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| Chipageddon? |
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| paulca:
Looks like it's not just poor supply of gaming hardware. https://www.bbc.co.uk/news/technology-55936011 |
| schmitt trigger:
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. |
| gnuarm:
--- Quote from: schmitt trigger on February 06, 2021, 03:06:10 pm ---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. --- End quote --- That 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. |
| KE5FX:
--- Quote from: gnuarm on February 06, 2021, 11:34:03 pm ---That 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. --- End quote --- The 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. |
| gnuarm:
--- Quote from: KE5FX on February 06, 2021, 11:50:32 pm --- --- Quote from: gnuarm on February 06, 2021, 11:34:03 pm ---That 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. --- End quote --- The 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. --- End quote --- Sorry, 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. |
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