Fire at German factory stokes fears of further chip shortages

Chip machinery maker ASML has shuttered part of Berlin factory after a fire broke out, with onlookers claiming closure could worsen global chip shortages

Chip machinery maker ASML was forced to shut down some of its operations in Berlin this week after a fire broke out, with onlookers claiming the closure could exacerbate an already dire shortage of semiconductors globally.

The fire did not lead to any injuries, but ASML said it is too early to tell how serious the damage is and to what extent it will impact its operations.

Bloomberg claims that the fire affected roughly 200 square metres of the 32,000 square metre factory. Operations outside of the affected area remain unaffected.

Dutch-based ASML is the world's largest supplier of photolithography systems, and the only provider of extreme ultraviolet (EUV) lithography machines which are used to etch circuits onto silicon wafers.

Its customers include Samsung Electronics, TSMC, SK Hynix and other chip makers which supply vendors including Apple, IBM and Samsung.

Bloomberg Intelligence analyst Masahiro Wakasugi speculated that the fire could exacerbate an already dire global chip crisis impacting the tech industry.

"If ASML's shipments are cut by 10 per cent due to a fire at its Berlin factory, where key parts for its semiconductor lithography machines are made, that could temporarily reduce global supply of lithography tools by around 8.4 per cent, as ASML has 84 per cent market share in the tools," Bloomberg Intelligence analyst Masahiro Wakasugi wrote on Tuesday.

ASML claims it is currently operating at full capacity amid global chip shortages.

Global chip shortages, which are affecting everyone from car manufacturers to PC vendors, are expected to rage on deep into 2022 according to Gartner analysts, while IBM's president Jim Whitehurst said last year that they could last another two years.