The IC shortage: Many causes and some solutions

Article By : Bill Schweber

There are many reasons for the present IC shortage and several alternatives for dealing with it to help electronic products reach the market.

The “chip” shortage is getting a lot of well-deserved attention, with the pundits, consultants, commentators, and other analysts all explaining the reasons for it. As usual, they are both right and wrong, as the shortage has multiple causes and complex solutions. You’ve undoubtedly heard their stories and can add your own assessment and perspective. Increasing the supply of desired ICs can only happen by building new fabs—a very costly, two-to-three-year process—or by shifting the product mix to ICs which are physically smaller or have fewer production steps.

Analog-centric ICs occupy an interesting niche in the IC-fab ecosystem. Some analysts maintain that the shortage of automotive ICs is partially due to the fact that many of these are produced on older, smaller wafers using larger geometry processes, and in older fabs with limited capacity. Others claim the problem is that demand for high-end processors and high-function digital ICs for everything from PCs and smartphones to servers and data centers is gobbling up new-fab capacity. In summary: analog and related legacy ICs are both responsible and not responsible for the woes of automakers and others—you can take you pick—or maybe it’s both.

Note that despite the loud cries of “help me” from the auto vendors, their actual share of the IC market is between 5% and 10%, depending on if you measure by dollars or units. Of course, autos have a very large multiplier effect; if a car can’t be finished because an IC is unavailable, that’s a lot of almost-complete products sitting in a storage lot.

Some “quick” solutions

Since new fab capacity can’t come online quickly, the next question is: what to do? I have read stories, mostly anecdotal, about some vendors redesigning their products to use more-available ICs, but I am skeptical. First, what assurance is there that these ICs will still be available? Second, redesigning or porting even a simple design is not trivial in practice even if it’s so in theory. There are layout issues as well as EMI, packaging, qualification and other unpleasant surprises in nearly all designs, even supposedly simple re-dos.

As an answer to that, one automaker claims to be switching back to mechanical analog speedometers in place of digital readouts. Again, I question that action, as the ripple effect of doing so must be significant with respect to the BOM changes, related console parts, and fittings, assembly procedures and more.

There are other conflicting stories about how electronics product vendors are dealing with the shortage. One reputable article narrates that home-appliance makers are focusing on their lower-end machines, since these products need fewer ICs. So, they could finish and sell them quickly. Another article claims that automakers are reserving their limited supply of ICs for higher-end, more expensive vehicles. I suppose both stories could be true, since appliances and cars are very different products and have different customer situations.

Another alternative?

Since almost everyone seems to have an answer, here’s my solution: maybe not design low-end ICs into products which really don’t need them, thus freeing up fab capacity. There are many cases where adding electronics in general and ICs in particular enable designers to add functions and features, yet the end product is really not more useful to the customer, except that it has more bells and whistles.

Examples range from small to mid-size products: there’s the basic wind-up one-hour timer ($8), which is so simple to use, never needs batteries, and is accurate enough for most household applications (Figure 1).

Figure 1 This simple, mechanical spring-driver one-hour timer does only one job, which is a good thing in many cases. Source: Wayfair

There’s also the non-electronic basic toaster oven with a wind-up timer, still widely available at a $35 price tag (Figure 2).

Figure 2 This Black & Decker toaster oven has been in production for decades with minimal changes; it operates directly and entirely from the AC line power with no electronics. Source: Target

Another example is the classic Maytag A608 clothes washer from the 1970s, considered by some washer aficionados to be the most reliable machine of its type (Figure 3). It used switches and relays, no electronics, and had a typical life of 25 years. The only repair most units needed was replacement of the drive belt between motor and drum every 7-10 years ($100 dollars if using a repair service, or $15 and 30 minutes if you did it yourself) and many of its parts or subassemblies are still available.

Figure 3 The control panel of the Maytag A608 washing machine shows its functional simplicity, which parallels its electromechanical design approach. Source:

Of course, not every small non-electronic product is better than its electronic counterpart. I would not want to give up my digital caliper for the all-mechanical vernier, the one I have also kept (Figure 4), for reasons like basic accuracy, convenience, features and repeatability. More interestingly, a high-quality vernier caliper is comparable in cost to the basic electronic one ($25 to $50).

Figure 4 Both the digital caliper (top) and the mechanical Vernier caliper (bottom) perform the same basic measurement function at about the same cost. However, the digital one is far easier to use, has less potential for user error, and offers other useful features such as a re-zeroing and selectable English/metric readout. Source: Mitutoyo Corp.

What are you views on the causes of and solutions to the IC shortage, besides waiting for new fabs to come online? Do you see circuit redesign as a viable approach? System or overall product redesign? Use of fewer ICs? Other approaches? Or should we just wait it out?

Author’s Note: I dislike the use of the term “chips” for ICs when used by those who wouldn’t know an IC from a blob of plastic. While Planet Analog readers know what an integrated circuit is, many of those who use the term “chips” casually do not. By calling them chips, these people diminish these micro-miracles we all now take for granted, and make it sound like ICs are on par with potato chips, wood chips, and paint chips. While I am not minimizing what it takes to make those items in a factory setting—I have seen videos of their mass-production in factories and they are impressive—they are simply not anywhere close to ICs in terms of design or fabrication complexity.


This article was originally published on Planet Analog.

Bill Schweber is an electronics engineer who has written three textbooks on electronic communications systems, as well as hundreds of technical articles, opinion columns, and product features. In past roles, he worked as a technical website manager for multiple EE Times sites and as both Executive Editor and Analog Editor at EDN. At Analog Devices, he was in marketing communications; as a result, he has been on both sides of the technical PR function, presenting company products, stories, and messages to the media and also as the recipient of these. Prior to the marcom role at Analog, Bill was Associate Editor of its respected technical journal, and also worked in its product marketing and applications engineering groups. Before those roles, he was at Instron Corp., doing hands-on analog- and power-circuit design and systems integration for materials-testing machine controls. He has a BSEE from Columbia University and an MSEE from the University of Massachusetts, is a Registered Professional Engineer, and holds an Advanced Class amateur radio license. He has also planned, written, and presented online courses on a variety of engineering topics, including MOSFET basics, ADC selection, and driving LEDs.


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