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<ul class="summary-list"><li>Hurricane Helene, the dockworkers' strike, and Middle East conflict threaten to upend the US economy.</li><li>Oil prices are up as conflict widens between Israel and Iran.</li></ul>A sudden flurry of global developments has the US economy staring down a troubling trifecta of major crises.Devastation from Hurricane Helene, a dockworkers' strike, and escalating conflict in the Middle East all threaten to scramble supply chains and inflate prices. The confluence of events comes just as the US economy is recovering from a years-long bout of elevated inflation. Coupled with a cooling but still-strong labor market, it looked possible the US would avoid a recession. These events could threaten that.While the effects of Iran's<a target="_blank" href="https://www.businessinsider.com/iran-attacks-israel-with-missiles-after-hezbollah-leader-killing-2024-10"> missile</a> attack on Israel on Tuesday are more speculative, the other two crises happening on American soil could have more predictable impacts. Experts point to direct impacts on the prices of goods like oil, food, and industrial equipment as well as infrastructure damage that would create knock-on effects across industries.For now, it's a waiting game. Many of the effects depend on how long the strike and cleanup last and how quickly the parties responsible for resolving them can act.<h2 id="bb66dc7c-8a7f-46f6-83fe-f763c7971b08">1. Escalation in the Middle East</h2>On Tuesday, the risk of a full-blown war between Iran and Israel escalated when Iran <a target="_blank" class="" href="https://www.businessinsider.com/iran-attacks-israel-with-missiles-after-hezbollah-leader-killing-2024-10">launched a massive ballistic missile</a> attack on its adversary.It came less than a day after Israel ramped up its attacks on Hezbollah with an invasion of southern Lebanon. The heightening conflict also threatens to <a target="_blank" class="" href="https://www.businessinsider.com/us-warns-severe-consequences-for-iran-after-attack-on-israel-2024-10">further entangle the US</a>, which announced it's sending additional fighter jets and thousands of troops to the Middle East to defend Israel and reinforce US troops already in the region.Since Iran's offensive, the price of oil has surged up, raising concerns that a broader conflict could push oil and gas prices higher. When petroleum prices rise, that also impacts the cost of plastics, which could raise prices on a range of goods. Some experts <a target="_blank" class="" href="https://www.theguardian.com/world/2024/oct/02/israel-iranian-oil-refineries-retaliatory-strikes">warn that Israel could target Iranian oil production facilities</a> in potential retaliatory attacks, which could risk further oil price increases."History would say that when there is conflict in the region, the prices of petroleum remain elevated and could continue to rise," Douglas Kent, an executive vice president at the Association for Supply Chain Management, told Business Insider.<h2 id="74292a69-7822-4de1-bb2c-cdde4749d751">2. Dockworkers on strike</h2>Also on Tuesday, dockworkers at all the eastern US ports from Maine to Texas went on strike, threatening <a target="_blank" class="" href="https://www.businessinsider.com/dockworkers-port-strike-ila-impacts-2024-10">a slew of adverse economic impacts</a>, including increased prices on key goods ahead of the holiday shopping season.About 30% of goods imported to and exported from the US pass through the East Coast and Gulf ports, according to a Morgan Stanley analysis, along with about <a target="_blank" class="" href="https://www.businessinsider.com/us-economy-markets-react-israel-iran-escalates-dockworkers-strike-helene-2024-10">half of all US ocean imports</a>. The strike could cause shortages of goods and push consumer prices up, but how much depends entirely on how long the work stoppage lasts, experts say.A few days of snarled supply chains likely wouldn't be a major hit to the economy, while a week or longer could have major impacts. Every day, the work stoppage is costing the economy up to $4.5 billion, according to JPMorgan analysts. If the strike goes for at least two weeks, it may <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/us-port-strike-biggest-stock-market-winners-losers-investing-analysis-2024-10?_gl=1*w94t9f*_ga*MTM5OTQyNzAxOS4xNjc1MDExMTIw*_ga_E21CV80ZCZ*MTcyNzg4MTM4OC4zNTQuMS4xNzI3ODgzOTYyLjQ5LjAuMA..">increase inflation.</a> If it lasts a month, it could <a target="_blank" class="" href="https://www.businessinsider.com/port-strike-impact-costs-us-economy-recession-outlook-shipping-delay-2024-10">cause a recession</a>.And the strike will also have knock-on impacts. For every day the ports are closed, it will take an estimated five days for supply chains to get back to normal, Kent said."We are in a bit of a wait-and-see mode about what the impacts are going to be," Sameera Fazili, former deputy director of the National Economic Council under Biden, told BI. "If the strike goes on for one day or three days, it could take two weeks for some companies to recover, some industries to recover, it could take months for others to fully recover."Some of the imported consumer goods <a target="_blank" href="https://www.businessinsider.com/consumer-products-most-likely-to-be-impacted-by-port-strike-2024-9">most vulnerable to the port closures</a> include perishable foods like fresh fruits and vegetables, wine, beer, liquor, toys, tires, furniture, and raw commodities like salt, sugar, and gypsum. Kent noted that automotive, pharmaceutical, and industrial equipment supply chains are also vulnerable. US meat, dairy, and poultry exports <a target="_blank" class="" href="https://www.businessinsider.com/us-port-strike-hurt-agriculture-livestorck-dairy-farmers-presidential-election-2024-10">could also be disrupted</a>, as well as coal and heavy agricultural equipment.How much the strike impacts prices depends on how much of a cushion companies have built to deal with any bottlenecks. With the memory of pandemic supply chain crises still fresh, many businesses have become better prepared for disruptions by importing goods ahead of schedule in anticipation of the strike or <a target="_blank" class="" href="https://polb.com/port-info/news-and-press/port-of-long-beach-achieves-busiest-month-on-record-09-12-2024/">diverting shipments</a> to West Coast ports."The 2020 disruption presented unforeseen challenges but encouraged many firms to diversify their supply chain and seek backup sourcing: preparation that will likely soften the blow of the dockworker strike," Lauren Saidel-Baker, an economist at ITR Economics, said in a statement.But mitigation efforts, including redirecting shipments, cost money and push prices up. Bottlenecks also encourage carriers to raise their prices, increasing retail and consumer goods prices, Kent said.Fazili said she's confident the dockworkers' union — the International Longshoremen's Association — and the organization representing their employers — the United States Maritime Alliance — can come to a deal to raise wages and improve benefits for workers. With the election looming, Biden administration officials are particularly incentivized to grease the wheels of their negotiations.<h2 id="b5a7373b-dcda-4543-bf11-a8ea2a739cbd">3. Natural disaster strikes the South</h2>All of this comes as Southern states are scrambling to handle the fallout from a superstorm with billions of dollars in damage. Dozens of people have been killed in the flooding, landslides, and high winds wrought by Hurricane Helene, which washed out an untold number of roads, destroyed homes, and devastated entire towns. Rescue and recovery efforts are still underway, with <a target="_blank" class="" href="https://www.wcnc.com/article/weather/hurricane/helene/north-carolina-hurricane-helene-missing-people-finder-victims-survivors/275-d811bbc2-754d-4637-b156-7e4af6e1eadb">hundreds of people still missing</a>, particularly in North Carolina.The storm will likely have far-reaching economic impacts, including the immediate costs of providing emergency services for thousands of residents left homeless or without power or water, and the longer-term costs of rebuilding roads, bridges, and other infrastructure. Helene has likely caused between $15 billion and $26 billion in damage to property on top of about $5 billion to $8 billion in lost economic output, according to Moody's Analytics.In the immediate wake of the storm, a slew of residents across the affected states have <a target="_blank" class="" href="https://www.businessinsider.com/price-gouging-complaints-surge-hurricane-helene-states-fuel-water-hotels-2024-10">reported price gouging</a> by hotels, gas stations, and grocery stores. The hurricane has also disrupted some supply chains, including <a target="_blank" href="https://www.axios.com/2024/10/01/hurricane-helene-iv-fluid-shortage-health-supply-chain">healthcare supplies</a> and high-purity quartz needed <a target="_blank" class="" href="https://www.businessinsider.com/quartz-mine-computer-chips-hurricane-helene-spruce-pine-semiconductor-2024-9">for semiconductor manufacturing</a>."The combination of these events just reemphasizes how important it is for the private sector and companies, which are the ones that control supply chains, to move away from just-in-time and from efficiency only and to recognize that disruptions are on the rise and they ought to be better prepared for that," Fazili said.But the superstorm also threatens much longer-term economic damage, hitting the property insurance industry and the federal flood insurance program. Homeowners in affected areas will likely deal with rising property insurance costs or even lose coverage altogether, experts say."In the short run, the most costly element of the disaster is the damage to homes, property and infrastructure," Adam Kamins, a senior director at Moody's Analytics, told BI. "Longer term, the disaster itself is unlikely to drive people out of the hardest-hit areas, but insurance premiums could rise, denting affordability. This would be especially difficult for Florida, where many private insurers have already left the state."

