vacancies advertise contact news tip The Vault
facebook rss twitter

AMD CEO: Global chip shortage severity to ease in H2 2022

by Mark Tyson on 29 September 2021, 12:11

Tags: AMD (NYSE:AMD), Intel (NASDAQ:INTC), TSMC, Samsung (005935.KS)

Quick Link: HEXUS.net/qaeq63

Add to My Vault: x

On Friday, HEXUS reported upon Intel's groundbreaking ceremony in Arizona, as it sent in the diggers (both symbolic human and practical mechanized types) to get started on the building of two new leading-edge chip fabs. Towards the end of the article I highlighted that the welcome expansion of chip making facilities might have some degree of unwelcome impact on chipmakers, as the industry swings from shortages to oversupply, but this has typically happened over time for semiconductors and seems to be the nature of the business.

At the beginning of the week, the CEO of one of Intel's major rivals was interviewed about the fortunes of the industry. AMD CEO Dr Lisa Su was questioned about microprocessor supply chain bottlenecks, work on improving the situation, and projections for when supply will ease.

"We've always gone through cycles of ups and downs, where demand has exceeded supply, or vice versa," Su said at the Code Conference in Beverly Hills, California. "This time, it's different." Reading on, the AMD CEO clarifies that "the pandemic has just taken demand to a new level". So we have a demand swing wider than usual, and the cyclical nature of the business looks set to continue. After such a strong impact, though, it will still take quite a long time to recover this time around. Su predicts gradual improvements in supply will start to be felt / noticed by H2 2022.

The key to the turnaround is that "manufacturing plants that were planned last year will likely start producing chips in the coming months," indicated Su. Semiconductor responses to shortages can easily take two years to create an impact on supply due to planning, budgeting, facility expansion, and production preparation times.

AMD, like many other tech giants, has done well during the pandemic. CNBC notes that its shares are up 120 per cent since the start of 2020, a very nice increase for investors who have had confidence in the firm. AMD, unlike Intel, is entirely reliant on third party companies to manufacture its processors, but the whole industry looks like it intends to expand at breakneck rates. In related news, TSMC reportedly plans a US$7.5 billion expansion into India.



HEXUS Forums :: 10 Comments

Login with Forum Account

Don't have an account? Register today!
Well its not like they'd dare say otherwise…
I'd heard the reason the automotive industry had such supply issues was down to them using old process chip tech and being unwilling to move to newer small chip tech due to the costs involved in redeveloping well tested products. I've no idea how true this is but if it is having more high end chip production won't help the car manufactures. (Supposedly Tesla avoided this as rather than having lots of specialist chips they just use two central Nvidia CPUs in a fail safe failover setup.)
cheesemp
I'd heard the reason the automotive industry had such supply issues was down to them using old process chip tech and being unwilling to move to newer small chip tech due to the costs involved in redeveloping well tested products. I've no idea how true this is but if it is having more high end chip production won't help the car manufactures. (Supposedly Tesla avoided this as rather than having lots of specialist chips they just use two central Nvidia CPUs in a fail safe failover setup.)

That and the entire automotive industry operates in Just In Time manufacturing mode so that means they have an expectation they can just snap fingers and have the product. Whereas with chip production, it is certainly not a snap finger process and it is also certainly isn't something where you go “TSMC, you're not fulfilling our needs immediately, we're taking our design to Samsung”. It takes many many months to retool a design if the comparable node on the alternate supplier is not cross compatible.

So now the automotive industry have had to wake up to the fact that they have painted themselves into a corner and are quite aggressively trying to get out of it.

Edit: it would make me laugh if we had an Audi/Fiat/Ford chip fabrication plant xD
Tabbykatze
That and the entire automotive industry operates in Just In Time manufacturing mode so that means they have an expectation they can just snap fingers and have the product. Whereas with chip production, it is certainly not a snap finger process and it is also certainly isn't something where you go “TSMC, you're not fulfilling our needs immediately, we're taking our design to Samsung”. It takes many many months to retool a design if the comparable node on the alternate supplier is not cross compatible.

So now the automotive industry have had to wake up to the fact that they have painted themselves into a corner and are quite aggressively trying to get out of it.

Edit: it would make me laugh if we had an Audi/Fiat/Ford chip fabrication plant xD
Bosch recently opened a new one in Dresden, presumably near enough to GF (ex-AMD) plant.

Cheap at round $1 billion but then while it is 300mm it's only 65nm:
https://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants

Unsure, but would suspect a lot of that is dedicated to car, power and analogue stuff.

About time someone realised that dogmatic JIT can get really expensive, but instead once again car manufacturers expect government to rescue them from their own incompetence.
kompukare
About time someone realised that dogmatic JIT can get really expensive, but instead once again car manufacturers expect government to rescue them from their own incompetence.

It's a little bit more complex than that. The automotive supply chain is geared towards minimising waste and storage, because they're expensive on-going costs. Supply-side risks are normally modelled as one-off costs, because normally, they are. What we've hit is a situation where supply-side risks have become ongoing, and that's thrown everything out of whack - not just JIT supply chains. A case in point would be the GPU market.

Incidentally, due to previous experience with earthquakes in Japan, Toyota did have a substantial stockpile going into the current situation. It did buy them about six months or so, but that was it. So I'm not at all clear that there would be any preparations that could have circumvented what's happening now.