Affected by the persistent shortage of chip supply in recent years, we have seen construction announcements of multiple fabs located around the world. But before going into actual production, it was all constrained by the availability of lithography machines from ASML in the Netherlands.ASML CEO Peter Wennink has just issued a warning that the company is struggling to meet customer demand for its products.
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It is reported that ASML focuses on the production of various types of lithography machines suitable for the semiconductor industry, and is a world leader in this field. Its customers include chip giants such as Intel, TSMC, and Samsung.
The latest news, however, is that ASML will not be able to deliver all orders smoothly, at least for the next few years. Even though the expected shipments of lithography machines this year are higher than last year, the growth will not slow down next year.
TechPowerUp points out that each of these machines is custom-made and hand-built according to the actual needs of the customer. Due to the low yield, each lithography machine takes a lot of time to assemble, debug, and ship.
Peter Wennink added that the company does need to significantly increase production capacity by more than 50%, but this will obviously take a while to achieve.
Supply chain analysis shows that ASML has around 700 different component suppliers, 200 of which are critical. Therefore, whether ASML can successfully and rapidly increase its production capacity largely depends on whether its supply chain partners can keep up.
Take Carl Zeiss as an example. The company provides ASML lithography machines with optical lenses required in the etching process, but currently cannot increase the speed of lens production to the level expected by ASML.
To produce more lenses, ASML is trying to push Zeiss to build a new clean room factory. Once the factory is ready to continue, the required manufacturing equipment has to be ordered, staff hired, and then it takes at least 12 months to manufacture the lenses.
And that’s not to mention that ASML itself will need additional staffing for the factory, even though Peter Wennink says the company has spent some time working out the issues.
Finally, it should be pointed out that due to the lack of competitors, ASML has formed a virtual monopoly in the advanced lithography machine market. And this ironic status quo has sparked widespread concern among industry insiders, including Intel’s CEO.