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Mr. Chip Erich Lejeune warns: When it comes to semiconductors, we have been permanently disconnected

2021-11-23T10:10:57.210Z


Is the chip bottleneck something that will pass? It will stay and even worse, says the Munich entrepreneur Erich Lejeune, who knows the industry like no other.


Is the chip bottleneck something that will pass?

It will stay and even worse, says the Munich entrepreneur Erich Lejeune, who knows the industry like no other.

Munich

- Cars are on the dump and cannot be delivered because a tiny component is missing. You have to wait six months for dishwashers. A microcontroller for the electronics is not available. European industry is suffering: chips, essential for any electronic control system, are in short supply. The problem is not new. A resourceful Munich businessman had already seen the shortage of chips and its consequences in 1976, predicted that it would worsen, and turned overcoming the shortage into a business idea.

Erich Lejeune, who came from a humble background and started selling electronic components, founded the company CE Consumer Electronics, which was at times the world's largest chip broker.

An unparalleled success story.

We spoke to "Mr.

Chip ”, as Lejeune was called back then.

His view of the prospects is sobering: "We have lost the connection and can no longer correct that." The German industry was at the top of the world and has vacated this position without need.

Chips came from Japan and America, later from Korea and Hong Kong and now from Taiwan and China.

Erich Lejeune misses the willingness to take risks: A lot of stupid capital

He sees the cause of this in the attitude of many Germans to risk: "We have so much stupid capital in Germany that is lying around unproductively," he says, "instead of being invested in young minds and innovation".

That is different in other countries.

He names Telefunken as a representative of many companies that have disappeared - because they have not faced the challenges of technical development.

Some like Grundig or Becker are only brands owned by foreign companies.

In Germany, large parts of the added value have been given up.

As a result, German and European industry was left behind more and more.

Lejeune has followed this development with a shake of the head.

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Erich Lejeune, expert on the chip industry

© Klaus Haag

In the 1970s and 1980s there was no Internet in which one could exchange information in real time across continents.

Every piece of information had to be laboriously collected and stored.

Erich Lejeune built up a valuable treasure: a database that stored which of the electronic components were available where in the world.

That ensures transparency.

Whoever has this information knows what is available and where to negotiate money and where better to keep it.

And sometimes even large sums of money play a minor role.

If a chip was defective in an assembly line, the whole factory came to a standstill.

Astronomical costs were incurred every day because a tiny part had given up its service.

Often the manufacturer had already stopped production of the component.

Erich Lejeune: data treasure at the push of a button

Now the phone rang at CE: Erich Lejeune and his data treasure came into play.

In no time at all, he knew where and how often the missing component was still available.

From today's perspective, the actual procurement was sometimes bizarre: an employee got on a plane, flew to Japan or the USA, bought the part, and flew back.

It wasn't cheap.

But shutdown production was more expensive.

The elevators of a globally important manufacturer threatened to fail little by little because a chip manufacturer had stopped producing a component.

“We found a replacement,” says Lejeune.

Back then, chips were more simply structured and similar to one another.

That has changed fundamentally.

Each of these parts is embedded in an environment that is tailored to precisely this one chip.

Almost every chip creates a monopoly and thus dependency.

And something else has changed: At that time, a car might have had a handful of chips.

Today there are hundreds.

“Nothing works today without chips,” says Lejeune.

“We are mega-dependent.” The chip industry saw it that way early on and adapted its business model.

Erich Lejeune puts it drastically: “There was one death in the chip industry in 1984,” he says.

“The price list has passed away.” There have been no tariffs since then.

If a part was in short supply, whoever paid the most got it.

Industry had discovered its market power.

When Lejeune asked the boss of one of the leading US manufacturers what his secret was, the answer consisted of one word: "Profit".

Nothing changed about that.

Erich Lejeune: Companies experience the market power of manufacturers

He compares the European auto industry, which is used to dictating the conditions to its suppliers, to a drug addict who, shaken by withdrawal cramps, goes to the dealer and insists on the usual price.

No chance: the provider determines the price at will.

What if the customer doesn't want to pay?

"Then parts are simply not available," says Lejeune.

And in case of doubt, the parts go to customers with more sustainable products and thus better prospects.

The European industry with its focus on classic cars and machine tools has slipped down.

Erich Lejeune: The chip train has left for Europe

What to do?

Can Europe build a chip industry like the EU Commission President Ursula von der Leyen is planning?

“Hopeless,” says Lejeune.

"We can no longer catch up." You would not need billions, but trillions - for a game with an uncertain outcome.

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Full of chips: assembly of the VW ID3 in Dresden

© Sebastian Kahnert / dpa

His recommendation is to come to terms with this situation and make the most of it.

Just like Erich Lejeune achieved with CE, the company that, as a chip fire brigade, had all the important information to make it a market advantage.

The situation has worsened dramatically since then. A persistent shortage is just as devastating for Germany and Europe as a widespread failure of the infrastructure. Erich Lejeune believes that the state should not leave industry alone. Politics and business should try together to ensure the supply. Europe and Germany still have enough consideration to offer in order to come to stable supply agreements that are then adhered to.

Would Erich Lejeune offer his expertise to a new federal government?

He hesitates.

His knowledge of the industry is still in demand.

A large German car manufacturer has already asked him for help.

Lejeune is still thinking.

At 77, however, he no longer wants to bring himself into play.

But if an Olaf Scholz were on the phone, he would hardly refuse.

List of rubric lists: © Klaus Haag

Source: merkur

All news articles on 2021-11-23

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