According to Pete Helsinger, CEO of Intel, the current shortage of chips is due to the lack of equipment for lithography (EUV and DUV), and the difficulty of building semiconductor plants.
The lack of equipment and tools for chip production should continue the shortage of components until 2024. This was again explained by Intel CEO Pat Helsinger during an interview he set up on CNCC’s TechCheck to comment on the company’s first quarter results. Despite the fact that in the first quarter the company showed good results, forecasts for the second quarter are not so positive, and Intel shares have suffered.
To meet demand, semiconductor manufacturers have had to overcome a number of challenges, including the cessation of production due to the Covid pandemic. However, Helsinger specifically blamed the lack of production equipment and the complexity of building new semiconductor plants as the cause of the current shortage. “Because of this, we expect the global semiconductor shortage to persist until 2024, beyond our previous estimates for 2023, for the simple reason that the shortage is currently affecting equipment and that launching new production units will be more difficult,” Helsinger said. on the show.
Key player: Dutch ASML
While there is no shortage of companies capable of supplying equipment for the production of low-cost components, the Dutch company ASML Holdings is the only company that has mastered the technology of extreme ultraviolet radiation (EUV), which is used to burn chips smaller than 10 nm. . However, ASML recently stated that it could fulfill only 60% of orders for chip production tools this year. “Current demand comes from a variety of industries,” ASML CEO Peter Wennink said two weeks ago during a conference with analysts on profits. “This is common, and we have greatly underestimated its scale, so it is not expected to decrease soon,” he added.
ASML provides several EUV fabs. Customers who can use its technology can be counted on the fingers of one hand: Intel, TSMC and Samsung. But these extreme ultraviolet foundries are awful. The building is the size of a football stadium, and the craft equipment inside is the size of a small house. This is not a trivial craft, and there is a reason why the construction of these factories takes two to four years. Most of the $ 20 billion that Intel has pledged to build on EUV’s Arizona plants certainly does not cover the costs of building, electricity, heating, ventilation and air conditioning.
EUV (Extreme Ultraviolet) Lithography Technology uses ASML UV radiation with a wavelength of about 2.5 to 5 nanometers, replacing lenses (or so-called “pass-through masks”) with a series of precision mirrors (ie so-called “reflective” mirrors). masks). . Using this technology will create more accurate images on 300 mm plates and, consequently, produce more chips or with more transistors. (ASML loan)
Although there are no more than two dozen semiconductor manufacturers, production equipment is a very large market. It will reach $ 50 billion in 2020 and is expected to reach $ 84.8 billion in 2028. This is one of the reasons why Intel is expanding its Intel Foundry Services chip business to other companies. Speaking at a earnings conference with financial analysts, Helsinger said that for the first time, Intel Foundry Services had generated $ 1 billion in revenue and that Intel had more than 10 advanced contract options worth more than $ 5 billion.