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As I understand the problem: Auto manufacturers need 380nm production lines. They unwisely canceled all their orders for >6 months. Their suppliers mothballe

by chasil 6y ago

As I understand the problem: Auto manufacturers need 380nm production lines. They unwisely canceled all their orders for >6 months. Their suppliers mothballed all these antiquated facilities. Maybe Intel can make money with this. It will be interesting to see.

wyldfire 6y ago
> They unwisely canceled all their orders for >6 months. These guys hate inventory with a raging passion.
- Guest42 6y ago
  That’s one thing I noticed in aerospace. The executives would far sooner run out of parts and have very expensive delays in order to hit turnover targets than to have a 2 month buffer to handle demand surges or scheduling variability. Then they’d leave for similar roles at bigger companies.
  - throwaway2048 6y ago
    That's a plague amongst modern management and corporate operations, you return amazing numbers by cutting all your inventory and production slack and it works fantastically, until a slight hiccup occurs and it fucks your production for years to come. But that is the next guy's problem, not yours. Efficiency and Robustness are very often a tradeoff, the more efficient you are, the more prone your entire operation is to minor disruptions. Something akin to overfitting in machine learning. Also something to consider is what happens when the entire economy is forced in that direction, where you either cut everything to the bone for the sake of efficiency, or go out of business due to competition.
    - GlennS 6y ago
      There's also the issue that it's much easier to do quality control when you're receiving your supplies Just In Time. The longer the lag between producing a faulty part and trying to use it, the harder to diagnose the problem. The analogous software problem is probably having database backups sitting around without regularly testing if you can successfully restore from them.
      - varjag 6y ago
        A two month warehouse buffer doesn't really pose any problems to QC.
      - hef19898 6y ago
        That's why QC happens when parts are received. And not when they are to be used. And I really wished I the "everything is running on JIT" meme to die. Because it is just plain wrong.
  - akiselev 6y ago
    > The executives would far sooner run out of parts and have very expensive delays in order to hit turnover targets than to have a 2 month buffer to handle demand surges or scheduling variability. That sounds like a contractor milking a cost-plus contract.
    - Guest42 6y ago
      Can you explain? This was a cost center for a large conglomerate with a number of multi-year contracts but I haven’t heard of cost-plus contracts only cost-plus pricing.
      - cptskippy 6y ago
        > haven’t heard of cost-plus contracts I don't know why someone would agree to them, but they're fairly common. Nasa awarded Boeing a cost-plus contract for the SLS. Basically they're awarded a contract for the cost estimate plus any overruns, it's basically a blank check.
  - hef19898 6y ago
    Coming from a Supply Chain function in aerospace, I have to agree and disagree. 2 months of stock are somewhere around a turn rate from 4-6. A region some aerospace companies can only dream of. The problems are, that they stock to much of some parts and not enough from others. That problems gets worse when programs reach end of life, obsolescence is a severe problem then. Most of the demand fluctuations in aerospace, less so for spares, is home made. Delivery lead times and production lead times are so long, that done right, fluctuations are mainly a problem for long lead time items. And that is manageable.
    - Guest42 6y ago
