They say desperate times call for desperate measures, and if you needed any more indications that the state of supply chain security has reached crisis level, consider headlines like this one:
“Tech firms rip apart NEW washing machines so they can harvest their computer parts in a bid to beat the global microchip shortage”.
The news surfaced during an earnings call with the CEO of a Netherlands-based company, who told shareholders that a “major industrial conglomerate has resorted to buying washing machines and tearing out the semiconductors inside for use in its own chip modules.”
Chip shortages first began making headlines in the wake of the coronavirus pandemic, but shortages are expected to persist for the foreseeable future, as demand for semiconductors continues to increase across industry sectors, particularly in light of the acceleration of the “electrification of everything.”
The automobile industry is a case in point. As the EV revolution continues to gain steam, automakers, according to Bloomberg, have “yet to overcome a semiconductor crunch that has challenged their operations for over a year,” prompting some corporations to trim output targets or alert shareholders to expected “negative effects from chip scarcity.”
It is for good reason that the Biden Administration dedicated an entire chapter to “semiconductor manufacturing and advanced packaging” in its 100-Day Supply Chain Review last summer (- see our coverage of the report here -), in which the Administration underscored that [d]ue to the extremely complex and geographically dispersed nature of the semiconductor supply chain (which results in the typical semiconductor production process spanning multiple countries and products crossing international borders up to 70 times) there are many access points for supply chain vulnerabilities along the way.
Several steps have been and continue to be taken to shore up semiconductor supply chains, and thankfully, the U.S. is not only in the fortunate position to have known resources for both Gallium and Indium (via deposits in Texas and Alaska, respectively). Both metals can also be “unlocked” in the “co-product” development of their Gateway Metals Aluminum (for Gallium) and Zinc and Tin (Indium) — another reason stakeholders should focus more on the inter-relationship between Gateway Metals and the critical co-products they unlock.
Of course, as followers of ARPN well know, our critical mineral supply chain challenges extend far beyond the materials required for the manufacture of semiconductors, and as such, this complex challenge can only be addressed in the context of a comprehensive “all of-the-above” approach across the entire value chain — from mine to manufacturing. But, as we have frequently pointed out: “the first word in supply chain is ‘supply,’” so any effort must begin at the beginning – with the responsible sourcing of the materials needed to underpin 21st Century technology.
Recycling parts can and must be part of any comprehensive solution. But when industry has to resort to “cannibalizing” new consumer products to manufacture others, the situation is truly dire, and warrants concerted action.
After all, ripping microchips out of brand new washing machines is not exactly what we had in mind by “clean energy.”
