A fire at a plant in Berlin, Germany owned by ASML Holding could worsen the global computer chip shortage as the plant is the sole provider of a vital technology used to manufacture computer chips. The chip shortage has already been severe, as the semiconductors are used in everything from phones to cars. The blaze occurred on Sunday night. The company is the largest supplier of photolithography systems and the only producer of extreme ultraviolet lithography machines, which are used to etch circuits onto silicon wafers. The chips are later used by Apple, IBM, Samsung, and other tech giants. ASML Holding sold billions of dollars in equipment in just the third quarter of 2021 alone.
The world is experiencing a computer chip shortage due to the global pandemic, trade difficulties, droughts, and snowstorms. It has also coincided with a period of unprecedented demand, with chip sales reaching $40 billion in January alone. Semiconductors possess limited capacity, and building new plants requires massive investments and several years to complete. Semiconductor companies are racing to increase production and governments are seeking to bring plants to their own countries. If ASML is unable to recover from the fire and provide as many machines as expected, the shortage could increase in severity and last much longer.
Read More: Fire at vital tech factory could worsen global computer chip shortage
So What: The health of the US economy and economy of the world depends on the health of our chipmaking capabilities. This company is the largest supplier of photolithography systems and the only producer of extreme ultraviolet (EUV) lithography machines, which are used to etch circuits onto silicon wafers.
What’s Next: Time for every business to assess this impact on the supply chain.
Your Action: Dive deeper into OODA analysis on this event at: The ASML Holding’s Factory Fire and Specialized Manufacturing Equipment for Semiconductor Production. Become an OODA Network member to discuss this topic with peers.
