Micron pledges $40b for US fabs as financial headwinds mount

Micron committed to investing $40 billion in new semiconductor manufacturing capacity in the US over the next decade, even as the company warns of financial headwinds due to slipping product demand. The announcement comes just as President Joe Biden signed the $280 billion CHIPs and Science Act into the law this morning. The …

[Doctor Syntax]

Here we're told falling demand is causing problems. A couple of stories back we're told that car makers are cutting production because of shortages. Two apparently contradictory stories. Just what is happening in the semiconductor industry? Perhaps el Reg could give us an overview story.

[elsergiovolador]

Small and medium businesses relying on just in time manufacturing, facing not being able to manufacture any products, because of missing key components and unknown dates when back orders could be filled, are simply going under.

There is only so much time you can sustain the company for without having any revenue.

When companies fold, the demand falls.

I noticed that some parts that were impossible to get only 3 months ago are now being heavily discounted by scalpers. 6 months ago I was quoted $355 for a part that costs $22 new at low volume, then 3 months ago nobody had it in stock. Now I could get it for $43. Still not available at official distributors.

Seems like something is happening...

[NullDev]

As an EE working at an electronics OEM, the semiconductor "issue" is currently hit or miss. In this case, memory devices are not the issue, but rather analog, power management, IGBTs / MOSFETs, and embedded CPUs are the main culprits. The auto industry relies heavily on these and they currently have extremely long lead times. 52+ weeks is unfortunately rather common these days.

[Michael Wojcik]

Somewhat similarly, our local electric company warned that pole transformers currently have a backlog of around a year – bad news for all the people building new homes on previously-undeveloped lots (we're experiencing a housing boom as people discovered they can work from home and are fleeing California and Texas).

[Spazturtle]

There is a shortage of the basic chips that are used in pretty much every electronic device, they are manufactured on larger nodes. These older fabs have been closing down over the year until now only enough were left to manufacture the chips at the rate the industry was using them.

But the industry stopped buying them over covid so the fabs stopped churning them out, because of this no stockpile built up. Now the companies are trying to boost manufacturing to clear their covid backlog but the fabs are unable to make chips at a higher rate so the backlog is not getting cleared.

There is an oversupply of the high end chips that are only used in modern computers, like CPUs, GPUs, Memory. Stuff that is made on very modern small nodes where all the money has been going and expansion happening.