General > General Technical Chat
What's actually "chip shortage"?
TimFox:
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.
Wallace Gasiewicz:
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
RoGeorge:
- 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 spending
Could 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. 8)
ataradov:
--- Quote from: dunkemhigh on June 10, 2021, 08:47:12 pm ---Mmmm. 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...
--- End quote ---
Why 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.
ataradov:
--- Quote from: RoGeorge on June 10, 2021, 10:19:26 pm ---- The "people stay home buying electronic gizmos" is also hard to believe.
--- End quote ---
But 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.
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