Chipmakers Struggle with Supply Chain Disruption

According to the head of a critical technology supplier of chipmakers, a major industrial conglomerate has resorted to purchasing used washing machines and extracting their chips for use in their products due to the global semiconductor shortage.

Hot Hardware reports Peter Wennink, CEO of ASML, made the remarks during an April 20 earnings call without naming the conglomerate scavenging chips from washing machines. ASML dominates the global market for machines designed to etch circuits into silicon wafers. 

Wennink stated that ASML had a record year in revenue and profit and was experiencing unprecedented customer demand across all sectors, including its lithography machines, which act as a sort of printing press for silicon chips.

Wennink noted that ASML made many hires last year, although many new hires are still training.

ASML is dealing with equipment and component shortages and supply chain disruptions caused by COVID, according to Wennink.

Wennink told the Financial Times in March that ASML’s multi-billion-dollar expansion plans will be hampered for the next two years by shortages of critical equipment as the supply chain struggles to ramp up production. Increased demand for semiconductors has exposed supply chain inefficiencies, triggering a historic wave of investment and the elimination of government subsidies.

He stated that the story about the unnamed major industrial company purchasing old washing machines to salvage the chips inside was not unique, illustrating the chipmakers’ desperation to meet demand, Hot Hardware reports.

According to The Register, Wennink also stated during the earnings call that ASML’s machine utilization rates were at all-time highs, implying that customers are purchasing more not to stockpile but to keep up with surging demand.

Intel, a customer of ASML’s lithography equipment, told the Financial Times that there is still time to resolve the lithography machine shortage. It takes two years to construct a chip factory’s shell, and Intel will not need ASML’s machines until year three or four, Intel CEO Pat Gelsinger told the media outlet.