Global chip shortage 'chain reaction' disrupts supply of chip-making systems

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A global shortage in chips is having a knock-on effect on the availability of chip-making systems – including laser drilling machines – which require chips to produce.

Reported by newspaper Nikkei Asia, the situation highlights that the global semiconductor supply crunch has now reached a point where it is rebounding onto the chip making industry itself.

Delivery times for certain critical tools have grown to 12 months or more, which will slow capacity expansion plans for a wide range of suppliers, including chip manufacturers, packaging and testing service providers and substrates suppliers.

‘It's a chain reaction,’ remarked Chiu Shih-fang, a tech and supply chain analyst with the Taiwan Institute of Economic Research. ‘Electronics and automakers expect component makers to expand capacity to address the shortage. But when these component makers talk to their equipment and materials suppliers, they realise deliveries could be as late as the end of this year or even next year. That means basically everyone is kind of stuck here. The dangerous part is that even if only one or two components are lacking, the whole system would be unable to move forward.’

At least four types of vital production equipment are in short supply, according to the newspaper’s industry sources.

For laser drilling machines used on printed circuit boards and chip substrates, equipment maker Mitsubishi Electric has warned clients that the lead time for some tools is now more than 12 months for orders placed from April onwards. The lead time for high-end chip substrates has lengthened to 52 weeks.

‘It's not like we don't want to increase our capacity, [but] even if we wanted to book more machines, we couldn't get them very quickly,’ said a chip substrate executive. ‘People are booking 50 or even 100 of Mitsubishi's laser processing machines at a time. We have been told by [Mitsubishi] that its capacity is fully booked because demand is so strong, and if we want to order new machines now, we will have to wait until next year for them to be available.’

David Shen, chairman of Hota Industrial Manufacturing, a key automotive parts supplier, added: ‘We are trying to find alternative equipment suppliers for drilling machines, but the precision and speed are just not as satisfactory as what we used to have.’ 

The lead times for wire bonding machines (used in chip packaging after chips are fabricated on wafer materials), wafer dicing machines (used to slice wafers into chips) and chip testing machines, have also grown considerably.

‘Some of these equipment makers are also suffering from chip shortages and some are struggling with labour issues due to pandemic lockdowns, like all the other tech players, and that weighs on the process of building machines,’ commented a source with direct knowledge of the situation. ‘Covid-19 lockdowns had disrupted production since last year and just when it was about to recover, the serious chip and component shortage hit them.’

Pandemic travel restrictions are also hampering equipment delivery and installation, according to Nikkei Asia, as personnel are usually dispatched to help clients install and test the machines. While some equipment suppliers have tried using virtual reality headsets and simulation software to remotely guide clients through the process, some critical support must still be provided on-site.

Has your usage of laser technology been disrupted by the global chip shortage? Let us know at: editor.lasersystems@europascience.com

For more information and the source of this story, click here.

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