Recently, a seemingly "outrageous" news in the semiconductor circle has been well known, due to the lack of cores, some companies have purchased a large number of washing machines, which will be dismantled for their own products.
In fact, this is not anecdotal gossip, its source is the international lithography machine giant ASML (hereinafter referred to as Asma) on April 20, the 2022Q1 company's earnings conference, Asmak CEO Peter Wennink said that a large industrial company has begun to take chips from household washing machines for its own products chip modules.
Peter Winningk did not specify which company it was, but said the company had revealed the dilemma to it just last week. Peter Winningk said: "The demand we are currently seeing comes from a lot of parts of the industry... We grossly underestimate the breadth of demand, and I don't think that's going to go away. ”
Dismantling the washing machine is not outrageous
Although the "buy washing machine and dismantle chips" incident seems outrageous, combined with the current soaring price of some chips, from an economic point of view, this may be much cheaper than taking goods from some second-hand channel providers. Yu Chengdong, CEO of Huawei's consumer business and CEO of Smart Car BU, recently said when talking about the lack of cores in cars: "A chip of 10 or 20 yuan has been speculated to 2500, which is too expensive for me to accept."
The price of ordinary household washing machines ranges from hundreds to thousands of prices, but if the company can buy washing machines in bulk from recycling centers or second-hand home appliance equipment manufacturers, then the company can take this batch of goods at a considerable discount, at the same time, there is more than one chip in a washing machine, so the cost of obtaining chips from second-hand washing machines is indeed much lower than that of some black intermediaries who hoard goods.
Image source: Originated from the network
Theoretically, many chips in household washing machines can indeed be applied to many manufacturing industries, including automobiles, and the recycling technology of semiconductors is also very mature. The chip in the washing machine includes a microcontroller (MCU), a power chip, a motor driver, the importance of the MCU for electric vehicles need not be said, due to its programmability, the MCU can still be taken out of the washing machine can still be redesigned and used.
In addition, manufacturers do not have to consider the problem of chip life of second-hand home appliances. These chips applied in the washing machine are almost all chips manufactured on the mature process node, although these chips are far less delicate and small than 5nm, 7nm and other chips, but due to the mature process and wide application, the chips of these mature processes have a very long service life, far beyond mobile phones, computer processors, memory and other chips, and the life expectancy is basically more than fifteen years.
From missing cores to structural missing cores
Behind the dismantling of the washing machine chip incident is the well-known lack of core events, although the lack of core is still the main problem faced by many industries, but the current industry core shortage situation and the lack of core since the second half of 2020 is actually very different, many market research institutions and industry analysts believe that the "structural lack of core" to describe the current lack of core is more appropriate.
At the beginning of last year, when the chip was in the most shortage, the industry described the lack of cores at that time as a "lack of core tide", almost all types and processes of chips are facing the problem of comprehensive shortage of stock, at that time there was a quite vivid but unusually real "paragraph" to tell what is the "lack of core tide". A chip factory entrusted a wafer foundry to produce a chip, but the wafer foundry production capacity is already insufficient, need to buy equipment from the equipment manufacturer to expand production capacity, but the equipment manufacturer said that they do not have enough chips to produce equipment, so the industrial chain fell into a "dead cycle", which is why even second-hand chip equipment is in short supply until now.
By the second half of last year, there were many mobile phones, computer manufacturers said that the shortage of chips is not so serious, to the beginning of this year, some wafer foundries also have a similar voice appeared, in February this year, SMIC CEO Zhao Haijun said that the global foundry industry has entered the "structural lack of core", that is, from the "lack of core tide" to some categories, the shortage of certain process chips, and then specifically the use of advanced processes of mobile phones, computer high-end processor chips have not been lacking, Automotive semiconductor chips with mature processes are still in short supply.
From the financial report released by Asma in the chip equipment in the past two days, we can also see the change in the wind direction of the lack of core, first of all, the global core-scarce environment remains unchanged, and Asma said that it still needs to increase production capacity by more than 50% to meet the surge in orders. In the case of the basic disk of the global lack of cores, Asma's latest financial report is basically in line with expectations, Asma's 2022Q1 revenue was 3.534 billion euros, revenue fell by 19% year-on-year, and gross profit margin also fell from 54.2% in the previous quarter to 49% in this quarter.
Asma said that the decline in revenue and profit margin was mainly affected by the rapid delivery strategy, in order to meet the needs of fabs to rapidly expand production capacity, although the company's shipment speed became faster, but the fabs need to complete verification to recognize revenue, thus generating deferred revenue, so Asmatsu this quarter even shipped nine EUV lithography systems, but only recognized three of the systems of 591 million euros in revenue.
Source: Asma
Secondly, from asma's revenue source area, it can be found that the revenue of Chinese mainland has risen from 22% of last year's Q4 to 34% of this year's Q1, becoming asma's largest customer this quarter, to know that chip companies Chinese mainland can not buy EUV, which means that the market demand for lithography equipment of mature processes is extremely strong, and what is most lacking in the market is mature process chips.
Semiconductor manufacturers usually use EUV and DUV for semiconductor lithography program, the key to the difference between EUV and DUV lies in the wavelength of the light source, the wavelength of the light source of the EUV is 13.5nm, and the shortest wavelength of the DUV light source is also 193nm, generally speaking, the shorter the wavelength, the higher the resolution in the lithography process can be achieved. How accurate is the EUV? In the words of one researcher: "Its accuracy is equivalent to shooting an arrow from the earth to hit an apple placed on the moon." ”
Therefore, the shorter wavelength EUV can meet the wafer manufacturing below 10nm, EUV has also become the key to helping the semiconductor industry to break through the chip 7nm and lower process, the current ASML can not export to China is the EUV lithography machine, and DUV is ASML's deep ultraviolet lithography business, DUV can only be used to manufacture chips of 7nm and above. This is also reflected in the pre-orders that Asmail accepted during the quarter, with orders for EUV systems of 2.5 billion euros and DUV orders of 4.5 billion euros.
Source: Asma
Finally, a significant change in Asmak's revenue sources is that its lithography systems come from more customers in memory production, and the proportion of lithography systems produced in the quarter that are ultimately used in the field of storage device production is 34%, an increase of 11% over last year, and Asma said that memory chip manufacturers such as Micron and SK Hynix are gradually turning to EUV.
To know that the usual memory chip process in 20 to 40 nanometers, the production of such chips generally do not need to use the production of 5nm, 7nm EUV system, Micron, SK Hynix and other memory chip manufacturers began to buy EUV may indicate two signals, one is the manufacturer for the memory chip technology upgrade to prepare, the second is that the mature process of equipment is really not easy to grab, that the advanced process of the first buy it and then say it.
Source: Asma
What Peter Winningk didn't know was that Asmak's own lithography machines had more than doubled in the second-hand market, and that some of the old equipment used to produce mature processes, even though they had been in use for more than 20 years, were priced at the same price as new ones (if you could grab it). Perhaps, the world has passed the stage of the most lack of core, but under various external environmental factors, the balance of supply and demand of the entire industrial chain still needs a long time.