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The crisis in the semiconductor market – symptoms, diagnosis, forecasts

It has been reported in the media many times, so you must have heard about it already, that the car manufacturers are unable to produce new cars due to the crisis in the semiconductor market. Modern cars are full of electronics but is it really bad enough to halt production? Does the semiconductor crisis only affect the automotive industry and is there no cure or at least a vaccine for it?


One of the first symptoms of the crisis in the semiconductor market was the lack of GPUs. Allegedly, their production has been halted due to the shortage of GPUs. Everyone explained this situation with the growing interest in cryptocurrencies (processors built into graphics cards improve the work efficiency of cryptocurrency mining software), but it was probably not the only reason. The next to sound the alarm were car manufacturers. At the time, many people were rubbing their eyes in amazement – how come you cannot make a car, due to a lack of semiconductors? This situation was new, although not for everyone.

Check out the range of semiconductors offered at TME

Older people, who have been involved in the electronics industry for decades, can still remember the days of shortages, when, for example, production of a music kit was halted because the delivery of LEDs was late. Nowadays, before the crisis in the semiconductor market, such a situation was unthinkable, but in the past, it was not uncommon for huge plants to experience downtime because of shortages of all kinds of small components. The exemplary LEDs, on the other hand, were the main elements of the indicators, backlighting, and influenced the aesthetics and functionality of the product. However, such situations are now a thing of the past and we have certainly got over the shortage of raw materials for production. Especially if we are talking about those that are mass-produced in millions of copies. However, the truth is that if certain models of microcontrollers or GPUs were to disappear overnight, the production of TVs, tablets, smartphones, cars, high-end domestic appliances and other consumer devices would be immediately affected, as they are essential components of today’s user interfaces.

In today’s world, with the mass production of components, it is difficult to understand the semiconductor shortage and the situation where supply does not keep up with demand, that is, where no money is being made when there are huge profits to be made.


It is probably impossible to identify the single reason for the chip shortage and, for example, blame everything on the pandemic. The modern economy has a global dimension, which means that the situation in one country can have an impact on the situation in another. The same applies to large market players or suppliers of a rare commodity – their legal, political, or technical problems can affect economies around the world.

For example, a rare snowstorm in Texas, which we saw a few months ago, prevented many American companies from producing, not only in the semiconductor industry. A Japanese semiconductor factory was closed for over a month following a fire. Samsung Electronics Co. warned of a “serious imbalance” in the industry, while Taiwan Semiconductor Manufacturing Co. said it was unable to keep up with demand despite running factories at more than 100% of capacity. The US embargo on large Chinese component manufacturers meant that the plants there had to reduce production. We are talking, e.g., about SMIC, a major Chinese player in the semiconductor market, which is prevented by geopolitical factors from seizing market opportunities.

It also seems that producers closing their factories during the quarantine period had somewhat underestimated needs. Production has been halted at many factories and the employees were on forced leave. Reduced demand has led to reduced supply, and it takes time and energy to turn the flywheel again. On the other hand, remote work has increased the demand for tools dedicated to it, such as laptops, cameras, tablets, modems, printers, etc. Automotive component plants have been able to switch to producing components for consumer electronics, for which demand has increased significantly. So, it is not surprising that when car production resumed, the component warehouses were empty.

The semiconductor market crisis and the chip shortage appear to have resulted mainly from inaccurate demand forecasts during the pandemic in 2020. Many companies predicted at the time that people would start to cut down on consumption when times got tough. However, demand has proved to be Covid-proof. People, who were forced to stay at home, started spending their money on technological gadgets. They stocked up on better computers and larger displays to work remotely. They bought new TVs to watch movies or consoles to play video games. Children had to be provided with the necessary equipment for remote learning. People stocked up on coffee machines, advanced kitchen robots and other equipment to make quarantine life taste better. The pandemic turned into an online spending spree, which was supported by the biggest e-commerce players introducing special offers.


Car manufacturers were caught by surprise. They shut down their factories at the start of the pandemic when demand fell as showrooms were also forced to close. The interruption in production has slowed down sales of semiconductor chips, which are essential for today’s vehicles. At the end of last year, demand for cars started to grow. People wanted to move around, but due to the Covid risk, they did not want to use public transport. Car makers began reopening their factories and started to order components from chip manufacturers such as TSMC and Samsung. Unfortunately, it turned out that the factories were not able to meet the needs of vehicle manufacturers fast enough and the shortage of semiconductors in the automotive sector became a reality.

