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UMC Investing $3.6 billion on 28 nm Manufacturing Capabilities Amidst Worldwide Semiconductor Shortages

UMC has announced plans to invest $3.6 billion in increasing output from its 28 nm manufacturing facilities. This move comes amidst a global semiconductor shortage, and isn't the first time a semiconductor manufacturer "dust off" their older manufacturing processes as a way to remove pressure from more modern silicon manufacturing capabilities. In this case, UMC will be increasing manufacturing output from its 300 mm Fab 12A facility in Tainan, Taiwan.

UMC has entered agreements with some of its clients, who will be paying upfront for expected chip rollout in the future. In exchange, clients will get the benefits of preset pricing (thus avoiding any potential increases arising from increased demand or general price fluctuation), as well as UMC's assurance of certain manufacturing volume allocation towards their needs. Fab 12A currently manufactures 90,000 300 mm wafers per month (wpm). An additional 10,000 wpm is being installed this year and phase six will add another 27,500 wpm to the mix. The mature 28 nm tools will be installed in floors that already feature support for future tooling upgrades to 14 nm. UMC expects to hire around 1,000 additional employees as part of this expansion effort.

PC Shipments Show Continued Strength in Q1 2021 Despite Component Shortages and Logistics Issues, According to IDC

Global shipments of traditional PCs, including desktops, notebooks, and workstations, grew 55.2% year over year during the first quarter of 2021 (1Q21), according to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker. While PCs remain in extremely high demand, the growth rate benefitted from the shortages faced in the first quarter of 2020 when the global pandemic began, resulting in an unusually favorable year-over-year comparison. PC shipments reached 84 million worldwide in 1Q21, a modest 8% decline from the fourth quarter of 2020. While sequential declines are typical for the first quarter, a decline this small has not been seen since the first quarter of 2012 when the PC market declined 7.5% sequentially.

Global Chip Shortage Takes Another Toll... Now Your Home Router?

The global supply of semiconductor processors has been at risk lately. Starting from GPUs to CPUs, the demand for both has been much greater than the available supply. Manufacturing companies, such as TSMC, have been expanding capacities, however, they have not yet been able to satisfy the demand. We have seen the results of that demand in a form of the scarcity of the latest generation of graphics cards, covering NVIDIA's GeForce RTX 3000 series Ampere, and AMD' Radeon RX 6000 series Big Navi graphics cards. Consumers have had a difficult time sourcing them and they have seen artificial price increase that is much higher than their original MSRP.

However, it doesn't seem like the situation will improve. According to the latest reporting from Bloomberg, the next victim of global chip shortage is... you guessed it, your home internet router. The cited sources have noted that the waiting list to get a batch of ordered routers has doubled the waiting time, from the regular 30 weeks to 60-week waiting time. This represents a waiting list that is more than a year long. With the global COVID-19 pandemic still going strong, there is an increased need for better home router equipment, and delays can only hurt broadband providers that supply routers. Taiwan-based router manufacturer Zyxel Communications, notes that the company has seen massive demand for their equipment. Such a massive demand could lead to insufficient supply, which could increase prices of routers well above their MSRP and bring scarcity of them as well.

Report: TSMC and UMC are Trucking in Water Amid Shortages

Manufacturing silicon is no easy task. You need to have all the right supplies available all the time. One of the most used ingredients in silicon manufacturing is water. Almost every process needs it and it needs to be constantly available to the manufacturer. According to the report coming from Reuters, Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) are experiencing water shortages. The Taiwan island is in trouble, as the typhoon season has been rather mild and water supplies are at the historic lows. Water restrictions are in place all across the island and the reservoirs in the center and southern regions are at only 20% capacity.

The lack of water is a big problem for TSMC and UMC, as both companies rely on the constant income of it. With water restrictions in place, TSMC has to keep its facilities running and needs to solve the problem. That is why Taiwan's biggest silicon manufacturer is now making small orders of waters, delivered by a truckload. TSMC expects to compensate for the lack of water coming from its regular sources with truckloads of it. While we do not know the numbers of it, we can expect the water use to be very high if we take into account the number of wafers TSMC produces at its facilities.

