Taiwan Semiconductor Manufacturing Co. is seeking to safe its provide chain and construct up capacities that produce high-purity neon fuel regionally. The corporate confronted large turmoil available on the market of noble gases after Ukrainian firms ceased to provide them after Russia’s warfare within the nation destroyed noble fuel manufacturing capacities.
TSMC is negotiating with quite a few fuel suppliers to research prospects of manufacturing high-purity neon fuel in Taiwan in three to 5 years, stated J.Okay. Lin, senior vice chairman of knowledge expertise, supplies administration and threat administration, in an interview with Nikkei.
Because the world’s largest contract maker of chips, TSMC requires regular and high-volume provide of supplies (e.g., chemical compounds, wafer subtrates, and so on.) to fulfill buyer. The corporate confronted main challenges coping with the worldwide chip scarcity in 2020 – 2022, which elevated its prices and required it to hike costs for its prospects.
However in a bid to make its provide chain extra resilient, TSMC is now wanting ahead to localizing part of its provide chain, notably manufacturing of high-purity gases like neon. This isn’t significantly simple as neon is a byproduct of metal manufacturing.
“Now we have a concrete plan to work with suppliers to localize some neon fuel provides and are presently within the course of of shopping for tools,” Lin advised Nikkei. “The thought is to have extra sources to extend the extent of provide chain security. Nevertheless, our plan is to not construct all of the provides regionally. That’s not real looking and really pricey.”
Earlier this yr TSMC confronted main turmoil after Russia destroyed Cryoin and Ingas, two main producers of high-purity neon, in Odessa and Mariupol within the first days of warfare. These two firms shipped 360,000 m^3 of high-purity Grade 5.0 neon final yr and 75% of their output went to chipmakers. They managed round 50% of semiconductor-grade neon in 2021, it was revealed earlier this yr.
The semiconductor enterprise is a significant international trade, and it’s inconceivable to localize the entire provide chain in a single nation. The corporate sources manufacturing tools from the Netherlands and the U.S.; buys uncooked supplies from Europe and Japan after which makes use of native firms to construct fabs.
ArF immersion lasers used to make refined chips that require deep ultraviolet (DUV) lithography use a combination of neon, fluorine, and argon gases. Neon accounts for over 95% of the mix; in the meantime, fashionable manufacturing instruments function neon recycle techniques that scale back precise consumption by over 90%. However whereas every ArF/DUV scanner doesn’t eat quite a lot of gases, there are tens of hundreds of such scanners in use worldwide and all of them want neon, fluorine, and argon gases, so demand for these noble gases is robust.
Whereas demand for chips is slowing proper now, TSMC’s income proceed to extend. The corporate posted October income of NT$210.3 billion ($6.673 billion), which is up a whopping 56.3% from NT$134.5 billion ($4.267 billion) in October ’21, reviews Bloomberg. TSMC will possible be among the many final chip firms to report income drop attributable to demand droop, however would be the first chipmaker to learn from demand rebound in 2023 ~ 2024. So it makes an important sense for the foundry to spend money on its provide chain now.