Out of stock. The world is ending?

[SilverSolder]

Trump did the right thing, judging by that it touched your nerve.

That is some of the worst logic I have ever read.

"Because you are upset, their actions are correct"

By that logic, everyone you disagree with is automatically right, which is obviously rubbish.

You do not know the user blueskull's poisture on the forum very well, do you.

I find his posts pretty much bang on. Inconvenient, but bang on.

I like seeing things from another point of view.   There are many that prefer to stick their heads in the sand, and hug a friend, instead of dealing with the world as it actually is.  It isn't good to be like that, it isn't good for you, or the economy in general!

[Rick Law]

There is a very old and widely acknowledged economic theory,  called the theory of comparative advantage  https://en.wikipedia.org/wiki/Comparative_advantage

This explains why we are all better off by not trying to do everything ourselves (starting from you, personally, and moving on up to city, state, national, and international levels).

It is way too simplistic to try to go back to the pioneering days of making everything ourselves out of wood...   we need to make the best of our own resources, yes, but we also need to make the best of other countries' resources - that way we are all better off overall.  Basically, that means trading with them.

And this is what I think Trump failed to grasp, even if he made several points along the way that I could agree with.

I believe you missed my point about survival there.  I bold it here:

...
From listening to Trump on TV/streaming, I gather the reasons for his action(s) was two fold:
(a) National survival: keep a design and manufacturing infrastructure within USA for vital products.
(b) Financial: buy USA when possible.  In most cases, survival issues override financial.
...

In most cases, survival issues override financial...  Financial advantage hardly matters if you are stone dead...

Imagine if you are doing youtube streaming as your way of making a living.  There are enough complains right here on this forum about youtube.

Imagine if all your income is based on youtube (thus making it vital), and suddenly for certain politically incorrect statements you made in the past, your channel is now severely limit.  Your income is now severely restricted.  With your survival now in question, it hardly matters how financially rewarding it was when it was good.

The same is true for nations.  To avoid political debate, I will use two historical example instead of more current examples.  That was history and not much to argue about them.

I. 1920's to 1930's  Good customer<Allied

China purchased most if not all its military equipment from Germany and was loaded with German advisors.  At least one city (Nanjing being best documented) got its electricity powered by Siemens equipment and supported by Siemens personnel.

Such a close economic cooperation that China's leader Chiang Kai-shek's adopted son Chiang Wei-kuo studied in the  Kriegsakademie (War Academy in Munich) and was sergeant-cadet in the 98th Jäger Regiment that went into Austria in 1938.  China was at war with Japan already at that time.

After the 1940 Tripatite Pack between Germany, Italy and Japan. Germany stop selling to China and recalled most of its personnel from China.  No more new hardware or replacements parts.

Lessons learned, I suppose - when it is vital, even buying from friends may not be a good idea.

II. 1969  Even allies can go bad

I suppose we are all aware that China relied on Russia for its military hardware and advisors in the 1950's and 1960's....

Good that the 1969 China-Russia border war was brief, just 7 months with 1 month heavy fighting.  Imagine a long war and China needed to buy replacement MIGs and tanks from Russia...

Lesson learned, even between allies, disagreement can explode into shoot wars.  So even buying it from allies may not be a good idea.


Perhaps I am the only one who is selfish...

So, what is wrong with keeping what is considered vital industries/infrastructure domestic?  I would imaging most of us would like that.  More R&D means more job opportunity.  More competition means more opportunity for better products.

[SilverSolder]

[...]
So, what is wrong with keeping what is considered vital industries/infrastructure domestic?  I would imaging most of us would like that.  More R&D means more job opportunity.  More competition means more opportunity for better products.

Nothing is wrong with that at all - everyone has to be able to stand on their own two feet, which the law of comparative advantage doesn't actually preclude!

You talk a lot about "survival", but if a nation isn't an economically viable entity in its own right, then it doesn't matter whether you wall the place off or trade with everyone... you will be broke either way.

The whole concept of international trade is based on the concept of "adults", i.e. countries that are able to stand on their own two feet, trading with each other to improve living standards beyond what is possible if both were walled off from each other.

If large sections of the population are feeling hard done by (which I think we can agree is probably the case today) and the economies of Western countries are not giving the same opportunities to today's young as they did to our parents' generation (I think a solid case can be made for that being true), it will create a lot of tensions...   and it is always easier to blame "the others" than fixing your own life...  yet this is what bad politicians have always done throughout history, there are plenty of examples.

[Warhawk]

hey admins, what about moving this thread somewhere else?

[Ed.Kloonk]

Dumpster?