GPU Shortage Hits Data Centers: NVIDIA A100 GPU Supply Insufficient

GPU supply has been one of the most interesting things this year. With a huge demand for the new GPU generations like NVIDIA's Ampere and AMD's RDNA 2 "Big Navi" graphics cards, everyone is trying to grab a card for themselves. Besides the huge demand, there is also a big problem. The supply of these GPUs is just too low to satisfy the demand, driving up the prices, and increasing the scarcity of them. Companies like NVIDIA have their priorities set: all of the major production will go for the data center expansion and data center customers. However, even that plan is proving not to be good enough.

The scarcity of GPUs has now hit data centers, with NVIDIA unable to satisfy the demand for its A100 GPUs designed for high-performance computing. "It is going to take several months to catch up some of the demand," said Ian Buck, vice president of Accelerated Computing Business Unit at Nvidia. That is an indicator of just how huge the demand for these accelerators is. With the recent company announcement of A100 GPU with 80 GB memory, partners expect to have the first cards in their systems in the first half of 2021. That means that this situation and inadequate supply will hopefully resolve sometime around that timeframe.

NVIDIA: RTX 30-series Shortages Partly Caused by Insufficient Wafer, Substrate and Component Supply

The current widespread shortages on anything gaming-related (be it gaming consoles or the latest GPUs from both NVIDIA and AMD) are a well-known quantity by now. However, it now seems that NVIDIA's shortages aren't just the result of "outstanding, unprecedented demand", aided by scalping practices, but also from wafer and component shortages. NVIDIA's CFO Colette Kress at Credit Suisse 24th Annual Technology Conference expanded on these issues, saying that "We do have supply constraints and our supply constraints do expand past what we are seeing in terms of wafers and silicon, but yes some constraints are in substrates and components. We continue to work during the quarter on our supply and we believe though that demand will probably exceed supply in Q4 for overall gaming."

There was no further information on exactly which components are experiencing shortages. An educated guess might pin some of these issues on the exotic GDDR6X memory subsystem on high-tier Ampere graphics cards, but there could be other factors at play here. If NVIDIA did underestimate demand for its Ampere graphics cards, though, that will make it that much harder for the company to ramp up orders (and hence production) with Samsung - semiconductor manufacturing works with several months of lead time between orders and their actual fulfillment.

NVIDIA CEO Comments on RTX 3080 and RTX 3090 Supply Shortages

Shortages in supply of GeForce RTX 3080 and RTX 3090 graphics cards could persist until 2021, according to NVIDIA CEO Jen-Hsun Huang, responding to a question in a Q&A session of the GTC 2020 (Fall) conference. "The 3080 and 3090 have a demand issue, not a supply issue," said Huang. "The demand issue is that it is much much greater than we expected—and we expected really a lot," he added.

Jen-Hsun predicts that the Holiday 2020 shopping season will only compound availability woes. "I believe that demand will outstrip all of our supply through the year. Remember, we're also going into the double-whammy. The double-whammy is the holiday season. Even before the holiday season, we were doing incredibly well, and then you add on top of it the "Ampere factor," and then you add on top of that the "Ampere holiday factor," and we're going to have a really really big Q4 season." He likened the demand of the RTX 3080 to that of the Intel Pentium in the mid-1990s. "Retailers will tell you they haven't seen a phenomenon like this in over a decade of computing. It hearkens back to the old days of Windows 95 and Pentium when people were just out of their minds to buy this stuff. So this is a phenomenon like we've not seen in a long time, and we just weren't prepared for it."

Logitech Says It's Doing Everything it Can to Thwart Webcam Shortages

Physical distancing has meant a resurgence in technologies meant to bridge gaps in geography (mainly webcams), as people have found that face to face conversations and team meetings are multiple steps above emails. However, ever since the pandemic (and associated lockdown and work from home) procedures began, it's been difficult to find any webcams available for purchase - at least at MSRP. Both new and used webcams have seen their prices increased in wake of tight supply and demand equations, and Logitech, as one of the premier webcam manufacturers in the world, has been on the forefront of fighting these shortages.

