ByteSnap Design in the UK has been contemplating the trends most likely to dominate the embedded electronics industry in 2022
Chip shortages are likely to ease once ‘panic mode’ calms
Shortages to continue through most of 2022 with easing starting in Q3. Like many things, toilet rolls or chips, people are in a panic mode now and any supply that starts coming through will be grabbed up. Next year will be hard, but there will be easing in 2023 with many manufacturers having stock piles to get through by then.
Continued chip shortages will lead to greater market opportunities for smaller IC manufacturers, and corresponding software development practices designed to easily port across heterogenous platforms and architectures.
2022 will also see the rise of Chinese Silicon vendors into Western designs as they are less impacted than Western companies (partly due to investment, partly US foreign policy under Trump). In a move away from the traditional manufacturers, ByteSnap has been asked to use these Chinese silicon vendor chips from time to time for cost benefits, mostly by smaller or start-up companies. No doubt they will be more widely used to fill the gap.
Alternatively, processor manufacturers will come into their own to deal with the shortage in processors from the big brands. Manufacturers will be giving priority to high value parts that are going to high volume designs, while the rest of the industry fights over the remains.
Better stock control and short-term end to Just in Time manufacturing
The chip shortages will cause the end of Just in Time manufacturing for the short term on electronics. However, ultimately no one wants to hold stock, its costly to buy, store and there are risks if it is not used. Currently, it’s a necessary evil. Many companies will introduce better stock control forecasting, ordering for months ahead but not receiving products until needed.
Shortages of electronics ripple through much more into consumer space, as they have been sheltered from it mostly due to stock holding. Expect to see it more in the news.
Ultimately, they have already hit the consumer market: graphics cards, new cars, consoles and more. So much equipment we use around the house has a microchip in it these days.
Next: Recovering from the chip shortage