Cranes soar over Lone Star State as Texas Instruments pushes to get new fabs online

Texas Instruments is flexing its chip-making muscles, boasting of impressive foresight in avoiding the worst of the component shortages and its progress in bringing two new fabs online – but admits it could be years before either begin producing in volume. "We are investing for the long-term," Dave Pahl, head of investor …

[Yet Another Anonymous coward]

A new definition of operational

. "That's when the shell will be completed, and then we will be deploying equipment there by the second half of 2022."

I'm assuming that for a semiconductor fab the tricky part is the shell - the lithography equipment, installation, calibration, testing etc are trivial ?

[Anonymous Coward]

Reporting Progress

That's when the progress meter hits 90% and has to merely dot and cross its way through the second 90%, ie. basically finished already.

[Anonymous Coward]

So they currently have 111 days of inventory, but at the end of the pipeline we're seeing leadtimes of weeks to months for ICs. I get that there's lots to do after the water leaves the fab, but if the fabs are the bottleneck, I'd expect they'd be running hand-to-mouth and would be at 0 inventory.

Unless the TI chips in question are still available.

[Anonymous Coward]

I have a feeling, they mean production inventory, i.e. raw materials to be able to produce.

We went into overdrive, when the first lockdowns occurred, but at some point, we had to throttle back, because the raw materials were just not deliverable, or the timescales had extended. That meant scaling back production volumes, to ensure we had enough raw materials to keep the plants going. When certain chemicals became available, we'd order as much as we could store, to ensure we had supply for production going forward, with no certain availability or delivery dates, when the next wave of lockdowns came.

It is a juggling act, ensuring enough raw materials are coming in to be able to produce, and having enough orders going out, to justify the buying of the raw materials. Raw materials sitting around in the warehouse are a cost to the business and the last 40 years or so, it has all been about cutting those stocks down to near zero in some industries.

For example, automotive get tyres delivered throughout the day, usually going from the trailer to the production line and straight onto rims, which go straight onto the vehicles running off the line. There might be a couple of hours of inventory, but not much more. If the trucks stop coming, production stops. Obviously, not all parts can be delivered that way, but for bulkier items, JIT (Just in Time delivery) is used as much as possible.

I worked on systems in the late 80s and early 90s to optimize JIT production and logistics, it is actually a fascinating problem; but as the last year shows, if supply dries up, you are royally screwed.