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Is there a good article around that explains the specific semiconductor bottlenecks everyone is facing right now? I’d like to know more. It seems like a huge op

Is there a good article around that explains the specific semiconductor bottlenecks everyone is facing right now? I’d like to know more. It seems like a huge opportunity, but also I am guessing it’s a very hard or impossible problem since it hasn’t already been solved by infinite money?

kalleboo 5y ago
Right! I get it for the very high end chips used in CPUs and GPUs that are in demand for home computers and cryptocurrency mining are constrained by a very limited amount of fabs, but what is holding back the older process chips?
- FearlessNebula 5y ago
  What is a fab?
  - JamesCoyne 5y ago
    https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
  - wlesieutre 5y ago
    Shorthand for "fabrication" https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
  - deleted 5y ago
    [deleted]
  - Tortoise 5y ago
    https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
  - 015a 5y ago
    https://wiki.factorio.com/Processing_unit https://wiki.factorio.com/Processing_unit
- InitialLastName 5y ago
  There's a confluence of things affecting the older-process, more commodity chips as well: - Demand for electronics as a whole, at all scales (from computers to cars to IOT to industrial controls and all kinds of other things that we don't think about) has been shooting up for the last decade (without compensating expansion in fabrication capacity). This is the 3rd serious supply shortage we've seen in electronic components in the last few years (anyone else remember seeing MLCC lead times hit 100 weeks in 2017-2018?). - All of these supply lines running all the way back to the raw silicon operate with very lean (or no) supply buffers. Think "suppliers making deliveries directly to the factory floor" lean. These sorts of systems are not resilient, and do not respond well to shocks (like suppliers having to shut down due to a global pandemic). - As has been commonly noted, there have also been demand shocks, where electronics consumers (especially car companies) who are normally operating on timelines forecasting out 6-24 months forecast reduced customer demand, reflected that in their orders, and then had to adjust back when demand for cars came back. - Similarly, with people locked down and working from home, demand for electronics both for professional use and as a replacement for entertainment options has expanded. - Finally, there are rumors (that I haven't been able to confirm in a meaningful way) that some large Chinese manufacturers have been stockpiling components in anticipation of further tariffs, sanctions and trade tension.
  - baybal2 5y ago
    > (anyone else remember seeing MLCC lead times hit 100 weeks in 2017-2018?). I did, even Chinese domestic market still has months long passives shortages even today. > - Finally, there are rumors (that I haven't been able to confirm in a meaningful way) that some large Chinese manufacturers have been stockpiling components in anticipation of further tariffs Actually plain speculations, some times by people very far from semiconductors market, just like with masks, baby formula, apartments, pork, cement, aluminium, stocks etc.
    - InitialLastName 5y ago
      > Actually plain speculations, some times by people very far from semiconductors market, just like with masks, baby formula, apartments, cement, aluminium, stocks etc. Or, you know, by the manufacturers themselves: https://www.bbc.com/news/technology-54266531 https://www.bbc.com/news/technology-54266531
dharmab 5y ago
I have friends working in the physical side of the chip industry- there is a lot of money being poured into the industry right now to increase fab output, but it takes time to build the physical infrastructure. Chip fabs are highly hazardous environments and need to conform to pretty intense standards. And of course, every time anyone on their specific team within the fab gets COVID-like systems, the _entire team_ goes home for two weeks. This has happened several times over the past year.
- UncleOxidant 5y ago
  You'd think that a fab would be one of the least likely work places where one would pick up covid. The air is constantly filtered, you're wearing bunny suits with face coverings and the density of people is pretty low.
  - dharmab 5y ago
    This fab is in an ultraconservative city where masks and social distancing are not practiced. The workers have been getting COVID from the community, not at work.
    - ls612 5y ago
      But if I have covid and you and I are both wearing those weird space suit looking things (I don’t know what they actually are called) you would think the odds of me giving you covid would be minuscule right?
      - jacques_chester 5y ago
        I assume people have to eat lunch somewhere.
      - dharmab 5y ago
        Not everyone at the plant wears a full suit. A lot of the workers are sitting in offices most of the day monitoring systems, or are working on supporting systems like chemical pipes, or loading and unloading trucks. And then everyone sees each other outside of work anyway. Some of the people at the plant are family, or as close as family. Some go to the same church. Some go camping or fishing together on the weekends
Arainach 5y ago
Even infinite money can't set up new fabs overnight - factories are tough. Unless you're a government paying for the strategic advantage of domestic manufacturing, you have to decide whether the plant will still be profitable when the shortage ends - and whether it's currently profitable enough to merit building. It's not unlike the situation with PPE manufacturing circa March 2020.
- pmichaud 5y ago
  Yeah I guess I'm just surprised. It feels to me (who knows basically nothing about it) that it's been a pretty big problem for at least a few years, and it also seems like the combined buying power of the entire world's hardware companies would make the investment in new fabs trivially worth it. Maybe fabs take longer than a couple years to set up regardless of money spent? Maybe fabs take a level of expertise that only a handful of people in the world have, and it's a matter of ramping up promising undergrads to that level which will take like 15+ years? Maybe analysts expect demand to even out so that capital outlays right now don't make sense? But all of these are surprising to me to the degree that we still don't have enough semiconductors. I'm just hoping for a sort of comprehensive overview of the issue, if such a thing exists.
