"Can't Make Devices Without Parts"! South Korean Semiconductor Inspection Equipment Industry Faces "Most Severe" Component Shortage in History

The South Korean semiconductor testing equipment industry is currently facing a severe supply chain bottleneck—widespread shortages of non-memory chips used in the production of testing devices have led to significantly extended lead times and soaring equipment costs. Multiple equipment vendors have already been forced to postpone their delivery commitments to customers.

Among these, the delivery lead time for programmable semiconductors (FPGAs) has suddenly increased from the original 8-10 weeks to a maximum of 52 weeks, while driver integrated circuits (Driver ICs) have shifted from immediate availability to requiring at least a 10-week wait. A testing equipment manufacturer that previously signed a supply contract worth billions of KRW with Samsung Electronics has had to postpone the delivery date by three months due to this situation.

The shortage of Intel server-grade CPUs (Xeon series) has further intensified this situation. Intel has prioritized its limited production capacity for hyperscale cloud service providers and data centers, resulting in insufficient supply for other downstream markets. The market price for some CPUs has surged from about 1 million KRW to 3 million KRW, a threefold increase.

Industry insiders have pointed out that the current dilemma is not due to the shortage of a single component but represents an overall imbalance in the non-memory semiconductor supply chain. With the continued surge in demand for AI and data center infrastructure, the demand for semiconductor chips and testing equipment has simultaneously soared, creating direct competition between the two. This shortage is unlikely to be alleviated in the short term.

Lead Times for FPGAs and Driver ICs Greatly Extended

FPGAs are core components of testing equipment, mainly used for real-time analysis of test data and rapid identification of yield issues. A chip distributor representative noted, "FPGA lead times vary depending on specifications,but usually require 52 weeks at present," indicating that the supply situation is extremely tight. The global FPGA market is dominated by AMD, which previously completed the acquisition of Xilinx.

For driver ICs, the integrated "Pin Driver" product lines supplied by Analog Devices (ADI) for Automatic Test Equipment (ATE) are experiencing extremely severe supply bottlenecks. In the past, these chips could be purchased instantly from agents, but now the delivery wait has extended to more than 10 weeks.

Intel Prioritizes Large Clients, Next-Gen Products Delayed

The shortage of server-grade CPUs has created additional challenges for the testing equipment industry.

Recently, Intel has shifted the supply focus of its Xeon series CPUs to the more profitable hyperscale cloud service providers and data center customers, leading to tightened supply for other markets. An equipment industry insider noted, "It is becoming increasingly difficult to procure Intel's server-grade CPUs," with prices of some products tripling.

In addition, Intel's mass production plan for the next-generation server CPU "Diamond Rapids" has been postponed from the second half of this year to mid-next year. This delay means that the next-generation testing equipment relying on the high-performance features of this processor will see both their R&D and delivery schedules affected to varying degrees.

Component shortages are already having a direct impact on actual deliveries. Reports indicate that a testing equipment manufacturer recently signed a contract with Samsung Electronics worth over 10 billion KRW, but due to delays in receiving parts, the equipment delivery date had to be pushed back by three months.

An industry insider said, "The current situation is not an issue of one specific component like FPGAs or CPUs, but of severe bottlenecks across the entire non-memory semiconductor supply chain."

Stockpiling Becomes the "New Normal," Shortages to Persist

In response to the mounting supply pressures, testing equipment manufacturers have generally adopted forward stockpiling strategies: negotiating equipment quantities and delivery schedules with their customers several months before the formal signing of purchase orders (PO), and placing component orders in advance. However, as industry players admit, even with these mechanisms in place, achieving a 100% smooth supply chain is still out of reach.

The industry widely expects that the tight supply situation for non-memory semiconductors needed in testing equipment will not improve in the short term. Robust demand for AI and data center infrastructure continues to drive buoyant overall semiconductor industry conditions, putting explosive demand pressures on both downstream components and testing equipment. As a result, supply pressures are not likely to ease quickly.

For semiconductor manufacturers procuring testing equipment, the situation looks equally grim. An industry insider commented, "Close collaboration between semiconductor manufacturers and equipment vendors, advance planning, and proactive response" is a strategy now being adopted by more and more companies, becoming the new normal for the industry.