General > General Technical Chat
What's actually "chip shortage"?
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schmitt trigger:

--- Quote from: Tomorokoshi on June 10, 2021, 04:56:14 pm ---

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.



--- End quote ---
And with a high Q, the oscillation takes a wh to dampen down
SilverSolder:

--- Quote from: David Hess on June 11, 2021, 07:13:04 pm ---
--- Quote from: Marco on June 11, 2021, 12:22:54 pm ---Sometimes it works. Partial central planning during WW2 in UK/US/Germany can't really be compared to say Mao's melting plowhshares.
--- End quote ---

I 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_lFmp6vQ
https://youtu.be/CvHd1b20wdc

I 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.

--- End quote ---

Having 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!  :D
nardev:

--- Quote from: RoGeorge on June 10, 2021, 10:19:26 pm ---- 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)

--- End quote ---

This 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$. Now i think it's more like 100-180$ :)


SilverSolder:

--- Quote from: nardev on June 12, 2021, 04:43:12 am ---
--- Quote from: RoGeorge on June 10, 2021, 10:19:26 pm ---- 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)

--- End quote ---

This 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$. Now i think it's more like 100-180$ :)

--- End quote ---

Let's say "they" wanted to intentionally create inflation...   How would you do it?
coppice:

--- Quote from: SilverSolder on June 12, 2021, 02:04:14 pm ---Let's say "they" wanted to intentionally create inflation...   How would you do it?

--- End quote ---
Flood 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.
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