The shortage of semiconductor chips is becoming alarming. Technology companies and automakers are becoming very concerned. This is raising ominous bells worldwide. Why can’t more chips be made to meet the growing demand?

Making semiconductor chips is not a straightforward process. It takes years to build a semiconductor fabrication site, costing billions of dollars. Also, the economics are so vicious that you can’t succeed if your manufacturing competence is a fragment behind your competition.

Most manufacturers believe that chips are the most complicated devices ever made. This is why many first-world countries like the USA, China, and Japan haven’t achieved semiconductor self-sufficiency.

Here are some reasons why semiconductor chips are expensive and so hard to manufacture:

Chips Are so Small Yet so Complex

Chips are categories of circuits that utilize data, run the software, and control the functions of electronic devices. The arrangement of these circuits determines the purpose of each chip.
For example, the structure of the Nvidia GeForce RTX 3090 makes it the best at turning code into realistic video games graphics. As a result, many chip manufacturers try to load more transistors. This is done to enhance overall performance and to make devices more efficient.
While Intel has been the leading producer of microprocessors, they were quickly replaced when Samsung Electronics Company and Taiwan Semiconductor Manufacturing Company started making better transistors. These transistors have dimensions down to five billionths of a meter.

Atomic Level Manufacturing

Chips are made up of layers of materials as much as one hundred. These materials are deposited, then partly removed, to form a composite three-dimensional structure that connects all the transistors.
A few of these layers of materials are as thin as one atom. Many machines made by top manufacturers like Applied Materials Inc, Tokyo Electron Limited, and Lam Research Corp shuffle different factors, including pressure, temperature, magnetic and electric fields, etc., to make this possible.

One of the most complex processes is Lithography. This is done by using light to create patterns on materials placed on the silicon. After the process is done, the patterns become transistors. And this is done on such a small scale. The most recent way of doing this is by using extreme ultraviolet light.

Naturally, this is only done in space; recreating the same process in a controlled site is challenging but achievable. ASML machines use a laser pulse to zap molten droplets of tin. The required EUV light is emitted as the metal vaporizes. Also, mirrors are used to focus the light into a thinner wavelength, mirrors are used. Other processes are doping, etching, oxidation, coating, etc.

Clean Environment Increases Cost

An immaculate room is crucial before you can put silicone into chipmaking machines. Many individual transistors are way smaller than a virus, and one speck of dirt can cause catastrophes, leading to the loss of effort and millions of dollars.

Many manufacturers put their chipmaking machines in spotless rooms to significantly reduce risk. They constantly filter the air and only allow a few people to go inside. Not more than one or two people are allowed to go inside at a time too.

Even after being so cautious, the wafers of silicon can neither be touched by humans nor can they be exposed to air. Instead, they are transported between machines in cartridges carried by robots. And the wafers of silicon only leave the cartridge when they are inside the machine, and a critical step is about to occur.

Worrisome Economics

Chip manufacturing facilities run 24 hours a day, seven days a week. And they do that because of cost. About $15 billion will be spent to build an entry-level facility that manufactures about 50,000 wafers of silicon per month. And more giant manufacturers like Intel, Samsung, and TSMC spend way more than that to build their massive facility.
After spending all that money to build a chipmaking facility, they can become outdated in five years or even less. So to avoid losing money, you must make at least $3 billion in profit per year.

However, only the biggest manufacturers, especially the top three, can own multiple facilities because they generate around $188 billion combined in revenue every year. You get better at manufacturing chips the more you do it.

Chips that are at least 90% efficient can go into the market, but many chipmakers only achieve this by making costly mistakes and learning from them. However, worrisome economics means that most companies can’t keep up.

TSMC produces around 1.4 billion smartphone processors every year. Samsung dominates the memory chip industry. Intel owns about 80% of the computer processor market. So, it is very challenging for other manufacturers to break in.

Final Thoughts

Manufacturing a chip can take more than three months, and it involves giant facilities, multi-million dollar machines, dust-free rooms, lasers, and molten tin. The result is to convert silicon wafers to transistors, giving electronic devices vital capabilities. However, while this process may look easy on black and white, it’s a whole different ball game when it comes to actualizing it.