There is an 18-month wait for the delivery of semiconductor manufacturing equipment

In the past two years, there have been various shortages in the semiconductor supply chain, and major semiconductor manufacturers around the world have invested huge amounts of money in the expansion of production capacity, which requires a large number of procurement of production equipment. It has been reported before that, due to strong market demand, even if ASML, the world’s largest lithography machine manufacturer, speeds up, its annual output of lithography machines still lags behind the procurement requirements put forward by semiconductor manufacturers. It needs to increase by 50% on the current basis to meet the market demand.

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In fact, it is very difficult to expand semiconductor production capacity at this stage, and there is a bottleneck in the production of semiconductor manufacturing equipment. Semiconductor equipment makers have told customers that the average wait time for new orders is about 18 months, TomsHardware reported. According to ASML, the supply of various parts from mirror blocks, valves, and pumps to microcontrollers, engineering plastics, and other parts has encountered difficulties, which will affect the delivery time of equipment. Obviously, delays in the delivery of semiconductor manufacturing equipment will ultimately affect the semiconductor supply chain. Unimicron said lead times for substrates have increased from 12 to 18 months in 2021 to the current 30 months.

In addition to the production of semiconductor manufacturing equipment, the semiconductor industry lacks enough professionals to cope with the current capacity expansion, which not only affects supply but also delays original plans. It is reported that the construction of some of TSMC‘s fabs is facing delays due to a lack of sufficient staff. In addition, it has also indirectly led to an increase in the probability of poaching in the industry, prompting industry giants like Intel to spend more money to attract and retain technical talents. For small and medium-sized enterprises, the resistance to seeking development is even greater.

While semiconductor manufacturers are investing heavily in efforts to alleviate supply chain issues and ensure sustainable growth for years to come, however, it will still be subject to various factors, unable to meet all the requirements of various products, and ultimately only limited production capacity can be used in products with higher profit margins. Over time, the ongoing supply issues in the semiconductor industry will gradually manifest in the consumer market, from pricing to supply, such as the long time it takes for a new product to drop in price.