Chip manufacturer TSMC warns shortages could continue through 2022

[Tesla DeLorean]

I'm going to post this here, as a lot of people don't appear to be paying attention to the unravelling situation in the semi-conductor space.

ST has it's own fabs, but the business environment is likely to push capacity toward highest margin wafers/die manufacture. And for those products for which they have contractual obligations, likely already pushing into next year at this point.

Expect large orders to have No Cancel, No Return, clauses.

https://www.theverge.com/2021/4/15/22385240/tsmc-chip-shortage-2022-intel-ceo-earnings-graphics-cards-cpus-gpus

[Uwe Bonnes]

Is there really such a big surge in semiconductor usage, or did some first temporary shortages make everybody trying to pile up stock?

[Tesla DeLorean]

A lot of things going on,

Migration to a Build-to-Order model over last few decades.

Capacity loss due to COVID, supply chain issues.

China cornering the market by buying up fab capacity for its own product mix/demands.

Fire at AKM fab, specialized product in critical parts in radio/telco type applications.

Migration of older fabs to high volume/margin parts, LEDs, etc.

EOL on low profit lines.

Demand up from products containing high part counts, things like cars, tablets, phones, tvs, etc.

Lot of orders on the books, pushing delivery out, lot of planners worried about availability and committing to orders rather than finding free stock.

Arbitrage guys seeing this coming since mid/late 2020, and buying up available stocks and positions in the order queue.

[Tesla DeLorean]

I'm not this bearish, but I'm adding it here for perspectives

Intel, Nvidia, TSMC execs agree: Chip shortage could last into 2023

https://arstechnica.com/gadgets/2021/04/intel-nvidia-tsmc-execs-agree-chip-shortage-could-last-into-2023/

If they have to build capacity it will take years, but I'm not sure that's primary issue. To Uwe's point there is a lot of fear driving booked orders.

One issue ST has created for itself is a vast array of parts in the STM32 families, and promises to commit to them for a decade. I'm on the skeptical side of the fence here, and a natural disaster or bankruptcy might occur that breaks the commitment, or a new CEO comes in and decides it is stupid because he wants to shutter a fab, sell it or change its focus.

This could be problematic if older fabs need to be retired/refitted, or as I've seen in the past a critical piece of test equipment fails and can't replaced. Or an outside vendor doing packaging says they are done.

[waclawek.jan]

While probably all things Clive said are true, we've seen variations to this theme in the past and IMO this is the same as always - relatively minor shortage inflated to a huge bubble. IMO there's more panic plus speculation than material shortage. Unfortunately the momentary net result for the garage-scale buyer is the same; the good thing is that there will be plenty of surplus stock in the years to come.

JW

[Mike Hooper]

I'm afraid that I'm very bearish on this. Just think of the ripple effects of not having chips until at least 3/22 (11 months from now), which is the DigiKey target availability date of the STM32F765VIT6 chip that we have (had) in manufacturing. I have had my assembler panic purchase as many compatible parts from around the world as possible. Now, in almost all cases, there is NO stock of any variety.

This type of shortage affects not only the manufacturers of electronics product, but ALL of the sub-suppliers of supporting parts/products. Since microcontrollers are so pervasive in our worldwide economy, think of all of the supporting companies that will not longer be able to ship products, even though they do not contain a microcontroller, but depend on that small chip for the basis of the product/shipment. I don't want to cry "chicken little", but this long-term shortage has ramifications that stretch well beyond our manufacturing business. This will have a huge economic impact on the world economy. My 2 cents.