A trifecta of global crises could snarl supply chains and increase prices

<ul class="summary-list"><li>TSMC has begun producing chips for Apple at its Phoenix fab, people familiar with the matter said.</li><li>This development bodes well for the future of the US semiconductor industry, to which the Biden administration pledged $52 billion.</li></ul>The US's efforts to produce more <a target="_blank" href="https://www.businessinsider.com/us-china-tech-war-computer-chips-semiconductor-plants-costing-americans-2023-1">semiconductor chips</a> have encountered some challenges over the past few years, but the tide may be turning.TSMC, the world's leading chipmaker, has begun producing A16 chips for Apple at one of its <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-chip-semiconductor-factory-biden-global-economy-china-taiwan-2022-12">Phoenix semiconductor chip fabs</a> (or factories), two people familiar with the matter told Business Insider. One of the people said that full production levels have not yet been reached. Their identities are known to BI.<a target="_blank" class="" href="https://timculpan.substack.com/p/apple-mobile-processors-are-now-made">Tim Culpan</a>, an independent journalist who covers technology and is based in Taiwan, first reported the news last month.The chips, which Culpan reported are being produced in "small, but significant, numbers," mark a major development for the company, which <a target="_blank" href="https://pr.tsmc.com/english/news/2033">announced</a> plans in 2020 to invest billions of dollars in Arizona and create thousands of jobs. Additionally, it comes two years after Tim Cook, the CEO of Apple, announced that the company would be the "<a target="_blank" href="https://www.businessinsider.com/apple-tim-cook-america-us-made-chips-first-time-decade-2022-12">largest customer</a>" of TSMC's first Arizona fab and use US-made chips for the first time in nearly a decade.A TSMC spokesperson declined to comment on the company's US work with Apple. When asked about the progress on the company's first chip fab, the spokesperson said that the project is "proceeding as planned with good progression," and that the company is on track to be fully operational in the first half of 2025.Apple didn't respond to BI's request for comment.<h2 id="1819bf24-3dc2-49d1-a9d0-42044a61e24c">'A success story'</h2>Dylan Patel, a chief analyst at the semiconductor research and consulting firm SemiAnalysis, said stateside chip production for Apple is a key milestone."Despite many negative stories early on, this shows the fabs are on track and operating as expected — a success story," he told BI.Mark Muro, a senior fellow at the Brookings Institution, told BI that beginning the production of A16 chips — which have been used in some recent <a target="_blank" href="https://www.businessinsider.com/guides/tech/iphone-15-plus-review">iPhone models</a>, though not the new <a target="_blank" class="" href="https://www.businessinsider.com/guides/tech/iphone-16">iPhone 16</a> — is a very positive signal for the Apple-TSMC partnership."It suggests Apple has enough belief in the new US facility to dive right in with US production of one its most advanced mobile processors," he said, adding, "This is encouraging given some observers' skepticism US sites could reach TSMC standards anytime soon."TSMC's commitment to <a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">building three</a> chip fabs on its Phoenix campus is key to the Biden-Harris administration's efforts to boost the US's production of the chips that power everything from iPhones to washing machines. In 2022, President Joe Biden signed the <a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7">CHIPS Act</a> into law, which included <a target="_blank" href="https://www.businessinsider.com/trump-taiwan-china-semiconductor-chips-us-economy-trade-biden-election-2024-7">$39 billion</a> in manufacturing incentives for chip production in the US. In addition to creating US jobs, the administration hopes to secure supply chains and make the US <a target="_blank" class="" href="https://www.businessinsider.com/asml-tsmc-semiconductor-chip-equipment-kill-switch-china-invade-taiwan-2024-5">less reliant</a> on advanced chips in Taiwan.<h2 id="8f73c768-4752-403c-b6e5-a20430cb553e">TSMC faced construction slowdowns and worker tensions in Arizona</h2>TSMC's investment in Arizona hasn't always been smooth.Last year, TSMC announced that the official opening of its first Arizona fab would be <a target="_blank" href="https://www.businessinsider.com/tsmc-taiwan-semiconductor-phoenix-arizona-factory-chipmaker-job-qualification-debate-2023-8">pushed back</a> from 2024 to 2025. And when the company announced plans to send technicians from Taiwan to train US workers, a local <a target="_blank" class="" href="https://www.businessinsider.com/tsmc-taiwan-semiconductor-phoenix-arizona-factory-chipmaker-job-qualification-debate-2023-8">Arizona labor union</a> protested due to concerns that American jobs would be threatened.Management and safety concerns have also led to some frustrations among TSMC's construction workforce in Arizona. Workers <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">previously told BI</a> that managerial challenges had fueled construction delays, and some have accused the company of <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">safety violations</a>. TSMC <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">previously told BI</a> that it's committed to ensuring that its working conditions are safe.In 2022, TSMC's founder and former CEO Morris Chang told the Brookings Institute that the US's efforts to boost <a target="_blank" href="https://www.businessinsider.com/why-tsmc-chipmaker-investing-billions-us-cost-more-make-chips-2022-12">domestic chip production</a> would be "a wasteful, expensive exercise in futility," citing labor force and cost challenges.Despite these hiccups, TSMC said in April during an earnings call that the progress on its first Arizona fab was "<a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">well on track</a>."TSMC's production of Apple chips is good news for Americans <a target="_blank" href="https://www.businessinsider.com/semiconductor-industry-jobs-salary-chips-phoenix-arizona-tsmc-students-2023-10">hoping to land jobs</a> in the industry, Patel said. That's because TSMC's early success suggests it will continue to invest in the US."This drives job growth not just at TSMC but for the entire ecosystem — fab construction, equipment vendors, etc. that are all needed to support the fab," Patel said. "While modern fabs are not especially labor intensive, they require highly-skilled workers and will operate for decades, meaning many high-quality, long-term jobs are being created."TSMC has said that it will <a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">charge customers more</a> for chips made outside Taiwan due to higher manufacturing costs. But Patel said he doesn't expect this to have a material impact on the prices of Apple's products."US government subsidies were meant to offset differences in construction and other costs between Taiwan and the US to make the business viable for TSMC," he said, adding, "Neither Apple nor consumers should expect a price difference for these US-produced chips.Going forward, chip makers like TSMC will face another challenge once they're operating at full capacity: <a target="_blank" class="" href="https://www.businessinsider.com/semiconductor-certification-program-chipmaker-manufacturing-jobs-new-career-intel-tsmc-2023-8">finding workers</a>.According to a <a target="_blank" href="https://www.semiconductors.org/america-faces-significant-shortage-of-tech-workers-in-semiconductor-industry-and-throughout-u-s-economy/">report</a> published last year by the Semiconductor Industry Association, the US semiconductor industry faces a worker shortage of 67,000 workers by 2030, including technicians, computer scientists, and engineers. However, Patel said that he doesn't expect labor force challenges to materially impact production at TSMC specifically.Muro was also optimistic. He said he thinks TSMC's production of Apple chips would bode well for the future."This is an important signal that the American drive to re-shore high-quality chipmaking is well founded," he said.Do you work in the semiconductor industry and have a story to tell? Reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>.

