President Moon Jae-in quickly congratulated President-elect Joe Biden last week following his projected victory over Donald Trump in the 2020 General Election. In his November
Global Chip Equipment Shortage Leads to Demand for Used Equipment
The global pandemic and world-wide economic slow-down has resulted in significant shortages in the semiconductor markets over the past 12 months, with a coming crisis in automotive chips as well as limited capacity at foundries to address this lack of supply. However, a larger problem that hasn’t attracted as much attention is the mounting shortage of semiconductor equipment that is stretching out the delivery time for new equipment purchases to up to a year or more—while some tools, such as 200mm systems, are simply not available.
That supply shortage is hitting Korean manufacturers as well. Kulicke and Soffa Industries, with a large presence in the country, has reported being six months behind in its delivery of packaging equipment due to semiconductor shortfalls. Samsung has recently issued a dire warning of the “serious imbalance” in semiconductors, forecasting a significant challenge to its finances over the coming business quarters.
Part of the cause of this equipment shortage is a result of eased U.S. trade sanctions against Chinese foundry SMIC, increasing demand for equipment in China. An estimated 90 percent of used semiconductor manufacturing equipment from Korea and other nations in the region are now being export to China. Competition for this used equipment is getting so high that manufacturers are now buying bundles of used equipment—often with components that they do not need—to ensure supplies.
The market for integrated circuits (IC) has been on a rollercoaster ride since the pandemic hit in March of 2020. While the industry was riding high in early 2020, business closures and stay-at-home orders substantially slowed orders and forced a retreat by manufacturers. Yet, by mid-2020, the market bounced back as the work-from-home economy drove demand for laptop computers, TVs, and other home-business electronic equipment.
At the same time, the lead time for manufacturing tools jumped from 4-6 months to more than 10 months. The lead times for new 200mm tools caused by demand for automotive chips, RF products, and other devices was already heated, with much of that coming from China. That has resulted in the growing demand for used 200mm and 300mm tools, with lead times also increasing.
Much of this growth is attributed to the rebound in automotive manufacturing at a pace with which the supply chain is struggling to meet. Some industry insiders say the shortages will last at least another year.
Addressing this shortage, Samsung last May announced that it will open a new production line in Pingze City, south of Seoul. It plans to begin mass production of 5nm chips in the second half of this year.