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Wow, new fabs are popping up everywhere. Any thoughts on exploding fab development causing a downleg in the commodity cycle?

by fny 5y ago

jjoonathan 5y ago
It always does. Knowledge of the cycle doesn't stop the cycle, though. Semiconductor manufacturing infrastructure lead times are looong, so getting the system out of oscillation is more difficult than just dropping the gain. Do that and you're guaranteed to be left behind.
imtringued 5y ago
Well, that's pretty much the point. Semiconductors are supposed to be cheap like food. We don't want fabs to go out of business so we'll be forced to subsidize them.
j_walter 5y ago
Sure...except just because fabs are being announced doesn't mean they will actually be up and running any time soon. The recent supply chain issues only add to the long lead times on 300mm tools that have been seen for the past 2 years. Getting enough people to actually build the fabs is also another problem with having to pull tradesmen from 3 or 4 surrounding states to support a single fab construction project.
ksec 5y ago
Not likely. When was the last downleg of NAND and DRAM? Commodity cycle works when there are a consistent under and over supply cycle. When enough consolidation happens you rarely see this happens anymore in any commodity market, tech or not. ( Downleg here refers to negative margin, a correction from insanely high market price isn't a down leg in my opinion ) Low cost Node have been in demand outstripping supply for years going all the way back to 2015/2016. Foundry are just very cautious because of high CAPEX and they often lack TAM data. What happens in these sort of crunch is you have lots of new customer coming in given you new confidence and perspective. And it also fix the GF's Chicken and Egg problem especially when they have Wafer supply agreement with AMD. Hence the expansion of Fabs. Not to mention building Fabs and actually getting up and running with Capacity is an entirely different thing. The current lead time for material and equipment are over a year.

Wow, new fabs are popping up everywhere. Any thoughts on exploding fab development causing a downleg in the commodity cycle?

by fny 5y ago

Wow, new fabs are popping up everywhere. Any thoughts on exploding fab development causing a downleg in the commodity cycle?

jjoonathan 5y ago

It always does. Knowledge of the cycle doesn't stop the cycle, though. Semiconductor manufacturing infrastructure lead times are looong, so getting the system out of oscillation is more difficult than just dropping the gain. Do that and you're guaranteed to be left behind.

imtringued 5y ago

Well, that's pretty much the point. Semiconductors are supposed to be cheap like food. We don't want fabs to go out of business so we'll be forced to subsidize them.

j_walter 5y ago

Sure...except just because fabs are being announced doesn't mean they will actually be up and running any time soon. The recent supply chain issues only add to the long lead times on 300mm tools that have been seen for the past 2 years. Getting enough people to actually build the fabs is also another problem with having to pull tradesmen from 3 or 4 surrounding states to support a single fab construction project.

ksec 5y ago

Not likely. When was the last downleg of NAND and DRAM? Commodity cycle works when there are a consistent under and over supply cycle. When enough consolidation happens you rarely see this happens anymore in any commodity market, tech or not. ( Downleg here refers to negative margin, a correction from insanely high market price isn't a down leg in my opinion ) Low cost Node have been in demand outstripping supply for years going all the way back to 2015/2016. Foundry are just very cautious because of high CAPEX and they often lack TAM data. What happens in these sort of crunch is you have lots of new customer coming in given you new confidence and perspective. And it also fix the GF's Chicken and Egg problem especially when they have Wafer supply agreement with AMD. Hence the expansion of Fabs. Not to mention building Fabs and actually getting up and running with Capacity is an entirely different thing. The current lead time for material and equipment are over a year.