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Their margins are much tighter than Apple’s. This outcome is far better than having a ton of unsold stock depreciating in dealer yards. That quickly leads to ba
by jdsully 6y ago
Their margins are much tighter than Apple’s. This outcome is far better than having a ton of unsold stock depreciating in dealer yards. That quickly leads to bankruptcy as it did in ‘08.
Limiting their downside risk was the right call given the information.
- tonyedgecombe 6y agoSo now the auto manufacturers know they don't need to worry the next time it looks like there will be a downturn. They can cancel orders and if they turn out to be wrong just get on the phone to their favourite politician.
- detaro 6y agoand then what? TSMC falls over itself because oh no, Merkel sent a letter, full focus on automotive chips? I doubt that has very much influence in how production is balanced.
- profquail 6y agoMaybe more like: next time there’s a downturn, keep the orders if they can afford to. Having the chips on hand when the market picks up again could be a great investment, since they’ll be able to produce vehicles when their competitors can’t. Or they can sell some of the chips they’re holding to their competitors (at the going market rate).