In the coming one to two years, chip machine maker ASML does not expect to be able to keep up with the expansion drive of chip manufacturers. That says CEO Peter Wennink in conversation with the Financial Times.
The machines are desperately needed to be able to meet the demand, which continues to grow in the coming years. The sector has been struggling with a major chip shortage for over a year; there is no short-term solution. In the longer term, additional production capacity should therefore relieve the pressure.
The Dutch ASML, based in Veldhoven, is an essential link in the global chip sector. The company makes machines that parties such as Intel, Samsung and TSMC need to be able to produce chips.
ASML even has a monopoly position in the field of the most advanced chips, which are made with EUV (extreme ultraviolet) machines. The companies can therefore not ignore ASML. And if that group cannot deliver enough, those companies cannot grow fast enough.
“There will be shortages in the coming year and the year after,” Wennink told the Financial Times. The company expects to ship more machines, but it will not be enough to meet the demand, the CEO thinks. “We need to increase our capacity by more than 50 percent. That takes time.”
When asked, a spokesperson told NOS that this example indicates “the complexity of the entire supply chain”. When asked whether the situation has worsened, the answer is no. The company is currently expanding capacity considerably and recruiting and working new people
increase European production
Just last week, Intel announced a major investment of tens of billions of euros in the European chip sector. As part of that, it also plans to build a large production campus in Magdeburg, Germany.
For the time being, it does not appear that this location will also suffer from this; the expectation is that the two factories that will be built there will not start producing chips until 2027. If ASML’s estimate is correct, the shortages will have been resolved well before that time.
Intel CEO Pat Gelsinger tells the newspaper that he is in direct contact with Wennink about the situation. He emphasizes that there is still time to solve the problems before the factories that are now being built are put into operation.
Wennink also agrees, but at the same time emphasizes that his company is dependent on the production of lenses from Carl Zeiss, a German manufacturer. “Significantly more” should be made of that. Expanding production takes quite some time, quite apart from the fact that making the lens itself takes more than a year.
Competitors are building too
In addition, the investment in Europe is only a small part of a much larger whole. Intel has also announced a new major location in the US and competitors Samsung and TSMC are also investing tens of billions of euros in building new factories.
Many, if not all, production locations will be filled with the chip machines of the company from Veldhoven.
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