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A statement from the Brymen President
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Its true. Component shortages is probably the most serious issue in the industry at this time. And notice prices have increased - some by a lot. I dumped STM as a preferred micro and went to MSP430 because of the supply fiasco. The novel patent pending product it is used in should be a world wide hit with large volumes of sales. TI wins ST Micro loses. We won't be going back to ST. Many specialised chips are simply not available now. You can design of a chip that seems plentiful on Digikey, Mouser, Element 14, Findchips, Arrow etc and within a week the entire stock is gone, with a ridiculous lead time.
Reasons for this fiasco:
- Electric cars.
- Massive cash handouts by governments.
- COVID-19
The supply chain was ill-prepared for any of these.
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I don't get the automotive shortages. Who's buying cars during lockdown??
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I don't get the automotive shortages. Who's buying cars during lockdown??
Vehicles still wear out, get written off in accidents, eaten by rust, etc.
Less so if you're only going out for vital things like buying food, or vital work related stuff.
Problem is the car industry just considered sales during lockdown to be cancelled for good, rather than delayed.
So they cancelled the semiconductor orders, rather than take delivery and bung them in the warehouse.
Meanwhile that semiconductor fab time has gone into making parts for PC, PS5, TV/monitor, or other high demand by consumers/working from home.
Say there is a month long lockdown, the next month gets double the sales, oops we can't even get the normal monthly supply now, much less 200% of it.
As for why people are still buying new cars, without the need to drive to work and pay for fuel, they have more money. So some choose to buy a new car. -
In the US, car sales normally hover around 17 million per year.
In 2020, only 14.6 million were sold.
In 2021, analysts believe 16 million will be sold.
So, sales are definitely down, even this year... -
It is not just chips that are short in supply. There seem to be also a shortage of some plastics (e.g. EVA) - supposedly due to damages to some chemical plants during the power outage in Texas this winter.
The chip shortage comes with a self destabilizing effect: when parts are in short supply you buy the parts early, just in in case. So in addition to the actual use some of the rare parts went to ware-houses to be stored. In normal times the chips are bought just in time because the price may go down and the need to keep them dry. -
Whoever is using all the chips, it isn't the automotive industry... their sales are down. So who is it?
I could imagine PC and phone sales running at high levels, but do they use all the kinds of chips that are in short supply?
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It's probably a combination of the automotive industry and people getting worried so they are buying up all the chips thus leading to where we are now - like the toilet paper fiasco in the US. I know my company went ballistic and purchased at least an order of magnitude chips more than normal for some of its products. That being said, are all electronic components in a car supposed to be AEC qualified? If they are then the automotive industry alone would not explain why lots of non-AEC qualified parts are out of stock with resulting long lead times.
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IMHO this isn't a bonafide shortage, I heard it said it's like semi's are the new toilet paper. I think it's politics.
Historically, during semi shortages you see panic buying from product manufacturers and also scalpers swoop in and stockpile parts, with the intention to later price gouge and make profit. You'll notice unpopular parts 1000's in stock and then 0 stock. Who loaded up on that auto MCU with 32KB FLASH that is old- when it's the 256KB parts the industry is using.
I hear they (scalpers) just blanket pig out on parts buying and if you later make profit on most of your portfolio, great. It's commodity traders causing the overshoot.
I'm hearing this semi shortage is getting much worse past June, shipments after that are all 45-52week lead-times. -
I read that a major issue was home-bound consumers buying electronic doodads (entertainment devices) in record amounts. Many tablets and PCs were purchased for children to use for school-over-Zoom. With more money available due to no dry cleaning / gas for the car / lunches with the guys and being confined to the nest I have been clicking the "Add to cart" button more than usual.
Another issue that is playing playing an increasingly large role is the rising cost of shipping. Due to rebounding demand (the whole "Suez Canal is blocked for a few days" thing didn't help here) shipping costs are very high now, and I understand that it's getting to the point where even if you are willing to pay out the nose you can't find a free spot on a boat for your shipping container for weeks or longer for China to the USA. This is going to be more of an issue as the TIs and ADs try to get their chips from manufacturing facilities in APAC to the Mousers and Digikeys of the world. Do they start shipping reels of opamps by 747?
https://gcaptain.com/container-lines-firmly-in-control-as-market-stays-red-hot/ -
FWIW a device I was interested in (Raspberry Pi Pico) was recently stated to be held up mostly by availability of packaging, not the actual semiconductor die. Apparently packaging is a separate industry from fab and while not as capital-intensive it is also more labor intensive. Not sure why that should be, but allegedly that's the way it currently is.
The articles I read about automotive were that the car places just cancelled orders completely, and did not accurately predict the return of demand even if it's not to pre-pandemic levels. The activity of speculators in the market, and the lean-manufacturing, no-stock strategies magnify any small supply-demand problem into a much larger one.
A friend of mine wanted an only slightly unusual mechanical bicycle part. Normally in stock; but was told now out, and backorder lead time is now over one year (!)