General > General Technical Chat

What's actually "chip shortage"?

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nardev:
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/EU

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?





PlainName:
This appears to explain it well:

https://www.theregister.com/2021/06/09/let_the_chips_fail_where_they_may/

ataradov:
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.

nardev:
Fair enough but in your opinion, is there a possibility for my theory?

ataradov:
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.

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