Quote:The semiconductor industry is notoriously slow when it comes to reacting to sudden increases in demand. Some analysts believe that demand for chips now exceeds supply by about 30%, and it will take three or four quarters for the supply to catch up with the demand. Essentially, this means that chip shortages will persist well into 2022.
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"We believe semi companies are shipping 10% to 30% below current demand levels and it will take at least 3-4 quarters for supply to catch up with demand and then another 1-2 quarters for inventories at customers/distribution channels to be replenished back to normal levels," said Harlan Sur, an analyst with J.P. Morgan, in a note to clients, reports MarketWatch.
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Major foundries, including Taiwan Semiconductor Manufacturing Co. and GlobalFoundries, have announced expansion plans for this year, and there are indications that packaging companies are going to do the same. However, it will take months for companies like ASML, Applied Materials, KLA, LAM Research, and others to build the fab tools; then, it will take some time to install the equipment. As a result, any capacity-related decision made now will not have an impact until several quarters from now, at best.

Keeping in mind that demand is already outstripping supply by around 30%, and for many products, the backorder is building up, it will take months after semiconductor companies solve their capacity problems before everyone gets the chips they need. Meanwhile, it is unclear what happens to the 'excess' capacity after the demand is met and inventory levels get back to normal.

Furthermore, it obviously remains to be seen whether fabless makers of chips continue to introduce new SKUs if they cannot meet demand for existing products.

(02-24-2021, 08:16 AM)SteelCrysis Wrote: https://www.tomshardware.com/news/chip-shortages-to-persist

Quote:The semiconductor industry is notoriously slow when it comes to reacting to sudden increases in demand. Some analysts believe that demand for chips now exceeds supply by about 30%, and it will take three or four quarters for the supply to catch up with the demand. Essentially, this means that chip shortages will persist well into 2022.
...
"We believe semi companies are shipping 10% to 30% below current demand levels and it will take at least 3-4 quarters for supply to catch up with demand and then another 1-2 quarters for inventories at customers/distribution channels to be replenished back to normal levels," said Harlan Sur, an analyst with J.P. Morgan, in a note to clients, reports MarketWatch.
...
Major foundries, including Taiwan Semiconductor Manufacturing Co. and GlobalFoundries, have announced expansion plans for this year, and there are indications that packaging companies are going to do the same. However, it will take months for companies like ASML, Applied Materials, KLA, LAM Research, and others to build the fab tools; then, it will take some time to install the equipment. As a result, any capacity-related decision made now will not have an impact until several quarters from now, at best. 

Keeping in mind that demand is already outstripping supply by around 30%, and for many products, the backorder is building up, it will take months after semiconductor companies solve their capacity problems before everyone gets the chips they need. Meanwhile, it is unclear what happens to the 'excess' capacity after the demand is met and inventory levels get back to normal.

Furthermore, it obviously remains to be seen whether fabless makers of chips continue to introduce new SKUs if they cannot meet demand for existing products.

Quote:Manufacturing silicon is no easy task. You need to have all the right supplies available all the time. One of the most used ingredients in silicon manufacturing is water. Almost every process needs it and it needs to be constantly available to the manufacturer. According to the report coming from Reuters, Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) are experiencing water shortages. The Taiwan island is in trouble, as the typhoon season has been rather mild and water supplies are at the historic lows. Water restrictions are in place all across the island and the reservoirs in the center and southern regions are at only 20% capacity.

The lack of water is a big problem for TSMC and UMC, as both companies rely on the constant income of it. With water restrictions in place, TSMC has to keep its facilities running and needs to solve the problem. That is why Taiwan's biggest silicon manufacturer is now making small orders of waters, delivered by a truckload. TSMC expects to compensate for the lack of water coming from its regular sources with truckloads of it. While we do not know the numbers of it, we can expect the water use to be very high if we take into account the number of wafers TSMC produces at its facilities.