Chipageddon? - Page 1
Forum section: electronics / general

author: paulca
author_rank: Super Contributor
timestamp: February 06, 2021, 02:45:47 pm
content: Looks like it's not just poor supply of gaming hardware.https://www.bbc.co.uk/news/technology-55936011

author: schmitt trigger
author_rank: Super Contributor
timestamp: February 06, 2021, 03:06:10 pm
content: I believe that the genesis of the problem is outlined in these paragraphs:"The automotive industry, meanwhile, initially saw a big dip in demand and cuts its orders.As a result, chipmakers switched over their production lines.But then, in the third quarter of 2020, sales of cars came roaring back more quickly than anticipated, while demand for consumer electronics continued unabated."The automotive industry, known for squeezing the last drop of blood from their suppliers, will quickly cancel orders when demand dips, but also expect their suppliers to ramp up immediately when it picks back up.That may work for most captive auto components manufacturers (e.g., seats, airbags) but for cutting edge silicon, where there are other markets which are as large if not larger, they cannot really dictate their terms.

author: gnuarm
author_rank: Super Contributor
timestamp: February 06, 2021, 11:34:03 pm
content: Quote from: schmitt trigger on February 06, 2021, 03:06:10 pmThat would explain the automakers not getting the chips they need, but it doesn't explain the shortage of parts in other domains. In fact, the automakers cutting back on demand would free up capacity for everyone else. Even with the automakers increasing orders for future delivery would not impact other users until that shift started to happen.

author: KE5FX
author_rank: Super Contributor
timestamp: February 06, 2021, 11:50:32 pm
content: Quote from: gnuarm on February 06, 2021, 11:34:03 pmThe assumption was that demand would shrink sharply across all sectors, not just automotive. That didn't happen.The IC manufacturers can stamp "Automotive Grade" on a part and jack up its price. That doesn't work so well with "Game Grade" or "Smartphone Grade" or "Test Equipment Grade." They can make more money by selling chips to the automakers, so the rest of us get to wait our turns.

author: gnuarm
author_rank: Super Contributor
timestamp: February 07, 2021, 01:21:07 am
content: Quote from: KE5FX on February 06, 2021, 11:50:32 pmSorry, I'm not following the logic. The IC makers did not shut down any fabs. The same IC production capacity exists now as existed a year ago. So there is no reason the same number of ICs can't be produced now as a year ago. Only the mixture of the production would have changed.If the IC industry was preferentially shipping parts to auto makers over other segments of the electronics industry, there would not be a severe shortage in the automotive sector.The numbers need to add up and they don't. Silicon fabs are too expensive to sit fallow. IC makers scramble to find every customer they can to keep the fabs productive. It may be that the IC industry is playing "catch up" in the automotive sector and so production has shifted to automotive. If that is so, then the automakers should be back in full production very, very soon. When that happens, the excess demand will end and supply will level out for everyone.What makes more sense is that as is common in times of scarcity of any goods and materials, the scarcity causes changes in ordering patterns in order to provide more inventory to mitigate shortages in the future. Some people call this hoarding. The reality is this is a natural consequence of even small variations in demand combined with constant production capacity and human behavior.ICs, toilet paper, it's all the same. The reports of toilet paper hoarding are vastly overblown. It is much more that the reports of any shortages cause some small percentage of consumers/businesses to pay more attention to their inventory and buy/order a bit more. Boom, inflexible supply results in shortages which cause more reports and the cycle continues.I remember in 2018 there was a shortage of 0603 size passives, claimed to be caused by a gradual upswing in automotive demand (most of the industry uses smaller components) with no corresponding increase in production capacity as this was not leading edge tech. It lasted less than a year. I expect this shortage to be over by summer or even spring. I'm going to help by not buying any new electronics until the shortage ends.

author: paulca
author_rank: Super Contributor
timestamp: February 07, 2021, 10:14:54 am
content: So where did they switch production lines to that resulted in shortages for Automotive, SmartPhone and consumer gaming electronics all at once?

author: tom66
author_rank: Super Contributor
timestamp: February 07, 2021, 11:31:09 am
content: The problem is more of a demand shock.Automakers and their suppliers panicked as the pandemic bit and cancelled orders. They have contracts with the manufacturers and can reduce their order volumes on demand. These suppliers then shifted towards other sectors that were booming due to the pandemic. Lines were shut down to produce automotive rated parts, and were shifted across to cheaper, consumer parts built to different processes.Then as automotive demand picked up, suppliers started buying all the automotive parts they could get their hands on, which led to these parts disappearing from every major supplier. The demand comes back, but the supply isn't there, and lead times go way out of control.The secondary issue is (completely understandably) manufacturers have to impose Covid precautions, like managing the number of people in fabs, extra cleaning/sanitising, that sort of thing, which also slows things down, then you have shortages of air freight in the initial time of the pandemic which reduce the supply of raw parts.This is one of the risks of just-in-time manufacturing, it is fine if there are no shocks but one shock can throw the whole thing off.This is also a problem we have had at our company, we cannot source many parts, because we work in an industry where industrial temp grade parts are needed, among other things, and the parts just can't be sourced as they have been bought up by everyone. This also affects GPS modules, PMICs, some analogue stuff and processors too. Xilinx are reporting 27 week lead times for some of their FPGAs, which get used in automotive radar and ADAS systems. It's a nightmare.

author: JPortici
author_rank: Super Contributor
timestamp: February 08, 2021, 09:21:59 pm
content: Quote from: tom66 on February 07, 2021, 11:31:09 amLucky youmicrochip and ST gave 54 week quotes on too many parts. Luckily for us we came prepared and have secured parts for the whole year ahead of time (or did we? other rumors are circulating about manufacturers deciding to unilaterally cancel orders)According to rumors it's also that a number of brokers decided to bet on covid disrupting supply chains, and apparently they are currently making a fortuneIn any case, I don't think lead time will actually be 27/54 weeks, but that for months (years?) supply will oscillate heavily between the two extremes (worse!)

author: gnuarm
author_rank: Super Contributor
timestamp: February 09, 2021, 01:24:54 am
content: I'm doubly screwed. I'm using an AKM part made in the factory that burned down. They are trying to restore production by securing fab time, but that's going to be tough at this point. I'm looking at redoing the board, but the AKM part was a uniquely simple CD quality CODEC with discrete configuration pins rather than an SPI or I2C port. I can manage a serial port, but it's more work in the FPGA which I prefer to touch as little as possible. Replacing any chips will likely require EMI recertification and other expenses since it becomes a new design, or "new" enough.If it weren't for the shortage they likely would have something in production by the end of the year.