Apple's Made-in-the-USA chips signal a turnaround for the US' big semiconductor bet

<ul class="summary-list"><li>SemiAnalysis has grown from three analysts to 12 experts across five countries in two years.</li><li>The firm provides deep insight into GPUs and AI models and has become essential for major companies.</li></ul>Nvidia CEO Jensen Huang isn't the only one who has gone from uber-nerd to <a target="_blank" class="" href="https://www.businessinsider.com/jensen-huang-signed-womans-chest-tech-conference-nvidia-rockstar-leather-2024-6">tech luminary</a> in the space of a few years. Dylan Patel may be less of a household name, but for those watching Huang's moves closely, Patel's firm SemiAnalysis has become a <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-ai-chip-blackwell-delay-new-annual-product-launch-2024-8">central source</a> of intel.OpenAI cofounder Sam Altman even called him "<a target="_blank" class="" href="https://www.businessinsider.com/google-gemini-ai-model-smashes-gpt4-says-semianalysis-2023-8">that semianalysis guy</a>" in a post on X, formerly Twitter, last year. Patel responded with an edited image of Google CEO Sundar Pichai pouring milk into Altman's mouth while holding him by the hair. Is there any greater sign of tech prowess than a high-profile online feud?SemiAnalysis gets deep into the weeds on graphics processing units, from the <a target="_blank" class="" href="https://www.businessinsider.com/ai-taiwan-china-chip-war-2024-6">base of the supply chain</a> to the end-users building the AI models that require so many specialized chips. That exchange with Altman was just a year ago, but it might as well have been in a different lifetime.In the last two years, SemiAnalysis has grown from a team of three analysts in two countries to a team of 12 subject matter experts in the US, Japan, Singapore, Taiwan, and France."We had some major companies that were customers, but now almost every major company in the AI infrastructure, server, model, space from sub-components all the way through to clouds and hyperscalers have become customers, which is a big shift," Patel told Business Insider.The firm's newsletter, launched in 2020, and its blog have become mandatory reading since they connect the semiconductor industry to the tech it enables in a way few do.News that Nvidia's next chip launch, <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-ai-chip-blackwell-delay-new-annual-product-launch-2024-8">Blackwell, would be delayed</a> stirred up many questions about how AI hardware from the largest player in the game is rolling out. Patel spoke to BI about the impact of the delay, and how to observe Nvidia like a pro.This Q&amp;A has been edited for clarity and length.BI: Where do you get your information?The team consists of people across the entire supply chain, geographically and technically. We have someone who previously worked as low as ASML (Advanced Semiconductor Materials Lithography), the largest equipment company, and then all the way through to companies upstream, such as former employees of Microsoft, Nvidia, etc. So we have the entire view of the supply chain, from manufacturing, up to models. Also, several people on the team are from hedge fund backgrounds.I think the team goes to more than 50 technical conferences across the entire stack — not just the trade shows, which are not really as valuable, but more the technical conferences where people are presenting papers and advancements in the field.When you establish all these research and consulting relationships, you end up with a large well of information. That is how we're able to get disparate pieces of information that may be known and even common in one part of the supply chain but don't spread far outside it. Engineering especially, is very horizontal. Trying to draw the lines between all the different parts of the stack is very important.BI: There was a recent report about Nvidia's next-generation<a target="_blank" href="https://www.businessinsider.com/nvidia-ai-chip-blackwell-delay-new-annual-product-launch-2024-8"> Blackwell chip being delayed</a>. How common is a delay like this in the semi-world?In semiconductor manufacturing, there's this loop of the design being sent to <a target="_blank" class="" href="https://www.businessinsider.com/chip-tsmc-taiwan-semiconductor-trillion-market-cap-nvidia-ai-asml-2024-7">TSMC</a>, which manufactures. Once you have the stencils, it's a multi-month process to produce chips. Then you send those wafers out to customers.Customers test them to make sure everything works. More often than not, it doesn't. Why? Take, for example, a modern iPhone chip. It has 25 billion transistors and 15 layers of metal. Twenty-five billion transistors are 25 billion on-off switches, and they're perfectly timed and organized so that everything you do on your iPhone happens.AI chips are even more complicated than that. It's impossible to perfectly simulate everything, so you are always going to have issues. Then they'll need to make a few modifications to the design and send it back. That has always happened. And the range of modifications can be major to minor.Nvidia has always had an incredibly aggressive timeline. They've always been really good about shipping either the first or second revision of the chip. Whereas, other companies can go through 12 revisions. Even big companies like AMD (Advanced Micro Devices) tend to go through two, or three, or four revisions.The fact that Nvidia wanted to ramp so fast — this Blackwell ramp was supposed to be the first chip with $100 billion in sales — meant there were some minor delays. It's just a few months at most.But because so many people are affected by that delay, it shakes the entire world. In the past, the customers affected by this would know, and it wouldn't shake up all the way to the top levels of every company.BI: What are your favorite non-revenue indicators to watch at Nvidia?One is the size and use of models.Meta releases a new model, and it's now 405 billion parameters, right? These new models continue to increase the demand for compute voraciously. Now that Meta released this new model, and now that everyone uses these open-source models and doesn't develop their own, everyone switches to this bigger, newer model, and that creates a significant increase in demand.On the flip side, all the way downstream, companies in Taiwan have to report their revenue monthly. You can see the exact ramp of everything as soon as you want to see it.So there's a lot of information all the way upstream in terms of the models and deployments, and all the way downstream to the various sub-component suppliers.The other place I like to look a lot is random suppliers that are very small in niche parts of the supply chain, or suppliers of suppliers.Maybe Nvidia suppliers are very hush-hush, but maybe TSMC's suppliers are very open about what TSMC is ordering and you can estimate what's going to happen to Nvidia's production capacity or ability to sell servers from there.BI: Assuming the initial Blackwell rollout will indeed be smaller than promised, what do you know about who gets to be first in line for the new chips? And why do they get to be first in line?How Nvidia decides who gets to be first in line is a very complicated decision matrix — especially now with the <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-mergers-and-acquisition-startup-buying-spree-ftc-investigation-2024-8">investigation by the FTC</a>.There are all sorts of reports that if you purchase their networking equipment, they will push you first in line or similar allegations like that.So, the question is who are they going to prioritize? My sense is that customers who have no choice or are smaller and, therefore need more support from Nvidia would probably be de-prioritized relative to customers who are much larger and have options.For example, Microsoft and Meta are their two largest customers. They also have chip programs internally, but they're not as successful as, say, Amazon and especially Google. But they also went out and bought AMD GPUs. If you're Nvidia, it makes sense to prioritize your biggest customers because they're the ones who are going to purchase the most products. They have a backup plan of <a target="_blank" class="" href="https://www.businessinsider.com/companies-using-ai-bain-survey-roi-2024-6">buying from your competitor</a>, and they require the least support.The calculus around allocations is difficult. But it would make sense that they prioritize their biggest customers, who purchase from other people and may purchase their networking equipment, whereas companies like Amazon don't purchase their networking equipment. You can go down the list and think about why you would provide hardware to one customer over another. Got a tip or an insight to share? Contact Senior Reporter Emma Cosgrove at <a target="_blank" href="mailto:ecosgrove@businessinsider.com">ecosgrove@businessinsider.com</a> or use the secure messaging app Signal: 443-333-9088

