How a scarcity of secondhand chip manufacturing machines, which use older fabrication techniques, has exacerbated the global chip shortage
The world is hungry for semiconductors, and not all of them need to be made with cutting-edge technology. The race is on to find older machines that can still crank out chips. Tweets: @benbajarin , @trengriffin , @chadbown , @adityapolsani99 , @mparekh , and @mims Tweets: Ben Bajarin / @benbajarin : As I'm fond of saying, microprocessors have to eat the world before software can. https://twitter.com/... Tren Griffin / @trengriffin : 1/ Would chips have been in short supply right now even without pandemic? Software is eating the chips! “In the second quarter of 2021, the latest for which data are available, the semiconductor industry sold more chips than at any point in history.” https://www.wsj.com/... https://twitter.com/... Chad P. Bown / @chadbown : The great chip shortage of 2020-21 has crimped the world's ability to produce everything from automobiles to smartphones. The lack of secondhand equipment for making those chips is one reason the semiconductor shortage has become so acute. By @Mims https://www.wsj.com/... Aditya / @adityapolsani99 : Want to make a microchip? Be prepared to pay top dollar for equipment that was going for fire-sale prices just a few years ago. “It's a complete reset of the entire semiconductor supply chain.” https://www.wsj.com/... @jbathgate @FoolAllTheTime @JRogrow @EricJhonsa @bradsling Michael / @mparekh : Old is Gold: “Bidding wars for used equipment have spiraled; a Canon FPA3000i4, a piece of lithography gear manufactured in 1995, used to etch circuits in chips, was worth $100,000 in October 2014, & today goes for $1.7 million”. https://www.wsj.com/... @mims : What's Harder to Find Than Microchips? The Equipment That Makes Them The world is hungry for semiconductors, and not all of them need to be made with cutting-edge technology. The race is on to find older machines that can still crank out chips. https://www.wsj.com/... https://twitter.com/...
Context & Ripple Effects
The shortage story has been building all year: a surge in laptop, 5G and auto chip demand kicked it off in January, and by spring reporting showed lead times for critical production equipment stretching to 10-12 months. This piece adds the missing layer — even the secondhand market for older-generation fab tools has been stripped bare, with Q2 2021 marking the industry's biggest quarter of chip sales ever.
The price signal is stark: a used Canon FPA3000i4 lithography tool that sold for $100,000 in 2014 now fetches roughly $1.7 million in bidding wars. That matters because most chips the economy actually runs on don't need cutting-edge nodes — they need working older machines, and there are almost none left to buy.
First-order effects
- Foundries trying to expand mature-node output can't source the tools, so legacy chip supply stays pinned even as demand sets records — keeping automakers and device makers on allocation.
- Operators holding usable older equipment gain windfall pricing power, with used-tool values up more than an order of magnitude since 2014.
Second-order effects
- Desperate buyers chasing scarce parts and machines widen the opening for fraudsters and counterfeit chips already documented in the shortage's supply-chain risks.
- Bidding wars pull functioning tools out of aging fabs and idle lines, cannibalizing one producer's capacity to feed another's — a zero-sum shuffle rather than new supply.
Third-order effects
- When the cycle turns and the market hits the inventory correction analysts flagged, buyers who paid bubble prices for secondhand tools will carry stranded assets into the downturn.
- Structurally, the episode shows chip supply is gated not just by leading-edge fab construction but by a thin, opaque resale market for decades-old equipment — a bottleneck no announced new fab fixes quickly.
The trend: Semiconductor capacity is increasingly constrained by the availability of older fabrication equipment, making mature-node supply as strategic — and as slow to expand — as cutting-edge fabs.