According to foreign media reports, the core shortage market situation that has plagued the world for a long time seems to be showing signs of easing recently. However, the latest statement of industry executives has revealed that the core shortage is far from over...
The Wall Street Journal quoted industry executives as saying that a new supply crisis has come amid a shortage of chips that has sparked concerns in supply chains around the world, due to a lack of chips needed to produce chip-making equipment.
Buying a new chip-making machine has never been a quick process due to the complexity and sophistication of manufacturing, and before the global pandemic, machine lead times were measured in months. Now, chipmakers say, that could be as long as 2-3 years.
The biggest problem with missing cores is not CPUs and GPUs, but more common chips, such as display driver chips and power management chips. These relatively low-tech chips are used in a large number of devices, making them more prone to shortages.
After the outbreak in early 2020, chip-making equipment took several months from placing an order to receiving the equipment. Today, chip-making and equipment executives say that wait time has stretched to two or three years in some cases. Some said there were also delays in deliveries of previously placed orders.
Unlike the past two years, expectations for a quick overcoming of the global chip shortage are waning. Chip executives believe the shortage will continue into 2023-2024 and beyond.
"There is a wishful thinking that by the end of 2022, supply and demand will balance," said Tom Caulfield, chief executive of contract chip maker GlobalFoundries Inc. "But I don't buy it."
Doug Lefever, chief executive of Advantest America Inc., said the company has doubled or more than doubled the typical lead time for machines the company uses to test whether new production chips function properly. The company's test machines use about 250,000 parts, and problems with the supply of a small number of parts could cause delays. He believes that it will be a long time before normal delivery times can be restored.
Ganesh Moorthy, CEO of Microchip Technology Inc., said the company has prioritized the supply of chips to chip equipment suppliers. "Our approach is that if any equipment manufacturer sees a particular Microchip product as a bottleneck for them and informs us, that manufacturer goes straight to the top of our priority supply list," he said.
This approach is not unreasonable. In fact, if chip suppliers give priority to supplying chip manufacturers, and the latter's equipment production can be shipped smoothly, the chip shortage is expected to be alleviated more quickly.