I wish you a happy and healthy New Year. I have taken the time between the years to recover from a very challenging 2021 and also pondered over expectations in 2022 and my vision for both our business and economy.
What I think 2022 will bring
You don´t need a crystal ball to know that one of the main challenges for our particular industry remains the lack of semiconductors. This essential component of many electronic devices is the brain of all modern technology. At RNT Rausch we design and build hardware to empower software solutions. Thus, we will continue to be impacted by the global chip shortage because they are core to driving our innovations and we would like to deliver these solutions to our partners and customers on time in 2022.
While we still have some wiggle room, we are concerned with assembling our existing solutions on time and without design modifications; ironically at a time when demand is skyrocketing. As a company, RNT Rausch may be in a slightly advantageous position as we have never relied on just-in-time delivery from abroad but have planned stock with quite a bit of lead time. However, it doesn’t look like the current production and delivery bottlenecks will come to an end this year but I’m expecting small improvements. Generally, we’re slightly less reliant on the global supply chain as we have always consciously sourced and assembled components in Germany wherever possible. However, the semiconductors we require for our solutions are simply not produced in Europe and the pandemic is really highlighting a global supply chain and a just-in-time delivery challenge. We have seen high container stacks in some parts of the world because seaports were shut down due to cases of Covid-19 causing soaring prices and mindboggling lead times. Fingers crossed we won’t be hit by another global hiccup like the container ship Ever Given that was blocking the Suez Canal for six days and effectively brought global shipping to a standstill.
Here are my conclusions
Like most entrepreneurs, I believe in free markets. While I don´t pretend to have special macroeconomic or political insights, I do think it´s worth mentioning that running out of semiconductors isn´t just an issue of production delays for entertainment electronics or the automotive sector. There are actual and real cyber security risks to consider.
The most obvious ones I can think of are chips needed for secure payments, data transactions, or general security in data centers. Another big concern is what happens if the global shortage leads to an increased usage of counterfeit parts?
I don´t mean to impose my opinion on others, but I personally think that having a conversation on building certain capabilities and manufacturing in Europe is very worthwhile having.
Such a conversation, led by a need for business continuity and security concerns, requires more than just simple intent. It’s rather a hugely complex enterprise requiring R&D collaboration across the entire supply chain and almost prohibitive multi-billion Euro investments. It is therefore quite encouraging to receive the strong economic and geopolitical signals of the European Union to increase competitiveness and sovereignty through the European Chips Act, as Ursula von der Leyen announced in September of 2021 in her State of the European Union address.
I am particularly impressed with companies and organisations already creating facts in the field, like
- Bosch inaugurated Europe´s first digitalized chip plant in Dresden in June 2021 with a focus on semiconductors for automotive needs
- Infineon opened its high-tech chip factory for power electronics in September 2021
It´s inspiring to see companies and European organisations #breakingthemold.
As RNT Rausch, we have taken a particular interest in the mission of Gaia-X, a project initiated by Europe for Europe and beyond to develop a next-generation European data infrastructure. In 2022, we aim to become a member of the German hub and contribute to innovation, transparency, openness, and the emancipation and independence of European data infrastructure. I believe it is essential to have a European alternative to the predominantly American hyperscalers.
What I anticipate with great expectations in 2022
We are all tired of the pandemic, our curtailed freedom and the impact it is having on our souls, the economy, and even policymaking. However, some things make me hopeful in this context, especially when I look at my home country, Germany. It’s not particularly renown for leading the digital revolution. However, the side effects of the pandemic like confinement, remote work, and severe limitations of in persona meetings have greatly accelerated digitalisation efforts. Advancing #digitaltransformation has become a priority for companies, communities, public agencies, and more. This is resulting in huge interest in learning more about processes, solutions, and digital literacy that can both advance and aid this transition. I am witnessing the desire to open new paths in terms of processes and technology, paving the way for cloud and hybrid solutions. Speaking of side effects, I hope that it shall not be long until 5G, improved internet, and phone coverage will make “lost connections” a thing of the past. I cannot wait to support and empower this evolution in 2022 and beyond.
I hope that all of you started 2022 rested, healthy, joyous, and full of ideas that will make our lives better.
Onwards and upwards,