shortage shows that chip sourcing risk mitigation cannot be neglected for the sake of cost reduction.
When the COVID-19 pandemic started to accelerate, automobile manufacturers had to slow down production. As the automotive industry is naturally focused on lean manufacturing to optimize the supply chain, automakers paused the purchase of semiconductors.
As a result, chip factories redirected their focus towards the consumer electronics industry, experiencing a sales boom. The sales of new cars did plummet initially. Still, when the factories restarted, chip capacity was then consumed by other businesses such as computers, cellphones and video games, as people worked and schooled at home.
BREAKING POINT EXCEEDED: CURRENT SUPPLY CHAIN STATE-OF-PLAY
While chips are massively produced in “gigafabs” located abroad (mainly Asia), the current shortage has been a ticking time bomb from the start. And it has been reinforced with aggravating factors such as the Trump administration banning Chinese suppliers, a fire in a massive Renesas plant in Japan, and global transportation challenges.
For full texts, please click White-paper-MicroEJ-2021-Chip-shortage-mitigation.