In its latest earnings call, Logitech President and CEO Brecken P. Darrel told investors that "PC webcams continued the strong momentum exiting last quarter with Q1 sales more than doubling to the highest quarterly level in a decade... We're ramping our capacity to meet demand, working to overcome component shortages as we do. We expect Q2 supply to improve, but still -- it still could remain pretty tight throughout the quarter." Demand equations in a time of pandemic aren't an exact science, so Logitech underestimating demand isn't all that unexpected. here's hoping the company can provide enough units for the resale channel so as to normalize pricing.

Continuing 14 nm Supply Shortages Lead Intel to Reintroduce Haswell-based, 22 nm Pentium G3420

"Nothing Really Ends" is the title of a song from dEUS, a Belgian "art-rock" band. And it would seem this applies all too well to the world of technology too. Intel has issued a Product Change Notification (PCN) which has changed the previously dead and buried, Haswell-era, 22 nm Pentium G3420 from its "Discontinued" status back to a worded "canceling this Product Discontinuance completely per new roadmap decision and enabling the product long term once again." Which means the Pentium G3420 will have a new lease of life, and will be available to customers until May 2020, with final shipments on December of the same year.

This is clearly an attempt from Intel to increase part availability for OEMs and system manufacturers, who have already been quoted as considering AMD due to both increases in performance and efficiency in their processors, as well as constrained supply from Intel, with giant Dell already having pointed the finger at Intel as a cause for their lower than expected revenue.

Amidst Intel CPU Shortage Woes, Dell Reportedly Looking Into AMD Alternatives

That news title should come as a surprise to no one, and extends to most other PC makers who are affected by Intel's inability to keep up with demand on its 14 nm (+++++?) node. News of Intel's factories being outputting less than the entire professional and consumer markets are required has already been covered multiple times and in multiple ways. Sand steps Intel has taken to mitigate this issue whilst trying to solve its 10 nm execution woes range from moving chipset production up from its 14 nm nodes to 22 nm to free capacity, increase production capacity over the already installed one, and even outsource some of its silicon manufacturing to other players in the industry. However, these measures won't actually take effect in the availability equation in a heartbeat, and of course PC makers such as Dell, who has already revised its revenue forecast and placed the blame on Intel, are looking to alternatives.

Dell Calls Out Intel for CPU Shortages Affecting its 2019 Full Year Revenue Forecast

PC major Dell in its quarterly results call blamed Intel for cuts in its revenue forecast for 2019 (full year) sales. "Intel CPU shortages have worsened qtr-over-qtr, impacting our commercial PC and premium consumer PC Q4 forecasted shipments," said Dell COO Jeffrey Clarke. Intel's CPU shortages are caused due to demand in the PC and server markets significantly outpacing supply, and not because Intel is supplying below its capacity. The company increased its capex toward manufacturer by $1 billion YoY, retrofitting its manufacturing facilities to make 14 nm processors, all while juggling resources to execute its 10 nm rollout for high-volume mobile and high-margin server processors.

The company hasn't launched 10 nm desktop or HEDT processors, yet, and is reportedly preparing yet another 14 nm line of processors for these platforms, codenamed "Comet Lake." This microarchitecture has also seen a mobile rollout for mainstream mobile form-factors, while Intel focused 10 nm "Ice Lake" for ultraportables and ultra low-power form-factors. Intel executive VP for sales Michelle Johnston Holthaus recently wrote a letter to its customers (primarily companies like Dell,) informing them that despite their best efforts, demand continues to beat supply, and that they hadn't managed to solve their supply issues.

Intel's 14nm Chip Shortage Continues

Intel is constantly having troubles with its silicon manufacturing business lately. Firstly the late delivery of 10 nm, then the shortage of 14 nm chips that started all the way back in 2018. Despite the making of $1 Billion investment into extending its 14 nm production capacity, there seems to be no end of troubles in sight.

According to sources close to DigiTimes, 14 nm production has fallen short of demand again and will likely cause many notebook manufacturers to delay their products to 2020. Most likely victim of this delay is the newly announced 10th generation mobile CPUs codenamed Comet Lake. Those CPUs were supposed to be built using Intel's "14nm++" revision of 14 nm technology which targets higher CPU frequencies and improved efficiency, but most likely due to continued shortage of 14nm, there will be only a few notebooks powered by these chips. As the source suggests, many manufacturers are likely to delay the launch of their products to 2020, when this situation is supposed to be resolved.

