Securing Semiconductor Equipment Stably Becomes Crucial to Expand Facilities
[Asia Economy Reporter Park Sun-mi] As Samsung Electronics and SK Hynix invest massive funds in semiconductor production line investments, the lead time (the time it takes to receive an order after placing it) for core semiconductor equipment is emerging as a major obstacle. The supply period for core semiconductor equipment, which averaged three months before the spread of COVID-19, has lengthened to the extent that it is expected to take more than 18 months. Depending on equipment supply, advanced semiconductor process development and mass production plans may face setbacks, prompting major companies to focus all their efforts on securing equipment.
According to the semiconductor industry on the 11th, leading domestic semiconductor companies such as Samsung Electronics and SK Hynix are strengthening cooperation with equipment trading companies and placing advance orders considering the prolonged lead time to respond to the global shortage of semiconductor equipment. An industry insider said, "In the past, only a few places such as Samsung Electronics and TSMC could accommodate a large amount of essential semiconductor equipment, but recently, as countries around the world have started fostering the semiconductor industry, the problem of equipment supply shortages has become serious, and we are responding accordingly."
In fact, when the CEO of the Dutch semiconductor equipment company ASML recently visited Korea, it was reported that several domestic companies made separate contacts. They are in a position where it is important to receive a stable supply of extreme ultraviolet (EUV) lithography equipment, which is essential for semiconductor processes, from ASML. The Japanese Nihon Keizai Shimbun also analyzed that semiconductor companies such as Samsung Electronics, TSMC, and UMC have been sending senior executives to the US and Europe recently despite the COVID-19 situation to ensure a stable supply of semiconductor equipment.
The shortage of semiconductor equipment is intensifying as major global companies receive full government support and significantly increase investments in semiconductor production lines.
According to Nihon Keizai Shimbun, global semiconductor equipment monopolistic suppliers including ASML, KLA, Lam Research, and Applied Materials have notified semiconductor manufacturers that the supply period, which was an average of three months before the spread of COVID-19 in 2019, has now extended to more than 18 months. In the case of some semiconductor testing equipment made by KLA, it is known that it will take more than 20 months from order to delivery.
As the imbalance in semiconductor equipment supply and demand is expected to continue for the time being, there are also predictions that major semiconductor manufacturers' investment plans will inevitably change.
For equipment companies to proceed smoothly with equipment production, the bottleneck in parts must be resolved, but there are no suitable alternatives to replace the items. Moreover, parts suppliers are reluctant to expand supply as it requires bold investment. Samsung Electronics Vice Chairman Han Jin-man and SK Hynix President Noh Jong-won recently admitted during earnings announcements that equipment lead times are lengthening this year as well, and stated that they are considering this aspect in establishing and executing investment plans.
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