Chinese semiconductor industry

The delivery period has been extended again, and some semiconductor equipment will have to wait for nearly 2 years​

According to the Nikkei Asian Review, key semiconductor manufacturing equipment may have to wait a year and a half or more for delivery, as unprecedented parts shortages and tight supply chains have hit the chip equipment industry hard.

Several sources told the Nikkei Asian Review that semiconductor equipment makers such as Applied Materials, Kelei, Colin, and ASML have warned customers that some key machines must wait up to 18 months, because everything from lenses, valves and pumps to microelectronics. Parts such as controllers, engineering plastics and electronic modules are all missing.

At the same time, demand from chip makers has surged. TSMC, UMC, Intel and Samsung Electronics all plan to start production, some as early as next year, and sources say they are starting to worry that long lead times will affect those plans. TSMC, UMC and Samsung have even sent executives overseas to urge their equipment suppliers to step up their efforts, people familiar with the matter said.

According to the report, before the outbreak of the epidemic in 2019, the average delivery time was about 3 to 4 months, and in 2021, it has been extended to 10 to 12 months. According to industry sources, the waiting time for Kelei testing equipment is more than 20 months. The chairman of Unimicron, the world's largest maker of chip substrates, said delivery of equipment used to make the substrates could take up to 30 months, compared with 12 to 18 months last year.



However, after interviewing more than 10 industry executives, it was found that many semiconductor equipment manufacturers have low willingness to expand their parts factories, and it is difficult to find alternatives.

The report quoted sources as saying that TSMC is worried that the delay in equipment delivery may affect the mass production schedule of factories in the United States, Taiwan, and Japan. TSMC's U.S. plant has previously faced the dilemma of lagging behind in construction due to lack of labor.


Almost 2 years wait for equipment. Looks like Chinese companies really need to kick off their homegrown production and R&D.

tokenanalyst said:

The report quoted sources as saying that TSMC is worried that the delay in equipment delivery may affect the mass production schedule of factories in the United States, Taiwan, and Japan. TSMC's U.S. plant has previously faced the dilemma of lagging behind in construction due to lack of labor.

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Of course its falling way behind due to lack of labor. Anyone who operates a business in America can tell you there is a labor shortage here and huge inflation. If TSMC thinks they can enforce their work hours and culture on Americans (especially the good people of sunny Arizona), they are in for a huge surprise. If they want to get people to work, they need to pay a lot more to workers and hire a lot more of them. Things will run massively over budget and behind schedule like every other construction project here in America.

Oh and who tells investors in 2022 that they might have trouble getting plants up and running 2 years later? Nobody does that.

tphuang said:

Of course its falling way behind due to lack of labor. Anyone who operates a business in America can tell you there is a labor shortage here and huge inflation. If TSMC thinks they can enforce their work hours and culture on Americans (especially the good people of sunny Arizona), they are in for a huge surprise. If they want to get people to work, they need to pay a lot more to workers and hire a lot more of them. Things will run massively over budget and behind schedule like every other construction project here in America.

Oh and who tells investors in 2022 that they might have trouble getting plants up and running 2 years later? Nobody does that.Yeah

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Yeah, there is a strong movement in the U.S in favor of unions right now, How TSMC see unions? because I don't see nothing about unions in their "worker rights" statement.

hvpc said:

tsmc AZ will have plenty of time to meet their 2024 production timing. Any delay in fab construction could be easily compensated through faster equipment move-in. Oh, I'm sure there is a slight delay in fab construction, but the tool move-in timing communicated to all equipment suppliers all point to on time production. There's enough buffer built into tsmc's original AZ fab project timeline to weather construction delay.

ASML like all equipment suppliers are unable to meet the overall market demand. Like my company, I'm sure ASML has to turn away smaller or less important customers because of the supply/demand imbalance. This shortage situation will not impact big customer like tsmc. I would assume the shortage would impact more on Chinese fab expansion plan since ASML will most likely favor tsmc over the Chinese fab customers. Also, tsmc is spending $44B USD in CapEx in 2022; assuming tsmc invest the same amount in 2023, in my estimate this will be about $6.6B to $8.3B of business for ASML. Even if there is shortage, there's enough systems for tsmc to allocate from one of their many expansions to AZ fab. Only reason tsmc AZ timing will be delayed is if tsmc chose to prioritize their other fab expansions over AZ fab.

Finally, if tsmc do expect a delay, they would have to report this to their investors. For the above reasons, I won't read too much into news articles, at this moment.

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Isn't TSMC only expanding with EUV lithography, and not DUV lithography machines?

I think even their latest fabs use DUV for some layers.

AndrewS said:

Isn't TSMC only expanding with EUV lithography, and not DUV lithography machines?

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EUV, ArFi, ArF, KrF, & iLine scanners are all needed for chip manufacturing for 7nm & below logic, DRAM D1z node and below.

tphuang said:

Of course its falling way behind due to lack of labor. Anyone who operates a business in America can tell you there is a labor shortage here and huge inflation. If TSMC thinks they can enforce their work hours and culture on Americans (especially the good people of sunny Arizona), they are in for a huge surprise. If they want to get people to work, they need to pay a lot more to workers and hire a lot more of them. Things will run massively over budget and behind schedule like every other construction project here in America.

Oh and who tells investors in 2022 that they might have trouble getting plants up and running 2 years later? Nobody does that.

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tool move-in is less than a year from now.

hvpc said:

tool move-in is less than a year from now.

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And if you think everything will go smoothly, you can long their stocks. I am simply telling you that things don't run on time here and tsmc will be in a huge shock at how expensive American labor is and how hard it is to find qualified employees to work at their plant.

tphuang said:

And if you think everything will go smoothly, you can long their stocks. I am simply telling you that things don't run on time here and tsmc will be in a huge shock at how expensive American labor is and how hard it is to find qualified employees to work at their plant.

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I am actually quite surprised they (TSMC) didn't know that

antiterror13 said:

I am actually quite surprised they (TSMC) didn't know that

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@antiterror13 Sir cause they take FED subsidized? and how about skill technical workers? in 2024 TSMC will also open a FABS in Southern Taiwan producing 7nm chips, where will they find additional personnel for the Arizona FAB?





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