Another semiconductor equipment giant warns, ASMI: lack of chips may affect the whole year

As the world’s largest chip makers scramble to expand capacity, semiconductor equipment companies have warned that delivery times for key machines could be delayed by a shortage of chips.

The Nikkei Asian Review reported on the 30th that Benjamin Loh, CEO of ASM International, a Dutch semiconductor equipment manufacturer and material supplier, said in an interview that the impact of chip shortages may continue throughout this year.

ASMI develops and manufactures equipment mainly for front-end wafer processing, serving world-class semiconductor manufacturers located in Taiwan, the United States, South Korea and China.

The ASMI product supply chain does observe wafer shortages, Loh said. The equipment that ASMI supplies to the semiconductor market has a lead time of 4 to 6 months, but it is now “a lot longer”.

He said that for major customers such as TSMC, Intel Corp., and Samsung Electronics who have announced production expansion, ASML should be able to meet their needs this year, but if customers make plans or unexpected requirements, it will be difficult. will become higher. Loh admitted that he had never seen such severe supply chain restrictions since entering the semiconductor industry.

Loh pointed out that “simple chips” (also known as mature process chips) are the most in short supply. For example, microcontroller chips are not only used in washing machines and cars, but also in ASMI equipment. Everyone needs the same source of supply. However, capacity for many mature processes will not come online until next year.

Russia and Ukraine go to war, and neon gas “dies out”? Semiconductors may spend 10 times the money to “buy gas”

Gases such as neon and hexafluorobutadiene are known as the “blood” in semiconductor machines and the “knife” for industrial use. They play a key role in the semiconductor process, but they have received little attention. Russia and Ukraine are both big countries of these special gases. As the war between Russia and Ukraine continues and Russia lists Taiwan as an unfriendly country, will Taiwan’s semiconductor industry be “killed”?

At the press conference before the listing of Jingcheng Technology, which produces and sells special gases for semiconductors, the legal person and the media gathered around Chairman Chen Yali. Will the Neon gas, which is necessary in the process, be “cut off” and affect Taiwan’s large wafer factories?

“If you want to ask whether the supply of neon gas from Ukraine and Russia will stop, I don’t think there is a big chance. But if you ask me whether the price will rise, I will say there is a 300% chance that it will rise!” Chen Yali said firmly.

Since Russia invaded Ukraine on February 24, the extended war has entered its third week. Even though the two countries are far away from each other on the other side of the world, few Taiwanese businessmen have established factories in Russia and Ukraine, and direct trade with the two countries does not account for much. However, the domestic semiconductor industry is closely watching the development of the war.

One of the reasons is that many of the gases required for the semiconductor process come from both countries.

Chen Yali admitted that Jingcheng supplies hexafluorobutadiene (C4F6), silicon tetrafluoride (SiF4) and other gas sources for the 3D NAND Flash etching process, and currently Thailand is half from its joint venture company with Russia.

The war in the big gas-producing city is tight, and manufacturers have stopped work
Taking neon gas as an example, Ukraine has more than 70% of the global market share, and Ukraine and Russia together have more than 90%. Reuters exclusively reported that two Ukrainian neon gas plants, Ingas and Cryoin, which account for half of the world’s semiconductor customers, have shut down recently.

According to Reuters, Nikolay Avdzhy, a spokesman for Ingas, said that Ingas’s annual production of neon gas is about 15 million to 20 million liters, and about 75% of it goes into the chip industry. The list of customers also includes Taiwan. The city where Ingas is located is located in the port capital of southern Ukraine near the Black Sea. Mariupol is now surrounded by Russia.

Arestovich, an aide to the Ukrainian presidential palace, announced on television on March 14 that more than 2,500 civilians had died in Malipo since the war. Although this number has not yet been verified, it is certain that a maternity and children’s hospital in Malibo was bombed not long ago, which made the Russian army be scolded by various countries. Now Ma Libo has problems with the internet and telephone, let alone production.

Enemy troops are under the city, and for Ukrainian companies, saving the lives of employees may be far more important than supplying another industry in another country.

Why is Ukraine a big neon country?