  - pjc50 5y ago
    From my perspective in the software side of a semiconductor company, it's very much a problem of the last year. The AKM fab fire in November 2020 also made the situation worse.
    - Leherenn 5y ago
      It's pretty much impossible to find GNSS chips currently, at least the ones we use (ublox). There's a massive TCXO shortage.
  - browningstreet 5y ago
    Fabs also have to be manufactured.
  - 5y ago
segmondy 5y ago
When the pandemic started, most companies thought demand will go down for things like cars, etc so didn't place orders for semiconductors needed for things like cars. Instead demand went up for devices used at home like laptops, webcams, etc. When companies order component, they don't buy on demand, but they order far ahead. So you might say something like, I want to buy 10million units of X in 6 months, or next year. The manufacturers operate at peak capacity already so they can't crank up output on demand. You give them enough time to be able to meet your needs. The companies that ordered say 1/3rd or 1/2 of what they needed realized they need more since the pandemic didn't slow sales down much. They went to order some more components and the manufacture says, "sorry! lead time is now 12 months" because they already got contracts with other folks. This of course is not a one supplier to one product problem, but possible across a chain of supplier/producer relationship. The organizations that saw there might be a supply problem earlier on, aggressively stocked up and bought up more than they needed which placed additional strain across the supply problem. The supply problem ends up cascading across industry. This is know as the bullwhip effect - https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect. No one wants to invest in new plant because by the time it's done, the issue might be resolved and even if it's not, the plant might not return the ROI. That's how we ended up where we are.
- nraynaud 5y ago
  anyone knows the beer game from the Fifth Discipline?
- SubiculumCode 5y ago
  this is why I roll my eyes at anyone trying to deride the stimulus bill etc about worries about inflation. The supply shortages are temporary as expectation of lower demand did not come true....it is not a fundamental limitation of supply capacity...truly our capacity to supply products can be ramped up enormously and fairly quickly.
  - totalZero 5y ago
    Fabbing older chips is not a particularly fruitful business for a startup, and the established players have their hands full. Some face water shortages. Others have suffered major factory fires. And all would need several months at a minimum in order to bring on more capacity. Part of the problem is that when the supply chain is long and fragile, a perturbation anywhere affects customers everywhere. Kulicke & Soffa has said that they're having trouble getting chips for their machines. That's problematic because they are a semiconductor equipment manufacturer. The result of shortage is that lead times get longer (not unlike how packets queue for a lossy channel), incentivizing chip customers to order more than they need. This, in turn, further constrains the market. The trailing edge lithography scanners don't get up to the 180 tons that an ASML EUV machine might weigh, but they're still large and you can't exactly get them with Amazon Prime two-day installation. Acer and AMD said the shortages would ease this year, but TSMC says they will continue to next year and Intel said yesterday that they think it will take a couple of years.
tyingq 5y ago
This article has some detail: https://www.extremetech.com/computing/318554-a-massive-chip-shortage-is-hitting-the-entire-semiconductor-industry https://www.extremetech.com/computing/318554-a-massive-chip-... The summary there seems to be "Insufficient investment in 200mm wafers". Combined with everyone's demand forecasts being screwed up due to COVID and being either too high, or too low. Finally, you can't just move from FabA to FabB (even for the same wafer and process size) quickly, so customers can't just quickly migrate to whatever fabs ended up with excess capacity. "200mm fabs are older facilities that process chips at mature nodes, which range from 350nm to 90nm" - https://semiengineering.com/demand-picks-up-for-200mm/ https://semiengineering.com/demand-picks-up-for-200mm/
deleted 5y ago
[deleted]
wernst 5y ago
https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-head-says-drive-to-onshore-chip-supply-chain-is-unrealistic https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-he... From TSMC's Mark Lui: - Supply chain disruptions from Covid - US / China trade disputes - Digital transformation from Covid (increasing demand for chips) - "Double booking" feedback loop (companies preorder more than needed, fearing fab capacity limits --> makes it seem like there's less fab capacity --> companies book more capacity, fearing capacity limits)...this is not specific to Covid, but heats up in this kind of situation
pjc50 5y ago
A lot of people seem to have learned economics 101 but not control theory, and seem to think that the economy will respond to signals instantly rather than having a finite frequency response. The high level of uncertainty doesn't help; how sure are you that there won't be a pandemic related demand crash in six months?
- totalZero 5y ago
  In past shortages, that demand crash is precisely what happened. Considering how long a new fab takes to pay for itself, and how thin the margins are in fabbing trailing-edge chips that have been around for years, it would be a major risk to lay out more capex than your road map from 2019 suggested. Meanwhile, if you just keep doing what you're already doing, utilization is high and prices are rising so you're guaranteed to turn a rewarding profit. There's not a major private-sector incentive that would justify costs whose amortization would require consistent demand for several years.
beowulfey 5y ago
I can’t speak for semiconductors but it seems like supply chains everywhere are hurting. I work in bio and it used to be you could order something and it would arrive in 2 days. Now literally every product I order is backordered 2 weeks to 2 months. Even innocuous things like centrifuge tubes or common chemicals!
Kliment 5y ago
I explained it in a comment here https://news.ycombinator.com/item?id=26842924 https://news.ycombinator.com/item?id=26842924 and here https://news.ycombinator.com/item?id=26659709 https://news.ycombinator.com/item?id=26659709

