The new CEO of Qualcomm, Cristiano Amon, warns that the global chip shortage may not end anytime sooner, Nvidia and Arm and also facing the issue, as per Tibken on CNET. [Qualcomm CEO Cristiano Amon NvidiaArmTibkenCNET]
From mobile phones to cars, the global microchip shortage is hurting every tech industry on the planet. For every electronic device to work, microchips are needed for proper functioning, but the recent semiconductor shortage has caused major tech makers as well as motor companies to cease production. Ford Motors, specifically, has stopped producing the Ford F-150.
In other news, did you notice that you can’t buy the Sony Playstation 5? It is because consoles are also facing a global chip shortage. Whether they are consoles, PC parts, or more specifically, graphics processors, everything is facing the issue.
Qualcomm is the world’s biggest mobile chipmaker and even this tech giant is facing the issue, forcing it to cease production. The newly appointed CEO of Qualcomm, Cristiano Amon, warns the semiconductor shortage will keep haunting the tech market.
Cristiano Amon has been at Qualcomm since 1995 and he recently bagged the role of President. In the company’s 36-year-old history, Amon will be taking the throne from Steve Mollenkopt, and become the 4th CEO of Qualcomm. [Qualcomm CEO Cristiano Amon NvidiaArmTibkenCNET]
For the newly appointed 50-year-old CEO, the challenge is not only the microchip shortage but also the intense competition in 5G technologies. Since everyone is getting good at it, Amon would have to outcompete them all and maintain Qualcomm’s dominance in mobile microchips and take over the 5G market.
“If you asked me, ‘what keeps me up at night?’ right now is this supply chain crisis we’re having in the semiconductor industry… it is causing a lot of stress as the supply chain was not prepared to deal with the growth,” said CEO Cristiano Amon in an interview with CNET.
It is believed that Covid-19 may be the culprit behind the microchip shortage. When the pandemic hit and major tech companies ceased production, the demand after everything got back to normal was huge and no one was ready for it.
Mostly, work from home and online studies required more tech devices, hence, requiring more microchips but as stated, the demand was way higher than the current supply. One of the biggest tech companies, Apple, couldn’t meet the demand as their devices were sold out.
According to Amon, the situation is what’s called a V-Shaped Recovery. In it, there is a huge gap is a buy and selling, hence, when the demand rises again, the limited supply of goods can’t keep up.
“As more and more devices have gotten digital over the years – cars are the best example – the amount of semiconductor demand has grown to the point that people are battling over capacity that’s available,” stated Bob O’Donnell, a research analyst.
“We have an incredible crisis in the supply chain.” – new CEO of Qualcomm, Cristiano Amon.
Tech experts also believe that the sanctions on Huawei can also be the culprit behind the chip shortage. For a quarter, Huawei was the biggest smartphone manufacturer on the planet, stealing the title from Apple and Samsung, but the US sanctions disturbed the global supply and demand. [Qualcomm CEO Cristiano Amon NvidiaArmTibkenCNET]
When the sanctions came, Huawei stopped making phones, leaving a window of opportunity for other smartphone companies to try their luck in the market. And when that happens, you guessed it, new chips are needed, but the supply wasn’t there to keep up again.
“So you add all of this together, we have an incredible crisis in the supply chain… [the shortage is] impacting everything, and of course, impacting phones,” added Amon.
US President Joe Biden to Allocate $37 Billion to Boost Chips Manufacturing
“Recently, we’ve seen how a shortage of computer chips … has caused delays in the production of automobiles that has resulted in reduced hours for American workers, a 21st-century horseshoe nail…We need to make sure these supply chains are secure and reliable,” said Joe Biden as he announced to invest a whopping $37 billion of US taxpayer money to boost the production of chips to keep up with the demand.
But the problem is that money alone can’t solve this issue. Tech giants don’t build their own chips; they design the architecture and hire other companies to build their chips. So, the state-of-the-art chips are not built overnight, and neither are they built inside the company.
Fabs, where microchips are manufactured, are mostly owned by Samsung and the Taiwan Semiconductor Manufacturing Company (TSMC).
Qualcomm CEO Cristiano Amon also believes that Biden’s approach and money won’t help the microchip shortage. “This is going to get better as we get to the end of 2021… But the importance of this is to call attention and make sure that we have [a] robust supply chain, and investments are made … across a number of technologies,” added Amon.
Cristiano Amon has also made it clear that despite the global microchip shortage, Qualcomm won’t be building their own fabs due to the reasons addressed above. Instead, the company will keep asking their factories in Germany as well as Samsung and TSMC to manufacture their mobile phone chips in the future as well.
“We’re very good at designing chips, and we’re very good at implementing technologies for a very fast pace of innovation…Manufacturing of semiconductors is a whole different expertise,” Amon said.
Note: Most of the Android flagship smartphones are powered by Qualcomm processors.
Cristiano Amon’s Appointment as CEO surprised Everyone in Tech
Not only tech experts but also Amon himself were surprised by his promotion to become the next CEO of Qualcomm. He learned about it just three days before it was publicly announced and a day before the company’s board approved his appointment.
“The decision really … was made by the board and Steve around the time that I was informed so it wasn’t something that was in the works for a while,” commented Amon.
According to Amon, “5G will continue to be priority No. 1, No. 2, No. 3…5G is one of the greatest opportunities we have in the history of the company.” Not only phones but Qualcomm is also eyeing to expand 5G into IoT devices as well. [Qualcomm CEO Cristiano Amon NvidiaArmTibkenCNET]
Qualcomm Doesn’t Want to Rely on Arm
“The strength of the Arm roadmap is its independence,” – Cristiano Amon, CEO of Qualcomm.
Qualcomm bought a chip startup called Nuvia for $1.4 billion, which makes powerful and energy-efficient CPUs that Qualcomm plans to use in its products like smartphones, laptops, and cars to make them more powerful and efficient. Qualcomm likes Nuvia because it designs its own CPUs, which can be customized for high performance and power efficiency, making Qualcomm less reliant on the British chip designer, Arm.
“Arm roadmap does not allow us to lead in the CPU performance for the next-generation computing devices…We needed to have a roadmap to lead in that transition,” said Amon.
Qualcomm’s CEO believes that the future of computing will be based on a mobile chipset, so companies need to make their chips more powerful and energy-efficient. Although Qualcomm is reducing its reliance on Arm, it opposes Nvidia’s acquisition of Arm since the strength of Arm’s roadmap is its independence.
“The strength of the Arm roadmap is its independence…Nvidia does not need to buy Arm to do what they said they were going to do. The Arm ecosystems thrive… and create incredible competition across the globe because it’s independent,” Amon said.
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