Tuesday, March 22nd 2022
ASML is the Next Bottle Neck in Chip Manufacturing
There have been several announcements of new semiconductor fabs being built all over the world, but those fabs might end up being empty shells, all because of a single company. ASML or Advanced Semiconductor Materials Lithography if you prefer, is a Dutch company that produces various types of photolithography machines that are used to produce semiconductors. They're the world leader in their field and their machines are used by the likes of Intel and TSMC to do the physical etching of the silicon wafers that semiconductors are produced from. Now a warning from ASML's CEO, Peter Wennink has arrived, stating that the company can't keep up with demand.
The company isn't expecting to fulfil orders for at least the next couple of years, despite expecting to ship more machines this year than last year and more machines next year than this year. As each of these machines are largely custom made for its customers and hand built, due to the low production volumes, it takes a lot of time to construct each of these huge machines. Wennink said that the company "really needs to step up our capacity significantly more than 50 per cent. That will take time."
With some 700 different component suppliers, of which 200 are said to be critical, a lot also depends on its partners, if ASML is going to be able to increase its production volume. One of its key partners is Carl Zeiss, as they supply the optical lenses used in the machines as part of the etching process. According to Wennink, Carl Zeiss is currently unable to ramp their production of lenses at the same speed that ASML needs them and is as such, trying to push Zeiss into building a new cleanroom factory, so more lenses can be produced. " Once a factory is ready, they need to order the manufacturing equipment; they need to hire people. And then. . . it takes more than 12 months to make the lens."
This doesn't take into account the extra staff that ASML needs at its own factories to be able to ramp production, although Wennink says that the company has been working on this and other issues for some time already. ASML doesn't have any direct competitors either, so it's not as if Intel, TSMC and all the other foundries out there can turn to someone else for these machines, which places ASML in what one could call a monopoly position. The irony in the situation is hard to miss, especially considering the concerns that Intel's CEO has been voicing about foundry monopolies, yet Intel has to rely on the same supplier as everyone else for the machines that are needed to make its chips.
Source:
FT.com
The company isn't expecting to fulfil orders for at least the next couple of years, despite expecting to ship more machines this year than last year and more machines next year than this year. As each of these machines are largely custom made for its customers and hand built, due to the low production volumes, it takes a lot of time to construct each of these huge machines. Wennink said that the company "really needs to step up our capacity significantly more than 50 per cent. That will take time."
This doesn't take into account the extra staff that ASML needs at its own factories to be able to ramp production, although Wennink says that the company has been working on this and other issues for some time already. ASML doesn't have any direct competitors either, so it's not as if Intel, TSMC and all the other foundries out there can turn to someone else for these machines, which places ASML in what one could call a monopoly position. The irony in the situation is hard to miss, especially considering the concerns that Intel's CEO has been voicing about foundry monopolies, yet Intel has to rely on the same supplier as everyone else for the machines that are needed to make its chips.
26 Comments on ASML is the Next Bottle Neck in Chip Manufacturing
When those gas prices and electricity go up, watch those mining rigs saturate the market. Soon (tm)
There's a reason why only two other companies even bother to compete in this tough market (Canon, and Nikon)
The mirrors - the mirrors I had a lsd flash back sorry
Can't the mirrors be used to duplicate inventory, all you need is a little smoke ?
I'm sure materials have already been horded long before anyone thought yo we need more fabs everywhere wonder whom has been doing that.
I'm curious if Pat or someone else will bitch about them being a monopoly and that some government (*cough*Japan*cough*) has to make sure more money is invested in making the equipment, considering how many governments have been told that they have to pitch in to get foundries, as TSMC has too much power.
I'm surprised China hasn't cloned any yet oops maybe their starting up now opportunity is knocking ?
I did think all the talk of new fabs was getting ahead of the horse a bit.
Plus these guy's got a taste for meaty price gouging, of course they're going to try to long it.
@ThrashZone China and Taiwan have both announced efforts to develop the required technology and infrastructure to have all the requirements to make chips and import less of everything, But these Euv machines cost over 50 billion in R and D, I believe, I also don't expect Lapsus$ to be embarrassing ASML.
Not simply that however Intel forced Nvidia out of the chipset business in a rather controversial to say the least manner and then ended up having chipset shortages where they had to repurpose their nodes to address which must've really made Jensen smile a bit. Intel is like the ouroboros serpent eating it's own tail from it's behavioral side effects. They were a virus before the pandemic even hit really not to ghost them.
It's hard to fault TSMC or ASML too heavily for something Intel spurred on in part over the course of decade and is catching up to the industry now and compounded by other events. I think there is a fair degree of competition between TSMC and other fabs there seems to be a heavier log jam bottleneck with ASML and not really much credible competition in that specialized field on parity with them. Intel ****ed around and found out. I think the chip shortages are in part a byproduct of Intel and other factors. I don't think I'm being too harsh on Intel given the history of events and their company behavior. Intel using the word monopoly is like boardwalk complaining about rent being expensive.
By the way, here's a little bit of info about the underdog. Nikon apparently used to sell most of its machines to Intel:
asia.nikkei.com/Business/Companies/Nikon-plans-reform-to-reduce-reliance-on-key-customer-Intel
They're on the very limit of applying the limit's of manufacturing and physics.
They aren't making Donuts.
These limits on manufacturing are not moved easily or without a lot of cash being spent cash that would need to be reclaimed in costs.
Had you kept in the loop on Euv you would know this.
And EUV is as yet STILL not fully a solved process just like light sources powerful enough, accurate enough with a long enough lifespan to enable it.
Or you could look up the Why(light sources , pellicles)
Or not and rant about stuff your not knowledgeable about.
Link here for actual info:
www.laserfocusworld.com/blogs/article/14039015/how-does-the-laser-technology-in-euv-lithography-work