Companies that manufacture machines essential to the production of semiconductors are worried. They are called Applied Materials, KLA, Lam Research or ASML, and have informed their customers (semiconductor manufacturers) that will have to wait several months to receive new machines essential to the manufacture of chips.
Extended lead times for critical semiconductor manufacturing machines
The shortage of semiconductors is now affecting the supply chain at the next level. Without the right machines, Taiwan Semiconductor Manufacturing Co, United Microelectronics Corp, Intel or even Samsung Electronics which plan to open new factories, will not be able to start production. Despite the ambitious plans of these giants to meet the strong global demand for semiconductors, several experts are concerned about the lengthening of the deadlines for receiving these essential machines (valves, pumps to microcontrollers, engineering plastics, or even electronic modules ) to the manufacture of chips.
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The machine manufacturers estimate that the normal timeframe is currently 18 months, compared to 10 months in 2021 and 3 months before the pandemic. It is logical, if the demand for semiconductors explodes, the demand for machines to manufacture the chips is also in full expansion. TSMC, UMC and Samsung even sent executives overseas to urge their equipment suppliers to redouble their efforts and ensure timely deliveries. Component shortages and logistical delays accumulate throughout the supply chain and this contributes to this situation. The American company KLA estimates that these machines will not be delivered for 20 months…
Another slowdown expected for chipmakers
On some machines, the delays are even longer. This is particularly the case for deliveries of equipment used to manufacture substrates, the material on which the chips are located before being mounted on printed circuits. There, you have to count up to 30 months, up from 12 months last year, according to the chairman of Unmicron, the world’s largest maker of chip substrates. Obviously chip makers are worried. This is the case of TSMC, which plans to build six factories in the United States over the next few years.
The procurement team at the world’s largest chipmaker has traveled to the United States to try to push delivery dates forward. This new crisis within the crisis will also prevent semiconductor manufacturers from considering changing components or materials in chip equipment. This is no longer a short-term option, as any alternative has to go through a lengthy verification process to guarantee the continuity and quality of production. According to UMC Chief Financial Officer Liu Chi-tung, “The machine shortage continues to deteriorate and may only start to improve in the second half of 2022. Our ramp-up capacity will certainly be slower than expected”.