Silicon wafer production lines, necessary for the production of semiconductor components, have become a bottleneck. The pandemic has generated so much demand for consumer electronics devices that semiconductor raw material manufacturing facilities are unable to provide enough material, e.g., for the production of LCD display drivers for computers, televisions and game consoles as well as new products where companies are starting to use screens and touch panels, such as refrigerators, heating and air conditioning appliances, sound equipment, etc.

The difficult market situation concerns not only car manufacturers. It is worth noting that many well-known consumer electronics manufacturers have postponed the launch of new products.

It is difficult to say how long this situation will last. On the one hand, vaccination against Covid-19 is underway and more sectors of the economy are being opened, but on the other hand, the entire world suffers from serious shortages in raw materials, components, and manpower. To save the industry and the economy, countries are forced to use reserves and/or to print money. Extensive economic recovery plans are being implemented. As a result, inflation is rising and the value of money is decreasing.


It remains to be hoped that the business will recover fairly quickly and that electronic component manufacturers will address the semiconductor shortage. Officially, it is said that around July/August there should be no more supply problems. But what about until then?

It seems that distribution companies that have stocks in their warehouses may be a solution for this issue. TME is one of those companies.

TME has grown from a local distribution company to an international corporation that cooperates with numerous manufacturers from all over the world, not only with the largest and most important ones, but also with those who provide so-called niche products, specific for a given industry or application. Products from TME warehouses are delivered to almost anywhere in the world and the support network covers countries on every continent. Importantly, the company’s policy provides for quick delivery, which is possible thanks to high inventory levels. In the current state of the semiconductor market, the advantage of stocking niche products becomes all the more valuable.

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Taking formal methods mainstream

In academia, we refer to computing science. In industry, we refer to software engineering. An engineer is a skilled technician who develops and applies scientific knowledge to solve technological problems. Too often in practice software people must resort to skillful tinkering as opposed to sound engineering. That’s why at Verum, we’ve dedicated ourselves to the development and application of scientific knowledge to solve the technological problems underlying this phenomenon. To meet these challenges head on, we’re developing a language that enables building reactive systems at industrial scale. The language offers built-in verification and allows for reasoning about both the problem and the solution. It’s complemented by tooling that automates every development aspect from specification, construction, and documentation to verification and validation. In this talk, we’ll present what we’ve achieved and what will come tomorrow, when we stop tinkering in software development.
Rutger van Beusekom holds an MSc in mechanical engineering from Eindhoven University of Technology. From 1999-2005, he worked as a software engineer at Philips CFT. From 2005-2007, he was a software engineer and team lead at Philips Research. Since 2007, he’s been at Verum, in the roles of consultant, software engineer, team shepherd, architect and CTO, working together with and at ASML, Ericsson, FEI, Philips and other customers.
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Developing for safety and security

Software systems have exploded in complexity, leading to an enormous increase in the number of vulnerabilities available for exploitation by bad players. This effects safety as safety and security are inexorably linked. Cars today have one hundred million lines of code, but should we be proud or ashamed? Developing systems that need to be safe and secure will require a shift in thinking away from huge monolithic to minimalistic, component-based that enables components to be fully validated and tested, to eliminate vulnerabilities. This talk explains how we need to change software development to make security and safety the main criteria.
Chris Tubbs is an industry veteran with 46 years’ experience in the avionics, simulation, medical, automotive and software industries. After 15 years in the aerospace industry managing safety-critical systems, he co- founded companies in the simulation and medical-imaging markets in the roles of commercial and managing director. He then spent eight Years in the automotive industry in Germany and the Netherlands as a development and business development manager, after which he joined Green Hills Software in 2008. He was promoted to Director of Business Development EMEA in 2012, since when he has specialized in safety and security.
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Remodeling legacy software

Have you ever considered remodeling your kitchen, while continuing to cook in it? It may not sound obvious, but that’s exactly what this talk is about. Within Kulicke & Soffa, high-tech pick & place machines are developed for the semiconductor industry. For the development of these machines, a software stack is used, the development of which started more than a decade ago. Over the course of years, different machine types were developed from this codebase, which led to a situation where alternative flows are implemented in various areas of the code base. Therefore, the decision was made to group product-type-specific code. Constrained by feature development, that should continue in the same code base. Remodeling while cooking! This talk will take you through the remodeling and the challenges that come with it.
Corné van de Pol is a software architect and trainer at Alten Nederland. This gave him the opportunity to work for a range of companies, including Philips, Vanderlande, ASML and Kulicke & Soffa. He enjoys learning and helping others and with over 10 years of experience as a professional software engineer, he got specialized in agile software development and object-oriented design and clean code.
Erik Onstenk is lead software architect at Kulicke & Soffa Netherlands. He joined Kulicke & Soffa (formerly Assembléon) in 2007. Over the years, he worked on the control software of the entire machine portfolio. His current focus is redefining the reference architecture to better suite recent developments and facilitate future expansions.
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Why high process compliance is no guarantee for good software quality

