Companies are scavenging washing machines for chip modules

A major industrial conglomerate has resorted to buying washing machines and tearing out the semiconductors inside for use in its own chip modules.

ASML Holding NV Chief Executive Officer Peter Wennink remarked on the situation, without naming the conglomerate, during his company's earnings call Wednesday. The beleaguered firm relayed its struggle to him only the prior week, he said, signaling that chip shortages are going to persist for the foreseeable future, at least for some sectors.

"The demand we are currently seeing comes from so many places in the industry," Wennink said, pointing to the wider adoption of Internet of Things applications. "It's so widespread. We have significantly underestimated the width of the demand. That, I don't think, is going to go away." ASML's equipment usage is currently at a high level, which means it means customers are not looking to stock up, but to use it for their production demands.

"Now all the advanced products are more than 1 year lead time and almost all customers are snapping up used equipments."

Automakers have yet to overcome a semiconductor crunch that has challenged their operations for over a year. Tesla Inc. said this week that production remains hampered by shortages and elevated prices for key components, while Volkswagen AG has cautioned to expect continued negative effects from chip scarcity. Earlier this week, Toyota Motor Corp. trimmed its output target by about 100,000 units for this year on insufficient semiconductor supply.

Production halts and component shortages as a result of the Russia-Ukraine war could intensify supply-chain challenges and delay a recovery of European auto sales in 2022. March passenger-car sales from Europe's five largest markets are 40% below pre-pandemic 2019 levels, indicating the semiconductor crisis remains unresolved. Despite strong order books, official ACEA data due on April 20 may reveal a 20% slide in European auto purchases due to these bottlenecks. THT

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