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Why can’t we quickly ramp up semiconductor manufacturing?

With the current global shortages for semiconductors at the forefront of our challenges, the question on everyone’s mind – ‘Why can’t we quickly ramp up manufacturing of these electronic components?’

Part 1: Environment requirements

Manufacturing semiconductor chips requires complex (and very expensive) high-precision equipment, which needs to be operated in a tightly controlled working environment. Some of the requirements to achieve this include:

  • An exceptionally clean environment,
  • Having procedures and equipment in place to control temperature and humidity, and
  • Having a vibration free environment to avoid any quality issues.
a close up of a circular silicon wafer

For example:

  • The wafer fab process requires Class 1 to Class 10 cleanrooms, which means there cannot be more than 1 particle for Class 1 or 10 particles for Class 10 of dust greater than 0.5μm. That’s half of a thousandth of a millimetre within a cubic foot of air!
  • An imaging room in PCB manufacturing requires a class 10,000 cleanroom, which allows 10,000 such particles in a cubic foot of air. Temperature and humidity must also be tightly controlled because even the slightest of change to either temperature or humidity will result in expansion and movement.

Part 2: Financial requirements

A significant amount of financial investment is also required in setting up a factory to house the equipment used to manufacture chips. The equipment required to manufacture semiconductors is amongst the world’s most expensive and advanced equipment than of any industry.

3d image of a semiconductor chip lab

For example: The Taiwan Semiconductor Manufacturing Company’s (TSMC) latest factory to manufacture 3-nanometer new generation chips costed US$19.5 billion to build.

Part 3: Process requirements

The various fabrication steps involved in making semiconductors are very complicated; some require equipment that’s made by very few manufacturers globally.

For example: Photolithography is one of the steps required in manufacturing semiconductors. It involves the use of extreme ultraviolet (EUV) radiation to etch billions of tiny structures onto a sliced silicon wafer. Advanced Semiconductor Materials Lithography (ASML), a Dutch multinational company that specialises in development and manufacturing of photolithography systems, makes around 62% of all photolithography machines globally. These machines have over 100,000 parts, costs around $120 million each and roughly take two years to build.

So, why can’t we quickly ramp up semiconductor chip manufacturing?

A switch that has Yes or Not Yet under the heading Increase Production

Bottom line – it’s not as simple (and easy) as turning on a switch with the label ‘Increase Production’.

  • The first major obstacle is the size of the investment required to set up a semiconductor plant; we need billions of dollars.
  • The next obstacle is the setup of the factory itself – making sure you pass all quality guidelines and processes.
  • Time also plays a major role, from decision to build to completion (TSMC’s new factory took around 2 years to build).
  • Having the ability to get quick government approval to construct a semiconductor facility is just another part of the puzzle.
  • Other factors required are access to large amounts of water and a well-educated, highly skilled workforce.

From our investigation there are new plants underway to increase the availability of semiconductors, but it will be years before we see this imbalance normalise.

Recently, United States and China have both expressed their interest in semiconductors by announcing that they are investing huge amounts of money in designing and manufacturing computer chips. USA currently manufactures 12% of the world’s semiconductors, and President Biden has allotted $50 billion towards domestic chip manufacturing as part of his $2 trillion infrastructure plan. In March 2021, China also highlighted ‘Investment in semiconductors’ as one of seven key priorities in its 5-year economic plan

Additionally, the world’s largest chipmaker TSMC announced it would invest a $100 billion into new plants over the next three years with a $12 billion location in Arizona. Samsung plans to invest $116 billion to manufacture new semiconductors by 2022, and over $10 billion will go towards their state-of-the-art chip plant in Austin, Texas.

It’s going to be an interesting next 5 years and we are keen to see how the world changes with these new manufacturing plants.

This is definitely a ‘watch this space’ moment for the electronics industry.

Stay tuned.

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