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Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

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Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#31

Post by syntaxing »

11thEarlOfMar wrote: post #3

Equipment companies are running at an all-out sprint to ship fabrication equipment. Applied Materials, the world's largest by revenue, has 1,390 open positions. #4 Lam Research has 570. The equipment space is brutally cyclic, akin to the oil services industry. Revenue can jump as much as 60% year over year, only to plummet 40% the next. It's always worrisome to see these macro-trends, feasting now, but famine sure to…

I think this is the problem. The downcycle for the semi industry should of came around 2-3 years ago. The issue is that never came and the industry is growing at an even more ridiculous rate. The semi industry is single handed buying a good chunk of the OEM equipment space these past 3 years. Just get a THK rail quote and look at awe at the one year+ lead time.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#32

Post by ralph84 »

scott_codie wrote: post #25
UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

Are you saying that Chinese semiconductor companies are outcompeting US semiconductor companies because they have greater access to capital? That doesn't seem right to me.

US sources of capital tend to have much higher time preference. Chinese sources of capital (i.e government entities) are willing to play the long game and accept below-market returns on capital for an extended period of time when it's building a strategically important industry.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#33

Post by lend000 »

While the demand is cyclic and volatile in this industry (compared to software), the huge demand and influx of capital is very exciting for those who care about the advancement of computing.

Note that there are only major shortages of leading edge nodes, not basic electronics on older nodes that people aren't as excited about using. So if some critical safety system needs a basic sensor, there is plenty of 65nm capacity available. That's why Global Foundries isn't experiencing the same growth and bookings as the leading edge fabs are.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#34

Post by testfoobar »

Drought in Taiwan is a problem as well.

"Taiwan's chip industry under threat as drought turns critical

TAIPEI -- Taiwan's tech manufacturers fear their output is under threat from the island's worst drought in decades, risking more turmoil for global supply chains already strained by shortages of semiconductors and other key components.

Taiwan's government will on Thursday further tighten water use in several cities that are home to a cluster of important manufacturers. Plants in Taoyuan, Taichung, Hsinchu and Miaoli will have to cut consumption by up to 11%, on top of a 7% cut requested last month."

https://asia.nikkei.com/Business/Tech/Semiconductors/Taiwan-...

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#35

Post by vmception »

scott_codie wrote: post #25
UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

Are you saying that Chinese semiconductor companies are outcompeting US semiconductor companies because they have greater access to capital? That doesn't seem right to me.

A state capital system with a comparable gdp is very efficient at quickly allocating resources to sectors

China is that

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#36

Post by AnthonyMouse »

scott_codie wrote: post #25
UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

Are you saying that Chinese semiconductor companies are outcompeting US semiconductor companies because they have greater access to capital? That doesn't seem right to me.

> Are you saying that Chinese semiconductor companies are outcompeting US semiconductor companies because they have greater access to capital? That doesn't seem right to me.

Suppose you have two companies in an industry where the start up cost is ten billion dollars. One can borrow ten billion dollars at 0% interest for the next five years, but they have to pay it back. The other just gets ten billion dollars from the government that they can keep.

Obviously the second company has a competitive advantage. The first has to charge higher prices in order to pay back the loan, which they can't do if the second undercuts them in the market.

This has been China's business model for decades. Then once all the competition is out of business they can raise prices to the point of profitability, but not to the point that anyone who hasn't already paid off their fixed costs can enter the market, and use the profits to do the same thing to the next industry.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#37

Post by stupidcar »

UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

The DoD's Industrial Capabilities report to Congress[1] that got posted on HN last week recommended exactly this:

> "Outside of the United States, foreign governments and their citizens pay the lion’s share, one way or another, of the cost of building the fab. The companies do not. They take on the other massive set of costs: running the fab. The hard truth is that if the United States does not start doing the same, our nation will continue to see its historically low share of chip production continue to decline to irrelevance."

[1] https://www.businessdefense.gov/Portals/51/USA002573-20%20IC...

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#38

Post by zucker42 »

lend000 wrote: post #33

While the demand is cyclic and volatile in this industry (compared to software), the huge demand and influx of capital is very exciting for those who care about the advancement of computing. Note that there are only major shortages of leading edge nodes, not basic electronics on older nodes that people aren't as excited about using. So if some critical safety system needs a basic sensor, there is plenty of 65nm capac…

> Note that there are only major shortages of leading edge nodes

Is this true? Do automotive companies use leading edge nodes, because they're experiencing a shortfall too.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#39

Post by HenryKissinger »

stupidcar wrote: post #37
UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

The DoD's Industrial Capabilities report to Congress[1] that got posted on HN last week recommended exactly this: > "Outside of the United States, foreign governments and their citizens pay the lion’s share, one way or another, of the cost of building the fab. The companies do not. They take on the other massive set of costs: running the fab. The hard truth is that if the United States does not start doing the same,…

The Chinese government is willing to spend what it takes to win and this is the reason why they will win. The US government is way too reluctant to spend in this regard. The Chinese government is investing hundreds of billions in artificial intelligence, hundreds of billions more in renewables, and so on. I don't see Congress giving a blank check to scientists and engineers, like China does.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#40

Post by NonEUCitizen »

ppf wrote: post #10
thewarrior wrote: post #6

Earlier quoted context omitted.

Good thing we aren’t doing anything to destabilize a climate system that’s not causing us too much trouble as of now.

You mean, like manufacturing electronics? It takes about 1MWh to manufacture a laptop, the same energy needed to drive a Tesla for 3000 miles. https://www.networkworld.com/article/2229029/computer-factor...

You can avoid a lot of flying and driving by using zoom on that laptop.
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