Russia has a developed metal industry for a long time. When smelting metal, steel plants will purify oxygen from the air, and the separated nitrogen and neon gas will become by-products of the steel industry. Therefore, Ukraine, which is geographically convenient, has become the largest in the world. Neon gas supplier. It is not that other countries do not do it, but they do not have a large-scale metal industry. It is not worthwhile to invest in such a set of air separation equipment.

And for a world on the verge of recovering from a chip shortage, this is undoubtedly bad news.

Neon is a noble gas that can be found in the atmosphere, but in very low levels, at 18.2 ppm (parts per million). When the concentration is high, neon gas is colorless and odorless, and it is not easy to undergo a chemical reaction, but it can emit orange-red light after being powered on. It is the most important gas in the neon tube and is also used in refrigeration, medical and other industrial scenarios.

The “Blood” of Semiconductor Machines
But what makes neon so special is its importance in semiconductor manufacturing.

The most important step in the semiconductor manufacturing process is that the chip manufacturer engraves the circuit pattern on the chip with ultraviolet light through the lithography system. The raw materials for this laser are argon fluoride (ArF) and neon gas as a buffer gas.

When the equipment is in operation, a mixture of argon fluoride and neon gas floods the lithography equipment. As the process continues, argon fluoride will be consumed, neon gas will also be doped with impurities due to exposure to a large number of ions, and the purity will decrease. Every one or two weeks, the semiconductor factory must replace or replenish the equipment in the machine. Neon gas.

“If you think about it, if the wafer supply is reduced by 30%, the impact will be that the customer’s revenue will be reduced by 30%, but the gas supply will be reduced by 30%, and the impact will be comprehensive and at a completely different level.” Chen Yali explained that this is why special gases are known as the “blood” of semiconductors.

Three major impacts on Taiwan’s semiconductor industry
With the regional conflicts and the Russian-Ukrainian war, it is the long-chain crisis brought about by these rare gas origins that are far away from the market. In conclusion, there may be three major impacts on Taiwan’s industry, which are worthy of attention.

The first is soaring prices.

Chen Yali, who experienced the Crimean War in 2014, recalled that at that time, Jingcheng had already been acting as a proxy for special gases, and now the impact of the confrontation between Russia and Ukraine on the industry is not far from that at that time. Chen Yali believes that in times of war, the phenomenon of “heavy reward must have a brave man” is particularly obvious. As long as you are willing to spend money, the supply and transportation of goods will not be completely stopped, but it must be reflected in the cost of obtaining gas.

As for how much it went up?

“Compared with last year, I can only say that the price of the brand sold on the market has probably risen ten times, and it is very powerful to buy ten times.” Chen Yali narrowed his eyes and said that the problem is sensitive, but the purchase price Soaring is an indisputable fact.

The uncertainty brought about by the war is also reflected in gas suppliers changing their pricing models for their customers.

Chen Yali said frankly that not only Jingcheng, but also many companies specializing in laser gas have changed the quotation mode from quarter to month to month by month, or responded to customers according to the price of each batch of goods.

“As for whether the cost can be passed on, I can’t say that every customer accepts it completely, but under their overall consideration, customers will make the most sensible choice,” said Chen Yali.

However, Chen Yali also explained that from the perspective of price, the actual impact of industrial gases on the industry may not be too worrying for the outside world. Although the price of special gas has soared, it does not cause too much burden to semiconductor customers. The reason is that although gas is critical, as long as the supply and demand are stable, the actual amount is not large.

According to Chen Yali’s analysis, taking a fab with a monthly output of 40,000 wafers and a 300mm wafer as an example, the amount of argon fluoride and other gases used is added up, and the monthly consumption is about 15 to 20 bottles, even if it rises to one of the historical highs in 2014 and 2015. The bottle costs 1.48 million yuan. For a wafer fab that works day and night, the cost is less than 30 million yuan. However, if the production is stopped due to “suffocation”, the loss in one day is far more than this number.

The second is to push up local manufacturers to “harmonize” technology upgrades.

When neon gas is transported from the source country to Taiwan, in order to make the rare gas meet industrial standards, it needs to go through two processes of “purification” and “mixing”. Manufacturers must mix neon gas with argon and krypton before delivering the gas to the machine. Taiwan, Taiwan did not have a similar back-end process in the past, but now Jingcheng has it.

