What's actually "chip shortage"? - Page 1
Forum section: electronics / general

author: nardev
author_rank: Unknown
timestamp: June 09, 2021, 04:33:26 pm
content: It might sound very very stupid to some but the most common explanation that i heard sounded pretty incomplete.If i got it right, the explanation was:First car manufacturers than some other electronics manufacturers "lost manufacturing slots" which makes delays.So my question is, what other industry branches "got those slots", how come they have so huge need and what other "industry" is making so huge sales?Also, "shipping" delays etc was given as an explanation. Despite the fact that all of mayor and mission critical manufacturing routes were active all the time.At the same time, more and more protectionism in USA/EU Economics starts to appear. Understandably all of them want to be less dependent on China manufacturing etc.Example:https://blog.adafruit.com/2021/06/09/bosch-opens-german-chip-plant/* There s many more information of huge investments and plans for semiconductor manufacturing support in USA/EUSo, my theory is that all the information about chip shortage is probably partially true but at the same time protectionism propaganda in order to motivate and shift manufacturing capabilities from China "back to USA/EU"?Does anyone else see it that way?

author: PlainName
author_rank: Super Contributor
timestamp: June 09, 2021, 04:53:32 pm
content: This appears to explain it well:https://www.theregister.com/2021/06/09/let_the_chips_fail_where_they_may/

author: ataradov
author_rank: Super Contributor
timestamp: June 09, 2021, 05:01:08 pm
content: Chip manufacturers do not make chips in quantities that large manufacturers want (250K+) just in case. The manufacturing is planned based on the orders placed in advance. For the orders there are cancellation dates, where you can cancel the order without penalties.Many car manufacturers and other large volume markets cancelled their orders they placed months ago. So those parts were removed from manufacturing plans and were replaced with different parts, which still had orders pending.Now all the orders were placed again, but the chips don't magically appear, it takes time to manufacture them. This is the delay you are seeing.There is no shortage of the parts in general, there is shortage of very specific parts. But that still screws everyone up.

author: nardev
author_rank: Unknown
timestamp: June 09, 2021, 05:11:26 pm
content: Fair enough but in your opinion, is there a possibility for my theory?

author: ataradov
author_rank: Super Contributor
timestamp: June 09, 2021, 05:29:15 pm
content: There is no harm in trying to highlight that current situation could have been resolved by having more manufacturing capacity and more flexibility.But why are you asking chip manufacturers to do more? Simply because chips are small and easy to store? The reason we have car shortage is because car manufactures did not make enough cars in advance. By that logic we need to build more car factories.Having extra capacity right now would help, but it would be sitting idle the rest of the time.It is a generally a good idea to have critical infrastructure locally, but how realistic it is in practice depends on the situation. If done correctly, it may work. The chances of politicians doing it correctly are next to zero.

author: David Hess
author_rank: Super Contributor
timestamp: June 09, 2021, 07:51:35 pm
content: Quote from: ataradov on June 09, 2021, 05:01:08 pmThere were also disruptions on the supply side, and not all COVID related.Quote from: ataradov on June 09, 2021, 05:29:15 pmExactly, extra capacity in use now is unused capacity at any other time. Nobody makes money with unused capacity so it is minimized.QuoteWendover just did an excellent documentary on this subject. A lot of the current problems were caused by poor business and government policies, (1) and none of that looks to change:https://youtu.be/b1JlYZQG3lI(1) An example of poor government policy is how the US government taxes railroad track by the mile, thereby discouraging double tracking, which makes existing tracks less efficient, and completely destroys consumer rail, which is maybe the intent now if it was not to start with?

author: chickenHeadKnob
author_rank: Super Contributor
timestamp: June 09, 2021, 11:16:29 pm
content: This current shortage has some features I have not witnessed in past shortages. First in the past it was the case most semi manufacturers had their own fabs. Quote from AMD's Jerry Sanders "real men have fabs". Now AMD is completely fabless as are many others. So shortages would fall in one of two categories: a specific chip from a specific manufacturer, say a processor from Motarola, or a more generic shortage of memory parts. Now with much production sourced from the big three TSMC, Global Foundaries and Samsung tight fab capacity is hitting everyone at once, across many market sub-sectors .As far as increasing demand, that started in 2019 pre-covid as Chinese manufactures like Huawei had bulk stock buys in advance of sanctions affecting key components. Then covid which initially formed a lull in demand then converted to work and school from home need for additional desktops and web-cams. Also generated additional demand for cars and movement to suburbs and ex-burbs. In North America real estate demand for single family dwellings outside cities is in a profound sellers market with bidding wars happening in the most desired areas.The backup of container ships at west coast ports and the rental cost increases for containers is a visible symptom of people sitting at home spending their "stimi" checks online and buying crap ultimately sourced from China, much of which contains electronic components.

