There is also a shortage of chips needed to make the chips

Even though everyone wants to build a factory, none of the ingredients needed to make it are available.

The Wall Street Journal about it reported, that there is already such a shortage in the field of chip production that the chips used to create the production equipment can no longer be found in the companies’ warehouses. In addition, the production and delivery of chip-making devices has taken longer and longer in recent months. While the delivery time was only a few months at the beginning of the coronavirus epidemic, it is now up to 2-3 years. Moreover, the delivery time for even previously ordered machines has also been extended. All this means that the difficulty that initially arose from demand has now created a structural problem.

“We have this dream that by the end of 2022, supply will be in balance with demand,” said Tom Caulfield, CEO of GlobalFoundries Inc. “I just don’t see that.” Major chip makers like Intel and Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) are increasingly asking their suppliers to give preference to their orders, and companies supplying microcontrollers and other devices are trying to meet the demands and prioritize these orders, if only because they are also ultimately more profitable with the chips. and the availability of other products.

But not only do the lack of tools hurt the heads of industry leaders, but new factories need skilled people, the supply chain for basic chemicals is stagnant, and there is a shortage of substrates that connect chips to printed circuits. The situation is exacerbated by the serious shortages of platinum and many other materials used in its manufacture. Thus, even if the necessary production equipment is delivered, it will take months for them to be commissioned. It is no coincidence that most suppliers and manufacturers anticipate that the situation may last until 2024 or even longer.


Demand continues to grow, with no sign of a slowdown. For the first time in the history of the chip industry, sales rose to over $ 500 billion last year and will double by the end of the decade. Meanwhile, deliveries have never taken that long, an average of six months. The situation can be improved by the fact that a number of new factories have started to produce, which, although producing older generation processors, are well suited for car manufacturers. However, the supply of cutting-edge chips will remain scarce for some time to come.

Lam Research Corp, one of the world’s largest manufacturers of chip equipment, said in April that despite high demand, it could not take full advantage of it due to a lack of components. The world’s largest contract chip maker, Taiwan’s TSMC, said last year it will spend $ 100 billion to expand production by 2024, and Intel will build three plants in Arizona, Ohio and Germany over the next decade. There is little chance of what is expected to happen, Intel CEO Pat Gelsinger also acknowledged that “the lack of equipment is really hampering the industry’s ability to increase supply at the previously thought-out pace.”

According to the semiconductor industry umbrella organization SEMI, they want to start 90 chip factories in the world by 2024. Despite supply problems, sales of chip-making devices could exceed $ 100 billion this year. This extremely rapid growth, Vice President Sanjay Malhotra 5 years ago, considered even $ 75 billion an exaggeration. Demand for chips is driven mainly by the shift to electric cars, increasing industrial automation and the proliferation of smart devices. And that demand is still so far from the bottom of the pit.


Source: SG.hu Hírmagazin – IT/Tech by sg.hu.

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