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Recently, Infineon Technologies reaffirmed its leading position in the global automotive semiconductor market, recording significant growth. According to the latest research by TechInsights, the global automotive semiconductor market grew 16.5% to a new record of $69.2 billion. Infineon’s flagship microcontrollers, AURIX and TRAVEO, are driving the transition to autonomous, connected and electrified vehicles by combining power and performance improvements with the latest trends in virtualization, artificial intelligence-based modeling, functional safety, cybersecurity and network functions.
Such seemingly ordinary business news, if correctly interpreted, can have important implications for production chains.
Another less recent but relevant example is Micron’s decision to invest significantly in the production of high-bandwidth memory (HBM) semiconductors for artificial intelligence, while not actually increasing its production capacity with new facilities.
If a manufacturer decides to shift production to a different type of component, such as HBM memory, without increasing overall production capacity, it may mean that the manufacturer has chosen to reduce the supply of a low-demand component to focus on HBM memory.
When requests for the low-demand product begin to increase (because stagnant demand typically eventually explodes), but supply has been decreased by production decisions such as this, it creates scarcity that drives prices higher, forcing you to turn to the open market at significantly worse economic conditions.
This raises another important implication: the choice of supplier in the open market.
Is a broker in the open market as reliable as an independent distributor?
We will answer these questions in the next newsletter, so follow us to discover other insights that are particularly pertinent to the current market situation. If you would like to comment and share your opinion, please feel free to write to us by calling us!
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