Chips for chipmaking machines are affected by chip shortage

Chips for chipmaking machines are affected by chip scarcity

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One of many catch-22s of the worldwide element scarcity is that chips for chipmaking machines are one of many objects briefly provide, say execs from Intel and Apple chipmaker TSMC.

Shopping for new chipmaking machines was by no means a speedy course of, given their complexity and delicacy, however lead instances earlier than the pandemic have been measured in months. Now, say chipmakers, that point could be so long as 2-3 years …


The worldwide chip scarcity was created by a mixture of components. These embrace elevated demand for know-how in the course of the pandemic, COVID-related manufacturing disruption, and a rising demand for chips by car-makers; as automobiles depend on rising numbers of microprocessor items.

The largest situation isn’t with CPUs and GPUs, however much more mundane chips like show drivers and energy administration methods. These comparatively low-tech chips are utilized in an enormous variety of gadgets, together with Apple ones.

Apple CEO Tim Cook dinner revealed that provide constraints price Apple $6B in two quarters, and warned that the hit could possibly be as excessive as $8B this quarter.

A latest report says that there have been shortages throughout seven chip classes, and that 4 of them will proceed to be affected all through 2022.

The vicious circle of chips for chipmaking machines

The trade is affected by a vicious circle: the worldwide chip scarcity wants chipmakers to spice up output, however that requires extra chipmaking machines which they will’t get due to the worldwide chip scarcity.

Whereas many commentators say they anticipate the chip scarcity to ease by the top of this 12 months, the WSJ stories chipmaking corporations describing that as a very optimistic view.

What started as a pandemic-era aberration of supercharged demand for laptops and different chip-hungry devices has spiraled right into a structural drawback for the trade. Now many chip executives say the issue will persist into 2023 and 2024, and even longer.

“There’s this wishful considering that by the top of 2022, provide can be balanced with demand,” stated Tom Caulfield, chief govt of contract chip producer GlobalFoundries Inc. “I simply don’t see it.”

Doug Lefever, chief govt of Advantest America [agreed, saying that] typical lead instances on his firm’s machines, which take a look at whether or not newly made chips operate appropriately, have doubled or extra. “I feel we’re in it for fairly some time earlier than we get fully again to plain lead instances,” Mr. Lefever stated.

Some chipmakers are prioritizing purchasers who produce chipmaking machines.

Ganesh Moorthy, CEO of Microchip Expertise Inc., a maker of microcontroller chips that course of information in every kind of digital gadgets, together with chip-making gear, stated his firm now could be treating chip-equipment suppliers as precedence prospects, not in contrast to the way in which it handled medical-device producers on the onset of the Covid pandemic.

Intel and Apple chipmaker TSMC are amongst these calling for this strategy to be extra extensively adopted.

A latest trade white paper argued the advantages of such a “multiplier impact.” A complicated testing software requires 80 specialist chips that may be reprogrammed after they’re produced, the evaluation stated, however then aids in making 320,000 of those self same chips annually.

Photograph: ASML

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