author: cortex_m0
author_rank: Regular Contributor
timestamp: June 09, 2021, 11:48:09 pm
content: Quote from: nardev on June 09, 2021, 04:33:26 pmI don't completely agree with this assessment. A fair chunk of the slots that the automakers cancelled went unfilled in spring 2020, with semiconductor factories operating but at lesser capacity than normal (because of government restrictions, management decisions, or both).There was very high demand for consumer electronics in 2020. A recent report said the number of "smart devices" in homes more than doubled in the United States from about 11 to 25:https://www.reuters.com/technology/smart-devices-get-pandemic-boost-us-households-deloitte-survey-2021-06-09/Shipping is in fact backlogged into the United States, and has been for some months. It's not a huge factor, but it is real.https://www.bloomberg.com/news/articles/2021-04-26/los-angeles-ports-are-slowly-chipping-away-at-their-ship-backlogDo I think that trade policy played a role? Yes, absolutely. I know that Huawei bought larger than normal orders of certain products in 2020 due to export restrictions taking effect. It wouldn't be shocking if foundries in China are reserving capacity for whatever replacement parts Huawei and others are going to use going forward.The other factor, perhaps the most important factor, is that one shortage resolving does not mean the build is clear of all shortages. I've been dealing with constrained component supplies for a good seven or eight months now. My company can only do its builds when ALL the components are available, and there have been constant shortages among the bill of materials, including passive components.

author: Siwastaja
author_rank: Super Contributor
timestamp: June 10, 2021, 12:02:30 pm
content: The important and possibly non-obvious pieces of the puzzle are* Factories are running normally near-100% because they are expensive investments,* Increasing production capability is a massive investment which takes a lot of moneyand time, once you decide it, it will take many years before it's in action and then you need to have customers to buy the product for the next 10 years.* If people can't fully work at said factories due to health restrictions, it will impact the output* Even normally there are small-scale shortages because supply and demand is so carefully finetuned together. It doesn't require much of extra demand, or much of extra problems to tip that balance off and cause a long backlog in short time, which takes long to rectify (see the first point of near-100% operation to see why; you can just go to 100%, not 110%).A really simplified calculation would show that if supply is normally working at 95% to satisfy the normal need, if output decreases by 10% to 85.5%, and demand increases from normal (95%) by 10% to 104.5%, during half a year a backlog of (104.5-85.5%)*6months = 114 percentage-months is created, and even if demand goes back to normal (95%) and operation is pushed to 100%, it would take 114 %-months / 6 months = 19 months to satisfy the backlog!Oversizing all the investments by, say, 25% would pretty much guarantee steady supply in all situations but that would basically be a 25% price increase in all products for no visible benefit under normal conditions.

author: madires
author_rank: Super Contributor
timestamp: June 10, 2021, 01:36:33 pm
content: Quote from: chickenHeadKnob on June 09, 2021, 11:16:29 pmUS PC Shipments Soar 73% In the First Quarter As Apple Falls From Top Spot:https://hardware.slashdot.org/story/21/06/08/1932246/us-pc-shipments-soar-73-in-the-first-quarter-as-apple-falls-from-top-spot

author: nardev
author_rank: Unknown
timestamp: June 10, 2021, 01:59:47 pm
content: So many interesting facts and opinions but it looks like my "theory" confused you. It's more speculation and in the domain of political economy<So, my theory is that all the information about chip shortage is probably partially true but at the same time protectionism propaganda in order to motivate and shift manufacturing capabilities from China "back to USA/EU"?Does anyone else see it that way?>

author: madires
author_rank: Super Contributor
timestamp: June 10, 2021, 02:12:33 pm
content: I think the national investment programs for semiconductors are a reaction to the current mess of outsourcing, just-in-time production done wrong and Chinese competition (some manufacturers are supported by subsidies). The chip shortage is real and not just propaganda.