In the automotive industry, Aspice is used for measuring an organization’s capability to develop high-quality software. Companies supplying software to automotive manufacturers  are required to have a minimum maturity level to ensure that they deliver that high quality. Still, having high-quality processes in place and complying with them is no guarantee. To see why that is and what else is needed to assure high quality software, we first need to understand the many different aspects of software quality and the influence they have. In this talk, Ger Cloudt will present a holistic view on software quality using the 1+3 SQM approach, addressing the consequences of high or low quality for each of the four defined quality types.

Ger Cloudt studied electronics at the University of Applied Sciences in Venlo (the Netherlands). At companies like Philips, NXP and Bosch, he has gained more than 35 years of experience in in-product software development across different industries, including industrial automation, healthcare, automotive, semiconductors, security and building technologies. After having developed software for over 15 years, he became a software development manager, leading numerous engineering teams. During all these years, he developed a vision on what really matters in software development, which he has encapsulates in his book “What is software quality?”.
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Opportunities and challenges of high-throughput 3D metrology equipment for semiconductor process control

With the shipment of its first system to a high-end chip manufacturer, Nearfield Instruments proves that the semiconductor market is very much open to innovative solutions for advanced process control metrology. This first product, Quadra, can measure in-line and in great detail (ångstroms) the on-surface high-aspect-ratio (10:1) features of integrated circuits. The company is now scaling up to deliver dozens of its scanning probe metrology systems per year.

Nearfield founder Hamed Sadeghian foresees the Quadra metrology platform to be the basis for several products and product lines. All of them will solve different problems the semiconductor industry is facing to follow Moore’s Law with its ever smaller and 3D features. Nearfield is expecting to deliver its second product line based on the Quadra platform next year. This system will be able to image, non-destructively, subsurface structures with nano-precision.

In this talk, Hamed Sadeghian will highlight the major requirements for developing non-destructive 3D high-volume manufacturing metrology equipment in the semiconductor industry, the architecture of Quadra (including software) and the challenges faced and overcome. He will also address the impact of the system architecture on the outsourcing strategy to the high-tech supply chain.

Hamed Sadeghian received his PhD (cum laude) in 2010 from Delft University of Technology. Four years later, he obtained an MBA degree from the Vlerick Business School in Belgium. He is the founder (2001) of Jahesh Poulad Co., a manufacturer of mechanical equipment.

Hamed was a principal scientist and Kruyt member of TNO and led a team of thirty researchers in nano-optomechatronic instrumentation at TNO in Delft from 2011 to 2018. In 2016, he co-founded Nearfield Instruments and is currently CEO/CTO at this scale-up that recently shipped its first in-line metrology system to a high-end chip manufacturer.

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Mastering the edge: critical factors to enabling edge computing

There’s no denying that cloud computing has been a top technology over the past two decades. So many of us working from home since the start of the pandemic would have been impossible not that long ago. Even though the cloud is key for today, it can’t handle the technologies of the future. Self-driving cars are a perfect example. They need to make ultra-fast, perfectly accurate decisions. There’s no time to wait for data to be processed in a data center. This is where edge computing comes in. Edge computing cuts across the IoT – from home and work to the most complex of all, the vehicle. Coupled with the rising digitalization that leads to everything connected, high-performance edge compute platforms are transforming ecosystems and the development landscape. In this talk, Maarten Dirkzwager will share why mastering edge computing with the right level of safety and security is critical to enabling next-generation technologies.

Maarten Dirkzwager NXP

Maarten Dirkzwager is responsible for corporate strategy and chief of staff to the NXP management team. He joined the company in 1996 at Philips. After several roles in central engineering, he moved to Philips Semiconductors in Hong Kong in 2005, where he was responsible for the innovation, efficiency and strategy of the discrete back-end factories. In 2009, he moved to the corporate strategy team in the Netherlands where he was involved in the transition of NXP to a profitable high-performance mixed-signal player. In 2015, he played a leading role in NXP’s acquisition and integration of Freescale, which resulted in creating one of the leading semiconductor companies and a leader in automotive semiconductors. In 2017 and 2018, he worked as head of strategy for ASML and AMS, after which he returned to NXP in early 2019.