How Analyst Dylan Patel gets inside Nvidia to make connections from the semiconductor industry to the tech it enables

<ul><li><keyword id="44883" type="General" weightage="20" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> India remains "vulnerable to supply side bottlenecks", according to a senior company official.</li><li>He noted that the company is working to do away with certain chips in some models/trims where the requirement is superfluous.</li><li>"We do not have full year visibility but at least Q1 will be tough and broadly the uncertainty continues," the official added.</li></ul><keyword id="6912" type="General" weightage="20" keywordseo="maruti" source="Orion">Maruti</keyword> Suzuki India remains "vulnerable to supply side bottlenecks" this fiscal even as it looks to source electronic components through multiple sources, according to a senior company official. The country's largest carmaker, which could not produce around 1.7 lakh units last fiscal due to semiconductor shortage, is also coming up with measures to reduce the usage of certain kinds of chips in its cars. "The problem (chip shortage) is a global one..it could affect different models, different companies, different modules differently..all our efforts are to organise supplies through multiple sources," Maruti Suzuki India (MSI) Executive Officer (Corporate Affairs) Rahul Bharti said in an analyst call. He noted that the company is working to do away with certain chips in some models/trims where the requirement is superfluous. "If there is a particular semiconductor in a particular variant of a model which is superfluous and not required..so we are removing all such needs so that our consumption is minimum. All such efforts are going on including negotiations at global scale. Having said that we are still vulnerable to supply side bottlenecks," Bharti noted. When asked about the company position in the ongoing fiscal, he said: "We do not have full year visibility but at least Q1 will be tough and broadly the uncertainty continues." Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cellphones to various other electronic items. The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as bluetooth connectivity and driver-assist, navigation and hybrid-electric systems. Replying to a query, Bharti confirmed that the strong hybrid technology introduced in Grand Vitara could be launched in more models. "We have got a very positive response..we plan to bring it (strong hybrid) in more models also," he stated. On sales growth outlook for this fiscal, Bharti said industry body SIAM estimates the passenger vehicle industry to grow between 5-7 per cent. "Maruti Suzuki should grow well beyond this. So we would be better than the industry," he noted. MSI CFO Ajay Seth noted that the company has lined up Rs 8,000 crore capex in the current fiscal with capital set to go into the construction of the Sonipat plant, development of new models and annual maintenance of existing infrastructure. He noted that the company has strengthened its presence in the sports utility vehicle segment with Brezza and Grand Vitara thereby increasing its market share in the vertical. "Moving forward with Jimny and Fronx, the SUV portfolio of the company will be further strengthened. With this the company aims to secure a leadership position in the SUV segment," Seth said. He noted that the company believes in offering products and technologies which are relevant to the Indian market context. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/upcoming-new-cars-and-suvs-in-india-in-may-2023/slidelist/99842426.cms">Upcoming cars expected to launch in India in May 2023</a> <a href="https://www.businessinsider.in/business/auto/news/mg-comet-ev-vs-tata-tiago-ev-which-electric-car-should-you-buy-under-10-lakh/slidelist/99806597.cms">MG Comet EV vs Tata Tiago EV – which electric car should you buy under ₹10 lakh?</a> <a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-fronx-vs-brezza-comparison-which-car-should-you-buy-under-10-lakh/slidelist/99729841.cms">Maruti Suzuki Fronx vs Brezza – which car should you buy under ₹10 lakh?</a>

Maruti Suzuki remains vulnerable to supply side bottlenecks as uncertainty continues: Official

<ul><li>There’s more bad news for the already-stressed <keyword id="1182241" type="General" weightage="20" keywordseo="semiconductor-chip" source="Orion">semiconductor chip</keyword> supply chain.</li><li>Analysts predict that the <keyword id="9594427" type="General" weightage="20" keywordseo="russia-ukraine-war" source="Orion">Russia Ukraine war</keyword> has the potential to constrain the supplies of neon and palladium – two critical components in the manufacturing of <keyword id="6451058" type="General" weightage="20" keywordseo="semiconductor" source="Orion">semiconductor</keyword> chips.</li><li>This could increase in costs of production, which could be passed on to consumers eventually.</li></ul>The ongoing <keyword id="6358826" type="General" weightage="100" keywordseo="russia" source="Orion">Russia</keyword> <keyword id="6355101" type="General" weightage="80" keywordseo="ukraine" source="Orion">Ukraine</keyword> war could claim another casualty – the already-stressed <keyword id="10780333" type="General" weightage="20" keywordseo="semiconductor-supply-chain" source="Orion">semiconductor supply chain</keyword>. This comes at a time when chipmakers are struggling to keep up with the demand for chips across the computing and automobile sectors, among others. The COVID-19 pandemic dealt a massive blow to the semiconductor chip supply chain, with the component shortage leading to an increase in prices of consumer electronics and forcing automobile companies to drastically reduce their production targets, leading to temporary plant shutdowns in many instances. <div type="Article" hostid="261" msid="89817168" title="Russia-Ukraine war: Anonymous hackers launch cyberwar against Russia taking down government websites" mstype="2" mssubtype="0"></div> Now, the Russia-Ukraine war threatens to worsen this crisis further, with experts believing that we could see the chip supply chain being hit in the future. According to a report by <a href="https://www.trendforce.com/presscenter/news/20220215-11119.html">TrendForce</a>, Ukraine is a major supplier of neon gas, which is used in the lithography stages of chip production. According to analysts, Ukraine has a share of 70% of the global supply of neon, a noble gas. <cmsannotation type="cmsannotation" annotationid="Prices of consumer tech products could increase" comment="subhead" text="Prices of consumer tech products could increase">Prices of consumer tech products could increase</cmsannotation> The analyst firm also states that this could lead to an increase in the cost of production of semiconductor chips. With these chips being vital to all modern electrical devices, companies may decide to pass on these costs to buyers, leading to an increase in the prices of consumer technology products. However, in the short term, analysts believe the semiconductor chip production lines may remain functional as manufacturers stockpile the gases they need. <cmsannotation type="cmsannotation" annotationid="West’s sanctions against Russia could also hit supply chains" comment="subhead" text="West’s sanctions against Russia could also hit supply chains">West’s sanctions against Russia could also hit supply chains</cmsannotation> It’s not just the shortage of raw materials from Ukraine that could hit supply chains. According to the analysts at <a href="https://www.cnbc.com/2022/02/24/russian-invasion-of-ukraine-to-further-strain-us-chip-supply.html">Techcet</a>, Russia is also a key supplier of neon and palladium – accounting for a third of the global supply of the metal. Palladium is a metal that is used for electronics, catalytic converters among other things. West’s sanctions against Russia could lead to a shortage of this metal and force manufacturers to scramble for alternative sources. SEE ALSO: <a href="https://www.businessinsider.in/india/news/this-is-what-indian-pm-narendra-modi-told-putin-during-the-phone-call/articleshow/89816592.cms">This is what Indian PM Narendra Modi told Putin during the phone call</a> <a href="https://www.businessinsider.in/finance/news/why-gold-price-and-crude-oil-are-inching-up-because-of-russias-war-on-ukraine/articleshow/89817724.cms">Here is why crude oil and gold prices are inching up because of Russia’s war on Ukraine</a> <a href="https://www.businessinsider.in/tech/news/russia-ukraine-war-anonymous-hackers-launch-cyberwar-against-russia-taking-down-government-websites/articleshow/89817168.cms">Russia-Ukraine war: Anonymous hackers launch cyberwar against Russia taking down government websites</a>