[parasole]

I blame Trump for this. Before Trump's reign, there was a harmonious balance where China takes advantage of Western technology through Taiwan, and US companies take advantage of the huge market of China through Taiwan, and Taiwan sits in between, benefited by both, all at the cost of the US losing its technological and potential military advantage to China.

Interesting interpretation, is it in the interest of the US and its people? Of course no, and you know this, but you blame a leader who actually tries to do something for the country and not only for the political establishment and US companies who are mostly nominal "US companies "

Since capitalists can lobby the government in the US, China can persuade US companies enough to keep the scheme going by opening up some market. And don't worry about the "image", China and US companies can together fake it so it looks like China is changing so politically the US government was looking well in spreading ideology.

This is called corruption, and we know that most of those "US companies" are corrupted, and again, who is the beneficiary of this situation?

If Trump stayed quiet about all of this and behaved like his predecessors, there would not be any drama. US companies will keep gaining Chinese market, China will keep getting the latest Western technology, Taiwan will keep doing its man in the middle job, and US government will keep looking good as China is perceived to be changing.

Yeah, that is what most past administrations did, sure enough, US establishment and China were happy, one making money and another keep getting the latest Western technology, all at the cost of the US losing its technological and potential military advantage to China. All your words, you pinpointed them quite accurately.
But, have you ever considered the possibility of real mutually beneficial cooperation, without hidden agenda to destroy US once you are strong enough? I bet no, and I acknowledge the West powers were naive enough on this "cooperation"...

Trump wanted to plug the hole that leaks technology to China, at the cost of US tech giants, China and Taiwan, all of them, hence the drama in the recent years. This guy knew nothing about maintaining such a delicate balance, and as a result all heaven broke loose.

Of course, now all have to pay the cost, as all are so much tied up... but decoupling is needed and it will happen as the process is triggered and is on its way, regardless of the current administration will... look what happens to Australlia as China imposes a trade ban on various exports, that is when a country has too much dependence from another one, lesson well outlined by Rick Law in his post, and which mostly ignored by many countries at list until now...
If US will not protect their integrity and security then they just will be annihilated, there is no normal economical cooperation between the two, it is more like a suicidal wild dance of two superpowers...   

What this overly patriotic orange fur ball did could bring the world, at least the technology world, to deep disaster.

“You were given the choice between war and dishonor. You chose dishonor, and you will have war.' - To Neville Chamberlain”
― Winston Churchill

The above quote is not about Trump, you guess who may fit better...

[techman-001]

And now back to our regular programming ...

https://www.electronicsweekly.com/news/business/equipment-lead-times-lengthen-2021-04/

" The lead time for wire bonding machines, mainly supplied by Kulicke & Soffa of Singapore said to be 10 to 12 months.

For wafer dicing machines, led by Japan’s Disco, delivery times are up tob5 to 8 months.

IC  testing machines made by Advantest of Japan and Teradyne of the U.S., among others, have sern lead times grow “significantly"

There is also a table from Nikkei Asia stating 52 weeks for "substrate materials".

[SilverSolder]

Wow, you have to wonder who is buying all this stuff:   China, to escape American restrictions, or America, to escape Chinese comparative advantage?

[JPortici]

Or brokers of whatever nationality who bet on this happening

[Siwastaja]

Or brokers of whatever nationality who bet on this happening

Yeah, grey market opportunists make the dire situation a bit more sharp.

I.e., normally you would expect that parts start gradually running out.

Panic buying sharpens this transition.

Opportunist brokers sharpen this even more, they buy the remaining stock to sell at higher price.

We needed a certain $4 (@qty 50) chip to finish a small batch. A Hong Kong based company offered them for us for $15 ea, a hefty 275% price increase. Once we replied yes, will buy, got a new price; $92 ea, 2200% price increase. We are not that desperate, so we are just not producing. Let them sit on the parts.

[luiHS]

Opportunist brokers sharpen this even more, they buy the remaining stock to sell at higher price.

We needed a certain $4 (@qty 50) chip to finish a small batch. A Hong Kong based company offered them for us for $15 ea, a hefty 275% price increase. Once we replied yes, will buy, got a new price; $92 ea, 2200% price increase. We are not that desperate, so we are just not producing. Let them sit on the parts.

I got some stock of a microcontroller in China, with an increase of 300% of the usual cost, and with delivery times of 15 days, and there will be no more.

In addition, with other components the Chinese cheated us, some accelerometers that we bought with an increase of 400% and finally were reused and most of them are damaged (it is seen under the microscope that the pads have solder remains).

The same has happened to us with some power MOSFETs, do not work well in a design in which we use them to activate motors. With the originals (Infineon manufacturer) it works perfectly, but with those of the Chinese it resets the microcontroller. It is clear that are fakes as well as very expensive.