author: SilverSolder
author_rank: Super Contributor
timestamp: June 10, 2021, 03:01:31 pm
content: Quote from: nardev on June 10, 2021, 01:59:47 pmI think it was answered above, if you put the jigsaw pieces together. The fundamental problem is that the industry is geared to run at near 100% capacity even during normal, sunny days - and this means there is no spare capacity to cope with any kind of demand peak.Your point about protectionism is valid: the protectionists, in their misguided zeal, have the effect of reducing flexibility and caused unusual orders to be placed (e.g. Huawei et al), making an already bad situation even worse. But they didn't cause the crisis on their own - they just make it worse, in that people can't as easily just sit down around a conference table and come up with good solutions.

author: CatalinaWOW
author_rank: Super Contributor
timestamp: June 10, 2021, 03:53:28 pm
content: Nardev, you are saying that some politicians are using the "crisis" for their own political gains. That is kind of like saying water is wet.I personally agree, it is absolutely happening. But I don't think it is cause or even a very large part of what is going on.

author: Tomorokoshi
author_rank: Super Contributor
timestamp: June 10, 2021, 04:56:14 pm
content: Back in the old days, like 2019, the shortage problem was ceramic capacitors. If I recall one strategy was to replace 0.1 uF with 0.068 uF or other such tricks.The issues with silicon components plays out as described above: a few very large fabs, many design firms trying to schedule into those fabs, and a wildly gyrating market.The MBA's made the same (wrong) decision that engineering managers often fall into: trying to schedule production to 100%. There is no margin or slack; the supply network is too long and too brittle to elegantly balance inductive supply with capacitive demand. Step responses like Covid throw the system into oscillation.I advocate (which of course never gets implemented) that engineering resources shouldn't be scheduled to more than 80%, and should really be more like 70% but that tends to get rejected as silly. Without that extra and realistic margin built in, the asynchronous events like redesign for part substitution breaks the schedule all the way out. The extra margin also allows for a more refined design.

author: nardev
author_rank: Unknown
timestamp: June 10, 2021, 05:06:36 pm
content: Quote from: CatalinaWOW on June 10, 2021, 03:53:28 pmWell, after reading all here i now 100% agree.The thing is that i'm from Bosnia and not only that we don't have much of an industry any more here,we also lack the supply optimization in other consumer goods,so i can confirm that i was shocked about shortages, back in march-april of toilet paper etc in USA as i didn't notice anything significant here.Well, flour and paper were in high demand but you could buy as much as you wanted. I don't remember a day that it was not available in all local stores and malls.

author: nardev
author_rank: Unknown
timestamp: June 10, 2021, 05:09:43 pm
content: Quote from: SilverSolder on June 10, 2021, 03:01:31 pmAgree, the "Wendover Productions" video explained some things that i didn't understand. I simply don't see companies in my country relaying much on supply optimization. A friend of mine had a phd in math, making models about stock optimization etc but very few companies were interested in that here.

author: coppice
author_rank: Super Contributor
timestamp: June 10, 2021, 05:17:30 pm
content: Quote from: Tomorokoshi on June 10, 2021, 04:56:14 pmNo margin for slack is how you maximise return on investment.Quote from: Tomorokoshi on June 10, 2021, 04:56:14 pmWho shouldn't be scheduling engineering resources more than 80%? A business should certainly be trying to get close to 100%. If society wants to have extra capacity lying around for a rainy day, and are prepared to fund equipment that will probably never be used, that's another issue. It doesn't serve the interests of a business, though.The real problem is that when we really should have stuff lying around just in case, like all the medical supplies the world was short of in the spring of 2020, society doesn't care enough to make the commitment it should. They just play a game of pass the blame when bad things happen.

author: nardev
author_rank: Unknown
timestamp: June 10, 2021, 05:38:04 pm
content: @coppice mentality of nations is not the same. Also, strategies that they incline to.I would just cite one simple example.VW back in 90's had two times more engineers (i think around 7K) while i think in whole USA (i don't remember if it was one or several main manufacturers) had around 3.5K engineers directly involved in design, planning, construction,manufacturing, testing etc.Well, VW is well known for quality were USA cars in 90's didn't have such reputation.So, you can make cars with less engineers but you can't get the quality, reputation and eventually be prosperous as VW.IMHO

author: coppice
author_rank: Super Contributor
timestamp: June 10, 2021, 06:20:14 pm
content: Quote from: nardev on June 10, 2021, 05:38:04 pmIs that supposed to relate to what I said in some way? If so, you'll have to explain.

author: Marco
author_rank: Super Contributor
timestamp: June 10, 2021, 06:22:23 pm
content: Quote from: madires on June 10, 2021, 02:12:33 pmOne major advantage of a national supply chain ... you can centrally plan stuff. Rationing versus hoarding and creating lottery winners.

