Results from Semiconductor Supply Chain Request for Information

There are a several factors that conspire to make the shortage worse:

- These legacy chips fabbed at legacy nodes are made with legacy equipment. In many cases, that equipment is a) fully depreciated and b) no longer available. Yes, most chips can be made with new equipment, but the profits with a new tool set are not going to justify the expense. You wouldn't buy a new $8 million CVD tool to make a 180 nm microcontroller that might sell for $2.

- Many chips are fabbed at 1 place only. The chip company owns the IP and has a defacto monopoly on the features of that chip, or even class of chips. If that fab is shut down, no more are being produced and customers have to buy up what brokers can scrounge. The more warehouses get picked out, the higher the prices go. In one extreme example, a chip made at Infineon's Kulim fab in Malaysia, that sold for $0.47, was purchased for $100 @ by (ironically) a chip equipment company.

- Hoarding has made the issue far worse. Companies are instructing buyers to order more than 1 year ahead, and seeing lead times exceed 1 year as well. The more these lead times extend, the farther into the future buyers extend their horizon and lead times just keep rolling.

- It may actually be the case that organic demand growth is not the main problem. More likely, it was the successful (and therefore vulnerable) just-in-time supply chain that collapsed as soon as COVID interrupted the choreographed flow of material.

The TL;DR of this report is that the "chip shortage" has been confirmed to be in the following nodes:

> Microcontrollers that are primarily made of legacy logic chips, including, for example, at 40, 90, 150, 180, and 250 nm nodes

> Analog chips including, for example, at 40, 130, 160, 180, and 800 nm nodes; and

> Optoelectronics chips including, for example, at 65, 110, and 180 nm nodes.

I had a feeling that these were the class of chips that were the problem. The car industry is well known to use the cheaper "legacy" nodes. Furthermore, the older nodes are on 200mm wafers, which necessarily makes far fewer chips (by area) than the more modern 300mm wafers.

--------

For us to be running low on "legacy" is pretty interesting, because there's less profit in these chips. But its also lower tech, there are more manufacturers who can make 180nm nodes than who can make 5nm nodes.