A cleanroom in a Samsung Electronics semiconductor production facility in Suwon, Gyeonggi Province. (image: Samsung Electronics)
SEOUL, Feb. 7 (Korea Bizwire) — South Korea’s top two chipmakers — Samsung Electronics Co. and SK hynix Inc. — have been having difficulty procuring equipment essential to the operation of their chip fabrication facilities.
Both companies mentioned the prolonged lead time, the time it takes for a product or service to go through all process steps or value flow from start to finish, as one of the key challenges they are currently facing during their fourth-quarter conference calls.
Chipmakers, in general, place pre-orders for semiconductor equipment depending on demand forecasts based on facility investment plans. Such pre-orders are normally placed three to six months in advance.
When it comes to extreme ultraviolet (EUV) machine, however, pre-orders are typically placed more than one year in advance.
However, facility investment competition has been heating up among major semiconductor companies, creating a bottleneck in orders and a delay in production, resulting in a longer lead time.
Against this backdrop, chipmakers are asking their long-term contracted suppliers to give them priority in supplying equipment, while flexibly adjusting the schedule of their facility investment plans.
In consideration of the bottleneck in the supply network and the prolonged lead time, Samsung has yet to decide on a specific investment plan for this year, opting instead to adopt a flexible approach subject to the availability of the equipment it needs.
To cope with the prolonged lead time, SK hynix front-loaded some of its investment scheduled for this year into the second half of last year. In particular, it exercised the placement of equipment orders far earlier than usual.
J. S. Shin (js_shin@koreabizwire.com)