Intel Turns to Samsung in Order to Resolve CPU Shortage on the 14 nm Process

Intel has seemingly partnered with Samsung, one of the largest manufacturers of Integrated Circuits, in order to help reduce the CPU shortage currently affecting the PC market. It is the first time ever that Intel turned to Samsung for it's CPU manufacturing given that, historically, Intel's Client Computing Group (CCG) has always relied on Intel's internal fab to manufacture all of its components. But as resources in those fabs became constrained, Intel CCG started looking at other resources, such as TSMC, to manufacture the chipsets used in Intel-based motherboards.

In a report prepared by Sedialy, a South Korean news media, Intel turned to Samsung specifically to meet demand on its 14 nm products. This unexpected move came after negotiations which, if you believe the rumors before the news, were in progress for quite some time already. Samsung has formally agreed to manufacture Intel's CPUs of the microarchitecture code-named 'Rocket Lake', which will serve as processors for mini PCs, planned to be released in 2021.

Intel CPU Shortages Could be Over, Hints Microsoft

Microsoft CFO Amy Hood in a quarterly financial results conference call with investors this Wednesday hinted that the worst could be over with Intel CPU shortages. "In Windows, the overall PC market was stronger than we anticipated, driven by improved chip supply that met both unfulfilled Q2 commercial and premium consumer demand as well as better-than-expected Q3 commercial demand." It's important to note that Hood did not name Intel, as PCWorld otherwise observed, but it's highly likely that she was referring to Intel, given that it continues to dominate pre-built notebook and desktop markets.

PCWorld uses Hood's statement from the previous quarter's results call to zero in on Intel. "The overall PC market was smaller than we expected primarily due to the timing of chip supply to our OEM partners, which constrained an otherwise healthy PC ecosystem and negatively impacted both OEM Pro and non-Pro revenue growth," she had said. Prices of 9th generation Core desktop processors in the retail channel appear to be normalizing, with the Core i5-9400 selling for $184 on Newegg, which is close to MSRP, its iGPU-devoid twin, the i5-9400F selling at a discounted price of $169; the overclocker-friendly i5-9600K selling for $264, and the i7-9700K at $409, which is a tiny $20 markup over MSRP.

Intel CPU Shortages to Worsen Thru Q2-2019

Supplies of Intel processors will worsen in the second quarter of 2019 according to Taiwan-based industry observer DigiTimes. In a research-based report covering not just the DIY channel, but also the OEM channel focusing on notebook manufacturer, DigiTimes notes that heading into Q2, growth in demand for entry-level portables such as Chromebooks based on entry-level Intel processors, and mainstream notebooks powered by Core i3 processors, which make up the largest demographic of PC consumers in the market.

A pertinent concept to this report is supply-gap, the percentage difference between demand and supply. A positive supply-gap indicates demand exceeding supply and shortages. Leading notebook vendors HP, Dell, and Lenovo, reported supply-gaps of 5% going into Q3-2018, which severely impacted their bottom-lines. The companies waded through Q4 with 4-5%. DigiTimes reports that even Apple wasn't spared from shortages in "Amber Lake" processors. "In the first quarter of 2019, the Core i5 processors featuring Coffee Lake architecture are now having the worst supply shortfall. Some of the demand for Intel's entry-level Atom processors has turned to AMD, while some others have opted for Core i3 processors," the report reads. AMD's market-share among OEMs increased from 9.8% in Q1-2018 to 15.8% in Q1-2019.

CPU Shortages Will Continue Into the Second Quarter of 2019 According to Asustek CEO

A few weeks ago we talked about Intel problems in the production chain. The semiconductor giant was facing a shortage of 14 nm CPUs probably due to Intel allocating volumes from the same 14 nm++ node for its upcoming 9th Generation Core processors. That caused a clear rise in the prices of processors like the Core i7-8700K, which had a launch price of $359 and was hard to find for less than $400 a month ago. Prices have relaxed since then, but are still higher than their launch ones.