Russia-Ukraine war could hit the already stressed semiconductor chip supply chain

<ul class="summary-list"><li>The Russia-Ukraine war could impact the production of key metals for auto and <keyword id="6451058" type="UNKNOWN" weightage="60" keywordseo="semiconductor" source="Orion">semiconductor</keyword> supply chains, <keyword id="12002884" type="UNKNOWN" weightage="60" keywordseo="jpmorgan" source="Orion">JPMorgan</keyword> says.</li><li>The production and supply of platinum, palladium, and neon could all be at risk. </li></ul>The West's economic sanctions on <keyword id="11894337" type="UNKNOWN" weightage="60" keywordseo="russia" source="Orion">Russia</keyword> are leaving a significant mark on the country's economy, but are also ramping up risks to the global supply of key materials needed in the production of automobiles and semiconductors, two industries already rattled by disruptions from COVID-19.That's according to JPMorgan analysts in a note on Friday, stating that while oil supply has received most of the attention since Russia invaded, a host of other commodities are at risk of disruptions. "The concern is that the two sectors hit hardest by last year's bottlenecks (autos and semiconductor chips) could one again be slammed," wrote bank analysts in a Thursday note. In particular, JPMorgan highlighted how the metals market could face renewed pressure as the crisis continues. Production of platinum and palladium could stall, and each are key components to catalytic converters in auto production. The production of neon — an integral ingredient in the making of semiconductors and a major Russian export — is also at risk.JPMorgan's analysts predict that the current stockpiles of these supplies are "sufficient" for now, and there is a cushion for another four to six months before the absence of Russian supply is felt. Since <a href="https://www.businessinsider.com/why-russia-is-attacking-ukraine-putin-justification-for-invasion-2022-2">Russia invaded Ukraine</a> last week, <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> have <a href="https://markets.businessinsider.com/news/stocks/stock-markets-today-russia-ukraine-nuclear-plant-seize-invasion-2022-3">whipsawed</a> and investors have faced profound uncertainty. A top economic historian said the war could spiral into the world's <a href="https://markets.businessinsider.com/news/commodities/russia-ukraine-war-energy-market-oil-disruption-1970s-dan-yergin-2022-3">worst energy crisis</a> since the 1970s. Oil has <a href="https://markets.businessinsider.com/news/commodities/oil-price-russia-ukraine-biden-energy-sanctions-opec-output-plan-2022-3?utm_medium=ingest&amp;utm_source=markets">spiked</a> and WTI crude was trading at the highest levels since 2008 this week. JPMorgan has predicted that prices <a href="https://markets.businessinsider.com/news/commodities/oil-price-russia-ukraine-war-jpmorgan-price-target-energy-sanctions-2022-3">could reach $185</a> per barrel by the end of the year.

Crushing sanctions on Russia's economy could worsen the auto and semiconductor supply-chain crisis, JPMorgan says

<ul class="summary-list"><li>US Commerce Secretary Gina Raimondo said on CNBC that the supply-chain issues pose a "problem."</li><li>Raimondo said the US is making "slow improvement," but people will feel the impact well into 2022.</li></ul>US Commerce Secretary Gina Raimondo <a href="https://www.youtube.com/watch?v=TG369nmcafk">told CNBC</a> on Friday that US consumers will likely feel the impact of the <a href="https://www.businessinsider.com/largest-us-port-breaks-multiple-record-cargo-ships-import-delays-2021-9">supply-chain crisis</a> into the coming year."There's a lot of work left to do," Raimondo said on CNBC. "We're making slow improvement. But there's no denying that it's a problem. I think we're going to be feeling these effects for well into 2022."Raimondo's comments come as the largest ports in the US deal with<a href="https://www.businessinsider.com/largest-us-port-breaks-multiple-record-cargo-ships-import-delays-2021-9"> near-record shipping volumes</a>, while warehouses, railways, and trucking companies <a href="https://www.businessinsider.com/shipping-containers-stuck-california-ports-combat-shortages-2021-9">struggle to keep up with demand</a>. The delays have spurred <a href="https://www.businessinsider.com/why-supply-shortages-economy-inventory-chips-lumber-cars-toilet-paper-2021-5">price hikes and shortages</a> across the country. The amount of time, as well as the cost for shipping goods between Asia and the US has <a href="https://www.businessinsider.com/executives-say-brace-for-shipping-delays-price-hikes-next-year-2021-9">nearly doubled in the last few months.</a>"It is disruptive, and that's why we have to stay focused," Raimondo said, highlighting the impact of the <a href="https://www.businessinsider.com/global-chip-shortage-could-last-another-2-years-experts-say-2021-5">global shortage of computer chips</a>, which has <a href="https://www.cnn.com/2021/01/11/tech/ford-plant-shutdown-computer-chip-shortage/index.html">shutdown entire auto plants</a> and made electronic goods <a href="https://www.businessinsider.com/global-chip-shortage-laptops-phones-cost-more-2021-6">increasingly valuable.</a>"Your entire life runs on semiconductors," she added.Last month, global supply-chain workers warned world leaders that the <a href="https://www.businessinsider.com/workers-warn-global-supply-chain-systems-collapse-possible-need-solutions-2021-9">industry is facing a potential "systems collapse"</a> if local governments do not take action to help workers. That same week, the director of one of the largest US ports said the <a href="https://www.businessinsider.com/port-director-warns-shipping-industry-is-in-crisis-mode-2021-9">"situation is in a crisis mode."</a>While ports in Los Angeles and Long Beach <a href="https://www.businessinsider.com/largest-us-port-breaks-multiple-record-cargo-ships-import-delays-2021-9">broke multiple records</a> for the number of ships in the locations, as well as the number of <keyword id="12189117" type="UNKNOWN" weightage="60" keywordseo="cargo-ships" source="Orion">cargo ships</keyword> waiting to dock in September, the number of vessels has since trended slightly downward.Raimondo said she's seen "incremental improvement" in the delays, but the crisis is far from over.The cargo on the ships currently at anchor in the Southern California ports have been waiting to unload for <a href="https://www.businessinsider.com/shipping-containers-stuck-california-ports-combat-shortages-2021-9">as long as five weeks</a>. Brian Whitlock, a senior director and research analyst for Gartner, <a href="https://www.linkedin.com/posts/blwhitlock_this-week-there-were-70-ships-at-anchor-outside-activity-6847293217055096832-S7ig/">said on LinkedIn</a> that the goods on the vessels will likely not be seen until the end of October or November due to the delays at the ports paired with backups at nearby warehouses and trucking companies. Several <a href="https://www.bloomberg.com/news/features/2021-10-04/out-of-stock-shortages-for-christmas-shopping-put-retailers-at-risk">major retailers have warned</a> they may have a shortage of goods going into the holiday shopping season. In September, <a href="https://www.businessinsider.com/nike-apparel-shortage-holiday-shopping-supply-chain-issues-2021-9">Nike said it doesn't have enough sneakers</a> to sell for the holidays. <a href="https://www.businessinsider.com/executives-say-brace-for-shipping-delays-price-hikes-next-year-2021-9">Experts told Insider</a> last month that they do not see consumer demand tapering until late next year as holiday demand, as well as companies' efforts to replenish inventory, continues to strain the global <keyword id="11894138" type="UNKNOWN" weightage="60" keywordseo="supply-chain" source="Orion">supply chain</keyword> at a time when it is still combating <a href="https://www.businessinsider.com/shipping-delays-shutdown-at-chinese-port-threatens-send-prices-higher-2021-8">COVID-19 shutdowns in Asia.</a>