kalleboo 5y ago

Right! I get it for the very high end chips used in CPUs and GPUs that are in demand for home computers and cryptocurrency mining are constrained by a very limited amount of fabs, but what is holding back the older process chips?

FearlessNebula 5y ago
What is a fab?
- JamesCoyne 5y ago
  https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
- wlesieutre 5y ago
  Shorthand for "fabrication" https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
- deleted 5y ago
  [deleted]
- Tortoise 5y ago
  https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
- 015a 5y ago
  https://wiki.factorio.com/Processing_unit https://wiki.factorio.com/Processing_unit
InitialLastName 5y ago
There's a confluence of things affecting the older-process, more commodity chips as well: - Demand for electronics as a whole, at all scales (from computers to cars to IOT to industrial controls and all kinds of other things that we don't think about) has been shooting up for the last decade (without compensating expansion in fabrication capacity). This is the 3rd serious supply shortage we've seen in electronic components in the last few years (anyone else remember seeing MLCC lead times hit 100 weeks in 2017-2018?). - All of these supply lines running all the way back to the raw silicon operate with very lean (or no) supply buffers. Think "suppliers making deliveries directly to the factory floor" lean. These sorts of systems are not resilient, and do not respond well to shocks (like suppliers having to shut down due to a global pandemic). - As has been commonly noted, there have also been demand shocks, where electronics consumers (especially car companies) who are normally operating on timelines forecasting out 6-24 months forecast reduced customer demand, reflected that in their orders, and then had to adjust back when demand for cars came back. - Similarly, with people locked down and working from home, demand for electronics both for professional use and as a replacement for entertainment options has expanded. - Finally, there are rumors (that I haven't been able to confirm in a meaningful way) that some large Chinese manufacturers have been stockpiling components in anticipation of further tariffs, sanctions and trade tension.
- baybal2 5y ago
  > (anyone else remember seeing MLCC lead times hit 100 weeks in 2017-2018?). I did, even Chinese domestic market still has months long passives shortages even today. > - Finally, there are rumors (that I haven't been able to confirm in a meaningful way) that some large Chinese manufacturers have been stockpiling components in anticipation of further tariffs Actually plain speculations, some times by people very far from semiconductors market, just like with masks, baby formula, apartments, pork, cement, aluminium, stocks etc.
  - InitialLastName 5y ago
    > Actually plain speculations, some times by people very far from semiconductors market, just like with masks, baby formula, apartments, cement, aluminium, stocks etc. Or, you know, by the manufacturers themselves: https://www.bbc.com/news/technology-54266531 https://www.bbc.com/news/technology-54266531

