Computer

There are no wafers to create chips: production reserved until 2026

Overwhelmed, each and every one of the players in the semiconductor industry, all up to their necks in water and investing in what is already known as chip inflation. Expenses, as we have mentioned before, are skyrocketing, mainly in investment for new FABs, something that was confirmed by the president of Sumco, Mako Hashimoto, who also offered a series of data that only worry us more, since it makes it clear that the current crisis is far from over.

FABs at full capacity, full production until 2026

Not only are efforts being made to produce 24/7 in the existing factories where there is not enough to satisfy the demand, it is that the production is reserved even for the new ones that are created in these years to the point that, perhaps, it is not possible to supply the levels that are demanded in 2026.

The first FABs of new creation and technology will arrive in 2024 and during that year they will be followed by some more that will possibly be available in 2025, but the problem is that even with their capacity, supply would not match demand until well into 2026.

SUMCO-wafers-2

Hashimoto has said publicly that this fact is unheard of, that in 40 years that he has his company and its subsidiaries he has not seen anything like it. But this is only a middle segment in the industry, so let’s go further down the pyramid.

Substrates and raw materials: overwhelmed

Sumco’s long-term contracts have been set until 2026 and their volume scope has left the Asian manufacturer with no choice but to close reservation orders to start planning for the future as of that year. In other words, there is no offer of wafers, everything is closed even what today is on a blank plan.

The problem is such that it is not certain that this will be solved in 2026, since, as the graph shows, the common forecasts are of a mismatch, minor, yes, but they would still be below what TSMC and Samsung would claim.

Unimicron-substrates-ABF

But the problem is bigger, since Sumco needs substrates and raw materials for its silicon rods, which are also in their own internal crisis. Unimicron is one of the largest PCB manufacturers and they are with a 20% deficit Looking ahead to next year, where its figures are worse for this 2022.

They have grown in sales 30% and their income is expected to triple by 2026, but this highlights another problem: they are not growing at the rate that the industry needs, since although they have 14 FABs producing both ABF substrates As for raw materials throughout Asia, they cannot satisfy what companies like Sumco ask of them in terms of volume.

In short, the messages of optimism from Intel, AMD and NVIDIA are cracking, the increase in prices of the three musketeers only shows that this year we will continue on the path of deterioration and that 2023 will not be a turning point, much less the end, unless everything turns sharply and seen what is seen it does not seem so.

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