Semiconductor supply shortages are about far more than supply chain disruption. They have exposed complex geopolitical risks and sustainability issues that require systemic coordination to solve. Without a sophisticated accounting of the broader issues that transcend supply chain bottlenecks, the crisis will remain intractable and likely escalate.
The Global Chip Crisis is Costly, Technically Demanding, and Geopolitically Fraught
Semiconductor shortages have done more than make companies more aware of the technical challenges of production. They’ve also brought to light geopolitical challenges related to chip-manufacturing hegemony. In 2020, Taiwan Semiconductor Manufacturing Company (TSMC) was responsible for producing 90 percent of advanced microchips, and this figure continues to hold relatively steady. Given the systemic nature of the crisis, barriers to stable supplies are more costly, more technically demanding, and more geopolitically fraught than is typically realized. To have any hope of solving the chip crisis, stakeholders must play the long game and focus on the following key objectives.
Chip and Electronics Reuse
Chip fabrication requires large volumes of toxic metals and hazardous chemicals. The downstream ecological and health consequences of chip production have been known since the 1980s. They include groundwater and air pollution and the generation of toxic by-products that have created the need for EPA Superfund sites in places like Silicon Valley.
While chips can be reused once extracted from electronic waste, only a small percentage of materials can be reclaimed from most devices. Existing electronics design practices present financial obstacles that preclude comprehensive reuse. For this reason, electronics design must be reconceived on fully circular terms with high-volume, low-cost approaches to disassembly, recovery, and reuse.
Controlling pollution that can result from reshoring will require a commitment to developing zero-waste manufacturing processes and production. This, however, depends on creating a truly circular economy for semiconductors that emphasizes ecological sustainability as heavily as supply chain resilience. Such a circularity represents the best chance for productive cooperation between transatlantic partners.
Pivot’s Glasgow-based subsidiary, Wideblue, is a major player in this effort and has attracted notable press for its sustainable initiatives and industry-leading quest for net-zero. Wideblue is thinking beyond product lifecycle, recyclability, reuse, and downstream environmental impact. It serves as an exemplar for reducing carbon emissions, energy and water use, and material waste across the product lifespan — from design and material selection to supply chain to manufacturing and distribution.
Electronic waste (e-waste) is the world’s fastest-growing source of trash. From mobile phones to refrigerators, small and large electronics litter landfills. The challenge of preventing waste from forming in the first place is twofold. First, planned obsolescence is part and parcel of the development of many consumer products, creating second-order incentives for waste generation. Second, new global repair and remanufacturing infrastructure must be built to stem the rising tide of electronic trash. Both problems must be addressed to restore ecological health and supply chain security.
Elevated Standards and New Models
Elevated stakeholder and industry cooperation standards are required to create transparent secondary markets for reused chips. Chip companies must follow the “certified pre-owned” model pioneered by the auto industry and create a comparable “certified second-hand chip” process to validate viable chips, protect against counterfeiting, and defend national security interests.
Nothing less than a systemic and coordinated approach is necessary for successfully surmounting the complex risks exposed by the global chip crisis. By focusing on electronics reuse, zero-waste production, infrastructure for repair and remanufacture, and the industry-wide establishment of used-chip validation models, a more secure supply chain and sustainable future is possible.
Looking for a Premier Partner?
If you’re gearing up to launch a new innovation, Pivot brings more than a half-century of proven experience. We deliver an extensive suite of the latest wireless and cellular technologies, ISO and ISE certifications, and an internationally award-winning product portfolio. We will work closely with your team to understand and support your business objectives, identify optimal solutions, overcome obstacles, and launch a profitable product that positions your company for market leadership.
Contact us today to learn more about we will help make your product vision a winning reality.