Chipmakers' expansion plans met with supply chain struggles of their own

[Shawn Knight]

In brief: Chipmakers are spending money hand over fist to boost capacity in an effort to meet the global surge in demand for semiconductors. Unfortunately, it's not an endeavor that an infusion of cash can solve overnight as supply chain partners are dealing with shortages of their own.

One such example is ASML, the Dutch multinational corporation that makes lithography machines used in the production of advanced semiconductors. Their machines are used to etch circuits into silicon wafers and according to at least one tech analyst, ASML is the single most critical company in the semiconductor supply chain.

ASML CEO Peter Wennink told the Financial Times that they will be shipping more machines this year than last year, and more machines next year than this year. Even still, "it will not be enough if we look at the demand curve," he said.

"We really need to step up our capacity significantly more than 50 percent. That will take time," Wennink added.

Intel chief executive Pat Gelsinger said he has been in direct contact with Wennink regarding the shortages. The chipmaker even sent its own manufacturing specialists to ASML to help expedite production.

"Today this is a constraint," Gelsinger said. Fortunately, there's still time to resolve the issue as it'll take at least two years for Intel to build the shell of a new factory. "Then you start to fill it with equipment in year three or four," Gelsinger added.

Wennink agreed with Gelsinger's assessment of the situation, but stressed its own suppliers would need to boost their production to meet increased demand.

Carl Zeiss, the optics company that makes lenses for ASML's equipment, will need to make "significantly more lenses," Wennink said. Before that can happen, they will need to "build clean rooms; they need to start asking for permits; they need to start organizing the building of a new factory. Once a factory is ready, they need to order the manufacturing equipment; they need to hire people. And then… it takes more than 12 months to make the lens."

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https://www.techspot.com/news/93861-chipmakers-expansion-plans-met-supply-chain-struggles-their.html

 

[Guberian]

Ive been staring at the nostrils of the guy who's holding a tray of chips for half a year. Please stop reusing the same image.

 

[Tantor]

None of this makes any sense. A traditional market driven economy is supposed to automatically respond to market needs. They should have been on top of this years ago. And why are there bottlenecks like ASML? The US has 320 million people, surely we can make our own lithography machines...

 

[p51d007]

See what happens when the global chip making (and others) stuck all their eggs in one basket (China)? HOPEFULLY they've learned a valuable lesson, but sadly, I don't think they have. They still chase the CHEAPEST labor market, which is China, Asian areas & India.

 

[Watzupken]

This does not come as a surprise at all. That’s why I feel Intel’s aggressive foundry expansion is going to hit a brick wall, and may end up with idle resources. Chips need to be produce by the foundry, but they don’t produce chips out of thin air. With so much material, specialised workforce and machinery requirements, any shortage in one aspect is going to stop the flow. So let’s see how all these aggressive expansion will turn out in the end.

 

[mbrowne5061]

See what happens when the global chip making (and others) stuck all their eggs in one basket (China)? HOPEFULLY they've learned a valuable lesson, but sadly, I don't think they have. They still chase the CHEAPEST labor market, which is China, Asian areas & India.

What on earth are you on about? ASML is a Dutch company, and you can't just re-use the old lithography machines (unless you want to make whatever node the re-used machines were designed for).

This bottleneck would exist if the new factories were being planned for Taiwan or for Michigan.

None of this makes any sense. A traditional market driven economy is supposed to automatically respond to market needs. They should have been on top of this years ago. And why are there bottlenecks like ASML? The US has 320 million people, surely we can make our own lithography machines...

Turns out, lithography is difficult once you start trying to focus photons to a literal atomic level of precision and accuracy. Not just the focusing of the 'light' (which is barely light anymore, the frequency is so high), but the spectrum of it as well.

China has a few billion people, and they only just figured out how to manufacture a ball point pen a few years ago (the CNC tech was beyond them). The number of bodies being thrown at a problem is irrelevant if none of the bodies manage to figure out a solution.