      I meant 2 months more as a floor across a majority of items(and it’s been a long time since then so there’s a certain amount of rounding). Production wanted to eliminate shortages whereas executives and accountants wanted to optimize turn rates while claiming to care about shortages. Overall, each of the projects had around 2000 unique parts (at least for what this particular plant was making). Occasionally, newer contracts would get a much higher prioritization and could grab parts (and employees) from older projects. Another scenario that would lead to extra demand was having test failures on a project that was nearing design freeze. I ended up changing industries to financial services, but will always have a deep respect and appreciation for what went into those projects.
      - hef19898 6y ago
        The funny thing is, that aiming for inventory levels, or certain levels across the board, can increase the likelihood of shortages. Higher stock means larger production lots and longer lead times. If for some reason your planned production / procurement doesn't match demand, almost a certainty with large production runs, one part cart run out of stock. And the large production runs make replenishment of this part difficult.
        Guest42 6y ago
        It was a very fun game that required knowing the capacity of each supplier and their suppliers as well. The sales orders had to get matched up with airplanes and sometimes the planes would have shortages that would then instantly changes years' worth of scheduling. Overall I felt like there were a number of good strategies but that sometimes the strategizing interfered with the execution. Peoples tenure and the projects they went through often influenced their notion of ideal. By the time I started getting comfortable understanding these things, it was time to get a new job.
rossdavidh 6y ago
It should also be mentioned that worldwide suppliers 1 and 3 had a big loss from power outages in Texas in February, and then supplier 2 had a fab burn down. But, if they hadn't canceled all their orders, it wouldn't be as bad a situation as it is.
burnte 6y ago
> Auto manufacturers need 380nm production lines. They "need" chips made on a 28 year old process? I'd really want a source for this. Even if it were true, there are still fabs that can make .35um process chips.
- akiselev 6y ago
  A source for what? Billion dollar capital projects have a lifetime of at least 30 years. RAD6000 CPUs are still made on 0.5um fabs.
  - burnte 6y ago
    A source that modern cars can't be built without .35um chips. I didn't say those old fabs aren't still pumpingout chips, in fact I pointed out THEY ARE still pumping out chips, despite the parent saying they had all been shuttered. I doubt that modern cars can't be built without old process chips, but would like a source rather than simply saying parent is wrong.
    - akiselev 6y ago
      My apologies, I completely misread what both you and the GP were saying
    - Arrath 6y ago
      I don't think its so much that the cars must be built with old chips, its that the designs are built, software written, tested, and safety certified around the specific chips they have. Whos to say the full process to swap out a handful of chips within the car and getting any required tests and certifications done wouldn't take as long or longer than waiting for the next production run of the spec'd chips?
KirillPanov 6y ago
> Auto manufacturers need 380nm production lines. I think you mean 350nm. This isn't surprising; a lot of nifty features got axed after 350nm, like having two full-fledged polysilicon layers (a few subsequent processes technically have two poly layers but one of them is totally crippled and can only be used for flash cells).
- baybal2 6y ago
  Yes, because doping wasn't surviving second poly
Kliment 6y ago
You understand semi-correctly. Here's my analysis on this from another thread https://news.ycombinator.com/item?id=26659709 https://news.ycombinator.com/item?id=26659709 The suppliers didn't mothball the facilities (which are not at all antiquated, and are massively in use for other things), they just sold that capacity to less capricious customers.

