How could gas supply constraints affect semiconductor manufacturing?

Last year I was chatting to a fab engineer at a semiconductor manufacturer, she said that her job was to keep an very expensive and very temperamental baby alive. The “baby” in this case was a cleanroom filled with all sorts of deposition equipment. The “temperamental” part referred to the fact that a single supply shortage of one of the specialty gases could cause her to scrap a batch of wafers, spend days re-calibrating her equipment, and explain to her operations director why a several week shortage of some obscure semiconductor manufacturing supply had caused a week or so of delay.

Most people don’t realize that the common goods found on the market today are made with extremely rare materials which are often moved around the world on special planes. If that plane is delayed then that material will be late also.

The Gases No One Ever Thought About Until They Were Gone

Semiconductor production requires many different specialty gases. NF3 and SiH4 are used for cleaning chambers. SiH4 and other silane gases are used for depositing films. Argon and helium are used as plasma gases. HCl and other halogen gases are used for etching. Production gases are not typical bulk commodities. These gases must be of the highest purity and used in a number of different process steps. The gases are typically stored and handled in specialized gas systems and distributed by a global supply chain with very few redundant nodes.

Each of the above gases can be produced somewhere around the world. But a closer look at the production maps for several of the most critical gases show a surprising concentration of supply in very few locations around the world. This means that even a single natural disaster, supplier bankruptcy or other crisis can very quickly have an impact on supplies of critical semiconductor gases. We wrote about the sudden and massive shortage of neon in 2022, caused by the Ukraine crisis and within days of the crisis all major semiconductor procurement organizations were frantically negotiating up contracts for this scarce gas. Helium used in many processes in semiconductor manufacturing is a non-renewable geologically scarce gas which is produced in a handful of locations around the world and can very quickly cause a semiconductor manufacturing supply crisis.

The chemicals used in modern fab processes are critical components to the processes and, in most cases, are actually incorporated into the process chemistry at the molecular level. As a result, the gases used in fab processes are no exception and there is no “close enough” in terms of other process steps where the chemicals can be swapped out with something similar.

Step 6: Describe on the shop floor what happens when the gas supply runs out.

The issues caused by a single supply problem can last for days or even weeks, leading to massive losses. This can lead to many frustrating conversations with customers trying to explain the reason behind delays in part delivery.

The downstream effects stack up with grim efficiency:

• Yield loss when processes run with off-spec gas or after extended equipment downtime
• Recertification delays when equipment has to be revalidated after a process interruption
• Contractual pressure from customers who have their own downstream commitments to protect
• Spot market costs that can run three or four times the contracted price, sometimes more

Lead time for semiconductors often decreases quietly before it becomes apparent that there is a problem. Sometimes a supplier does not meet a delivery window from time to time. However, when a procurement organization fails to meet its own window for stocking a critical gas supply and this occurs on a repeated basis then it becomes apparent that there is a problem. It may become apparent before the supply of gas is completely exhausted but only by a short margin. At that point everyone in the organization will know that a critical supply of gas is running low and production of semiconductors will be unable to continue for a while.

(As an aside, this situation makes me more than a little frustrated because in hindsight it is so easy to see the signs of a impending disaster and yet time and time again companies get caught out by their lack of preparedness).

The Way Forward.

Most discussions of the maturity of the semiconductor market include the assumption that as the market becomes more familiar to more people, that all of the “normal” supply chain type problems will somehow magically be solved. I find this view to be not just incorrect, but dangerous.

While semiconductor production has historically been geographically concentrated, the rise in demand for semiconductor production—by both advanced packaging and AI chips—has driven production of new domestic fab capacity across the U.S., Europe, and Japan. This new capacity will join the current worldwide supply of gases currently in production to service current customer production. Thus, what was previously a supply chain for the production of semiconductor will now become a single-lane bridge with very large trucks on it, with very narrow margins of error in terms of stock levels.

Here is an example of how geo-logically scarcespecialty gases like He are considered non renewable and that the helium shortage 2026 of such gases for semiconductor manufacturing creates a huge challenge for industries’ procurement and operations teams, who should start running scenarios for these challenges now, instead of waiting for future planning sessions.

Gas Criticality By Process Node

Advanced capabilities of the semiconductor industry are produced using the industry’s most strategic materials and the supply of the latter is the most brittle. These capabilities are currently produced at the higher process nodes and the materials used in these process steps have the least supply flexibility of all the different materials used in the semiconductor manufacturing process.

So what should manufacturers actually be doing?

Long production contracts with suppliers, diversification of the number of geographic locations from which a company is sourcing its specialty gases, on-site storage and on-site gas purification in order to remove as many uncertainties as possible with respect to the specialty gases that a company’s process requires, and proper modeling of those specialty gases as input to a company’s production planning in order to identify any potential problems that might develop with the production of a company’s wafers prior to the time when those problems actually develop.

Doing the right things to safeguard your production before a crisis is not sensational or newsworthy. It only receives attention when it pays off during a crisis and the production line of a manufacturer keeps running while that of his competitor has come to a standstill.

1. Map every critical gas to its supply chain, including tier-two and tier-three dependencies that rarely appear on anyone’s radar
2. Run scenario planning around the top three or four highest-risk materials, not just logistics delays, but geopolitical shocks
3. Build buffer inventory policies that account for climate disruption and political instability, not just the usual variance
4. Engage with suppliers on multi-year visibility, not just annual contracts that leave everyone exposed

It is not currently possible to “easily” substitute other materials for the ones listed for critical processes. As mentioned before, each material has its own processing requirements and those who attempt to utilize alternative supplies for their processing requirements will have to work through the individual material’s supply chain problems. For the most part, there is no easy solution for critical processing materials and, as mentioned in the beginning of this piece, each material supply can go down at any time and will only go in one direction – down. We can all hope that we are part of a company that can weather supply chain crises very effectively and go on to achieve great things. There are such companies. There are, however, many more that do not and the difference between the two is apparent to all who are affected by their downfalls.

Those who are not preparing are hoping the temperamental baby of fancy and demanding production lines sleeps through the night.

It won’t. It never does.