US Commerce Secretary says there's no denying the supply-chain crisis poses 'a problem'

<ul class="summary-list"><li>The average price of a new car in the US shot past $47,000 in December, Kelley Blue Book says. </li><li>Car prices have surged amid supply-chain issues and a shortage of new vehicles at dealerships.</li></ul>The cost of the average new car in the US has surged toward $50,000 over the last two years. Don't expect prices to come down dramatically anytime soon. In December, the average price paid for a new vehicle surpassed $47,000 for the first time, hitting $47,077, according to <a href="https://www.kbb.com/car-news/average-new-car-price-tops-47000/?PSID=CSTW1">Kelley Blue Book</a>. The average price of a non-luxury vehicle stood at $43,072, slightly down from an all-time high in November.All in all, the amount Americans paid for the average new car rose a staggering $6,220 in 2021, and $3,301 in 2020, Kelley Blue Book says. Americans today are paying almost $10,000 more for their new cars than they did before the pandemic in 2019. Prices may not return to typical levels for <a href="https://www.businessinsider.com/car-prices-are-expected-to-keep-climbing-throughout-2022-2022-1">quite a while</a>. New and used car prices have skyrocketed throughout the pandemic, mainly due to a drop in new vehicle production globally. In fact, cars were one of the key contributors to rampant inflation in 2021, <a href="https://www.businessinsider.com/inflation-december-cpi-price-growth-index-supply-chain-economic-recovery-2022-1">which had leaped to its highest pace since 1982, the Bureau of Labor Statistics said Wednesday.</a>Supply-chain snarls — including a <a href="https://markets.businessinsider.com/news/commodities/supply-chains-chip-shortage-auto-semiconductor-sectors-ford-toyota-tsmc-2021-08">shortage of the semiconductor chips</a> that underpin a huge assortment of vehicle technologies — have stunted manufacturing worldwide. As a result, US dealerships have had to grapple with historically low inventories. It's simple economics: When supply plummets, prices shoot up. And the low supply of new vehicles isn't going to resolve itself overnight.According to the research firm <a href="https://ihsmarkit.com/research-analysis/fuel-for-thought-auto-demand-levels-remain-depressed-on-chip-famine.html">IHS Markit</a>, vehicle production should slowly recover throughout 2022, but semiconductor shortages and other supply-chain challenges will drag on until 2023. Even once the chip situation improves, other coronavirus-related struggles having to do with raw materials or labor could emerge, the firm said.The Volkswagen Group, one of the world's largest producers of commercial and passenger vehicles, doesn't expect much of a change in the availability of computer chips this year, its CFO told <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fvw-finance-chief-expects-inflation-to-ease-and-chip-shortage-to-drag-on-11641843428">The Wall Street Journal</a> on Monday. Things seem to be improving. The supply of new vehicles in the US has risen in recent months, signaling that the worst of the shortages could be over, according to <a href="https://www.coxautoinc.com/market-insights/still-low-new-vehicle-supply-nears-1-million-units-average-price-surpasses-45000/">Cox Automotive</a>. But inventories remain far below normal levels. At the end of November, there were roughly 1 million new, unsold vehicles on dealer lots — that's 1.8 million fewer than the same time in 2020 and 2.5 million fewer than 2019 levels. There's another reason average transaction prices aren't likely to drop significantly in the near term: changing tastes. Kelley Blue Book says more luxury purchases and fewer low-cost sedans changing hands is driving average vehicle prices up.

The average new car now costs more than $47,000. Don't expect them to get much cheaper anytime soon.

