The price of used “iron” for the production of chips around the world has skyrocketed

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Эльяс Касми

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Microelectronics companies began to buy used lithography equipment, since new ones are now in short supply. This led to an increase in prices – some hardware, even 20 years old, can be sold at the price of a new one, and for another, the mark-up can be five times. But it is still beneficial for companies – having bought equipment, they can set up production faster than competitors and win over their orders.

“Resale” is growing in price

The global market is facing skyrocketing prices for used chip manufacturing equipment, writes Nikkei Asial Review. The increase in prices ranged from two to five times, depending on the hardware itself and the seller. At the same time, the rise in price did not affect the demand for such equipment at all.

According to the publication, for the second-hand “iron” for the production of semiconductors, almost lined up. There are several reasons for this, and the main one is the delivery time of the hardware. If buyers have to wait up to a year and a half for new production equipment, they can receive secondary equipment within a month.

All this is connected, among other things, with the general shortage of new equipment of this kind on the world stage. It has already been faced by both small manufacturers and market leaders, including the Taiwanese company TSMC, the largest contract chip manufacturer on the planet.

Coronavirus fuels demand

The lack of new production equipment is a consequence of the coronavirus pandemic, which has spurred demand for semiconductors. Vendors immediately reacted to it, starting to buy the equipment they needed to expand production.

Everyone wants to make semiconductors, even if it means paying five prices for equipment from the beginning of the century.

Currently, the demand for new hardware in this segment greatly exceeds supply, which leads to gigantic and in some cases unprofitable waiting times for deliveries. This is just one of the main reasons for the popularity of used equipment.

The second reason is also related to COVID-19. During the pandemic, demand for 200 mm silicon wafers has grown worldwide, while new modern equipment is designed for the most part for wafers with a diameter of 300 mm. This forces vendors to turn their attention to the secondary market.

Contributes and Chinawhich is also directly related to COVID-19since the spread of the virus began in a Chinese city Wuhan. This country is limited in the purchase of new hardware for the production of microcircuits and is also forced to turn to the secondary market. And since the influence of China in this segment is growing from year to year, then, as writes Nikkei Asian Review, this country is buying up more and more used equipment. For example, by the end of 2022, the share of China in the global output of semiconductors can reach 21%.

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The most unpredictable market

Together, all these factors do not allow interested companies to predict their costs for the purchase of used production equipment. Often they have to pay for such hardware twice the price that the seller asked for it before the pandemic.

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import independence

But it also happens that companies have to buy secondary equipment at literally the price of a new one. Moreover, very often they have to pay considerable sums for equipment that was used at the turn of the 20th and 21st centuries.

Paying five prices for hardware, which no one needed a couple of years ago, is also relatively common. And companies agree to such conditions not at all because they do not know how to count their money.

Everything is exactly the opposite. Manufacturers, spending considerable amounts on used hardware, not only acquire a valuable asset in a scarce environment, but also gain time. They can set up production, lure customers and thereby get more orders much faster than competitors who have missed a profitable lot. This will allow them not only to recover the costs of purchasing production equipment, but also to get a profit.

Russia is still lagging behind

Orders for the production of semiconductors for the most part are still passing by Russia. There is no opportunity in the country to produce semiconductors even according to technical processes 15 years ago.

Russian proxies occupy the market

Technique

The most modern hardware in this regard was at the Mikron plant, which calls itself the “chipmaker No. 1 in Russia.” He has only 65-nanometer equipment for lithography at his disposal, and this process technology was relevant at the beginning of the 20th century.

At the time of publication of the material, there was no information whether Russian vendors were purchasing used hardware for lithography, and if so, in what volume. We only know that the authorities want establish 28-nanometer production in the country, but only by 2030. For comparison, the mentioned TSMC in the next few years will pass at 1 nm.

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