author: tooki
author_rank: Super Contributor
timestamp: June 10, 2021, 06:41:07 pm
content: Quote from: nardev on June 09, 2021, 04:33:26 pmAbsolutely not.In a nutshell, the car manufacturers guessed wrong (they thought demand for new cars would plummet for years, but it didn’t), but the prolonged working from home and distance learning created a massive surge in demand for personal computers, tablets, webcams, etc. that still has not receded. So those free manufacturing slots became free just when the computer industry needed them. (And even with that added capacity, lead times on laptops are still around double what they were pre-COVID!)

author: coppice
author_rank: Super Contributor
timestamp: June 10, 2021, 07:19:50 pm
content: Quote from: Marco on June 10, 2021, 06:22:23 pmCentral planning always does wonders for smooth predictable supply.

author: nardev
author_rank: Unknown
timestamp: June 10, 2021, 07:34:04 pm
content: Quote from: coppice on June 10, 2021, 06:20:14 pmOMG, wrong copy paste, it should have been @CatalinaWOW

author: PlainName
author_rank: Super Contributor
timestamp: June 10, 2021, 08:47:12 pm
content: QuoteThat's a good way of putting itQuoteMmmm. Following that train of thought suggests that not long after this dearth of parts there will be a glut with consequently lower pricing. If one could just hold out until then...

author: TimFox
author_rank: Super Contributor
timestamp: June 10, 2021, 08:50:51 pm
content: Back in grad school (physics), when conversing with economics students, I discovered that most economics situations are equivalent to either relaxation oscillators or forced damped harmonic oscillators. The latter are usually underdamped.

author: Wallace Gasiewicz
author_rank: Super Contributor
timestamp: June 10, 2021, 09:23:16 pm
content: So the "chip shortage" especially as it applies to automotive production, is a result of the current supply management system designated as "Just In Time" SORRY "Almost In Time"Wally, former employee of an automotive manufacturer

author: RoGeorge
author_rank: Super Contributor
timestamp: June 10, 2021, 10:19:26 pm
content: - The car industry explanation doesn't make any sense. Less chips for cars would mean more chips for other industries.- The "people stay home buying electronic gizmos" is also hard to believe. What I see is exactly the opposite, people being more careful when spending for non essential goods. Not many will impulse buy today a $2k gaming rig like it's 2019.- Just in time delivery can only explain delays at the end of chain, but won't explain a general shortage.- Oscillations in the system doesn't make sense. With constant production and oscillations of demand we should see stock of some other parts piling up, but I don't see that.Other explanations would make more sense, the most probable causes IMO could be:1. Enforced scarcity (for political reasons, Taiwan is a hot area for some time)2. Monopoly industries want to raise prices (it was about time to happen after so many industry consolidations)3. Some new big centralized buyer(s) appeared overnight, for example military spendingCould also be because of a dystopian level story we are not yet fully aware. For example some nation(s) might be heavily manufacturing surveillance equipment right now, to be deployed soon and enforced by law, then connected later with big data and autonomous AI weapons.

author: ataradov
author_rank: Super Contributor
timestamp: June 10, 2021, 10:20:22 pm
content: Quote from: dunkemhigh on June 10, 2021, 08:47:12 pmWhy wold there be? The whole reason for this shortage is that chip manufacturers only produce parts for which there is guaranteed demand. All the parts that are made right now have been allocated. There will be no surplus.

author: ataradov
author_rank: Super Contributor
timestamp: June 10, 2021, 10:26:47 pm
content: Quote from: RoGeorge on June 10, 2021, 10:19:26 pmBut people do. Look at all the chip vendor stocks, they all have been up throughout the pandemic. And the demand has been consistent.Part of it is the money set aside for vacation, that was re-allocated to gadgets. Many people have been hurt by the pandemic, but quite a lot are doing ok. People just don't want to be vocal about it, since it is insensitive.Established chip vendors don't make parts "just in case", they make parts for which there are orders. Car manufacturers all removed those orders. The slots were allocated to other needs. Medical device manufacturers increased their orders. PC sales were up something like 70% this year. And PCs use a lot of chips.There is no general shortage, there is shortage in industries that failed to predict the demand.

author: johnboxall
author_rank: Unknown
timestamp: June 11, 2021, 12:08:04 am
content: Quote from: RoGeorge on June 10, 2021, 10:19:26 pmDepends on the country, this is true in Australia. WFH cleaned out places like Officeworks and other home/office gear retailers. We waited three months to get the new TV we wanted.