<ul class="summary-list"><li>The demand for Nvidia's AI chips could bolster job growth across the semiconductor industry.</li><li>That's because tech companies need more than just Nvidia's high-end chips to build their AI technologies. </li></ul>Nvidia's stockholders aren't the only ones who have reason to celebrate the <a target="_blank" href="https://www.businessinsider.com/nvidia-stock-price-jensen-huang-alphabet-amazon-magnificent-seven-charts-2024-2">company's smashing success</a> over the past year.Surging demand for the company's high-end chips — used to power <a target="_blank" href="https://www.businessinsider.com/nvidia-triple-production-h100-chips-ai-drives-demand-2023-8">AI technologies like ChatGPT</a> — could help create jobs for chip designers, manufacturers, and suppliers across the semiconductor industry.It could also help the <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-chip-semiconductor-factory-biden-global-economy-china-taiwan-2022-12">Biden administration</a> bring more semiconductor chip manufacturing stateside and reduce the <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-chip-semiconductor-factory-biden-global-economy-china-taiwan-2022-12">US's reliance on Taiwan</a> — which remains vulnerable to Chinese invasion that would <a target="_blank" href="https://www.businessinsider.com/taiwan-war-impact-us-economic-growth-first-year-china-chips-2024-1">wreak havoc on the global economy</a>. In 2022, President Joe Biden signed the <a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7">CHIPS Act</a> into law, which included $52 billion in subsidies designed to bolster the US semiconductor industry.In January, Deloitte projected that global semiconductor chip sales, led by AI chips, would <a target="_blank" href="https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/semiconductor-industry-outlook.html">grow 13%</a> in 2024 to the highest level on record. The market for AI chips has grown from close to zero in 2022 to a projected $50 billion in 2024, and by 2027, it could <a target="_blank" href="https://www2.deloitte.com/us/en/insights/industry/technology/technology-media-and-telecom-predictions/2024/generative-ai-chip-market-to-reach-40-billion-in-2024.html">account for half</a> of the entire chip market. Even many optimistic industry projections of the past now seem far too conservative, Intel's CEO Pat Gelsinger recently <a target="_blank" href="https://www.axios.com/2024/02/22/intel-nvidia-ai-chips-manufacturing">told reporters</a>.Even without the AI boom, the semiconductor industry was already poised for big job gains in the near future. The US government had plans to invest <a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7">billions of dollars</a> to bring the production of chips that power things like iPhones, pickup trucks, and washing machines back to the US. In a July 2023 report, the Semiconductor Industry Association projected that the industry's US workforce would grow by <a target="_blank" href="https://www.semiconductors.org/wp-content/uploads/2023/07/SIA_July2023_ChippingAway_website.pdf">nearly 115,000</a> by 2030.But a variety of roadblocks have delayed this rosy future from becoming a reality. In 2023, the historically cyclical semiconductor industry saw sales <a target="_blank" href="https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/semiconductor-industry-outlook.html">fall nearly 10%</a>, which caused many companies to scale back their near-term hiring and <a target="_blank" href="https://www.sfchronicle.com/bayarea/article/bay-area-tech-layoffs-intel-slashes-235-jobs-18564575.php">lay off workers</a>. Additionally, some major US chip factories have faced <a target="_blank" href="https://www.businessinsider.com/tsmc-taiwan-semiconductor-phoenix-arizona-factory-chipmaker-job-qualification-debate-2023-8">construction delays</a>, and the rollout of <a target="_blank" href="https://markets.businessinsider.com/news/stocks/citi-analyst-predicts-intel-and-micron-as-biggest-beneficiaries-in-us-chips-act-push-despite-regulatory-hurdles-1032898594?_gl=1*16qxmh5*_ga*MTY4MTI5OTYzMC4xNjg5MTg4NTU3*_ga_E21CV80ZCZ*MTcwOTEzNTkyOS42MzEuMC4xNzA5MTM1OTM3LjUyLjAuMA..">government funds</a> to support investment has been slow. It's left some people who've been trained to work in the industry wondering <a target="_blank" href="https://www.businessinsider.com/semiconductor-chips-jobs-hiring-arizona-tech-phoenix-tsmc-intel-china-2024-1">when all the promised jobs are coming</a>.Now, it appears the buzz around generative AI — and the surging demand for chips that power it — is turning things around. This could benefit a variety of US companies in the chip production supply chain, provide more jobs for Americans, and help the US bring chip production closer to home.<h2>Which companies will create jobs due to the AI chip boom?</h2>Nvidia is the leading designer and seller of H100 GPUs — the key chips companies use to <a target="_blank" href="https://www.businessinsider.com/nvidia-mark-zuckerberg-ai-chips-gpus-meta-2024-2&amp;post-bottom-piano-recommendations">train and deploy AI models</a>. In February, the company reported <a target="_blank" href="https://www.businessinsider.com/nvidia-just-showed-world-ai-daddy-now-chips-revenues-2024-2">over $22 billion in revenue</a> for the fourth quarter of 2023 and became the <a target="_blank" href="https://www.businessinsider.com/nvidia-stock-price-jensen-huang-alphabet-amazon-magnificent-seven-charts-2024-2">third most valuable</a> US corporation.Unlike some semiconductor companies, Nvidia doesn't manufacture any of its own chips. Most of Nvidia's high-end chip production is done by TSMC at its Taiwan-based factories, industry experts told Business Insider. The Taiwan-based company is the world's <a target="_blank" href="https://www.businessinsider.com/why-tsmc-chipmaker-investing-billions-us-cost-more-make-chips-2022-12">largest chip manufacturer</a> and one of the companies currently building plants in the US.While Nvidia and TSMC are the dominant players in the AI chips space, other companies could also benefit from the chips boom. That's because tech companies need a variety of chips to make their AI technologies run."It's not like you got the Nvidia H100 chip and your solution's complete — you need other chips," Syed Alam, global semiconductor lead at the IT services and consulting firm Accenture, told BI.This means that many companies that buy Nvidia's high-end AI chips could also buy a wide range of other chips. This is good news for companies across the semiconductor industry — and workers who could land jobs with these companies if demand spikes."I anticipate that the rising demand for AI chips will continue to increase as competition heats up, and this will benefit the entire semiconductor industry," Ed Kaste, senior vice president of product management at the chipmaker GlobalFoundries, told BI.GlobalFoundries <a target="_blank" href="https://www.nytimes.com/2024/02/19/business/economy/biden-administration-1-5-billion-chipmaker-globalfoundries.html">specializes</a> in chips that are typically used for cars and consumer appliances — but still have some use cases for AI companies.While Nvidia is the top player in AI chip design, other companies are trying to capitalize on the growing market. These include tech companies like <a target="_blank" href="https://www.businessinsider.com/amazon-nvidia-cloud-ai-anthropic-2023-10">Amazon</a> and <a target="_blank" href="https://www.reuters.com/technology/meta-deploy-in-house-custom-chips-this-year-power-ai-drive-memo-2024-02-01/">Meta</a> and established industry players like Intel and AMD."The generative AI boom is clearly a very good thing for Nvidia and TSMC in the lead," Mark Muro, a senior fellow at the Brookings Institution who studies the impact of AI on the economy, told BI. "But with that said, other big actors like Samsung, Intel, Google, and IBM could also benefit from the chip gold rush."TSMC remains the predominant manufacturer of Nvidia's high-end AI chips. But Muro said that as Nvidia grows, it may diversify its manufacturing ecosystem in the years ahead — and that the US semiconductor industry could reap some of the rewards. Last year, Nvidia CEO Jensen Huang <a target="_blank" href="https://www.reuters.com/technology/nvidia-ceo-feels-safe-relying-heavily-taiwan-manufacturing-2023-06-01/">said</a> that the company planned to manufacture some chips at TSMC's <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">Arizona factories</a> once they come online. The company could rely more on other chipmakers <a target="_blank" href="https://www.fool.com/investing/2024/02/04/if-this-nvidia-rumor-is-true-intel-just-scored-a-m/">like Intel</a>, though it hasn't confirmed any such plans.Manufacturing some of Nvidia's high-end chips in the US wouldn't just provide a boost to the economy, but help minimize risk to American companies in the case of a Chinese invasion of Taiwan.It's not just chip designers and manufacturers that could benefit from rising demand for AI chips.There are also several companies, many of them based in the US, that sell specialized semiconductor equipment that companies like TSMC use to manufacture chips. Dylan Patel, a chief analyst at the semiconductor research and consulting firm SemiAnalysis, said that Lam Research, Applied Materials, and KLA Corporation are among the businesses that could benefit from rising AI chip demand."Expect to see a significant expansion of employee count to meet the demand for chip design and semiconductor capital equipment," he said.Some of this job growth is already happening. Applied Materials' workforce, half of which Patel said is based in the US, grew from 22,000 employees in 2019 to <a target="_blank" href="https://www.macrotrends.net/stocks/charts/AMAT/applied-materials/number-of-employees">34,000</a> by the end of last year.<h2>Will there be enough workers to fill semiconductor jobs?</h2>As chip factories get more advanced, Accenture's Alam said that some processes could be automated — one factor that might offset some of the industry's job gains. But he said there should be plenty of demand for workers in the years to come.As expectations for semiconductor job growth in the US continue to grow, one of the key questions is who will fill all these jobs. Of the 115,000 US new semiconductor jobs the Semiconductor Industry Association is projecting by 2030, it said <a target="_blank" href="https://www.semiconductors.org/chipping-away-assessing-and-addressing-the-labor-market-gap-facing-the-u-s-semiconductor-industry/">roughly 67,000</a> of these positions risk going unfilled given current college degree <a target="_blank" href="https://www.commerce.gov/news/blog/2023/07/us-commerce-secretary-gina-raimondo-calls-students-every-level-education-consider#:~:text=and%20quantum%20computing.-,%E2%80%9C,90%2C000%20technical%20workers%20by%202030.">completion rates</a>.Per the Semiconductor Industry Association, most of the potentially unfilled jobs are for technician and engineer roles that typically require as little as a certificate or two-year degree and as much as a master's or Ph.D. In an effort to prevent a worker shortage, <a target="_blank" href="https://www.businessinsider.com/semiconductor-certification-program-chipmaker-manufacturing-jobs-new-career-intel-tsmc-2023-8">community colleges</a> and universities across the country have partnered with semiconductor companies."The job growth is there, and then also at the same time, there's concern whether we will be able to find the talented, skilled resources to fill these jobs," Alam said.