So now not only is the price abuse starting, but also the scam selling fake components that don't work.

[olkipukki]

Yeah, grey market opportunists make the dire situation a bit more sharp.

The cash is 'cheap' those days, and if you see components as shares traded on unregulated exchanges (aka DK, Mouser), well - you just need to pick up right ones...

[NorthGuy]

We needed a certain $4 (@qty 50) chip to finish a small batch. A Hong Kong based company offered them for us for $15 ea, a hefty 275% price increase. Once we replied yes, will buy, got a new price; $92 ea, 2200% price increase. We are not that desperate, so we are just not producing.

That's the mechanism how hyperinflation hinders production. Now the price for the things you were producing will go up too. Less production will cause more inflation, and more inflation will hinder production even more. This may spiral out of control very quickly. In the end, most companies either go bankrupt or abandon production in favour of buying and re-selling.

[madires]

... or it's just an opportunist who tries to make some quick bucks.

[DavidAlfa]

I'm doing a cooking thread next. To follow the offtopic

[Siwastaja]

We needed a certain $4 (@qty 50) chip to finish a small batch. A Hong Kong based company offered them for us for $15 ea, a hefty 275% price increase. Once we replied yes, will buy, got a new price; $92 ea, 2200% price increase. We are not that desperate, so we are just not producing.

That's the mechanism how hyperinflation hinders production. Now the price for the things you were producing will go up too. Less production will cause more inflation, and more inflation will hinder production even more. This may spiral out of control very quickly. In the end, most companies either go bankrupt or abandon production in favour of buying and re-selling.

Yes, although I still do believe the component manufacturers get their shit together and the whole crisis is best handled by waiting and avoiding panic buying. But it seems quite bad now, the big question is, will it still take 3 months, 6 months, or 9 months to start getting better?

This isn't new to anyone who has been designing for a decade or more (it was ceramic caps 3 years ago), but it certainly seems it's considerably worse this time, something I wouldn't have expected last December-January when it was becoming obvious shit is starting to really hit the fan.

My advice still is, try to wait over the crisis, although that's becoming difficult. In any case, remember that if you are going to do a quick redesign cycle using now available parts, don't assume they are available after a week. Buy enough stock for the whole redesigned batch to last next 6 months at least, only after shipping confirmation do schematic/layout/PCBA order. Not going to be easy on complex designs, or something requiring certification.

[NorthGuy]

Yes, although I still do believe the component manufacturers get their shit together and the whole crisis is best handled by waiting and avoiding panic buying. But it seems quite bad now, the big question is, will it still take 3 months, 6 months, or 9 months to start getting better?

There's a lot of uncertainty.

For example, If the price of bitcoins goes into millions, this will create huge demand for semiconductors. The miners will be able to buy semiconductors at prices which are many times higher than pre-crisis prices. Their demand is almost unlimited. To divert semiconductor production to other areas, the other buyers must pay prices which are at least comparable to what miners are willing to pay. But such an increase in prices will further strengthen the bitcoin. Nobody knows how this ends.

My advice still is, try to wait over the crisis, although that's becoming difficult. In any case, remember that if you are going to do a quick redesign cycle using now available parts, don't assume they are available after a week. Buy enough stock for the whole redesigned batch to last next 6 months at least, only after shipping confirmation do schematic/layout/PCBA order. Not going to be easy on complex designs, or something requiring certification.

I agree with that. Redesigning is not a good idea. It only adds to the uncertainty.

That said, I received an email from Mouser that an order I placed in February for a backordered part is going to ship in May. May be things are not as bad as they seem.

[harerod]

...

That said, I received an email from Mouser that an order I placed in February for a backordered part is going to ship in May. May be things are not as bad as they seem.

I would be delighted for you if it turns out that way. From recent experience the standard pattern would be another email, stating further delays.

One of my manufacturers just offered to scavenge components from scrap PCBs (older version of current product) free of charge, so they would get an order (small number of units, cost of electronics negligible to total COG).

At the same time I was told that FR4 is going to get scarce by summer. Now would be a great opportunity for an extended vacation. 

[schmitt trigger]

If one believes in the laws of supply and demand as a closed loop system, the situation will eventually reach equilibrium, albeit with significant swings before this occurs.

[floobydust]

It is a highly inelastic supply-demand curve, with a time-constant of many years, and supply concentrated in a region caught in the middle of the USA-china trade war.
Seems to be going into a stage 2 where the semi makers are exacerbating the situtation and seeing what government handouts they can get.
Polysilicon prices have doubled so PV will be also get hit.

