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Global Semiconductor Shortage Drives Interest in Older Chip-making Equipment

Global Semiconductor Shortage Drives Interest in Older Chip-making Equipment

Older, out-dated microchip chip on display; the semiconductor shortage is causing manufacturers to get creative by using older technology to produce much needed chips; to procure your electronic components see

The global semiconductor shortage has sparked a surge in demand for older chip-making equipment, reports U.S. News. The manufacturing pivot began because car companies still use 200mm silicon to make contemporary vehicle electronic parts.

Applied Materials and Lam Research have recently received many new requests to assemble or refurbish their older production tools.

In addition, Semiconductor Manufacturing International Corporation (SMIC) recently extended its billion-dollar supply deal with ASML Holdings to acquire more of its workhorse gear.

Everything Old is New Again

Currently, automakers like Tesla and Nio equip vehicles with state-of-the-art SoCs to power their advanced ADAS platforms. That means their suppliers, Samsung and Nvidia, have to use nodes capable of producing high-performance components at the nanometer scale. However, carmakers in general use 200mm tools designed decades ago to make simpler but incredibly rugged chips for engine and braking systems.

Amid the global supply crunch, vendors have taken to ordering the outmoded equipment to keep their production lines running.

Applied Material, the market-leading manufacturer of semiconductor fabrication tools, noted demand for its older items is “exploding." Similarly, Lam Research, another leading vendor, stated the shortage changed its business dynamics. Previously, it mainly received orders for 200mm gear from Chinese providers, but the bottleneck has generated demand worldwide.

Polar Semiconductor, a firm specializing in 200mm wafer production, is booked past capacity. The company’s offerings have been highly sought recently from scarcity-affected automakers. But the recent run on older machinery means it cannot expand its operations for 9 to 12 months.

SurplusGLOBAL, a used chip-making equipment vendor, said the availability of 200mm tools had become significantly more limited in the last six months. It also found that prices for that type of machinery had risen by 20 percent since September 2020. Rite Track, a semiconductor manufacturing support service, is helping firms upgrade their old gear to increase their yields.

Last month, Ford reduced its output of the hugely popular F-150 pickup truck because of the component shortage. Likewise, just this past week General Motors extended the shutdowns of three North American plants for the same reason. With the shortage likely extending into the third quarter, end-market interest in older equipment will not decline in the near-term.

SMIC Renews $1.2 Billion Supply Deal with ASML

Even with the recent popularity of outmoded chip-making equipment, SMIC’s recent spending likely put it in a class by itself.

The corporation, China’s largest contract semiconductor provider, spent $1.2 billion purchasing tools from ASML in the last 12 months. However, its expenditure did not go toward the Dutch company’s leading-edge extreme ultraviolet lithography (EUV) machines. Instead, it invested heavily in the suppliers’ less advanced, deep ultraviolet (DUV) gear.

Although both technologies have the capability to etch incredibly intricate ICs, the generational difference between the two is massive. DUV systems can produce chips using light wavelengths of 248 and 193nm, but EUV platforms can fabricate components with 13.5nm.

When Tesla, Nio, or one of their competitors launches a fully autonomous vehicle, it will be powered by EUV-made SoCs.

That said, SMIC can manufacture a lot of not quite state-of-the-art parts for its clients. And since it renewed its volume purchase agreement with ASML through year’s end, it should be able to ramp up its output of much-needed semiconductors relatively soon.

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