reply What's harder to find than a chip? That's the equipment that makes the chips

The Wall Street Journal published an article on its website on November 6 titled "What's Harder to find than a chip? The device that makes it." It was written by The Wall Street Journal columnist Christopher Mims. The full text is reproduced below:Stephen Howe, a dealer in expensive "antiques", is unhappy that demand is at an all-time high: demand is so high that he can hardly find anything to sell.Stephen Howe isn't buying and selling old watches or vintage cars. He's buying and selling chipmaking equipment, which is in short supply these days. The machines he sells are often at least a decade old -- because the most well-capitalized chipmakers, such as Samsung, Intel and TSMC, can hold onto new chip devices for about a decade. The machines he sells are much older.The chip shortage in 2020 and 2021 is severely hampering the world's ability to produce products from cars to smartphones. According to many analysts, semiconductor manufacturers and Mr. Howe himself, a shortage of used chipmaking equipment is contributing to the severity of the chip shortage.No one knows exactly how many of the world's chips are made from second-hand equipment, but Stephen Howe estimates it could be as high as a third.More than half of the global semiconductor industry's revenue comes from older chips, said Wayne Lamm, director of research at CCS Insight, a technology consulting firm. Intel's new advanced laptop processor chips cost hundreds of dollars to build. By comparison, many older chips cost just a few dollars or even a few cents.These chips, which use more mature technology, are embedded in cameras and other sensors in people's phones and cars, power electronics, logic controllers in factory equipment and chips that enable wireless communications. A shortage of those chips is at the root of problems such as car manufacturing shutdowns and Apple's inability to keep up with demand for the latest iPhone.In addition, the coronavirus pandemic has indirectly triggered the current chip shortage, leading not only to the closure of the factories that are critical to the manufacturing and packaging of these chips, but also to a surge in demand for home telecommuting equipment and other products that use chips. But the problem doesn't stop there.For years, a longer-term trend -- an ever-expanding and insatiable demand for chips in all kinds of electronic devices -- has kept the equipment supply chain at the heart of the chip supply chain busy.Hassan Cooley, chief executive of Semiconductor maker On Semiconductor, based in Phoenix, Arizona, said part of the reason for continued demand is the growth of the "Internet of things" over the past five years or so. Not only do many of the things people buy now have chips in them, some of them have far more embedded in them than ever before.Faced with these demands, chipmakers have pledged to produce more chips than ever before, but it is difficult, if not impossible, to speed up the production of the chips that so many companies now need.One reason is that even under the best of circumstances it takes months to expand the capacity of a chip factory, partly because the complexity of making chips is almost mind-boggling, even with older technology.This level of complexity means that even if a start-up or less experienced chipmaker can get its hands on chip-making equipment, it may not be able to make chips good enough to turn a profit. Even the best chipmakers throw away, on average, 10% of the chips they make, and achieving such a low scrap rate requires considerable technical expertise.As the chip crunch worsens, so does the scramble for used equipment, Mr. Howe said. Even chipmakers themselves are being affected by the chip shortage.