The ongoing chip issue is apparently turning into a different situation. ASML, the manufacturer of lithography machines, which is the backbone of the semiconductor industry, warned companies that orders would be delayed due to supply problems within its own structure. While every organization known for its processors needs lithography machines to make chip designs; ASML’s difficulty in meeting the demand seems to add a different dimension to the chip shortage issue. Let’s take a closer look at the details of the issue and how it will affect us users.
Peter Wennink, CEO of ASML, Financial TimesHe stated in an interview with . Stating that he is in contact with senior executives such as Intel CEO Pat Gelsinger regarding this supply disruption, which will last at least two, Peter Wennink also explained that it will take a long time to deliver lithography machines to chip manufacturers: This year we will ship more machines than last year, with little loss of time. We can deliver more machines to manufacturers next year, but if we look at the demand curve, these efforts will not be enough. We need to accelerate by increasing our capacity by more than 50 percent, but that will take a long time.
Lithography Machine Source:ASML
ASML’s efforts to bring lithography machines to manufacturers coincided with a time when semiconductor companies were investing billions of dollars to expand the number of factories. Naturally, this is another factor that forces ASML. For example, Intel announced last week that it will build a massive $19 billion facility in Germany. The Blue team also has a $20 billion factory investment in Ohio. On the other hand, TSMC announced that it has set aside $100 billion in funding to expand its production line over the next three years. Samsung, which does not want to fall behind its competitors, will spend 150 billion dollars in ten years with the aim of increasing its production.
Pat Gelsinger said that they can wait for ASML’s machines even though the construction process of the new factories started this year. Since it will take several years for the new facilities to be established to be operational, the Intel CEO, who hoped that ASML would have enough device stock by then, chose to act calmly on this issue. The opinion of other managers may not fit this view.
The Root of the Problem: Lenses
Lenses in the Lithographer
As chip manufacturers want to get more products off the production line, ASML aims to achieve the same result, but this is not as easy as it sounds. Peter Wennink says that the most complex component in lithography machines, which has a supply problem, is lenses. The lenses we are talking about are produced by Germany-based Carl Zeiss company, which is known in the field of optics. Currently, ASML needs more lenses, but it is not easy for Carl Zeiss to increase the production of parts used in lithography. This requires finding factory space, starting the construction process, ordering optical design equipment, and hiring new employees. When we consider the whole process, the reduction of lens production, which takes more than 12 months, in a short time means a huge financial need. In addition, it cannot be said that Carl Zeiss has the power to implement these expansion plans immediately. In summary, solving the chain of interconnected problems has taken a long time.
According to his predictions about the semiconductor industry, the chip problem will ease towards 2024. The same opinion of TSMC’s R&D Senior Vice President confirms this thesis. To overcome the problems, most chip companies have been trying to expand their production volumes with large investments since the beginning of the pandemic. This trend continued in 2021. According to the analysis made on the subject, these efforts on the basis of investment will bear fruit in four or five years. It is even said that after five years, the supply will be higher than the demand thanks to the increasing capacities of the producers. We hope that this will happen, and as users, we can access technology at a more reasonable price. Do not forget to share your thoughts in the comments.
