Let’s Hope They’re Wrong: Chip Shortage Could Only End in 2024

ASML EUV lithography machines 6 photos
Photo: ASML
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The chip crunch that emerged back in 2020 was supposed to end in 2021, but as we know already, the health crisis had different plans for the entire planet.
In other words, the end of the semiconductor shortage was “delayed” to 2022, as foundries across the world continued to struggle with lockdowns and government restrictions hitting their facilities.

It’s already clear the chip shortage is here to stay, but now analysts and a series of carmakers expect the nightmare to be over in the second half of the year or, in the worst-case scenario, in 2023.

Enter ASML.

ASML is the biggest manufacturer of lithography machines, which are a critical part of the chip production. Responsible for the fabrication of integrated circuits on silicon wafers, these machines have recorded a massive growth in terms of demand, with ASML confirming recently that it’s struggling to keep up with all the orders it receives.

Peter Wennink, chief executive of ASML, says the company just needs to produce more such machines, but boosting capacity overnight is simply not possible.

A rough estimate indicates the production of lithography machines must be increased by no less than 50 percent, and Wennink says there’s a good chance the demand will continue to increase in the short term.

His forecast isn’t at all good news: the chip shortage could continue not until the end of 2022, as some analysts expect, but until the end of 2024, as the constrained inventory would continue to be a problem.

The simple process of increasing the production of lithography machines is much more complex than it sounds. After getting the necessary permits, building and setting up a factory, the company needs to hire the staff, bring in the manufacturing equipment, and then still wait for 12 more months before kicking off the production.

Obviously, carmakers can’t be happy with such news, especially given their operations are massively affected by the lack of chips. For now, however, we can only hope that ASML’s forecast won’t prove accurate, as everybody misses the days when they could order a car and get it in a timely manner.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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