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Semiconductors
Business

Some chip-starved manufacturers are scavenging silicon from washing machines, as global shortage shows no sign of easing

  • Tesla said production remains hampered by shortages and elevated prices for key parts, while Volkswagen warned to expect negative effects from chip scarcity
  • Toyota Motor trimmed its output target by about 100,000 units for this year on insufficient semiconductor supply

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Bloomberg
A major industrial conglomerate has resorted to buying washing machines and tearing out the semiconductors inside for use in its own chip modules, according to the CEO of a company central to the chipmaking supply chain.

ASML Holding’s Chief Executive Officer Peter Wennink remarked on the situation, without naming the conglomerate, during his company’s earnings call Wednesday. The beleaguered firm relayed its struggle to him only the prior week, he said, signalling that chip shortages are going to persist for the foreseeable future, at least for some sectors.

“The demand we are currently seeing comes from so many places in the industry,” Wennink said, pointing to the wider adoption of Internet of Things (IoT) applications. “It’s so widespread. We have significantly underestimated the width of the demand. That, I don’t think, is going to go away.”

Even major chip equipment makers including US-based Lam Research are struggling to get enough components to fulfil orders, potentially making it more difficult for semiconductor fabs to significantly increase their capacity in the near term.

Workers dismantling electronic waste at a workshop at Guiyu township in Shantou city in southern China’s Guangdong province on August 9, 2014. Photo: AFP
Workers dismantling electronic waste at a workshop at Guiyu township in Shantou city in southern China’s Guangdong province on August 9, 2014. Photo: AFP

“On the demand side, the entire environment remains very strong, while continued supply-related delays could potentially limit how much wafer fabrication equipment investment can be executed in 2022,” Lam’s CEO Tim Archer said on an earnings call on Wednesday.

Carmakers have yet to overcome a semiconductor crunch that has challenged their operations for over a year. Tesla said this week that production remains hampered by shortages and elevated prices for key components, while Volkswagen has cautioned to expect continued negative effects from chip scarcity. Earlier this week, Toyota Motor trimmed its output target by about 100,000 units for this year on insufficient semiconductor supply.
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