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These chips for SME OEMs and contract manufacturers account for far less than 1% of the global semiconductor market.

The production of SME is dependent on a relatively small volume of semiconductors that are often purchased and incorporated into SME components by contract manufacturers to the SME original equipment manufacturer (OEM). 1: New 300mm and 200mm fabs expected to come online from 2020-2024 by region. Longer delivery times for equipment mean a slower ramp-up of planned chip production capacity, potentially prolonging the shortage.įig. According to the SEMI World Fab Forecast, 86 new fabs or major fab expansions are expected to come online between 20 (see figure 1), representing 20% growth in total 200mm fab capacity and 44% growth for 300mm capacity over this period. All efforts to expand chip production depend on SMEĮxtended lead times for equipment are holding back marginal fab expansions where space is readily available to add capacity and could significantly hamper expansion efforts for a wide range of device makers and their supply chain – from materials and process equipment suppliers through packaging and test providers. Įnsuring chip supplies needed for SME will significantly reduce lead times for the fab equipment that semiconductor device makers need to expand capacity without changing their allocation strategies. For some fab equipment, the lead time exceeds two years. Lead times for fab equipment were between three to six months in 2020, extending to 10 months on average in the first quarter of 2021, and even further to 14 months on average in July of 2021. Simply put, without more SME, there can be no additional capacity.Ĭhip shortages have contributed to increased lead times for fab equipment and other complex semiconductor manufacturing tools. This global effort to grow semiconductor manufacturing capacity hinges on the production and installation of additional semiconductor manufacturing equipment (SME).

Around the world, policymakers are increasing semiconductor manufacturing capacity to strengthen supply chains and meet growing demand for semiconductors through robust incentive packages totaling hundreds of billions of dollars. Global semiconductor supply imbalances have hindered countless industries including essential segments such as automotive and medical as well as workers and consumers.

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