News TSMC Says a Shortage of Commodity Chips Is Disrupting Trillion-Dollar Industries

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Where are all the chips going, if not to the companies that normally buy them?

Every company on earth is blaming all of their problems on "the supply chain" but none of them are actually explaining what's actually going on. Where's the bottleneck?

I don't think TSMC is self aware that they just tried to just tried to circularly shift blame for the chip shortage onto the chip shortage.
 
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Nobody's investing in 120, 90, 65, 45 nm nodes.

That's the problem.

Investing too much into 7, 5, 3nm nodes winds up being a mis-allocation of capital.

You can make a really fast CPU, but you can't make the motherboard, monitor, mouse or a keyboard to go with it.
 
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Giroro said:
Where are all the chips going, if not to the companies that normally buy them?
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Full-HD touch-screen toasters and a bunch of other things like that which are getting "smartified" just for lols.

If you compare the average mainstream vehicle today vs mainstream vehicles from 30 years ago, we're likely looking at ~50X more electronics since practically everything in modern vehicles is controlled by wire and electrically-powered, especially on EVs where mechanical power from a drive belt or vacuum doesn't exist unless created by electrical means. With advanced driving assists and quasi-self-driving requiring 10s of TFLOPs, you also have relatively high-end compute on board those models. Between the assist computer, all of the cameras and support sensors, all of the vehicle systems actuators that must be available for computer control, etc., that is hundreds of extra chips and jellybeans semiconductors..
 
Giroro said:
Where are all the chips going, if not to the companies that normally buy them?

Every company on earth is blaming all of their problems on "the supply chain" but none of them are actually explaining what's actually going on. Where's the bottleneck?

I don't think TSMC is self aware that they just tried to just tried to circularly shift blame for the chip shortage onto the chip shortage.
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It's the explosion of use. When I started my career I was an embedded software engineer for vehicle ECUs (Electronic Control Units, or what uninformed people call them "the car's chip(s)"). When I started most cars had 2 or 3 of these ECUs all with a 3 to 5 of semiconductors per control unit to control operation of the Engine, Transmission and AirBag. When I left 12 years ago that number had exploded to well over 40 ECUs on mid to high end vehicles. These days they are pushing 80+ and it's only getting growing in number. In roughly 23 years the number of semiconductors in a vehicle has gone from about 15 to 250+, that's a 16.5x (1650%) increase in 23 years and the numbers just keep going up. This is also just automotive, there are plenty of other industries like Aviation, Defense, Manufacturing, Computing, etc. that have all had similar explosions in semiconductor demand.

The bottleneck to answer the question directly is at the lower end of the semiconductor scale (120 nm, 90nm, etc.). For many of the applications listed above they don't need top of the line 3nm semiconductors to operate, but the margin for semiconductor makers is at that high end, not the low end. Semiconductor makers don't make a lot of money on 50 cent 120nm chips, they do however make a boat load of money on $700 5nm CPUs making headlines.
 
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shady28 said:
Nobody's investing in 120, 90, 65, 45 nm nodes.
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There is a very simple reason: it makes no sense to waste money on antique equipment that limits your ability to make finer stuff when 22-32nm equipment is much easier to come by, is more flexible and can still be used to make 1200nm stuff if needed, you just skip resolution enhancement tricks while preparing masks and the extra exposure passes they may require during lithography.
 
InvalidError said:
There is a very simple reason: it makes no sense to waste money on antique equipment that limits your ability to make finer stuff when 22-32nm equipment is much easier to come by, is more flexible and can still be used to make 1200nm stuff if needed, you just skip resolution enhancement tricks while preparing masks and the extra exposure passes they may require during lithography.
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ASML still makes that equipment.

You're ignoring the massive uplift in cost to develop a chip on new nodes. A full SoC can cost $500,000,000 to put on a 5nm node.

A lot of the smaller chip vendors count revenue in the tens and hundreds of millions.