Nvidia's AI chips boom could help the Biden administration bring semiconductor jobs to the US    

What began as cleaning supply and home office <a href="https://www.businessinsider.in/tech/news/intel-ceo-says-global-chip-shortage-will-not-end-before-2023/articleshow/87200140.cms" data-type="tilCustomLink">technology shortages </a>have since expanded into delays and scarcity for everything, from consumer appliances and electronics to automobiles in the pandemic. According to global market research firm Forrester, more companies are revealing that these shortages are prompted by disruptions in their Tier 1 or downstream supply chains, and it's not likely to get better anytime soon due to systemic risk. "Systemic risks do not take turns; they often trigger one another and can materialise all at once. To fix the problem, businesses must understand the top systemic risks shaping global supply networks," said Forrester senior analyst Alla Valente. <keyword id="318522" type="General" weightage="20" keywordseo="semiconductor-chips" source="Orion">Semiconductor chips</keyword> have become the basic ingredient in a wide variety of products. They include automobiles, a market the media has been highlighting as the 'poster child' for the <keyword id="10389950" type="General" weightage="20" keywordseo="chip-shortage" source="Orion">chip shortage</keyword>. "The impact extends far beyond autos, home appliances, consumer electronics, medical devices, farm equipment, and even toys. It is hitting corporate IT hard, as data centre equipment, cloud services, PC, and even Apple struggle to get these essential parts," said Vice-President and Research Director Glenn O'Donnell. If you cannot get aluminium, you cannot make chips; if you cannot get sand (raw silicon), you cannot make chips. "Chipmakers are increasing capacity substantially, but they just kicked off this supply repair process, which takes a minimum of two years. An ample supply of chips will not come until well into 2023, perpetuating the electronic supply chain for another two years or so," O'Donnell predicted. In the spring of 2020, it was toilet paper and hand sanitiser. Last holiday season, it was the PS5. This year, anything that does not make it onto shelves could be a beacon for the automated software programmes or bots, which means that people already paying higher prices for food and gas may be forced to pay markups for hard-to-find hot gifts or everyday essentials. "The good news is that retailers can mitigate this risk to their customers with effective bot management tooling: as you anticipate upcoming shortages, expect bot activity to expand," said principal analyst Sandy Carielli. "As supply chain disruptions continue, be prepared for bot operators to take advantage of any shortages," the report noted.

Global supply chain disruptions won't get better anytime soon due to chip shortage: Forrester

<ul class="summary-list"><li>Faced with limited supplies, companies are favoring the production of premium products.</li><li>A focus on higher-end goods has helped companies protect profits with fewer unit sales.</li><li>The shifting mix means that the average price in certain categories is higher, nudging inflation up.</li></ul>Ever since the invention of the television, comparable models have grown predictably more affordable each year. But the pandemic-induced supply-chain foul ups have broken that trend.Mike Abt, an electronics retailer in Chicago, <a href="https://www.wsj.com/articles/why-budget-appliances-tvs-are-in-short-supply-but-premium-models-are-in-stock-11633339801">told The Wall Street Journal</a> this is the first time he's seen prices go up. Not only that, there are now about half as many models to choose from, and what is available tends to be a more premium version."[Manufacturers] figured they would make less [variations], and more of them," Abt said. "It tended to be a little bit more deluxe too: middle to middle-high, less low-priced."And it's not just <keyword id="11992982" type="UNKNOWN" weightage="60" keywordseo="tvs" source="Orion">TVs</keyword>, either.While most of Weber's budget-friendly grills are made in China and imported, the models it makes in the US fetch a higher-price, the company's CEO Chris Scherzinger told the Journal.And in a July earnings call, Whirlpool told analysts it intended to remain "price/mix positive" through the rest of the year, meaning that it would favor more expensive (and profitable) offerings from its lines of <keyword id="11993860" type="UNKNOWN" weightage="60" keywordseo="washing-machines" source="Orion">washing machines</keyword> and KitchenAid products.Automakers also are steering their limited supplies of semiconductor chips toward the production and sales of their more profitable models. General Motors temporarily suspended new Chevrolet Malibus in favor of higher-margin SUVs, and Ford reported in June that sales of <a href="https://www.businessinsider.com/ford-made-more-electric-mustangs-than-gas-ones-this-year-2021-6">all-electric Mach-E Mustangs had outpaced traditional gas models</a>.There are a few factors at play behind the shift toward more expensive options.First, both Home Depot and Lowes both reported in August that shoppers were quite willing to substitute upward for a more feature-rich alternative when the entry level product they were looking for was out of stock. In other words, they were perfectly happy to pay a little extra for that tech-enabled dishwasher when the cheaper tech-free option was not available.Not only do higher-priced goods tend to command higher profit margins than lower-priced ones, the customers tend to be a bit less price sensitive when markups do happen.An ongoing study by a Harvard economist found that the <a href="https://www.businessinsider.com/inflation-is-higher-for-rich-americans-harvard-cavallo-analysis-2021-9">prices for things wealthy households buy</a> has gone up more quickly than the prices of things for lower-income shoppers. Inflation is hitting luxury goods more than grocery staples, so far.It's worth noting this move by manufacturers and retailers has an effect on the category prices the US government uses to measure inflation.Since there's no separate categories for "fancy washing machines" or "discount televisions," there's no real way to disentangle the effects of actual price increases on specific products versus simply having a larger availability of premium goods in a given category.Prices are most certainly going up, but what really matters is what you're buying.

Another reason things seem more expensive? Companies are pushing more upscale products while more affordable ones get held up by the supply-chain crisis.

<ul class="summary-list"><li>Nio shares fell Wednesday after the electric-vehicle maker reduced its third-quarter delivery guidance. </li><li>The Chinese automaker cited "continued uncertainty and volatility of semiconductor supply" as a reason for cutting its outlook. </li><li>Nio expects to deliver 22,500 to 23,500 vehicles in the third quarter, down from its previous range of 23,000 to 25,000 units. </li></ul><a href="https://markets.businessinsider.com/stocks/nio-stock">Nio</a> shares declined as much as 5% on Wednesday after the Chinese electric-vehicle maker lowered its third-quarter outlook for deliveries because of semiconductor supply constraints. The company now expects to deliver 22,500 to 23,500 vehicles in the third quarter, down from its previous outlook of 23,000 to 25,000 units. The global automotive industry has been <a href="https://markets.businessinsider.com/news/commodities/supply-chains-chip-shortage-auto-semiconductor-sectors-ford-toyota-tsmc-2021-08">plagued by a chip shortage and supply constraints</a> for more than a year, prompting other car manufacturers including <a href="https://markets.businessinsider.com/stocks/tm-stock">Toyota Motor</a> and <a href="https://markets.businessinsider.com/stocks/f-stock">Ford Motor</a> to reduce production at their factories. Nio also said Wednesday it delivered 5,880 vehicles in August, representing year-over-year growth of 48.3%."While the company's new order reached an all-time high in August driven by the increasing demand, the vehicle production, especially the manufacturing of the ES6 and EC6, was materially disrupted by <keyword id="12002865" type="UNKNOWN" weightage="60" keywordseo="supply-chain-constraints" source="Orion">supply chain constraints</keyword> resulting from the COVID-19 pandemic in certain areas in China and Malaysia," it said.After seeing torrid gains to start 2021, Nio's stock is now down nearly 20% year-to-date.<div type="image" title="nio stock chart 9-1-21" height="641" width="792" msid="85834506" hostid="261"></div>

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