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The Chip Shortage Keeps Getting Worse. Why Can’t We Just Make More?
Bloomberg
May 5, 2021
Shortages of semiconductors are battering automakers and tech giants, raising alarm bells from Washington to Brussels to Beijing. The crunch has raised a fundamental question for policymakers, customers and investors: Why can’t we just make more chips?
There is both a simple answer and a complicated one. The simple version is that making chips is incredibly difficult—and getting tougher.
“It’s not rocket science—it’s much more difficult,” goes one of the industry’s inside jokes.
The more complicated answer is that it takes years to build semiconductor fabrication facilities and billions of dollars—and even then the economics are so brutal that you can lose out if your manufacturing expertise is a fraction behind the competition. Former Intel Corp. boss Craig Barrett called his company’s microprocessors the most complicated devices ever made by man.
This is why countries face such difficulty in achieving semiconductor self sufficiency. China has called chip independence a top national priority in its latest five-year plan, while U.S. President Joe Biden has vowed to build a secure American supply chain by reviving domestic manufacturing. Even the European Union is mulling measures to make its own chips. But success is anything but assured.
Manufacturing a chip typically takes more than three months and involves giant factories, dust-free rooms, multi-million-dollar machines, molten tin and lasers. The end goal is to transform wafers of silicon—an element extracted from plain sand—into a network of billions of tiny switches called transistors that form the basis of the circuitry that will eventually give a phone, computer, car, washing machine or satellite crucial capabilities.
More from Bloomberg Big Take: Chip Shortage Forces Carmakers to Strip Out High-Tech Features
NVLink interface
Used for transferring data between central processing units and graphics processing units
and between connected GPUs.
Graphic processing cluster
Clusters of logic circuits that contain most of the GPU’s core graphics functions including portions that calculate the appearance of shadows
and textures in a video frame.
Frame buffer
An area of memory used to store information that will become the picture on a display.
28.3B
Transistors
L2 and memory controller
This is where the chip stores data ready to quickly access and work on.
Total chip area: 6.28 cm²
2.6829 cm
Actual
size
2.342 cm
Input/output, display and video
This part of the chip communicates with other
parts of the computer and the gear attached to it.
Transistorcount1K100K1M10M100M1B10B30BTransistor size10microns1micron100nanometers10nm51971👆Intel 40041993Pentium2001Xeon2006Core2 Duo2013A72017A112009GeForce GTX 2752020GeForce RTX 3090Transistors are getting smallerso chips can contain more
1 cubic
meter of air
10
Particles
10,000
Class 1 chip
manufacturing
clean room
Particles
Hospital operating theater
Each dust particle is counted as anything less than 200 nanometers (billionths of a meter) in size
An employee wearing protective gear walks past machines in a clean room at the GlobalFoundries semiconductor plant, Malta, New York, U.S.
One of the most difficult parts of the process is lithography, which is handled by machines made by ASML Holding NV. The company’s gear uses light to burn patterns into materials deposited on the silicon. These patterns eventually become transistors. This is all happening at such a small scale, the current way to make it work is to use extreme ultraviolet light, which usually only occurs naturally in space. To recreate this in a controlled environment, ASML machines zap molten droplets of tin with a laser pulse. As the metal vaporizes, it emits the required EUV light. But even that is not enough. Mirrors are needed to focus the light into a thinner wavelength.
1
FRONT END
59+
Oxidation and coating
Types of
equipment
Layers of insulating and conducting materials are applied to the surface of the silicon wafer. The wafer is then covered by a uniform coat of photoresist material.
Silicon nitride
Photoresist
Silicon substrate
Silicon dioxide
2
Projected
UV light
Lithography
The integrated circuit patterns
specified in the design are
mapped onto a glass plate
called a photomask.
Ultraviolet (UV) light is shone
through the mask to transfer
the pattern to the photoresist
layer on the silicon disk.
The exposed portion can then
be chemically removed.
Photomask
Projection lens
Patterns are projected
repeatedly onto the wafer
Arrow indicate movement direction
3
Development and bake
Wafers are developed to
remove the non-exposed areas
of photoresist then baked to remove solvent chemicals.
Layers unprotected
by photoresist
4
Etching
Areas of the silicon wafer unprotected by photoresist
are removed and cleaned
by gases or chemicals.
Photoresist layer
5
Doping
The wafer is showered with
ionic gases that modify the
conductive properties of the
new layer by adding impurities,
such as boron and arsenic.
Doped region
6
Metal deposition
and etching
A similar process is used
to lay down the metal links between transistors.
Metal connector
Steps 1-5 are repeated hundreds of times with different chemicals to create
more layers, depending on the desired circuit features.
BACK END
8
Completed wafer
Each completed wafer
contains hundreds of
identical integrated
circuits. The wafers are
sent for assembly, packaging
and testing which includes cutting the wafer into individual chips.
Types of
equipment
Close up of
a silicon wafer
More from Bloomberg Graphics: How a Chip Shortage Snarled Everything From Phones to Cars
Burdensome Economics
Chip plants run 24 hours a day, seven days a week. They do that for one reason: cost. Building an entry-level factory that produces 50,000 wafers per month costs about $15 billion. Most of this is spent on specialized equipment—a market that exceeded $60 billion in sales for the first time in 2020.
Heavy Duty
Global wafer fab equipment market
$60B
45
30
15
2010
2015
2020
Three companies—Intel, Samsung and TSMC—account for most of this investment. Their factories are more advanced and cost over $20 billion each. This year, TSMC will spend as much as $28 billion on new plants and equipment. Compare that to the U.S. government’s attempt to pass a bill supporting domestic chip production. This legislation would offer just $50 billion over five years.
Once you spend all that money building giant facilities, they become obsolete in five years or less. To avoid losing money, chipmakers must generate $3 billion in profit from each plant. But now only the biggest companies, in particular the top three that combined generated $188 billion in revenue last year, can afford to build multiple plants.
Big-Fish Industry
Combined total
0
95
189
284
$378B
Intel
Samsung
TSMC
SK Hynix
Qualcomm
Broadcom
Micron
Nvidia
Texas Instruments
$188B
$190B
Mediatek
Infineon
Combined revenue
of the top 3
Combined revenue
of the rest
STMicroelectronics
Kioxia
AMD
Sony
The more you do this, the better you get at it. Yield—the percentage of chips that aren’t discarded—is the key measure. Anything less than 90% is a problem. But chipmakers only exceed that level by learning expensive lessons over and over again, and building on that knowledge.
The brutal economics of the industry mean fewer companies can afford to keep up. Most of the roughly 1.4 billion smartphone processors shipped each year are made by TSMC. Intel has 80% of the market for computer processors. Samsung dominates in memory chips. For everyone else, including China, it’s not easy to break in.