Page 9 - Chip Scale Review_May June_2021-digital

GUEST EDITORIAL

Tackling the stressed-out global

semiconductor supply chain

By Carol Handwerker [Purdue University]
A s h a s b e e n w i d e l y for strengthening the supply chains for both capacity and capability, i.e., the ability to

Competitiveness is a combination of
reported, supply chains
semiconductor manufacturing and advanced
for semiconductors have
the U.S. General Services Administration
upcoming legislation.
been stretched and, for the packaging that are likely to be included in continue to “obey” Moore’s Law. Data from
automotive industry, broken during the show the inexorable decrease in the number
pandemic. High demand for cell phones, Defining strategies of semiconductor companies able to process
laptops, other work-at-home devices and The Semiconductor Industry Association at smaller and smaller nodes. Twenty-one
increased use of the internet and the Cloud (SIA) has taken the lead in analyzing companies were able to manufacture at the
have increased demand far beyond what was the current situation and its causes and 90nm node, six at 22/20nm, three at 10nm
expected. The global automotive industry in identifying strategies for increasing (TSMC, Intel, and Samsung), and two at
predicted that demand for cars would fall investment in semiconductor manufacturing both 7nm and 5nm (TSMC and Samsung).
during the pandemic, so reduced its orders in the U.S. Its advocacy has been essential TSMC and Samsung are developing 3nm,
for semiconductors—essential components in bringing these issues to light. The which TSMC expects to have in production
for controlling vehicle safety, emissions, and issues boil down to the decreasing U.S. in 2023. Production at Intel’s 7nm fab has
drive information systems. The auto industry manufacturing capability and capacity been delayed, but Intel CEO, Pat Gelsinger,
then experienced a higher than expected relative to the rest of the world, as the recently announced that the company
demand, leading to a semiconductor shortage demand and need for semiconductors expects its 7nm fab to be operational in
[1]. The Alliance for Automotive Innovation increases and other countries increase their 2023; in the meantime, the company will
[2], representing most major automakers in investments. Boston Consulting Group- outsource production of some chips at the
the U.S., expects this shortage to lead to 1.28 SIA Report on Government Incentives and 7nm to TSMC. Intel also expects to build
million fewer vehicles being manufactured US Competitiveness in Semiconductor two additional 7nm fabs in the U.S. with an
in the U.S. this year. U.S. governors [3] from Manufacturing (September 2020) [5] focused investment of $20B, and to use TSMC to
8 auto manufacturing states asked President on domestic capacity, as follows: manufacture chips at the 3nm node when it
Biden, “to urge wafer and semiconductor becomes available. There is also a small shift
companies to expand production capacity and/ 1. U.S. semiconductor companies have from manufacturing in Asia by TSMC and
or temporarily reallocate a modest portion of 48% of global sales, while only 12% of Samsung. TSMC has committed to building
their current production to auto-grade wafer global semiconductor manufacturing is a 5nm fab in Arizona for a total investment
production.” However, it is known within the in the U.S., down from 37% in 1990. of $12B. Samsung recently filed paperwork
industry that the system has no such elasticity: 2. U.S. share of memory manufacturing is to evaluate building a fab in Arizona, New
production capacity cannot be expanded at 4%, an area that is expected to grow. York, or Austin, Texas with an expected
will. A “modest” reallocation cannot be done 3. U.S. cumulative annual growth rate in investment of over $17B.
without moving the shortages elsewhere. semiconductor manufacturing is 7%, in In terms of capability and capacity, it is also
Issues with the global supply chain cannot contrast to the global rate of 11%. useful to compare the global wafer capacity
be solved easily or quickly, and will require 4. Total cost of ownership for U.S. fabs is by company and the expected outputs of
substantial investment. 25-50% more than in other countries, these new fabs to illustrate how much it costs
Substantial U.S. federal investment with 40-70% of the difference from to move the needle. In December 2020, IC
is hopefully in the works, not only for government incentives. Insights reported the existing wafer starts
semiconductor manufacturing, but also for 5. Global capacity is expected to increase per month (wpm) normalized to a 200mm
advanced packaging. President Joseph Biden by 10M wafers-per-month (WPM) by equivalent: TSMC produced 2.719M wafers
issued an Executive Order [4] in February, 2030. per month (wpm). Samsung, with a mixture
2021 for the Department of Commerce to 6. 50% of the capacity increase is already of memory and in-house processors, produced
lead a review of the U.S. supply chains for in development, leaving the remainder 3.06Mwpm. Intel produced 884Kwpm.
semiconductor manufacturing and advanced uncertain. The new TSMC fab in Arizona has been
packaging and requested public comment 7. SIA recommends a U.S. government estimated to be approximately 46Kwpm
on policy recommendations to strengthen investment of $50B in incentives to (200mm equivalent) or 20Kwpm using a
their resilience. In the context of Chip Scale enable the number of new U.S. fabs to 12” equivalent. An investment of $12B is,
Review and its readers, it is important to increase from an estimated 9 to 19. therefore, estimated to produce an increase in
shine a spotlight on the new opportunities capacity for TSMC of less than 2%.

Chip Scale Review May • June • 2021 [ChipScaleReview.com] 7 7