- Medium-sized companies want to bring back production
- Sinolytics radar: how China is fighting the power crisis
- EU committee criticizes Chinese influence
- US concerned about condition of detained blogger
- China plans to fight pollution
- TSMC invests in chip manufacturing
- Switzerland adopts special approach to China
- Evergrande NEV shows signs of life
- Profile: Kai Müller – standing up for Tibet
Global supply chains have been under severe strain for almost two years now. The Covid crisis caused supply shortages of microchips for months. Aside from the pandemic, there have been unforeseen incidents on a regular basis: At one point, a container ship was stuck across the Suez Canal for weeks. Then there was a power crisis in China – and logistics experts have now heard of blocked ports more often than they would like.
Marcel Grzanna asked German SMEs how they are dealing with the crisis. Their plea is to shift more production back to Europe – especially in critical sectors such as semiconductors and medical goods. Because China knows how to use its market power and strategically restricts exports of important goods, entrepreneurs complain.
But important questions remain: Are consumers willing to pay more for “Made in Europe”? And will corporations that shift their production back home still be able to keep up with competitors that benefit from lower Chinese prices?
At least in the medium term, the chip crisis could ease somewhat: The largest producer TSMC plans the construction of a new factory in 2022. Production is scheduled to begin in southern Taiwan in 2024. Over the next three years, the company plans to invest a total of $100 billion in new production facilities.
We hope you enjoy today’s issue!
Nico Beckert
Feature
Covid exposes vulnerabilities of supply chains
Just a few months back, Jochen Kopitzke, Managing Director of a medical technology company, did not consider the automotive industry to be a direct competitor for electronic components. The same components used in refrigerators and SUVs sound unusual at first. But modern technology in both industries has the same tiny origin: the microchip. And because the tiring problems of Corona are massively impairing chip supply, Philipp Kirsch GmbH is now also getting involved in the struggles between Daimler, BMW, or Porsche.
It is an uneven battle when a medium-sized company from German Willstaett in Baden-Wurttemberg competes against the world’s automotive elite. Philipp Kirsch is one of the “hidden champions” of the German SME sector. But “the automotive industry has a huge purchasing power that us medium-sized companies can only dream of. Nevertheless, we are fighting them over processors,” says Kopitzke.
For Philipp Kirsch, nothing less is at stake than ensuring its own production. The calculation is simple: without chips, no refrigerators. The company now has to pay 25 times more for a processor than before the Covid pandemic. And yet CEO Kopitzke says: “We are happy that we have found ways together with German suppliers to continue production. Even though it hurts us a lot.”
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