dharmab 5y ago

I have friends working in the physical side of the chip industry- there is a lot of money being poured into the industry right now to increase fab output, but it takes time to build the physical infrastructure. Chip fabs are highly hazardous environments and need to conform to pretty intense standards. And of course, every time anyone on their specific team within the fab gets COVID-like systems, the _entire team_ goes home for two weeks. This has happened several times over the past year.

UncleOxidant 5y ago
You'd think that a fab would be one of the least likely work places where one would pick up covid. The air is constantly filtered, you're wearing bunny suits with face coverings and the density of people is pretty low.
- dharmab 5y ago
  This fab is in an ultraconservative city where masks and social distancing are not practiced. The workers have been getting COVID from the community, not at work.
  - ls612 5y ago
    But if I have covid and you and I are both wearing those weird space suit looking things (I don’t know what they actually are called) you would think the odds of me giving you covid would be minuscule right?
    - jacques_chester 5y ago
      I assume people have to eat lunch somewhere.
    - dharmab 5y ago
      Not everyone at the plant wears a full suit. A lot of the workers are sitting in offices most of the day monitoring systems, or are working on supporting systems like chemical pipes, or loading and unloading trucks. And then everyone sees each other outside of work anyway. Some of the people at the plant are family, or as close as family. Some go to the same church. Some go camping or fishing together on the weekends

Arainach 5y ago

Even infinite money can't set up new fabs overnight - factories are tough. Unless you're a government paying for the strategic advantage of domestic manufacturing, you have to decide whether the plant will still be profitable when the shortage ends - and whether it's currently profitable enough to merit building. It's not unlike the situation with PPE manufacturing circa March 2020.

pmichaud 5y ago
Yeah I guess I'm just surprised. It feels to me (who knows basically nothing about it) that it's been a pretty big problem for at least a few years, and it also seems like the combined buying power of the entire world's hardware companies would make the investment in new fabs trivially worth it. Maybe fabs take longer than a couple years to set up regardless of money spent? Maybe fabs take a level of expertise that only a handful of people in the world have, and it's a matter of ramping up promising undergrads to that level which will take like 15+ years? Maybe analysts expect demand to even out so that capital outlays right now don't make sense? But all of these are surprising to me to the degree that we still don't have enough semiconductors. I'm just hoping for a sort of comprehensive overview of the issue, if such a thing exists.
- pjc50 5y ago
  From my perspective in the software side of a semiconductor company, it's very much a problem of the last year. The AKM fab fire in November 2020 also made the situation worse.
  - Leherenn 5y ago
    It's pretty much impossible to find GNSS chips currently, at least the ones we use (ublox). There's a massive TCXO shortage.
- browningstreet 5y ago
  Fabs also have to be manufactured.
- 5y ago

segmondy 5y ago

When the pandemic started, most companies thought demand will go down for things like cars, etc so didn't place orders for semiconductors needed for things like cars. Instead demand went up for devices used at home like laptops, webcams, etc. When companies order component, they don't buy on demand, but they order far ahead. So you might say something like, I want to buy 10million units of X in 6 months, or next year. The manufacturers operate at peak capacity already so they can't crank up output on demand. You give them enough time to be able to meet your needs. The companies that ordered say 1/3rd or 1/2 of what they needed realized they need more since the pandemic didn't slow sales down much. They went to order some more components and the manufacture says, "sorry! lead time is now 12 months" because they already got contracts with other folks. This of course is not a one supplier to one product problem, but possible across a chain of supplier/producer relationship. The organizations that saw there might be a supply problem earlier on, aggressively stocked up and bought up more than they needed which placed additional strain across the supply problem. The supply problem ends up cascading across industry. This is know as the bullwhip effect - https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect. No one wants to invest in new plant because by the time it's done, the issue might be resolved and even if it's not, the plant might not return the ROI. That's how we ended up where we are.

