Employee of the electronics service provider Katek: Chips remain scarce, and the war in Ukraine is disrupting the supply chains even more.
(Photo: Katek SE)
Munich The warehouses of the Munich electronics specialist Katek are full to the brim – but with half-finished electronics. Because individual chips are missing, CEO Rainer Koppitz has to stockpile masses of expensive controls and valuable chargers. This ties up millions of euros and frustrates customers who are impatiently waiting for goods.
There is no improvement in sight: “I’m skeptical about the next two quarters,” says Koppitz. The war in Ukraine and the ongoing pandemic would even exacerbate the chip shortage. “The situation has become even more unpredictable,” explains the manager.
The bad news is also bad for the industry. Production has been at a standstill in many places for months because chips are missing. The solar technology group SMA Solar expects sales to fall this year because there are not enough semiconductors available.
Katek fears counter-reactions from Russia
Katek’s alarm is serious, as the publicly traded company supplies a variety of industries, from automakers to medical devices. With more than 2600 employees, the Bavarians are one of the most important electronics manufacturers in Germany.
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Koppitz believes that chip manufacturers will be short of pre-products from Russia and Ukraine in the coming months. The semiconductor industry is particularly worried about the noble gas neon. “Now there are still supplies of neon,” says Sascha Bütterling, head of Supplyframe Germany. “In the long term, however, this will become an issue.” The US company operates marketplaces for electronic components and therefore knows exactly how the supply chains are doing.
According to calculations by the Reuters news agency based on data from the research company Techcet, between 45 and 54 percent of the global production of the gas comes from the Ukrainian suppliers Ingas and Cryoin. According to spokesmen, the two companies ceased operations after the start of the Russian offensive. Ingas is based in the particularly competitive city of Mariupol and claims to also produce for companies in Germany.
>>Read here: Europe’s chip offensive: 43 billion euros to catch up
Group leader Koppitz is also worried about chips from China. Recently, the government in Beijing has repeatedly cordoned off megacities, partly because of a few corona infections. The semiconductor production there also came to a standstill.
According to Koppitz, the demand for chips remained high: “The demand in all industries has increased.” According to the company manager, waiting times of two years are now normal for important chip suppliers.
Semiconductor manufacturers’ customers have to wait a year or more for their orders.
(Photo: Bloomberg)
Koppitz also fears that numerous Ukrainian employees will be absent from his plants in the near future. They are all allowed to take special leave. And: In the past few months, sick leave has increased significantly due to the omicron variant of the corona virus – especially in the factories in Eastern Europe. “We can see that this is currently going even further up.”
At the end of last year, the Katek boss had expected a slight relaxation. Because the chip industry is investing more than ever. At Germany’s largest semiconductor producer Infineon, for example, it is currently half more than in the previous year. However, all of this is not enough to even begin to cover demand. For this and the coming year, not only Infineon, but also competitors such as STMicroelectronics are already fully booked.
The chip shortage will not end before 2025
Supply frame manager Bütterling believes that some types of semiconductors will probably be available more quickly and easily towards the end of the year. More complex components such as microcontrollers, minicomputers for special tasks, will remain scarce even in 2023. Overall, the lack of chips will probably last until 2025, according to Bütterling. Then numerous chip factories should go into operation, the construction of which is currently starting.
Meanwhile, Katek boss Koppitz assumes that the order volume is at least partially inflated. Customers order significantly more than they actually need. She is driven by fear.
>>Read here: One year delivery time, a hundred times the price: lack of chips is a burden for medium-sized companies
Koppitz reacts to this: “Even with large customers, we cancel orders,” claims the manager. The volume is simply not manageable: “That would not be possible without a lack of parts.” At the same time, he is already discussing the business for the coming year with the customers today in order to determine the requirements as precisely as possible. “The partnership between us and our customers is closer than ever.”
The Siemens subsidiary Supplyframe has turned it into a business model. With the company’s software, engineers can already see during development whether and when the required components are available – and which alternatives may exist. “It’s important to look ahead as early as the design phase,” explains Bütterling.
It is paradoxical: Nobody knows how the war in Ukraine, the global economy and Corona will continue. At the same time, companies are being forced to plan ahead like never before.
More: First Ukraine, then Taiwan? The race to catch up with the chips is pressing