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Microchip Maker Adjusts Through Pandemic Sales Decline, Surge

Working from home during the COVID-19 pandemic has created a surge in sales of electronic goods, and that has created a higher demand for microchips. Microchips are used in almost everything that is electronic — from smartphones to kitchen appliances to cars.

David Somo is a Senior Vice President for Phoenix-based ON Semiconductor, a global supplier of microchips, mostly for cars.

Somo said in the first half of 2020, the pandemic caused a 40%-80% drop in automobile sales. That meant component parts, including microchips, dropped as well. At the same time, however, there was a shift happening because of the pandemic as more people began to work from home.

"There was a surge for demand in products that enable remote work, remote education, e-commerce environment that was happening due to the pandemic," he said.

Primarily, he spoke of chips used in smartphones, as sales surged in devices throughout the pandemic — including phones and other handheld and remote work-friendly electronics.

But, Somo said, the demand for cars has since come back while smartphone sales continue, and that has created a shortage of microchips. Somo said the price for microchips has increased as a result, but he said the most visible retail effects of the supply shortage is that car manufacturers have adjusted production; fewer cars are now being made.

“Car makers now are focused on their most popular models rather than trying to make all models with the limited, constraints in supply that they’re seeing,” he said.

About one-third of ON Semiconductor's sales come from auto-related sales, another third come from the industrial sector including solar and electrical vehicle charging along with medical devices and defense and aerospace applications. The rest is divided among telecom, wireless, consumer electronics and related sales.

Heather van Blokland moved to Phoenix in March 2016 to join KJZZ as a host/producer, after working as an on-air host/producer at Oregon Public Broadcasting in Portland, covering middays, weekends and most everything in between. van Blokland previously worked as a Morning Edition host and reporter at Florida NPR affiliate WUFT-FM, covering business and agriculture beats. She was also the local producer and editor for StoryCorps’ story booth.Like many in public media, van Blokland brings a diverse background to her daily duties. Her first career was in the private sector as a financial analyst manager in commercial and investment banking. She also used to teach canoeing and kayaking on the local rivers in North Central Florida. Her education includes a master’s in mass communication from the University of Florida, a bachelor’s in finance, marketing and multinational business from Florida State University, and a diploma in acting for film and television from Vancouver Film School in Vancouver, British Columbia. She wrote and produced a film, later submitted to the Vancouver International Film Festival.In her free time, van Blokland enjoys exploring the outdoors, everything from a hike on South Mountain to Vancouver's Butchart Gardens to a ride through Swaziland’s Mkhaya Game Reserve. Her travels have included South Africa, Swaziland, western Canada, Australia, the British Isles, Argentina, Uruguay and Paraguay and summers on the outskirts of London. She is also a certified open-water diver, and still looking to apply that skill in Phoenix.Half Southern and half English, van Blokland enjoys using phrases that surprise people. She does not enjoy steak and kidney pie or Monty Python. You can send your ardent disagreements with this statement to her directly at [email protected].