What should the embedded systems industry learn from the supply chain challenges?
Supply chains in the embedded systems industry are still strained, for multiple reasons. While the impact of the pandemic is waning, geopolitical tensions have become the dominant factor. To reduce the dependence on imports of advanced ICs, the US, Japan and Europe are striving to encourage domestic IC manufacturers, as well as trying to attract leading overseas semiconductor companies to invest in building new fabs locally.
However, it is obvious that even if the regions succeed in reducing the dependence on front end manufacturing, crucial parts of the supply chain will still be located in the Asia-Pacific region, particularly in China. Thus, many western companies need to cope with the US export restrictions to China. Firstly, they must figure out how much of their China business they could secure despite the restrictions; secondly, they need to find ways to maintain access to components manufactured in mature and trailing edge technologies in China, which China could offer for attractive prices – and which will be difficult to source outside China.