Intel's processor shortage could continue in the coming months, and in fact Jerry Shen, CEO of Asustek Computer, explained how the problem will continue until at least the second quarter of 2019. In his words, "the continued CPU supply crunch, escalating US-China trade disputes, and increasing competition in the notebook segment in Europe have pressed down Asustek's "operational visibility" for the fourth quarter of 2018 to the lowest level of 20% compared to an over 50% seen in previous years".

More Buyers for AMD Due to Intel CPU Shortages, OEMs Unhappy

Intel is hit by crippling inventory shortages for many of its fast-selling 8th generation Core desktop processor SKUs. A number of factors are contributing to these shortages, as we discussed in this article. A key short-term consequence of shortages in Intel's inventories is more uninitiated buyers discovering AMD processors, now that they've achieved the highest levels of competitiveness against Intel in over a decade. Stock market analyst firm Jefferies has raised AMD's outlook for Q4-2018, and projects that its $30 stock price could hit $36, by raising its target price.

OEMs are not happy with Intel. Haphazard roadmap and platform changes have forced them to revise their product designs way too frequently, and now they're faced with the prospect of a short-supply. A report from research firm Fubon predicts that by next year, 1 in every 3 personal computers sold by HP (Hewlett Packard) will run an AMD processor. "Fubon's report that Intel will undersupply the PC market between 4Q18 and 2Q19 leaves us with higher conviction that AMD will report improving revenue, pricing and margins near term, and that is positioned to take share in the high end PC MPU and server market long term," said stock market analyst Mark Lipacis. He predicts that AMD's CPU market-share climbing to 30% through next year (a very huge feat for AMD).

Intel 14nm Processors Face Shortages

Intel's 8th generation Core desktop processors based on the company's 14 nm node are facing shortages in the market, according to a Tom's Hardware report. Tracking prices and availability of popular 8th generation Core SKUs such as the i5-8400, i5-8600K, and i7-8700K, the report notes that retailers are heavily marking up these SKUs above their SEP, and many of whom are running out of stock often. This may not be attributed to heavy demand.

A possible explanation for these shortages could be Intel allocating volumes from the same 14 nm++ node for its upcoming 9th generation Core processors, which debut with three SKUs - i5-9600K, i7-9700K, and i9-9900K. Intel probably wants to launch the three chips not just at competitive prices, but also good enough volumes to win the 2018 Holiday season, and repair its competitiveness damaged by AMD 2nd generation Ryzen over the past couple of quarters.

The Balloon Falls: Memory Chip Price Decrease in Q4 2017 Prompts Investor Fear

Reuters reports that a sudden (if ridiculous) 5% drop in memory chip prices in Q4 2017 has brought revenue expectations and investors' profit measurements to a teetering halt. 5% may not look like much - it certainly isn't much when we look at the historic price increases that almost doubled the cost of DDR4 memory kits, as you can see in the PC Part Picker chart below. This memory module price chart doesn't include the 5% drop yet, probably because it takes time for memory chip pricing to materialize in end-user module pricing. But for investors, it's like a spark in a paper archive - it could signal an impending price decrease that would push all profit estimates out the window.

This 5% drop in pricing has prompted industry analysts to review their profit estimates for 2018, and expect that the memory industry's growth rate will fall by more than half this year to 30 percent. You read that right - investors are scared because growth rates will be 30 percent instead of 60 percent. Oh the joys of inflated pricing, and slower-than-usual ramp-up to keep demand higher than supply. The joys of economic capitalism, where prices for consumers go up, and an industries' value skyrockets by more than 70$ in a single year (2017).

No End to GPU Supply Woes: Germany Supplier Hit by Shortage, Pulls Cards

There seems to be no end in sight for current high-performance, discrete graphics cards' supply constraints. If you've been looking for a specialized graphics processing unit to push eye-candy on your favored 3D experiences to the max, you've probably been having trouble for a while now. It all stems from a crazy, dizzying wave of cryptocurrency mining. And the fact that this mining spree has already taken global mining power consumption to levels close to a 17 million population country, as one of our editors puts it, kind of has a human problem. And it would seem that not even NVIDIA and AMD's partners' attempts to sate current miners' appetite for profit-generating graphics cards has put a dent on demand.
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