Chip Crunch Is Stifling Production of New Chips, Gearmaker Warns

Chip Crunch Is Stifling Production of New Chips, Gearmaker Warns

The global shortage in semiconductors is spreading to companies that provide gear used to manufacture the silicon, with one chip packaging equipment supplier warning of delays in shipments.

Average delivery times of Kulicke and Soffa Industries Inc.’s packaging equipment, which require microcontrollers, have doubled to six months, said Executive Vice President Chan Pin Chong. The company supplies equipment to customers like ASE Technology Holding Co., the world’s largest chip packaging and testing services provider.

Chip manufacturers and their partners are now trying to expand capacity to meet the surging demand for silicon, only to be stymied in part because of difficulties in getting gear from suppliers like Kulicke and Soffa. Companies including Innolux Corp. and Asustek Computer Inc. have recently warned of tight supply with chip packaging, the final step in semiconductor manufacturing.

“Chips are critical for our equipment but there are not enough chips,” Chong said. The imbalances in the global semiconductor market may persist until late 2021 or early next year, he added.

The warning is the latest sign that the shortage of chips is spreading. Carmakers have had to idle plants while and consumer electronics manufacturers are slowing production, due to a lack of the vital components. Samsung Electronics Co. this week became the biggest tech giant to warn of the “serious imbalance” in semiconductors, saying that the crunch may pose a problem to its business next quarter.

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