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The reason why the global microchip deficit is a problem

While microchips have become important in many areas, their development and manufacturing are being driven by a handful of manufacturers who do not have the energy – and hunger – to solve chips that use modern technology. And because the manufacture of chips requires hundreds of manufacturing processes and months of manufacture, semiconductor manufacturers may not be able to move quickly to meet the increased risk of epidemics.

After decades of worrying about how to make small things like a few nanometers on silicon pillars, the spirit of Moore’s Law – the hope that cheap, strong chips will be readily available – is now being threatened by something very strange: not changing enough chains.

Lonely boundaries

Twenty years ago, the world had 25 manufacturers of small chips. Today, alone Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan, Intel in the United States, and Samsung in South Korea there are weapons, or fabrics, that produce the cheapest chips. And Intel, a former technical leader, is struggling to comply, as it lacked the longevity to create new generations.

One compelling reason is that building low-cost chips will cost between $ 5 billion and $ 20 billion. These fabrics form tiny chips like tiny nanometers; in commercial applications called 5-nanometer and 7-nanometer nodes. A lot of money for new fabrics is purchased to buy the latest equipment, such as a tool called an severe ultraviolet lithography (EUV) machines cost over $ 100 million. Manufactured by ASML in the Netherlands, the EUV machine is used to accurately record the parameters of a nanometer.

The party makers have been working on EUV technology for more than two decades. After investing billions, the EUV machine was first used in the production of commercial instruments in 2018. “This tool has been 20x, 10x years under budget, because it’s amazing,” said David Kanter, head of the open source software development firm. “It’s almost like a magic wand. They are like science fiction. ”

Such efforts led to the creation of billions of small transistors in Apple’s M1 device, developed by TSMC; It is one of the first EUV-dependent developers.

The technology companies alone are willing to pay hundreds of millions of dollars for advanced technology.

Paying for small chips is a good idea for Apple because the chips are coming in newer versions of the MacBook and iPhone, which are sold by millions at affordable prices. “The company that uses EUV most strongly is Apple, and it sells $ 1,000 for phones with a crazy limit,” says Kanter.

Not only are chips made like this not only expensive, but the cost of making the most difficult areas now many companies cannot afford. In addition to Apple, only large companies that require high performance, such as Instructions:, AMD, and Nvidia, is willing to pay hundreds of millions of dollars for the advanced chip, says Sri Samavedam, deputy director of CMOS technology at Imec, an international research organization based in Leuven, Belgium.

Many other companies are developing laptops, TVs, and cars using chips made from old technologies, and the requirements for the core of the chip are reduced. In short, many chip customers can’t afford – or don’t want to pay for – new chips; The modern car uses hundreds of microscopic particles, while the electric car uses many more. It increases rapidly. Instead, manufacturers of automotive products have chips made from the latest technology.

In addition, most modern electronics are not just using small chips. “It is unreasonable to put, for example, A14 [iPhone and iPad] chip on every computer we have in the world, “says Hassan Khan, a former medical researcher at Carnegie Mellon University who studied how government policies affect the termination of Moore’s Law and is now working at Apple.” You don’t need them in your best home thermometer at home. , and you do not need 15 of them in your car, because they are very hungry and very expensive. “

The problem is that while many consumers rely on old and cheap technology, the giants of the semiconductor industry are focused on developing new and innovative fabrics. TSMC, Samsung, and Intel have all recently announced billions of dollars in new technologies. Yes, they can be expensive, but that is where the benefits come from – and for the past 50 years, they have been in the future.

TSMC, the world’s largest chip manufacturing company, earned about 60% of its 2020 revenue by making 16 nanometers and smaller chips, including Apple’s M1 chip made with 5-nanometer chips. .

Adding to the problem is the fact that “no one is developing semiconductor equipment to support the old technology,” says Dale Ford, a senior analyst at the Electronic Components Industry Association, a commercial organization based in Alpharetta, Georgia. “That’s why we’re stuck between a rock and a difficult place here.”

Cheap chips

All of this is important for professional users not only because of the disruption of today’s causes, but also because it threatens the development of many things that can happen. In addition to being difficult to come by, cheap chips are also becoming more expensive, as each chip requires less expensive equipment and materials than previous generations.

Some retailers only require more potent chips. The rapid development of 5G networks and the proliferation of applications that run 5G speeds can force the sale of money in chips that make connectivity devices that communicate with multiple devices connected to the internet. Automotive equipment such as advanced driver systems and automotive “infotainment systems” can also benefit from small chips, as evidenced by manufacturers of electric vehicles. The deal that Tesla made and both TSMC and Samsung in the development of chip for self-driving cars in the future.

But buying new chips or investing in special chip designs may not be helpful for many companies in creating “smart everywhere” products. Manufacturers of consumer goods such as Wi-Fi hotspots will not spend the money to make their own chips to supplement their preferences, Kanter says. Instead, they can go back to anything that can be used using old technologies.

Many modern customers use cheap chips that represent the trade between price and performance.

And cheaper items, such as clothing, are said to contain “smaller packages” that leave a small room for expensive chips that can add a dollar – not to mention $ 10 or $ 20 – for each item. This means that the rise in electrical energy can prevent the production of clothing that, for example, can detect and respond to the laws of nature or climate change.

The world may be without game-loving machines, but the lack of cheap and powerful chips comes with a real price tag: the end of the era of Moore’s Law and its old promise that cheap digital power will be available on new products.

Many modern customers use cheap chips that represent the trade between price and performance. And the availability of such small chips seems to be an understatement as the global demand for computers grows.

“Still, the use of semiconductor in cars is on the rise, the use of semiconductor in your toaster oven and on all kinds of things is on the rise,” said Willy Shih, associate professor at Harvard Business School. “So the question is, where is the need going?”

Worries around the world

In early 2021, President Joe Biden signed a memorandum of understanding electronic comments of chips and supporting the back of the bipartisan push in Congress to approve a minimum $ 50 billion semiconductor manufacturers and researchers. Biden also held two White House meetings with leaders from semiconductor and the automotive industry, including the April 12 meeting where he highlighted the silicon barrier.

What they do will not resolve the conflict between chip requirements and immediate support. But not to mention, experts say, the current crisis represents an opportunity for the U.S. government to try to complete the process and improve the decline of new semiconductor products — and possibly boost the U.S.’s ability to produce much-needed chips.

About 75% of all chip production was in East Asia since 2019, while the US share has been about 13%. Taiwan’s TSMC alone has about 55% of the market that oversees consumer equipment manufacturing operations.

Each symbol is a war between US-China. China’s largest company SMIC has been manufacturing fabrics for the last five to six years at the end of chip technology. But it is possible that Chinese businesses could help meet the global demand for chips based on antiquities in the coming years. “With the government’s revenues, it is possible that Chinese corporations will be the cheapest if they rely on 22-nanometer and 14-nanometer machines,” Khan said. “Chinese clothing may not be competitive at the border, but it can give you a bigger share of the need.”


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