It's simply not viable to port something they already have to 28nm for example, when they only sell 1million $5 chips per year ($5,000,000). The ROI just is not there.

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Giroro said:
Where are all the chips going, if not to the companies that normally buy them?

Every company on earth is blaming all of their problems on "the supply chain" but none of them are actually explaining what's actually going on. Where's the bottleneck?

I don't think TSMC is self aware that they just tried to just tried to circularly shift blame for the chip shortage onto the chip shortage.
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We don't need IoT. Most of that stuff is junk that will go in the landfill soon enough.
 
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shady28 said:
ASML still makes that equipment.
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Or does it? When the differences between models are little more than higher precision wafer table positioning, higher precision wafer leveling, higher precision alignment sensors and other tiny yet still critical tweaks when dealing with nanometers, I wouldn't be surprised if all the DUV variants sold today were the same machine adapted and certified to be a drop-in replacement for older ones.

shady28 said:
You're ignoring the massive uplift in cost to develop a chip on new nodes. A full SoC can cost $500,000,000 to put on a 5nm node.
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It isn't the node that costs R&D time, it is the amount of extra stuff that tends to get crammed into chips as processes shrink. A 80486DX's ~1M transistors would require approximately the same amount of R&D work regardless of whether it is ultimately made on 1um or 5nm.
 
What's the point of this TSMC complain ?
Their equipment (that needs bigger nodes) are only used for small node products.

Maybe TSMC needs to invest / produce bigger nodes for their critical supplier equipment so they don't run into issues ?

Of course they will never do that, they will just make billions/pocket all profits and pass the blame.
 
InvalidError said:
Simple: with everything down to toasters, toilets, light bulbs, light switches, etc. going 'smart', demand is growing faster than supply does.
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Shouldn't those be the ones to suffer from supply issues first, then? You'd think that the cheaper appliances where chips are largely unnecessary would be the first to be throttled from supply issues.
 
wifiburger said:
Maybe TSMC needs to invest / produce bigger nodes for their critical supplier equipment so they don't run into issues?
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Fabs-for-hire will invest in whatever nodes are most cost-effective and flexible for the range of stuff they plan to make on it. If a fab focuses mainly on analog and power stuff at 120nm but 32nm equipment is more cost-effective and flexible long-term thanks to replacement parts being readily available, they'll get 32nm equipment to make their 120nm stuff which gives them the option of making stuff down to 32nm if need be.

coolitic said:
Shouldn't those be the ones to suffer from supply issues first, then? You'd think that the cheaper appliances where chips are largely unnecessary would be the first to be throttled from supply issues.
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Chip manufacturers and distributors sell their stuff to the highest bidders. They aren't in the business of picking losers and winners on the retail side of things.
 
coolitic said:
Shouldn't those be the ones to suffer from supply issues first, then? You'd think that the cheaper appliances where chips are largely unnecessary would be the first to be throttled from supply issues.
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There are nuances there. Once you have a contract, you have a contract, it's not like the fabs are picking and choosing based on what they consider to be important. Frankly I would not want them to do that.

In the auto space, it's known that the auto makers and their suppliers cancelled many of their orders in early to mid 2020. When things rebounded starting late 2020, they didn't have any supply, and they didn't have much on order.

I would imagine that same scenario played out across many different industries.

I think of supply chain like a pendulum that normally only moves very slightly from left to right as far as production/supply and demand. Covid was basically like taking that pendulum and pushing it all the way to one side and letting go. It's now swinging back and forth between excess and shortages.

My real problem with this is that the public, because things like GPUs and CPUs are so visible, is largely unaware of all the other chips required for the day to day mundane functions. So we wind up with all this focus on TSMC Samsung and Intel.

