ASML CEO Claims Chip Shortage Has Firms Harvesting Washing Machines For Semiconductors

The computer chip shortage has been a topic of much discussion over the past year and more as GPU prices have shot through the roof and entire lots of newly built cars sit awaiting microcontrollers. Both governments and companies alike are taking measures to increase semiconductor production capacity in light of high demand. An ASML earnings call this week highlighted just how bad the chip shortage is at present.

The Dutch multinational corportaion is the world’s largest developer and manufacturer of photolithography systems, which are essential to the production of modern computer chips. ASML’s CEO, Peter Wennink, fielded a question during the earnings call regarding his market forecast through 2025. Wennink answered by spelling out just how high and wide-spread demand is for computer chips right now. “Technology-wise, market-wise, geography-wise, it's so widespread that we have significantly underestimated, let's say, the width of the demand … I don't think is going to go away.”

The CEO illustrated his point by recounting what he heard last week from the executive of a large industrial conglomerate: “actually, they told me that they're buying washing machines to rip out the semiconductors to put them in industrial modules. I mean, that's happening these days.” According to Wennink, harvesting old semiconductors is now a fairly common practice, pointing to Internet-of-Things (IoT) devices as a major sink for these chips.

Wennink stated that demand could decrease by 25% and still be above ASML’s maximum capacity. “I'm just looking at the data points and the data points just point into a market that is significantly short of semiconductor manufacturing capacity this year and next year … currently, we see no signs of any weakening in our customer base, zero. And even if the demand weakens, there's a big gap between the demand and our capacity.”

You can find the full transcript of the earnings call here.