We know that what we are going to comment on the report does not affect those of us who are immersed in this world of processors and graphics cards, but that is really a mistake in itself. And it is because the two components along with the others need precisely thousands of small chips such as capacitors, resistors and various controllers which are also chips. IDC puts white on black in a move only a few could guess.
The reasons for the shortage of tokens: a bad strategy that conditions everything
Although it seems obvious because it is the builders who work with their demand, the strategy they followed was largely wrong. We still believe that the lower nanometer wafers are the most in demand and they really are, but only partially. AMD, Intel and NVIDIA are looking for performance and therefore the best node, but the rest of the industry needs other manufacturing processes that have a common argument: volume and price.
The pandemic started and all players focused on putting the money in the bigger lithographic processes because the demand was concentrated there. But it dragged everyone to a point of almost no return because the strategy couldn’t be based on that alone, you had to plan ahead and be alert to what was to come, but they didn’t and here is the biggest problem according to IDC.
There has been no investment in mature, cost-effective processes
Cutting-edge processes have pushed the rest of the industry to need 40nm or larger chips at staggeringly higher volumes as the three major players push machines to the limit. There were substrates, there were chips, but there was no ancillary industry to support them with multi-billion dollar investments for the rest of the manufacturing processes which now had to increase their productivity by larger than Intel, Samsung and TSMC.
To be specific, IDC claims that the 67% semiconductors were produced using these mature processes in 2021 (immature processes are considered from the 16nm down), since advanced manufacturing represents only 15% of the wafers manufactured in the world.
This 15% however, it represents in terms of revenue 44% and for this reason, at the beginning of the semiconductor crisis, everyone turned to the sharpest nodes, because they bring a lot of money, but they did not calculate either the investment or the blow that it would carry with it for the rest of the industry. There was only one company, a foundry which, due to its situation, could not take this step and subsequently benefited from: Texas Instruments
The company gained 19% from the year-ago quarter. The solution to the problem will not come until at least 2025, when China and South Korea will go from 16% and 12% to 19% and 15% of the market thanks to the investments made today, while Taiwan goes from 67% to 68%. It is only in Asia, as data from Intel as such and Texas, as well as GlobalFoundries has not been offered to have a global map of the market direction of wafers and semi- drivers.
Anyway, the investment was badly done, that’s definitely one of the reasons for the chip shortage because they just focused on making more money in the short term and not thinking about the long term because by then they should have the ability to react to soften the blow, which none of the participants could do because, as they say, “Rome was not built in a day”.