If you want to know the type of thing that will fix the actual problem, it's stuff like Texas Instruments $30B fab expansion in Sherman, TX.
 
shady28 said:
If you want to know the type of thing that will fix the actual problem, it's stuff like Texas Instruments $30B fab expansion in Sherman, TX.
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Samsung had to reduce production at its TX campus due to power and water shortages not so long ago. More fabs won't do you much good when the infrastructure already cannot reliably support existing ones.
 
InvalidError said:
Samsung had to reduce production at its TX campus due to power and water shortages not so long ago. More fabs won't do you much good when the infrastructure already cannot reliably support existing ones.
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Sherman is about 50 miles from me. You're talking about a peak power usage that was due to weeks of 106 degree heat, and when the wind died down they were concerned about hitting max power usage. We never hit it though. Normally we have about a 25%-30% margin on power available vs demand.

The problem in TX is that about 34% of our power is 'renewable' wind and solar, and we have a massive population surge from transplants moving in from out of state that's been going on for 5+ years. The next highest state is Washington state with about 25%. followed by CA with ~19%. The wind doesn't always blow, and the sun doesn't always shine.
 
InvalidError said:
It isn't the node that costs R&D time, it is the amount of extra stuff that tends to get crammed into chips as processes shrink. A 80486DX's ~1M transistors would require approximately the same amount of R&D work regardless of whether it is ultimately made on 1um or 5nm.
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That is not true, to use a new node you would had to remake the tooling, so you cant just put a 120nm design to TSMC and ask them to make it on 7nm, you would have to rebuild the chip. This is why you don't get node shrinks very often (proper node shrinks not 7nm to 6nm which is an optimisation).

Even if you do rebuild your chip for a smaller node you will also see variations in how the chips perform, consoles have had issues in the past with node shrinks as it completely changed the performance characteristics of the chips even though they technically should have been the same. This would be a huge issue for car makers as you want things like airbags and ABS brakes to perform the same as you intended otherwise you would have to completely revalidate everything which is the very thing that all the car makers are trying so hard to avoid.
 
shady28 said:
Sherman is about 50 miles from me. You're talking about a peak power usage that was due to weeks of 106 degree heat, and when the wind died down they were concerned about hitting max power usage. We never hit it though. Normally we have about a 25%-30% margin on power available vs demand.

The problem in TX is that about 34% of our power is 'renewable' wind and solar, and we have a massive population surge from transplants moving in from out of state that's been going on for 5+ years. The next highest state is Washington state with about 25%. followed by CA with ~19%. The wind doesn't always blow, and the sun doesn't always shine.
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That's a strew man argument if I ever heard one. I work in the grid management industry, utilities always have a supply of on demand plants to handle "non sunny" and "non wind blowing" days. The modeling is built into the software they use to measure demand and future draw on the gird. Regardless of how much renewable sources are installed, good utilities always model for near zero production from variable sources and ensure they have enough on demand capacity or can buy the capacity on the market to cover the loss. If your utility company isn't doing that, they are cutting corners and are the real cause of the problem, not the wind or sun.
 
JamesJones44 said:
That's a strew man argument if I ever heard one. I work in the grid management industry, utilities always have a supply of on demand plants to handle "non sunny" and "non wind blowing" days. The modeling is built into the software they use to measure demand and future draw on the gird. Regardless of how much renewable sources are installed, good utilities always model for near zero production from variable sources and ensure they have enough on demand capacity or can buy the capacity on the market to cover the loss. If your utility company isn't doing that, they are cutting corners and are the real cause of the problem, not the wind or sun.
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Nice attitude you got there sparky. Here's a clue, you can't get blood from a turnip, and if the temperature outside is 106 in the 2nd largest state in the country (Texas) it's probably 103 in neighboring areas on the grid. If the wind doesn't blow, power generation drops, and the grid can't make up that kind of difference.

The result is that they have to bring reserve generators online. Those reserve generators have to be there, they cost money to put in, and to maintain. About $1B / year in Texas.

