Chip shortage: ASML factory fire could be another blow to global semiconductor supply

ASML Holding, which provides a vital know-how utilized in computer chips, has reported a hearth at a manufacturing plant, but the extent of the hurt just isn’t but recognized

By Matthew Sparkes

A fireplace at a manufacturing facility owned by the sole service provider of a important know-how utilized to manufacture computer chips could exacerbate an currently major worldwide shortage of semiconductors utilized in anything from telephones to vehicles.

The blaze broke out right away on Sunday at a plant in Berlin, Germany, owned by ASML Keeping. Though significantly from a domestic title, the Dutch enterprise is the world’s greatest supplier of photolithography systems and the only supply of serious ultraviolet (EUV) lithography equipment, which are additional highly developed. These units are utilized to etch circuits onto silicon wafers and create laptop chips applied by Apple, IBM and Samsung. In the third quarter of last year, ASML Keeping offered €5.2 billion well worth of this gear.

The earth is enduring a laptop or computer chip shortage owing to a ideal storm of troubles including a global pandemic, a trade war, droughts and snowstorms. It has coincided with a period of time of soaring, unprecedented demand – in January 2021 by itself, chip sales arrived at a report $40 billion.

Semiconductor factories have minimal capacity, and developing new plants needs large expenditure and usually requires a number of many years. Although semiconductor businesses are racing to boost generation and governments are signing deals to deliver crops to their personal shores to assurance source, if ASML just cannot present as many devices as predicted, the scarcity could go on for substantially lengthier.

ASML Holding declined a request for job interview, but said in a press release that it was far too early to convey to how significant the problems was and no matter whether it will have any influence on output. “The fireplace was extinguished throughout the night and the good thing is no people ended up wounded throughout this incident,” the release said. “It will take a couple of days to carry out a comprehensive investigation and make a comprehensive evaluation.”

Vladimir Galabov at technologies analysts Omdia states some of the conclusion products and solutions that depend on ASML Holding’s equipment have now been in “dire shortage”. The impact of the fire will depend on what was ruined and irrespective of whether that has an effect on the most superior chip-generating technology, which has been a lot less affected by present shortages, or more mature gear.

“If it’s parts applied for lithography devices employed to manufacture bleeding edge processors, we might handle a bit improved. If the fire-damaged elements used to manufacture the older nodes, we’re in issues due to the fact we have to have to urgently ramp up the producing of such processors,” states Galabov.

“We’re coming into 2022 with a large amount of pent-up demand,” he suggests. “If the fire is critical and if ASML struggles to get well swiftly, we may have to have to get utilized to a tough semiconductor provide situation for the up coming two yrs.”