author: PlainName
author_rank: Super Contributor
timestamp: June 11, 2021, 12:22:57 am
content: Quote from: ataradov on June 10, 2021, 10:20:22 pmIt ain't oscillating if there's never too much as well as too little. Past examples include DRAM, hard drives, etc.The fabs may only manufactureexactlywhat's demanded, but that demand is generated by OEMs thinking they're going to sell as many as they can get hold of to people gasping for kit, only to find they've since spent the money on something they could actually buy and don't want it now. Or there's newer flasher kit so the stuff they've over-demanded is obsolete. Many slips twixt cup and lips, you know.

author: coppice
author_rank: Super Contributor
timestamp: June 11, 2021, 12:28:44 am
content: Quote from: RoGeorge on June 10, 2021, 10:19:26 pmPerhaps you need to look at this in a less shallow way. Huge numbers of people have suddenly NEEDED tools to work remotely, which they never thought they would have in their homes. They need decent mics and cameras, so their conference calls run smoothly. They may need a faster computer, a better screen, and better interactive tools like Wacom tablets, to ensure they are productive. In many cases their employers are paying for this stuff.

author: ataradov
author_rank: Super Contributor
timestamp: June 11, 2021, 01:49:32 am
content: Quote from: dunkemhigh on June 11, 2021, 12:22:57 amWell, ok, there may be a surplus of finished goods. I was thinking more of surplus of parts. And that will not happen, since OEMs are on the hook to buy those parts no matter what.

author: tooki
author_rank: Super Contributor
timestamp: June 11, 2021, 05:37:32 am
content: Quote from: RoGeorge on June 10, 2021, 10:19:26 pmIt’s actually quite remarkable to see someone get things as wrong as this. Every single point above is demonstrably 100% wrong. They’re not speculation, they’re the documented reality of the situation. Not to mention that I and others explained these points in detail.As for just in time delivery: what on earth makes you think only the end of the chain uses JIT delivery? The entire problem with JIT is that since everyone uses it now, a hiccup early in the chain will hold up the entire chain.

author: David Hess
author_rank: Super Contributor
timestamp: June 11, 2021, 09:34:57 am
content: Quote from: Marco on June 10, 2021, 06:22:23 pmCentral planning invariably leads to rent seeking and ignoring economics, making the situation worse. For example anti-gouging laws prevent reallocation of scares resources through arbitrage, and that happens during every emergency, where politicians make it worse.Quote from: TimFox on June 10, 2021, 08:50:51 pmAnd they include significant nonlinearities including behaviors like clipping and latchup.Quote from: RoGeorge on June 10, 2021, 10:19:26 pmBut with such long leadtimes, it initially means initial loss of capacity from delay.QuoteMany people were forced to work from home and they made purchases to support this. There was a significant jump in purchases for personal computer hardware.Quote from: johnboxall on June 11, 2021, 12:08:04 amThat was sure true where I am near St. Louis. The stock of computer hardware in retail stores including office supply stores was bought up early in the pandemic. It only marginally affected the two systems I got around November because I always build my own systems, but I still had problems finding parts like cases and GPUs.

author: Marco
author_rank: Super Contributor
timestamp: June 11, 2021, 12:22:54 pm
content: Quote from: coppice on June 10, 2021, 07:19:50 pmSometimes it works. Partial central planning during WW2 in UK/US/Germany can't really be compared to say Mao's melting plowhshares.

author: coppice
author_rank: Super Contributor
timestamp: June 11, 2021, 12:49:42 pm
content: Quote from: Marco on June 11, 2021, 12:22:54 pmCentral planning by the military isn't really central panning at all. Its just the customer saying what they need.

author: Marco
author_rank: Super Contributor
timestamp: June 11, 2021, 05:28:47 pm
content: They want infinity of everything, they need to balance the importance of the existing economy too, impact on the population and balance the conflicting impacts on the supply chain of all their demands.They didn't just print money and try to let the market figure it out, it wouldn't have worked either, the market can't adapt on such short time frames. Rationing and central planning was widespread.

