Demand for semiconductors is as much as 17% higher in 2021 than it was in 2019, and consumers aren’t seeing commensurate increases in the available supply, according to the US Department of Commerce. Adding to this strain, the majority of on-stream semiconductor manufacturing facilities are operating at or above 90% utilisation, meaning there is limited additional supply to bring online without building facilities.
The semiconductor shortage has been a hot topic in the US since the start of the coronavirus pandemic (Covid-19), as demand for electronics saw incredible growth when families were restricted to their homes during lockdowns, resulting in the need for new forms of entertainment or new computers to support work from home advice. However, as the world slowly begins to open up again, these strains are still being felt by the industry.
Semiconductor shortages can drastically affect the production of multiple products from multiple industries including, computing, healthcare, military systems, transportation and clean energy. Asemiconductor is at the heart of that invention, your smartphone has a semiconductor within it, your car will feature a semiconductor chip and even your TV.
Within these applications, a semiconductor is a material that conducts electricity more than an insulator but less than a pure conductor – and there are four basic types. However, recent data from the US Department of Commerce has highlighted the urgent need for government support to address the supply and demand issue, putting pressure on congress to the US Innovation and Competition Act, announced by the White House back in June, which proposed $52bn for domestic semiconductor production.
Showcasing the importance of such support, the Department of Commerce stated that if a Covid-19 outbreak, a natural disaster, or political instability disrupts a foreign semiconductor facility for even just a few weeks, it has the potential to shut down a manufacturing facility in the US, impacting American workers and their families at risk.
“The semiconductor supply chain remains fragile.”
Gina Raimondo, US Secretary of Commerce, commented, “The semiconductor supply chain remains fragile, and it is essential the congress pass chips funding as soon as possible. With sky-rocketing demand and full utilisation of existing manufacturing facilities, it’s clear the only solution to solve this crisis in the long-term is to rebuild our domestic capabilities.”
“President Biden has proposed $52bn to revitalise our domestic semiconductor industry, and every day we wait on this funding is a day we fall further behind. But if we address this problem, we can create good jobs, rebuild American manufacturing and strengthen our supply chains here at home for the years ahead.”
Whilst bringing on new capacity is obviously a big investment that comes with months, or in some cases years, of commitment, it is a move that some companies in the semiconductor space are making to support customers and the industry as a whole. In fact, in the last couple of weeks alone, gasworld has reported plans from industrial gas giant Air Liquide and semiconductor company Intel to bring new capacity onstream.
On 25th January (2022), Air Liquide said it will invest $60m to build, own and operate onsite plants and systems at a new manufacturing site in Phoenix, Arizona, to supply ultra-high purity hydrogen, helium and carbon dioxide to one of the world’s largest semiconductor manufacturers. Whilst the name of Air Liquide’s new customer has not been disclosed, the site is positive for the semiconductor market, with operations from the plant, and supply to the customer, are expected to begin at the second half of this year (2022).
Across the pond, in the middle of last year Air Liquide also said it will invest $70m in a state-of-the-art gas in Wuhan, Central China, to produce 52,000 Nm3 of nitrogen an hour, as well as oxygen, argon and other ultra-high purity gases. Gases from the plant will be supplied under a long-term agreement with a major memory chip maker. Again, the customer was not disclosed. For many years now, Air Liquide Electronics has long served the semiconductor industry, producing and supplying onsite gases with the purity, reliability and quality required for the most advanced semiconductor manufacturing sites. In addition to the two mentioned sites, the company has much more capacity onstream worldwide.
”Intel is leading the effort to restore US semiconductor manufacturing leadership.”
In what could be described as another breakthrough from the US semiconductor industry, California-based semiconductor company Intel said it will invest more than $20bn in two new chip manufacturing facilities in Ohio, US, to meet surging demands. Set to be a new epicentre for advanced chipmaking in the Midwest, the 1,000-acre site will mark the largest single private-sector investment in Ohio history.
Presenting a further economic boost, the manufacturing factories are expecting to create 3,000 Intel jobs and 7,000 construction jobs. At the time of announcement, Pat Gelsinger, CEO of Intel, said, “Today’s investment markets another significant way Intel is leading the effort to restore US semiconductor manufacturing leadership.”
“Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. Intel is bringing leading capability and capacity back to the US to strengthen the global semiconductor industry.”
Further to these new facilities, there are of course new capacity that has recently come onstream to help boost the market and close the supply and demand gap. For example, Business Korea earlier this month announced that POSCO has brough a new neon production facility on stream for the first time in Korea. gasworld tried reaching out to POSCO at the time, but had no response.
Role of high purtity gases
As explained by Linde’s Dr. Paul Stockman in a 2018 article for gasworld, gases have been a key enabler of the electronics industry since the first commercial transistors and integrated circuits were produced in the mid-twentieth century. Properties unique to gases have made them the desired materials to build ever more complex devices: easy to transport and store; easy to dispense with precision and accuracy; and most importantly, easier to control desired chemical reactions at the molecular level.
At the core of almost all electronic devices are semiconductors. These are materials that have electrical conducting properties lying between conductors, which allow electrons to freely move, and insulators, which prevent the movement of electrons. The most familiar semiconductor material is elemental silicon, and by adding small amounts of other elements and/or placing it in an electric field, we can regulate the number of electrons moving at any time.
Electronics are built up from semiconductor devices – capacitors, diodes, and transistors – just like the simple breadboard circuits we may have built in science lab, but thousands of times smaller in scale. And just like those simple circuits, these electronics have not only semiconductors, but also conducting wires, with insulators surrounding all the working devices to ensure the electrons move where the circuit engineers intend them.
“The chip shortage started with the unprecedented demand for electronics spurred by Covid-19.”
While some electronics achieve an incredible level of complexity – the latest computer chips are made using more than 1,000 steps and have more than 10 billion individual transistors, all connected by nano-scale wires in intricate, 3D levels of design – they all are made using mostly simple, building block-like processes in use for over 50 years, and are built and shaped using mostly gas materials, Dr. Stockman continued.
The semiconductor shortage, and the gases that are used within the chips, is something gasworld has been following for some time now. Last year, gasworld spoke exclusively with Jim Minicucci, Global Head of the Specialty Gases business field at EMD Electronics, on the semiconductor chip shortage. At the time of publication, Minicucci said, “The chip shortage started with the unprecedented demand for electronics spurred by Covid-19.”
“The pandemic required people to work from home, virtually go to school, shop online. We saw home entertainment activities including online streaming and gaming increase dramatically. This acceleration of a digital economy boosted the demand for PC’s, monitors, smartphones, tablets, and other electronic devices and all these electronic devices need lots of chips.”
“Also, these devices are connected and generate tremendous amounts of data that needs to be processed and stored, which drives infrastructure needs that also use lots of chips. The huge spike in demand coming from every sector outpaced the industry’s production capacity leading to a global scarcity of chips.”