There is a shortage of chips, it’s a fact. The causes of this supply crisis are diverse, say, distribution problems derived from the pandemic, increased demand, and even geostrategic issues. But experts agree that one of the most influencing factors is the enormous technical complexity behind the manufacture of each chip.

The technical director of the Spanish company KDPOF, Rubén Pérez-Aranda, explains these difficulties to Zoom Net: “It’s very difficult to manufacture chips because what we have to manufacture is of a ‘ridiculous’ size”. The microelectronics industry has been adding more and more complexity to integrated circuits due to the fact that the devices that are manufactured are smaller and smaller (transistors, resistors, capacitors, etc.) Pérez-Aranda points out that in a standard silicon wafer, like the ones manufactured at KDPOF, there are 10,000 chips that are going to be assembled.

Manufacturing a chip is very complex because very precise tools are required for such small devices. In addition, greatly simplifying the process, beyond the design – in which companies such as KDPOF have years of experience – the development of a chip is divided into three phases: manufacturing the silicon wafer, assembling it in the integrated circuit, and doing a test of each chip. The most expensive thing is to make the wafer.

Setting up a factory has a huge cost. A process of about 65 nanometers costs between 1,000 and 2,000 million dollars, calculates the technical director of the Tricantina company. “If you go to more advanced processes, for 22-28 nanometers you go to 7,000 million dollars, and for processes of five nanometers the start-up of the factory costs between $16,000 and $18,000 million,” says Pérez-Aranda.

In addition to the high investment required by these types of factories, setting them up takes no less than five years, with all the accumulated experience of large manufacturers such as TSCM. The same is not the case with the other two phases. Its importance in the final product represents two-thirds of the process but the cost of the factories to assemble and test is measured in hundreds of millions of dollars – it is still a high bill – but we are no longer talking about billions, as is the case with the silicon wafers manufacturing process.

In this area, that of assembling and verifying that the chip is ready to work in the device for which it has been designed, European companies in general, and Spanish companies in particular, have a lot of experience. Setting up an OSAT, which is how these types of assembly and test factories are called, a small one, can be tens of millions of dollars. That is an opportunity to attract these types of factories to Europe because you have to invest less, the technical director of KDPOF assures.

This type of factories for assembly and testing can be ready in three years and that is where countries like Spain and companies like KDPOF can and want to. The executive director of KDPOF, Carlos Pardo, is planning to establish production lines for optoelectronic components for the automobile industry in Tres Cantos that will allow Spain to be at the forefront of manufacturing.

They need 40 million euros

According to the experience of the experts at KDPOF – a company that is also suffering from the problems derived from the lack of supply of chips from Asia – the main bottleneck is not so much in the manufacture of silicon wafers but in the assembly and testing of chips. For this reason, European companies with experience in this field have an opportunity. That opportunity is what KDPOF wants to take advantage of. For this, you need at least 40 million euros. There’s a hope to get part of that investment from the EU’s IPCEI grants for “major projects of common European interest.”

The start of the project would be in June-July next year, and within a year the factory would have to be available here, in Tres Cantos, Pardo explains, mentioning that “we would start serving car manufacturers during 2024.” It would be a milestone that would serve to promote the semiconductor industry in Spain. The process is technically very complex but the shortage of semiconductors also opens the door to the manufacture of Made in Spain chips.