nraynaud 5y ago
anyone knows the beer game from the Fifth Discipline?
SubiculumCode 5y ago
this is why I roll my eyes at anyone trying to deride the stimulus bill etc about worries about inflation. The supply shortages are temporary as expectation of lower demand did not come true....it is not a fundamental limitation of supply capacity...truly our capacity to supply products can be ramped up enormously and fairly quickly.
- totalZero 5y ago
  Fabbing older chips is not a particularly fruitful business for a startup, and the established players have their hands full. Some face water shortages. Others have suffered major factory fires. And all would need several months at a minimum in order to bring on more capacity. Part of the problem is that when the supply chain is long and fragile, a perturbation anywhere affects customers everywhere. Kulicke & Soffa has said that they're having trouble getting chips for their machines. That's problematic because they are a semiconductor equipment manufacturer. The result of shortage is that lead times get longer (not unlike how packets queue for a lossy channel), incentivizing chip customers to order more than they need. This, in turn, further constrains the market. The trailing edge lithography scanners don't get up to the 180 tons that an ASML EUV machine might weigh, but they're still large and you can't exactly get them with Amazon Prime two-day installation. Acer and AMD said the shortages would ease this year, but TSMC says they will continue to next year and Intel said yesterday that they think it will take a couple of years.

tyingq 5y ago

This article has some detail: https://www.extremetech.com/computing/318554-a-massive-chip-shortage-is-hitting-the-entire-semiconductor-industry https://www.extremetech.com/computing/318554-a-massive-chip-... The summary there seems to be "Insufficient investment in 200mm wafers". Combined with everyone's demand forecasts being screwed up due to COVID and being either too high, or too low. Finally, you can't just move from FabA to FabB (even for the same wafer and process size) quickly, so customers can't just quickly migrate to whatever fabs ended up with excess capacity. "200mm fabs are older facilities that process chips at mature nodes, which range from 350nm to 90nm" - https://semiengineering.com/demand-picks-up-for-200mm/ https://semiengineering.com/demand-picks-up-for-200mm/

deleted 5y ago

[deleted]

wernst 5y ago

https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-head-says-drive-to-onshore-chip-supply-chain-is-unrealistic https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-he... From TSMC's Mark Lui: - Supply chain disruptions from Covid - US / China trade disputes - Digital transformation from Covid (increasing demand for chips) - "Double booking" feedback loop (companies preorder more than needed, fearing fab capacity limits --> makes it seem like there's less fab capacity --> companies book more capacity, fearing capacity limits)...this is not specific to Covid, but heats up in this kind of situation

pjc50 5y ago

A lot of people seem to have learned economics 101 but not control theory, and seem to think that the economy will respond to signals instantly rather than having a finite frequency response. The high level of uncertainty doesn't help; how sure are you that there won't be a pandemic related demand crash in six months?

totalZero 5y ago
In past shortages, that demand crash is precisely what happened. Considering how long a new fab takes to pay for itself, and how thin the margins are in fabbing trailing-edge chips that have been around for years, it would be a major risk to lay out more capex than your road map from 2019 suggested. Meanwhile, if you just keep doing what you're already doing, utilization is high and prices are rising so you're guaranteed to turn a rewarding profit. There's not a major private-sector incentive that would justify costs whose amortization would require consistent demand for several years.

beowulfey 5y ago

I can’t speak for semiconductors but it seems like supply chains everywhere are hurting. I work in bio and it used to be you could order something and it would arrive in 2 days. Now literally every product I order is backordered 2 weeks to 2 months. Even innocuous things like centrifuge tubes or common chemicals!

Kliment 5y ago

I explained it in a comment here https://news.ycombinator.com/item?id=26842924 https://news.ycombinator.com/item?id=26842924 and here https://news.ycombinator.com/item?id=26659709 https://news.ycombinator.com/item?id=26659709