Nokia CEO says the global chip shortage requires ‘constant attention’

The ongoing global chip shortage must be intently monitored and provide chain visibility is not pretty much as good because it was once, Nokia President and CEO Pekka Lundmark advised CNBC.

Lundmark, who took the top job at Nokia in September, advised CNBC’s “Squawk Box Europe” Friday that the chip market is “tight” at the second.

“It’s not only telecoms. It’s automotive, it’s consumer gadgets, it’s the emerging IOT (internet of things) devices,” he mentioned. “The whole semiconductor industry is actually very busy finding ways to increase capacity.”

Chips are used to energy vehicles, telephones, excessive efficiency computer systems, protection programs, AI functions and lots of different issues.  

The chip shortage has hit the cost-conscious automotive business significantly exhausting because it makes use of chips in every part from energy steering and brake sensors, to leisure programs and parking cameras. The smarter vehicles get, the extra chips they use.

Several producers together with GM, Honda, and Ford have been compelled to chop manufacturing.

Nokia itself, nevertheless, hasn’t been too badly affected. “We are not seeing any real shortage,” mentioned Lundmark. “The situation is manageable, but this is a matter that requires constant attention.”

He added that the medium to long-term visibility on chip provide is inferior to it was once.

The Finnish agency makes use of chips in its networking tools and its smartphones, but it surely does not really manufacture them itself.

The world’s largest producers are Taiwan’s TSMC, China’s SMIC, and South Korea’s Samsung. However, Samsung and TSMC are the solely two corporations in the world which might be able to manufacturing the 5 nanometer chips.

One of the causes there are so few 5nm chip manufacturing vegetation is as a result of they’re costly. Building one thing so small requires hi-tech tools that is not low cost.

According to the Semiconductor Industry Association, a coalition backed by a number of chipmakers, the U.S. only accounts for about 12.5% of semiconductor manufacturing. Europe accounts for lower than 10% of global manufacturing, though that’s up from 6% 5 years in the past. The European Commission, the government arm of the EU, needs to spice up that determine to twenty% and is exploring investing 20-30 billion euros ($24-36 billion) to make it occur.

Countries at the moment are taking a look at funding new chip vegetation as a part of an effort to type out provide points. President Joe Biden signed an government order on Feb. 24 that is meant to handle the chip shortage by a assessment.

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