Chen Yali believes that Jingcheng specializes in special gases, which is different from the major gas companies that supply atmospheric gases such as oxygen and nitrogen. Although the amount of special gases is small, Jingcheng has developed a unique set of purification and detection technologies. Gas sources from different countries are capable of equalizing production, allowing Taiwan to have more gas sources.

Taking neon gas as an example, Chen Yali analyzed that gas sources other than Russia and Ukraine include South Korea and China, and as for hexafluorobutadiene, Belgium and China are the most fundamental sources of raw materials to reduce the risk of material outages.

The overlord of the domestic gas market, Air Liquide Far Eastern also has the idea of ​​decentralizing the supply chain. Lin Heating, associate manager of the corporate communication and administration office of Yadong Industrial Gas, explained that Yadong has special responsibility in the semiconductor compound and gas market. subsidiary, which is convenient for bulk purchasing and centralized manufacturing.

“From the perspective of Taiwan’s supply chain, there is not really much impact in the short term. In the past two years, the new crown epidemic has made the group strategically increase the level of gas inventories. The impact of the war is even greater than that of the Russian-Ukrainian war,” Lin Henan said in a televised interview with Foresight.

Lin Heating also analyzed that most of the gas factories will investigate the demand from the semiconductor factory in advance, so as to transfer the goods to the head office in advance. Many of Yadong’s gases used in Taiwan’s semiconductor factories are shipped from the United States to Taiwan, which means that Taiwan will not directly purchase gas sources from Ukraine.

After the gas is transported to Taiwan, it has to be mixed and filled. The long supply chain also means that the gas source fluctuates temporarily, and the crisis will not manifest immediately.

Finally, the issue of “gas recovery” came to the fore.

In addition to the fact that most of the major semiconductor manufacturers have established gas safety stocks for one quarter to half a year, Jingcheng revealed that most of the gas factories will reserve some gas for customers to achieve the previously negotiated delivery volume.

In the longer term, since the Crimean War, semiconductor factories have realized that the situation in the gas producing areas is unstable. ASML and other major manufacturers have also proposed plans to reduce the use of neon gas many years ago. Under the premise of efficiency, prolong the time of supplementary gas.

As for the recovery of neon gas from equipment, it is technically feasible at present, but it has not been widely used in semiconductor factories.

At the time of the neon crisis in 2016, ASML stated that only 16% of the more than 2,500 production sites at the time had systems that recycle neon. The reason is that the recycling system needs to be shut down for renovation. The opportunity cost is too high for the semiconductor factory. In the past, most of the gas has been a standardized product. It is not practical to invest in the cost of retrofitting equipment.

The special gas market has gone through two baptisms of war. From price adjustment, local production to economical use in factories, there is no doubt that the supply chain has become more resilient. The war has also forced the industry to think and implement it. Insignificant “little things” become critical big things.

Top 10 semiconductor factories record high profits, but face 3 hidden worries including “Ukraine”

The demand for chips continues to be strong, and the world’s top 10 semiconductor factories, including TSMC, recorded a new high in net profit last quarter, but the operating environment faces three hidden concerns, including the “Ukrainian situation”.

Nikkei reported on the 5th that due to the strong demand for chips, the world’s top 10 semiconductor manufacturers such as TSMC, Samsung Electronics, and Nvidia boosted the total net profit last quarter (October-December 2021, and some are November 2021-January 2022). The value reached 36.6 billion US dollars, a sharp increase of 30% over the same period last year, setting a record high for the same period since 2011 for which data can be continuously compared.

The report pointed out that due to the Metaverse and carbon reduction business opportunities, the demand for chips is expected to continue to be strong in the future, but the operating environment of semiconductor manufacturers has begun to change, and they are facing three hidden worries, namely increased investment, talent shortage and the situation in Ukraine. Intel CEO Pat Gelsinger (Pat Gelsinger) said, “In the semiconductor industry, no matter who you are, you are facing problems such as rapid inflation and rising manufacturing costs.” Although Intel and TSMC’s revenue increased in the last quarter, their net profit rate shrank. Among them, TSMC’s net profit rate was about 38%, down more than 1 percentage point from the same period last year.

According to reports, the cost of building new factories and developing next-generation chips has increased, and excellent engineers are indispensable for increasing production or developing next-generation technologies. In order to compete for talents, personnel costs have also increased significantly. This is also seen as This is one of the reasons why TSMC’s net profit rate fell last quarter.

