COVID-19 Impact on Integrated Passive Devices in Semiconductors and Electronics Industry

COVID-19 Impact on Integrated Passive Devices in Semiconductors and Electronics Industry

  • Semiconductors and Electronics
  • Sep 28, 2020

COVID-19 Impact on Integrated Passive Devices in Semiconductors and Electronics Industry

The pandemic started with its epicenter in China in 2019 and has been continuously spreading by then to all over the world, so far 216 countries and territories have been affected with COVID-19, the U.S. being on the top with cases reaching to about 5.61 million, followed by Brazil, India and then by many European countries such as Russia, Spain, Italy among others.

The COVID-19 cases reaching to the big named countries with strong dominance in the global market which has adversely affected the economy globally. The spread of Coronavirus has led to the global recession, many companies are being bound to take stringent actions of laying of their employees, small business are being shut, manufacturing facilities are being put on hold.

There has been a disruption in supply chain of many industries due to restriction in logistics and closing of manufacturing facilities. In addition, the slowdown in economy has lowered the spending capability of individuals and people are saving money for emergencies.

Integrated passive device aids in miniaturization of devices by integrating various functional blocks such as impedance matching devices, baluns, couplers and harmonic filters to form a single silicon wafer which saves the chip space and enhances the device performance. The use of integrated passive devices is highly varied as per the applications.

It is used in reducing the number of parts which are to be assembled in an electronic system, it aids in miniaturization to be used in electronics, RF, wearable and mobile phones. It also helps in reducing the weight of the electronic assembly and is being extensively used in the unmanned aerial vehicles such as drones.

The pandemic has led to the growth of digital era, the users and industries have shifted to online sources and digital platforms for their daily operations. The internet penetration is increasing with high adoption of smartphones. The demand for consumer electronics has increased as the individuals are spending more time at home and using electronic devices for their daily usage. Integrated passive devices are utilized in the consumer electronics as it provides the benefit of militarization which is leading to the growth in the market.

The supply chain of integrated passive devices was seen to be initially disrupted with the shutdown of various manufacturing facility, especially China being the dominating region in the manufacturing of electronic devices. The disruption also occurred with the irregularities in the supply of raw materials as the logistics saw several restrictions. However, the loss in economy globally has made the government to open the manufacturing facilities with implication of certain regulations.

IMPACT ON DEMAND AND SUPPLY CHAIN AND LONG TERM STRATEGY ADOPTED BY MANUFACTURERS OR STEPS TAKEN

The behavior of the individuals have certainly changed in the pandemic, people are now more inclined towards digital platforms for their major uses. The major factor being the increasing adoption of smartphones among the individuals for video conferencing and connecting with the known ones, also the increasing use of smartphones for financial transactions has increased the adoption of smartphones during the pandemic. The smartphones and mobile phones consist of the integrated passive devices and the increasing demand of smartphones is increasing the requirement of integrated passive devices.

For instance,

  • In 2019 there were about 2.71 billion smartphone users worldwide and is seen to be reaching at 7.33 billion by 2023. The increasing usage of smartphones globally is likely to increase the demand of integrated passive devices.

However, the sales of smartphones dropped drastically with the spread of the novel virus. The sales of Samsung and Huawei dropped by 17% in the second quarter. Apple also noted a drop of about 8%. The slowdown in the sales of smartphones adversely affected the integrated passive devices market but the effect was temporary and the market recovered after the second quarter.

The integrated passive devices are used in RF modules including cellular and wireless applications such as ZigBee, Ultra-Wide Brand (UWB), Long-Term Evolution (LTE), wireless local area network (WLAN) and Bluetooth.

The growth of RF modules has increased during the pandemic with the increasing usage of internet services. The high usage of internet services by the users has increased the demand for wireless and IoT devices and application increasing the requirement of integrated passive devices.

For instance,

  • The internet usage increased to 70% during the pandemic and the streaming reached to about 12% globally. The high increase in internet usage increased the demand for the wireless applications.

In addition, the IoT market is also growing with rise in internet penetration and the IoT devices utilizes the integrated passive devices because of its various benefits such as militarization. The increase in internet services is therefore increasing the requirement of integrated passive devices during the pandemic.

The supply chain was affected due to the disruption in the supply of raw materials, the integrated passive devices is composed of various materials according to the requirement and application. The initial restrictions on the logistics and temporary shutdown of manufacturing facilities had disrupted the supply chain. Integrated passive devices are typically manufactured on a silicon substratum using common wafer fabrication techniques such as thin film.

The company such as AIXTRON is engaged in providing thin film technology and came across a COVID-19 case in their office and took the necessary steps to avoid any worse situation. However, it noted no disruption in the operation of its business units leading to free flow of supply chain.

Integrated passive devices are being highly used in medical equipment due to its compact size and benefit of weight reduction. The government is also focusing on increasing the use of technology in medical field as well as consumer electronics. The increasing focus of government towards the advancing technology will increase the requirement of integrated passive devices to be integrated in various devices.

CONCLUSION

As the COVID-19 prevails the initial period saw a disruption in both supply and demand of the integrated passive devices market. Most of the manufacturing facilities were closed bringing down the production of integrated passive devices manufacturing companies.

However, as the countries are getting digitally transformed and people are being more accustomed to the digital sources the consumer electronic market seems to be growing. The RF technologies are utilizing the integrated passive devices due to its compact size and light weight. Companies are launching new wireless connectivity and IoT technologies due to increasing demand.

For instance,

  • IN 2020, Quorvo announced the launch of world's smallest, highest-performing Wi-Fi 6 solution in integration with the IoT. The product also provides Bluetooth and Zigbee and minimizes cross radio interference. The new wireless products will require integrated passive devices for the manufacturing of the devices in order to provide high benefits.

The growth of integrated passive devices is likely to increase post pandemic major factor being the high investment of companies in advanced technologies. The growth of unmanned aerial vehicle is also likely to boost the integrated passive device market as it provides lightweight to the drones. The drones are being extensively used for security reasons and for cross border monitoring. The increase in the drone manufacturing will increase the demand of integrated passive device market.

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