Semiconductor industry executives say that as the chip shortage affects car production, raises the price of electronics and raises concerns about supply chains in countries around the world, there is now another situation: the equipment needed to make chips is in short supply.

The wait time required to get access to chipmaking equipment, one of the most complex and sophisticated types of manufacturing in the world, has lengthened in recent months. In the early days of the COVID-19 pandemic, it took months from placing an order to receiving equipment. In some cases, that time frame has been stretched to two or three years, according to chipmaking and equipment executives. Deliveries of previously placed orders will also be delayed, executives said.

Therefore, in the third year of the global chip shortage, the possibility of a quick alleviation of the global chip shortage is decreasing. What started as a normality of excess demand for laptops and other chip-intensive devices due to the COVID-19 pandemic has morphed into a structural problem for the semiconductor industry. Many chip executives said that the chip shortage problem will continue until 2023 and 2024, or even longer.

Tom Caulfield, chief executive of chipmaker GlobalFoundries, said: "There is a wishful thinking that by the end of 2022, supply and demand will be balanced, but I don't think so."

"I think we're going to be going through a long period of time before we fully get back to standard lead times," said Doug Lefever, chief executive of Advantest America, typical of the machines his company uses to test whether newly manufactured chips work. Lead times have doubled or more. The company's test machine uses about 250,000 parts, and a small supply disruption could cause delays.

Micron Chief Executive Officer Ganesh Moorthy said his company now views chip equipment suppliers as priority customers. "The attitude we take is that if any device maker finds out that a particular Micron product is an issue for them, that device maker goes straight to the top of our priority list," he said.

Chip companies are pressing for the preferential treatment, arguing that shortages will ease more quickly if they prioritize supply to semiconductor makers.

A recent industry white paper demonstrates the benefits of this "multiplier effect". A complex testing tool requires 80 specialized chips that can be reprogrammed after production, but then contributes to the production of 320,000 of the same chips per year, the analysis said.

Tools aren't the only headache. Chipmakers point to challenges in recruiting people to work in new factories, supply chain disruptions for essential chemicals and shortages of so-called substrates that connect chips to circuit boards, exacerbating the relative scarcity of semiconductors.

Meanwhile, demand shows little sign of abating. Chip industry sales topped $500 billion for the first time last year and should double by the end of the century.

Lead times for chip deliveries remain at historically high levels. April is more than six months on average, nearly double the peak of the previous boom, according to estimates from Susquehanna Financial Group.

Peter Hanbury, a partner at Bain & Company who specializes in chip technology, said the shortage may ease in some industry sectors this year. As new factories come online to produce mature-process chips that have been a supply challenge for automakers and others. "Restrictions in the auto industry may lift, but I expect supplies of the cutting-edge chips at the heart of more advanced electronics to remain tight," he said.

Peter Wennink, chief executive of ASML, a Dutch company that makes some of the world's most sophisticated and expensive chipmaking equipment, said recently that demand is expected to outstrip supply for a "very long time." The company is working with suppliers to see if it can make more tools to meet demand, but that won't happen until 2025. Even when they deliver, chipmakers will need time to take full advantage of them.

Issues with equipment deliveries have affected sales for some companies. Tim Archer, chief executive of Lam Research, one of the world's largest chip equipment companies, said in April that parts shortages meant the company was unable to fully benefit from strong demand.

The disruption comes as demand for chip production tools is burning and chipmakers embark on expansion plans. TSMC said last year it planned to spend $100 billion by 2024 to boost its manufacturing capabilities. Intel, the largest U.S. chipmaker by sales, is building factories in Arizona, Ohio and Germany that could cost hundreds of billions of dollars over the next decade.

Intel Chief Executive Pat Gelsinger recently said the company has pushed back any hope of supply-demand balance until 2024, a year later than he expected a few months ago. "Equipment shortages are really affecting the ability of the industry as a whole to increase supply at the pace we thought it would be," he said. However, Intel's plans for the new factory remain unchanged, he said.

The situation is prompting executives to make longer-term plans. Gregg Lowe, chief executive of the North Carolina-based chipmaker, said his company recently opened a factory in New York with the goal of expanding capacity faster than initially planned to meet the ubiquity of its chips for electric vehicle charging systems. demand. With the current wait time, Wolfspeed will have to make decisions on future expansion much earlier, he said.

More than 90 chip factories around the world are expected to start production between 2020 and 2024, according to industry group SEMI — a huge number in an industry where a single manufacturing tool can cost tens of millions of dollars. Even with supply issues, global equipment sales are expected to exceed $100 billion this year, SEMI estimates, a threshold many industry veterans believe will take longer to pass.

"Five or six years ago, I would say $75 billion was a step up," said Sanjay Malhotra, vice president of SEMI. Although the peak demand during the new crown epidemic has eased and rising inflation is putting pressure on consumer spending, chip executives said , Long-term market changes, such as the shift to electric vehicles, increased industrial automation and the popularity of smart devices, are filling factories with orders and prolonging chip shortages.

"Demand hasn't reached a point where we have a chance of getting out of the woods," Micron's Mr. Moorthy said. "The difficulty of chip equipment being short of chips will become more dangerous every quarter as demand strengthens."