But I bet that's not about reality for you now is it? Some kind of agenda?
 
shady28 said:
Sherman is about 50 miles from me. You're talking about a peak power usage that was due to weeks of 106 degree heat, and when the wind died down they were concerned about hitting max power usage. We never hit it though. Normally we have about a 25%-30% margin on power available vs demand.

The problem in TX is that about 34% of our power is 'renewable' wind and solar, and we have a massive population surge from transplants moving in from out of state that's been going on for 5+ years. The next highest state is Washington state with about 25%. followed by CA with ~19%. The wind doesn't always blow, and the sun doesn't always shine.
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What past 2 months were you living through? The sun doesn't always shine? It did nothing but. That's what it always does in our oh so definitely hasn't always been this bad we have the numbers, summers. The days it ain't windy up in la dee da Sherman, it sure as hell is down on the coast. Same grid, remember? The days it wasn't windy up there? Also the same days, yet again, the thermal boys decided, lets just turn our stuff off.
https://twitter.com/x/status/1546528816272654337
View: https://twitter.com/AndrewDessler/status/1546528816272654337


Is wind and solar the answer to our massive massive and growing still energy needs? No. The oil and gas industry sure as hell isn't. They were the ones that didn't weatherize their pipes for pennies, let the state freeze and then handed us as a bill for billions. With a B. The fact of the matter is this is Texas. The wind is always blowing. Somewhere. Just a matter of how hard. This is Texas, when its over 100 degrees, the sun is shining. This is Texas, the coldest time of year is inside an office building in August.

Stop parroting a political talking point. We have a ton more people. They are still coming. We need power to sustain it all. The fact of the matter is, oil and gas is a suckers game. And its also a geographic lottery. Instead of being idiots and going to buy a new white truck and a massive new gate to the ranch, lets be smart, and and use some of it to set up a better power system. We have battery makers and nuclear physicists. We have the sun and a lot of empty roof tops. We always have wind somewhere. Stop being willfully ignorant. No one wants to suck in whatever all the frackers are burning out. Being able to set water, something else we have to actually address like adults, on fire is not a good thing. We also have a lot of people like you. This is Texas.
 
wbfox said:
What past 2 months were you living through? The sun doesn't always shine? It did nothing but. That's what it always does in our oh so definitely hasn't always been this bad we have the numbers, summers. The days it ain't windy up in la dee da Sherman, it sure as hell is down on the coast. Same grid, remember? The days it wasn't windy up there? Also the same days, yet again, the thermal boys decided, lets just turn our stuff off.
https://twitter.com/x/status/1546528816272654337
View: https://twitter.com/AndrewDessler/status/1546528816272654337


Is wind and solar the answer to our massive massive and growing still energy needs? No. The oil and gas industry sure as hell isn't. They were the ones that didn't weatherize their pipes for pennies, let the state freeze and then handed us as a bill for billions. With a B. The fact of the matter is this is Texas. The wind is always blowing. Somewhere. Just a matter of how hard. This is Texas, when its over 100 degrees, the sun is shining. This is Texas, the coldest time of year is inside an office building in August.

Stop parroting a political talking point. We have a ton more people. They are still coming. We need power to sustain it all. The fact of the matter is, oil and gas is a suckers game. And its also a geographic lottery. Instead of being idiots and going to buy a new white truck and a massive new gate to the ranch, lets be smart, and and use some of it to set up a better power system. We have battery makers and nuclear physicists. We have the sun and a lot of empty roof tops. We always have wind somewhere. Stop being willfully ignorant. No one wants to suck in whatever all the frackers are burning out. Being able to set water, something else we have to actually address like adults, on fire is not a good thing. We also have a lot of people like you. This is Texas.
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Personal attacks?

What a bunch of sterotype grinding garbage.

Did you miss the part where Texas has far far higher use of renewables than California and Washington state?

If you want to infer something from it, infer this : California is regressive, Texas is progressive. Texas taxes property (progressive tax on wealth), CA taxes consumption (regressive tax on consumption).

I don't own a truck either punk.
 
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