author: David Hess
author_rank: Super Contributor
timestamp: June 11, 2021, 07:13:04 pm
content: Quote from: Marco on June 11, 2021, 12:22:54 pmI would say they are directly comparable. Central planning by Germany during WW2 destroyed their logistics and production, but even more so than the UK and US:https://youtu.be/1Oc_lFmp6vQhttps://youtu.be/CvHd1b20wdcI would go further and say that discounting the logistical problem by Germany is what made an invasion of the Soviet Union seem feasible, when it should have been plain that it was not. The logistical officers told them that before operation Barbarossa, but what did they know?The same thing happens in response to natural disasters in the US. Price controls to prevent price gouging discourage corrective actions that the free market might take, like shipping in additional supplies. The free market correctly recognizes that situation as a loss, and avoids it resulting in greater shortages. Of course then the free market takes the blame for not operating in a market controlled by politicians.

author: schmitt trigger
author_rank: Super Contributor
timestamp: June 11, 2021, 08:16:24 pm
content: Quote from: Tomorokoshi on June 10, 2021, 04:56:14 pmAnd with a high Q, the oscillation takes a wh to dampen down

author: SilverSolder
author_rank: Super Contributor
timestamp: June 11, 2021, 10:30:15 pm
content: Quote from: David Hess on June 11, 2021, 07:13:04 pmHaving lived in the US for a while, I am beginning to understand that most Americans hate a free market! - if prices go up, it is "gouging". If they are undercut (e.g. by China) that is also a big problem. Basically, Americans seem to prefer a nicely planned economy where everything is locked in place!

author: nardev
author_rank: Unknown
timestamp: June 12, 2021, 04:43:12 am
content: Quote from: RoGeorge on June 10, 2021, 10:19:26 pmThis chip shortage reminds me to when Luxottica purchased RayBan brand. First thing they did was to stop manufacturing aviators for a year or even more.The aviator glasses coasted around 10$. Now i think it's more like 100-180$

author: SilverSolder
author_rank: Super Contributor
timestamp: June 12, 2021, 02:04:14 pm
content: Quote from: nardev on June 12, 2021, 04:43:12 amLet's say "they" wanted to intentionally create inflation... How would you do it?

author: coppice
author_rank: Super Contributor
timestamp: June 12, 2021, 05:22:37 pm
content: Quote from: SilverSolder on June 12, 2021, 02:04:14 pmFlood a market with money and you will see inflation. Lots of people say the money supply massively increased after 2008, without causing inflation. Have you looked at what happened to things like stock prices between 2008 and 2020? The newly printed money was directed there, and in other assets. In 2020 quite a bit of newly printed money went into the average person's pocket. It remains to be seen how much that affects inflation in goods and services. If the newly printed money inflates things, higher interest rates are the usual way to bring them back under control. However, since 2008 people have gotten so used to low interest rates a vast array of things have been predicated on them. Significantly raising interest rates right now would make the entire economy will fall apart. For example, high house prices are predicated on low interest rates. Housing will crash if you raise the interest rate, and people start defaulting and becoming homeless. There is a reason why homes were cheaper in the 1970s, when much of the west had high inflation. Houses normally cost about the same amount - close to the limit of what people can finance, a figure which ebbs and flows with the interest rate, which ebbs and flows with inflation.

author: David Hess
author_rank: Super Contributor
timestamp: June 12, 2021, 08:07:42 pm
content: Quote from: schmitt trigger on June 11, 2021, 08:16:24 pmManagement is not paid for avoiding catastrophes which *might* happen, like cops are not paid for not arresting people, and prosecutors are not paid for not charging people with crimes.Quote from: SilverSolder on June 11, 2021, 10:30:15 pmLike I said, most of the "free markets" in the US are not. Politicians like to say they are, and then blame the free market for the bad results of their own policies.

author: tooki
author_rank: Super Contributor
timestamp: June 13, 2021, 09:00:20 am
content: Quote from: nardev on June 12, 2021, 04:43:12 amWhat’s weird is that I had missed Ray-Ban’s dip to the low end. Around 1994, my optician gave me a free pair of Ray-Bans, and back then they still cost something like $70. I never look at gas station sunglasses racks, so I guess I never noticed Ray-Ban had moved into that market just a few years later!This reminds me that I really need to get new glasses. I was about to do so a year and a half ago, and then corona came along and closed things down, and then I started my new apprenticeship, so here I am with the same worn-out lenses...

author: Neomys Sapiens
author_rank: Super Contributor
timestamp: June 13, 2021, 07:18:30 pm
content: Quote from: tooki on June 13, 2021, 09:00:20 amThe reputation of some products keeps with them faar too long.Since the early 80s, the only holder of the supply contract under MIL-S-25948 is Randolph.The teardrop for factor was outgoing in the 60s.

