The light at the end of the chip-shortage tunnel #makerbusiness
It’s been a long three years for the world, not least because of the chip shortage (not to mention the devastating pandemic). Yet the chip shortage has been showing signs of slowing down, and according to an article in IEEE Spectrum, may be greatly improved if not completely resolved by 2024.
There has been tons of investment in cutting-edge fab technology and manufacturing capabilities, but much of the shortage is related to older fabrication facilities, specifically 200-mm fabs.
Despite the auto industry’s desperation, there’s no great rush to build new 200-mm fabs. “The return on investment just isn’t there,” says Morales. What’s more there are already many legacy-node plants in China that are not operating efficiently right now, but “at some point, they will,” he says, further reducing the incentive to build new fabs. According to the chip manufacturing equipment industry association SEMI, the number of 200-mm fabs will go from 212 in 2020 to 222 in 2022, about half the expected increase of the more profitable 300-mm fabs.
In case you missed it, there were only 10 additional 200-mm fabs! The trick though is the increase in existing fab capacity.
More than 40 companies will increase capacity by more than 750,000 wafers-per-month from the beginning of 2020 to the end of 2022. The long-term trend to the end of 2024 is for a 17 percent increase in capacity for 200-mm facilities. Spending on equipment for these fabs is set to rise to $4.6 billion in 2021 after crossing the $3-billion mark in 2020 for the first time in years, SEMI says. But then spending will drop back to $4 billion in 2022. In comparison, spending to equip 300-mm fabs is expected to hit $78-billion in 2021.
It’s not a large increase, but it might be enough to let everything settle down.
One potential hiccup on the road to ending the shortage is that some of the skyrocketing demand appears to be from customers that are double-ordering to bulk up on inventory, says Jim Feldhan, president of Semico Research. “I don’t know of any product that needs twice the amount of analog” as the year before, he says. But manufacturers “don’t want a 12-cent part to hold up a 4K television,” so they’re stocking up.
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