The report pointed out that the deteriorating situation in Ukraine and the procurement of rare resources for semiconductors are also a concern. Neon gas, which is indispensable for semiconductor manufacturing, depends on Ukraine for 70% of the supply. Although the Semiconductor Industry Association (SIA) stated that “there is no immediate risk of supply chain interruption”, countermeasures such as alternative procurement will become the focus in the future. According to the calculation of Morgan Stanley in the United States, the neon gas inventory of Taiwan’s semiconductor companies is 6 months’ consumption. If the war is prolonged, the inventory alone will not be able to guarantee the supply, and the procurement crisis will intensify.

The subjects included in the Nikkei statistics include TSMC, Nvidia, Samsung Electronics, Broadcom, Qualcomm, Intel, AMD, Texas Instruments, Micron and SK Hynix.

TSMC’s 7nm + wafer-level 3D packaging helps, Graphcore pushes a new generation of AI processors

British IC design company Graphcore announced the launch of a new AI processor called Bow Intelligence Processing Unit, or Bow IPU for short. This is the third-generation IPU of Graphcore, which provides core computing power for the next-generation Bow Pod AI computer system, which can achieve 40% performance improvement and 16% energy consumption improvement compared to the old system. The most special feature of Bow IPU is the world’s first 3D wafer (Wafer-on-Wafer, WoW) packaged processor, produced by TSMC, the leading foundry.

Graphcore said that based on the design and manufacture of the Bow IPU, Graphcore worked closely with TSMC to use a 7-nanometer process, and then use 3D stacking technology to combine two wafers into one to achieve performance and energy efficiency improvements. Bow IPUs demonstrate the feasibility of transferring chip performance improvements from advanced technology to advanced packaging. In the future, TSMC will also provide similar technologies to other customers, so that 3D packaging technology will gradually popularize consumer chips.

According to Graphcore, the Bow IPU has 1,472 independent processor cores, can process 8,832 independent parallel programs, more than 60 billion transistors in a single package, 0.9GB memory storage and computing power of 65TB/s, 10 IPU-Links provide 320GB/s The interconnection bandwidth can achieve 350TeraFLOPS artificial intelligence computing. In order to achieve 3D stacking, the new chip adds nearly 600 million transistors, which not only increases computing power, but also optimizes the power structure.

The U.S. Department of Energy (DOE) National Laboratory Pacific Northwest (PNNL) will be one of the first customers to use Bow IPUs to improve performance and energy consumption, expected for applications such as chemical computing and cybersecurity. The person in charge said that he is excited to use the new system to try to push the boundaries of machine learning and graph neural networks to solve scientific problems that are difficult to solve with existing technologies.

Morgan Stanley: TSMC’s N3e process research and development is progressing smoothly, and there is an opportunity for mass production in the first quarter

Foreign media “wccftech” reported that the investment report of foreign investment Morgan Stanley (Morgan Stanley) quoted the social media statement of retired engineers of TSMC, the leading foundry, and visited equipment suppliers. TSMC’s 3nm improved N3e process is progressing smoothly , have the opportunity to obtain more orders, and give TSMC an “outperform” investment rating.

Dalmore said on Twitter that TSMC’s retired engineer said that TSMC will end the N3e process design process before the end of March, which means that N3e will be one quarter earlier than the scheduled third quarter of 2023 mass production, and mass production will begin in the second quarter of 2023. Although the number of N3e transistors is about 8% lower than that of the first-generation 3nm process, it is still about 60% higher than that of the 5nm process, and the reduction of 4 layers of EUV masks makes N3e an important cost and process advantage for TSMC.

The Morgan Stanley report came out after Taiwanese media reported that TSMC’s 3nm process encountered some bottlenecks, and also mentioned the situation of the N3b process. Originally, it was reported that TSMC’s 3nm process encountered some R&D bottlenecks, and customers had to replace it with a relatively mature and stable 5nm process in consideration of yield, but it has not been confirmed.

TSMC President Wei Zhejia mentioned in the third quarter of 2021 that the N3e process performance, yield, and power consumption are better, and it can develop new chip production technology with the processor giant Intel. The third South Korean Samsung capable of developing this node process is rumored to be investigating whether the company’s chip yield report is false.