[JPortici]

This isn't new to anyone who has been designing for a decade or more (it was ceramic caps 3 years ago), but it certainly seems it's considerably worse this time, something I wouldn't have expected last December-January when it was becoming obvious shit is starting to really hit the fan.

My advice still is, try to wait over the crisis, although that's becoming difficult. In any case, remember that if you are going to do a quick redesign cycle using now available parts, don't assume they are available after a week. Buy enough stock for the whole redesigned batch to last next 6 months at least, only after shipping confirmation do schematic/layout/PCBA order. Not going to be easy on complex designs, or something requiring certification.

I believe the problem is that currently RAW MATERIALS (and also intermediate goods) are being subject of speculation, not only chips.
Wood, paper, copper, everything. Every month we get a pamplheth with the latest increase and lead time and how it will have repercussions on current orders because they can't afford to absorb the difference anymore, bigger clients will sure get one weekly.
Family friend who works in finance informed me few weeks ago that there was a lot speculation going on on raw goods, people betting on how high prices will get, while companies which should build actual things wait in terror. i will never ceased to be amazed on how far these people will get to avoid having a real job and play with pretend money with awful real consequences*. finance sickens me**.

*yes, semi sarcasm
**not sarcasm

[SilverSolder]

It would be a lot simpler if those who can get along were able to trade - and those who prefer not to get along, take the back seat, don't trade, and STFU! 

[Ed.Kloonk]

Australia wants something to do with China practicing its lawful power in Hong Kong. If Australia never attempted to pollute China's political system and never attempted to spread Western idealism to China, none would have happened.

Except that the terms of the changeover from the British colony provided for time for Australian/Hong Kong people to move elsewhere. Your news sources there are forgetting to tell you that the govt jumped the gun.

[Ed.Kloonk]

They are welcomed to bugger off if they don't like HK. They are not welcomed to stay here and challenge the CCP. The CCP rules are simple, shut up and make money, or go bugger off. Consider this a grace. In the mainland personal wealth transfer to abroad is limited, so you don't get to bugger off even if you want to unless you leave everything behind.

But that's the problem. The residents were promised grace. However immediately after the end of the lease, laws regarding the tightening up of the transfer of wealth have encumbered so many people. 

Those residents and the nearby countries were promised by The Chinese Govt that families had plenty of time to allow their kids to finish treasury school, for example. And business owners who should have, by your standard, re-purchase factories, houses and emigrate the whole family elsewhere en-masse before 1997.

Now we are seeing this causing ramification of supply of goods because business owners are forced to leave with nothing or sell a well established business for food.

The local region understood that the Chinese Government promised to let HK keep doing what it was doing (mostly). I remember the golden-egg analogy been thrown around to make their claim plausible. This grace period was so residents could get their act together and also to prevent the spike in immigration to other countries in the remaining years of the last century.

Laws in HK suddenly changed against expectations and the Australian government and others in the region have always been trying very hard to prevent the bankruptcy by one thousand cuts of so many businesses in HK. The economic situation would be much worse if not for insisting on the slow and steady approach.

A twenty-year knock-on effect because the Chinese Govt can't do what they promised. And the easy way out now is to blame Trump.

[parasole]

Yes, for sure. The problem is however, the West has a mentality to attempt to destroy anything that has a different system than itself. The West has a naive and funny belief that the West should have power to the world, and should talk from the perspective of the "power" from above.

When the West stops thinking it is infallible and starts to tolerate and accept a parallel idealism with considerable power to rival the West itself, we can talk peace. With the West wanting everything not Western to cease, we have no option but to plan cooperation with cautious.

Funny enough, you were given exactly this opportunity some 40 years ago when US vote to accept China in WTO (with lots of preferences to help China development) and opened up investment possibilities for US money and technology, and what happen instead?
China can persuade US companies enough to keep the scheme going by opening up some market. And don't worry about the "image", China and US companies can together fake it 
Those are your words, and btw with which I fully agree. Then you talk about different mentality and China being innocent in her wishes? Sure, West was stupidly naive, we may agree on this, but the tide is changing...

Australia wants something to do with China practicing its lawful power in Hong Kong. If Australia never attempted to pollute China's political system and never attempted to spread Western idealism to China, none would have happened.

Australia as well the whole world also wanted to know few other things of common interest... But, I am not going to enter into any debate with you as no chance we may come to a common point of view over current and not only problems, time will show up who is right and to what extend. The only advice would be to temper a little down and do not consider yourself to be the smartest and brightest, the one who is checking real history events at a bare minimum extend, will notice that "Fortuna" is a very capricious lady