Investments in new capabilities by companies like #Intel, #GlobalFoundries, #Samsung and others will not prove to be a solution for all the resulting supply chain constraints. “The problem with many industries is that they use old chips, not that they’re bad,” Gold argues, explaining that some companies in the automotive industry still use a #chip based on 90nm technology that is many years old.
New investments in fab chips are unlikely to help customers, who use older chips, tap into a deeper supply because chip companies “won’t invest in 90nm fab facilities. They’re going to invest in cutting-edge 5nm and 7nm,” Gold said, adding, “So it’s going to be really hard to ramp up production of some of these older chips that people still rely on.”
This whole situation is further complicated by the fact that some manufacturing sites and materials distributors are still trying to regain their pre-pandemic pace after being shut down in the early months of Covid.
Even after reopening, some may have been operating at a limited production pace to meet pandemic warnings, or even continuing for a while to be hit by occasional outbreaks that required workers to be quarantined at home.
“We all think of the supply chain as a super-automated thing, but it’s not,” Gold said. “There are still a lot of people involved.”
Gold also noted that somewhere along the way, oversupply could emerge as a problem, though it will likely be a more isolated issue than the global dilemma that the semiconductor industry is still trying to solve.