the beginning of the magazine, where the articles are small
THE NEWS
World Chip Shortage
It’s not a good time to shop for components
© TSMC
THE MODERN world runs on silicon—even if a product doesn’t have chips in it, the machines that make it, deliver it, or supply the raw materials will. Manufacturing chips is expensive; the machines that make the wafers cost $100 million a pop. Such expensive machines are kept running continuously, and production runs are planned months in advance. Spare capacity is lost money, so the total capacity is close to total demand. If a manufacturer orders too few chips it can take a while until there’s a production slot available to build more.
The pandemic has thrown a spanner into the works, and the industry is struggling to adapt. The result is a chip famine. This isn’t unique—it happens regularly as part of the supply and demand cycle. But circumstances have combined to make this the worst yet.
It’s not all the pandemic either. Problems were already brewing. Cutting-edge silicon is made on 300mm wafers, and the major players have switched to the larger size in search of higher yields and more profitable chips. However, there’s still huge demand for simpler silicon using 200mm or smaller wafers. Here the technology is mature; costs are lower, but so are profits. The shift to high-value 300mm fabrication has left the total capacity at 200mm plants tight. Customers liked the simpler chips and had little incentive to move, so designs weren’t ported to 300mm, with the costs that entails. A surge in demand for 200mm Bluetooth, 5G, Wi-Fi, and automotive chips caught the industry off balance. We even face a shortage of such basic devices as PWM controllers, and there are a lot of these used in all sorts of kit. Add COVID, which has changed the pattern of demand, and the problem’s got much bigger.
❝TSMC has said that rectifying the shortage of automotive chips is a priority❞
The PC industry is struggling. Intel ran out of chipset chips, while AMD can’t make enough Ryzens. Any small snag is significant. Micron’s biggest memory plant suffered a power outage that trashed everything on the production line, and took days to fix. That one factory makes 10 percent of the world’s DRAM. There’s even a shortage of raw materials. Manufacturers are having to prioritize supply, so servers that run international business come first. Home consumer electronics are way down the list.