Chip Crisis (2020)

Semiconductor technologies are among the fundamental building blocks of modern digital infrastructure. Microchips are indispensable components across numerous critical sectors, including computers, mobile devices, automobiles, defense systems, and industrial automation. However, since 2020, the world has faced an unprecedented microchip supply crisis. Triggered initially by the COVID-19 pandemic, this crisis has been exacerbated by geopolitical tensions, production accidents, natural disasters, and the concentration of production in specific regions.

Microchip Production Process

Microchips are integrated circuits manufactured using semiconductor materials, such as high-purity silicon, and perform functions like data processing, signal control, and data transmission within electronic systems. The production process involves several key stages:

• Raw Material: High-purity silicon forms the foundation of chip production.
• Wafer Production: Silicon crystals are sliced into thin wafers.
• Photolithography: Millions of transistors are etched at the nanoscale using masks.
• Layering and Doping: Various elements are integrated into the semiconductor surface.
• Testing and Packaging: Functional verification is performed before final packaging.

Modern chips are produced with geometries of 5 to 7 nanometers, allowing billions of transistors to fit within a few square millimeters.

Causes of the Global Chip Crisis

Pandemic-Driven Demand Surge

With the onset of the COVID-19 pandemic, remote education, telecommuting, and increased digital content consumption caused unprecedented demand for computers, tablets, gaming consoles, and data center hardware. Concurrently, the automotive sector is anticipating a downturn and has canceled chip orders. However, the market quickly rebounded, leaving the automotive industry struggling to secure chips. Consequently, chip manufacturers prioritized consumer electronics, resulting in a shortage in the automotive sector.

Production Limitations and Geographical Concentration

Semiconductor manufacturing is a highly capital-intensive sector requiring advanced R&D capabilities. Therefore, production is concentrated among a few companies and specific regions:

• TSMC (Taiwan): Accounts for 60% of global advanced chip production.
• Samsung Electronics (South Korea): A leader in advanced chip manufacturing.
• Intel (USA): Once a dominant force, it faced competitive challenges due to production delays.

This concentration implies that any disruption in production has significant repercussions on the global supply chain.

Natural Disasters and Production Accidents

Several unexpected events have also disrupted semiconductor production:

• A fire at Renesas' plant in Japan (2021) significantly impacted automotive microcontroller supplies.
• A severe freeze in Texas halted production at Samsung's Austin facility.
• Drought in Taiwan impeded the availability of ultra-pure water essential for lithography.

Geopolitical Tensions

The technology conflict between the United States and China has introduced considerable vulnerabilities within the semiconductor supply chain. The U.S. imposed embargoes on Chinese manufacturers like SMIC, restricting Western companies' access to these sources. Additionally, heightened tensions in the Taiwan Strait posed security risks for TSMC, the world’s largest chip manufacturer.

Logistics and Raw Material Crisis

During the pandemic, disruptions in container shipping impacted the supply of critical raw materials, such as rare earth elements and high-purity silicon. Furthermore, the availability of specialized chemicals like neon, argon, and photoresists was severely hindered.

Sectoral Impacts of the Crisis

Automotive Sector

• Modern cars contain between 1,400 and 3,000 microchips.
• In 2021, approximately 11 million vehicles were not produced.
• Manufacturers like Ford, Toyota, and Renault faced production stoppages.
• Germany’s automotive production fell by 50% compared to 2017 levels.

Consumer Electronics

• Sony faced production delays for the PlayStation 5.
• Apple revised iPhone production targets.
• GPU and graphics card prices surged by nearly 100%.
• Global computer sales grew by 55% in early 2021.

Defense Industry

• The chip shortage posed risks to radar systems, missile guidance, and communication infrastructures.
• The U.S. declared semiconductor availability a strategic priority for defense.
• Türkiye developed the indigenous digital signal processor chip “Çakıl” under TÜBİTAK’s leadership.

Energy and Production Costs

• Lithography machines consume significant energy, putting pressure on national energy grids.
• LED chip prices increased by up to 10%.

Global Responses and Solutions

United States: CHIPS and Science Act

• Enacted in 2022, allocating a $52 billion incentive package.
• Intel launched a $20 billion factory investment in Arizona.
• The U.S. military declared semiconductor supply a matter of national security.

European Union: EU Chips Act

• Aim for a 20% global production share by 2030.
• Promotes R&D support, regional production hubs, and diversified supply chains.

Asia

• TSMC established manufacturing facilities in the U.S. and Japan to diversify production.
• Samsung announced a $17 billion investment in Texas to increase capacity.

Türkiye's Position and Strategic Initiatives

TÜBİTAK and ASELSAN Projects

• TÜBİTAK BİLGEM conducts chip production, focusing on digital signal processors and domestic microcontrollers.
• ASELSAN develops integrated circuit solutions for the defense industry.

ODTÜ MEMS and R&D-Based Approaches

• ODTÜ MEMS Center develops microchips/sensors for defense and automotive applications.
• Türkiye fosters academia-industry collaboration to establish a semiconductor R&D ecosystem.

Logistics and Geographical Advantage

• Türkiye serves as a strategic logistics hub between Europe and Asia.
• Reports from companies like Maersk highlight Türkiye's advantageous position in regional supply chains.

International Collaborations

• Technology transfer agreements with countries like Malaysia support the development of local production capabilities.

The global chip crisis has highlighted the importance of strategic autonomy and technological independence, not just in production but in long-term planning. Although Türkiye’s efforts are promising, establishing a sustainable semiconductor ecosystem requires:

• Public-Private Partnerships
• Skilled Workforce Development
• Investment Incentive Policies
• Integration into International Production Networks

Only through comprehensive and coordinated efforts can Türkiye reduce its dependency and strengthen its position in the global semiconductor landscape.