author: nardev
author_rank: Unknown
timestamp: August 17, 2021, 03:17:22 pm
content: Well, to me this all looks more than obvious now that it's an artificially generated crisis. Until now, everything should have been stabilized IF they wanted.btw. here is the strategy of EU, pretty fresh documenthttps://www.bruegel.org/wp-content/uploads/2021/07/PC-2021-17-semiconductors-.pdf

author: ataradov
author_rank: Super Contributor
timestamp: August 17, 2021, 03:50:36 pm
content: Quote from: nardev on August 17, 2021, 03:17:22 pmWho are "they"? Semiconductor companies? They don't want to "fix" it, they are working as normal based on what was ordered. All new orders went to the end of the queue.You need to understand that 52 week factory lead times were normal even before the crisis. You just were always observing the other end of that pipeline, because distributors managed their orders well, and there was no interruptions. But once you interrupt it by cancelling orders, you are in for a long wait.There is nothing artificial about it.

author: coppice
author_rank: Super Contributor
timestamp: August 17, 2021, 04:42:33 pm
content: Quote from: nardev on August 17, 2021, 03:17:22 pmSo you think its quick and easy to add fabs that cost billions each, and require teams of highly skilled people? You also think people will be delighted to spend those billions when every large surge in demand is followed by a bad slump, long before any new capacity has been amortised?

author: David Hess
author_rank: Super Contributor
timestamp: August 17, 2021, 11:15:22 pm
content: I think there were major customers who thought they could eat their cake and have it to look at. They wanted just in time delivery, with someone else eating the cost of inventory.

author: nardev
author_rank: Unknown
timestamp: August 18, 2021, 04:14:27 pm
content: Quote from: coppice on August 17, 2021, 04:42:33 pmAt the moment, i'm pretty frustrated because i can't find LAN8742/LAN8740 chips. And they are in plans for ~75 weeks. So popular, so simple and doesn't require sophisticated procedures for manufacturing.To me it's not obvious why such chips are not available. I can't understand that.

author: ataradov
author_rank: Super Contributor
timestamp: August 18, 2021, 04:24:30 pm
content: Quote from: nardev on August 18, 2021, 04:14:27 pmManufactures don't continuously produce parts. They do runs on multiple wafers for the predictable near future demand and already placed orders. Then store those wafers and package them as needed into the final parts.Then production is switched to something else. There was no demand or placed orders for your parts, their slots were allocated to other parts, so now your parts are at the end of the queue.For some rarely used, but still active ICs there are parts shipped now that were made more than 5 years ago. They will have recent date code, since date code indicates time of packaging, not the source material.

author: nardev
author_rank: Unknown
timestamp: August 18, 2021, 04:29:20 pm
content: Quote from: ataradov on August 17, 2021, 03:50:36 pmWell, ok, another thing i bothering me.Why are so many popular, not so sophisticated chips to manufacture out of stock?When i read those policies, it's very clear that there is a“technological cold war”going on.USA/EU have pretty clear instructions (i'm not saying that there is anything wrong about that) to protect IP, increase investments, build fabs, protect technologies, keep the tech gap 2 generations apart from China etc.In my understanding, in order to do that, it takes, time, money and it will also have to impact the cost as they will probably reduce export to CN (reduce a profit as a consequence), yet go into an investments. So, my expectation is that making this "out of stock" maneuver is not spontaneous market reaction but also buying time for some changes that should come.I don't see any rushing to supplement the "out of stock" parts.You are right, even in the strategy that i shared here, they claim that it's every 4-5 year cycle of parts being delayed or slowed down in manufacturing. However, i think that we have new political situation which fuels it more than purely technological reason.

author: ataradov
author_rank: Super Contributor
timestamp: August 18, 2021, 04:38:06 pm
content: Quote from: nardev on August 18, 2021, 04:29:20 pmSame reason toilet paper was out of stock. Everyone who uses those chips decided to go and buy 1-2 year worth of demand, just in case. There was not enough free stock available to support that demand. Sophistication of the chip has nothing to do with this.Quote from: nardev on August 18, 2021, 04:29:20 pmWhy would there be rushing? IC vendors would be interested if the lines were down and nothing was being made and money were lost. But the ICs are made, just the ICs that were actually ordered.You are frustrated, and that frustration translates into some paranoia.

author: nardev
author_rank: Unknown
timestamp: August 18, 2021, 04:42:08 pm
content: Quote from: ataradov on August 18, 2021, 04:38:06 pmI wrote that 2. reply and you posted another in the meantime.Quote from: nardev on August 18, 2021, 04:29:20 pmAlso, there was no reason for an insulting addition. I was expressing my opinion about some global things, you gave some pretty logical and i believe, probably true explanations. Differing in opinion doesn't need to end like this.I'm completely ok with the circumstances, i don't bite my nails because of this. I have plenty other things to do in my life. I'm here to discuss, ask, express my opinion.

author: coppice
author_rank: Super Contributor
timestamp: August 18, 2021, 06:04:38 pm
content: Quote from: nardev on August 18, 2021, 04:14:27 pmThe chip is largely irrelevant. Its the processes that matters. If you can't get the part you want for a long long time, it probably means someone else has a part using the same process, but with a better profit margin. They can bid more for the wafer capacity both they and your vendor need. Occasionally its a limitation in packaging capacity, but that's usually just for very specialised packages. If you need a ceramic package, so many are made by Kyocera they can be a horrible bottleneck, even when you chose a device with multiple sources.Its usually wafer capacity limits, though.

author: nardev
author_rank: Unknown
timestamp: August 18, 2021, 06:58:08 pm
content: I'm very glad for all the replies. This community is amazing.

author: EPAIII
author_rank: Super Contributor
timestamp: August 19, 2021, 08:52:44 am
content: I think one thing that is not being realized here is that an IC for a Ford automobile is not a generic part like a 74xxx or a 40xxx. It is a custom design for Ford and even if the fabrication facility was to make and store extra ones for future use, they could not sell them to anyone except Ford. This is called a proprietary part and it can not be sold on the open market. It would be illegal to sell it to GM or Volkswagen or any other auto company or any other company of any type. They could not even sell them to individuals.So if Ford does not order that IC, then it can not be sold. And the fabrication facility has only one way of knowing how many Ford will use. That is called an ORDER. And it is up to Ford to order them in a timely manner. If Ford guesses wrong, then Ford has to wait.I think the COVID thing upset the thinking at many levels in many companies and the net result is the economy is now upset. Things will settle down, but it will take time.

author: madires
author_rank: Super Contributor
timestamp: August 19, 2021, 09:39:00 am
content: Selling a proprietary part to a third party isn't illegal, but it would be a breach of contract in case there's such a provision in the contract.

author: Trader
author_rank: Frequent Contributor
timestamp: August 19, 2021, 06:47:37 pm
content: FYI: The Impact of Chip Shortages on the Electronics IndustryStart Time: Friday September 17, 2021 - 8:00 AM EDTIn this Industry Tech Days Keynote, we have an all-star panel of industry experts to talk about the ramifications of the global chip shortage and what lessons we can learn from them. You'll hear from Dave Doherty, President and COO of distributor Digi-Key Electronics, Steve Sanghi, Executive Chair of semiconductor manufacturer Microchip Technology, and Michael Knight, Corporate Senior Vice President of Business Development of distributor TTI.This keynote session will be followed by a Q&A with the audience.https://www.allaboutcircuits.com/tech-days/summer-2021/digi-key-eletronics-microchip-technology-and-tti/webinars/itd-2021-keynote-industry-panel-global-chip-shortage/

author: rstofer
author_rank: Super Contributor
timestamp: August 22, 2021, 06:34:50 pm
content: Quote from: nardev on June 10, 2021, 01:59:47 pmNot really...It would not be in China's interest to throttle production and encourage chip suppliers to build more fab capacity in the US. No doubt they are pissed that trade secret laws are being enforced and they can't simply copy and paste everybody else's chips. I don't know the ratio of capacity between China and Taiwan but I believe TSMC (Taiwan) is the largest foundry in the world.The magic is primarily created in the US, China and Taiwan simply provide manufacturing capacity. The thing is, it might cost $10-$50 billion to build a competitive plant. The only way that makes sense is if a lot of chip manufacturers get together to create a joint venture.And, so, Intel is getting into the foundry business in the US by building 2 plants for $20 billion:https://www.industryweek.com/technology-and-iiot/information-technology/article/21159119/intel-to-spend-20-billion-on-two-new-us-chip-plantsAt one time, the NSA was a huge manufacturer of in-house semiconductors. Thirty years or so ago, National Semiconductor ran their plant(s). I didn't find any current references on Google but I didn't look very hard.Watch the Intel projects, they may very well redistribute manufacturing capacity to the US.