by chasil 6y ago

wyldfire 6y ago

> They unwisely canceled all their orders for >6 months. These guys hate inventory with a raging passion.

Guest42 6y ago
That’s one thing I noticed in aerospace. The executives would far sooner run out of parts and have very expensive delays in order to hit turnover targets than to have a 2 month buffer to handle demand surges or scheduling variability. Then they’d leave for similar roles at bigger companies.
- throwaway2048 6y ago
  That's a plague amongst modern management and corporate operations, you return amazing numbers by cutting all your inventory and production slack and it works fantastically, until a slight hiccup occurs and it fucks your production for years to come. But that is the next guy's problem, not yours. Efficiency and Robustness are very often a tradeoff, the more efficient you are, the more prone your entire operation is to minor disruptions. Something akin to overfitting in machine learning. Also something to consider is what happens when the entire economy is forced in that direction, where you either cut everything to the bone for the sake of efficiency, or go out of business due to competition.
  - GlennS 6y ago
    There's also the issue that it's much easier to do quality control when you're receiving your supplies Just In Time. The longer the lag between producing a faulty part and trying to use it, the harder to diagnose the problem. The analogous software problem is probably having database backups sitting around without regularly testing if you can successfully restore from them.
    - varjag 6y ago
      A two month warehouse buffer doesn't really pose any problems to QC.
    - hef19898 6y ago
      That's why QC happens when parts are received. And not when they are to be used. And I really wished I the "everything is running on JIT" meme to die. Because it is just plain wrong.
- akiselev 6y ago
  > The executives would far sooner run out of parts and have very expensive delays in order to hit turnover targets than to have a 2 month buffer to handle demand surges or scheduling variability. That sounds like a contractor milking a cost-plus contract.
  - Guest42 6y ago
    Can you explain? This was a cost center for a large conglomerate with a number of multi-year contracts but I haven’t heard of cost-plus contracts only cost-plus pricing.
    - cptskippy 6y ago
      > haven’t heard of cost-plus contracts I don't know why someone would agree to them, but they're fairly common. Nasa awarded Boeing a cost-plus contract for the SLS. Basically they're awarded a contract for the cost estimate plus any overruns, it's basically a blank check.
- hef19898 6y ago
  Coming from a Supply Chain function in aerospace, I have to agree and disagree. 2 months of stock are somewhere around a turn rate from 4-6. A region some aerospace companies can only dream of. The problems are, that they stock to much of some parts and not enough from others. That problems gets worse when programs reach end of life, obsolescence is a severe problem then. Most of the demand fluctuations in aerospace, less so for spares, is home made. Delivery lead times and production lead times are so long, that done right, fluctuations are mainly a problem for long lead time items. And that is manageable.
  - Guest42 6y ago
    I meant 2 months more as a floor across a majority of items(and it’s been a long time since then so there’s a certain amount of rounding). Production wanted to eliminate shortages whereas executives and accountants wanted to optimize turn rates while claiming to care about shortages. Overall, each of the projects had around 2000 unique parts (at least for what this particular plant was making). Occasionally, newer contracts would get a much higher prioritization and could grab parts (and employees) from older projects. Another scenario that would lead to extra demand was having test failures on a project that was nearing design freeze. I ended up changing industries to financial services, but will always have a deep respect and appreciation for what went into those projects.
    - hef19898 6y ago
      The funny thing is, that aiming for inventory levels, or certain levels across the board, can increase the likelihood of shortages. Higher stock means larger production lots and longer lead times. If for some reason your planned production / procurement doesn't match demand, almost a certainty with large production runs, one part cart run out of stock. And the large production runs make replenishment of this part difficult.
      - Guest42 6y ago
        It was a very fun game that required knowing the capacity of each supplier and their suppliers as well. The sales orders had to get matched up with airplanes and sometimes the planes would have shortages that would then instantly changes years' worth of scheduling. Overall I felt like there were a number of good strategies but that sometimes the strategizing interfered with the execution. Peoples tenure and the projects they went through often influenced their notion of ideal. By the time I started getting comfortable understanding these things, it was time to get a new job.

rossdavidh 6y ago

It should also be mentioned that worldwide suppliers 1 and 3 had a big loss from power outages in Texas in February, and then supplier 2 had a fab burn down. But, if they hadn't canceled all their orders, it wouldn't be as bad a situation as it is.

burnte 6y ago

> Auto manufacturers need 380nm production lines. They "need" chips made on a 28 year old process? I'd really want a source for this. Even if it were true, there are still fabs that can make .35um process chips.

akiselev 6y ago
A source for what? Billion dollar capital projects have a lifetime of at least 30 years. RAD6000 CPUs are still made on 0.5um fabs.
- burnte 6y ago
  A source that modern cars can't be built without .35um chips. I didn't say those old fabs aren't still pumpingout chips, in fact I pointed out THEY ARE still pumping out chips, despite the parent saying they had all been shuttered. I doubt that modern cars can't be built without old process chips, but would like a source rather than simply saying parent is wrong.
  - akiselev 6y ago
    My apologies, I completely misread what both you and the GP were saying
  - Arrath 6y ago
    I don't think its so much that the cars must be built with old chips, its that the designs are built, software written, tested, and safety certified around the specific chips they have. Whos to say the full process to swap out a handful of chips within the car and getting any required tests and certifications done wouldn't take as long or longer than waiting for the next production run of the spec'd chips?

KirillPanov 6y ago

> Auto manufacturers need 380nm production lines. I think you mean 350nm. This isn't surprising; a lot of nifty features got axed after 350nm, like having two full-fledged polysilicon layers (a few subsequent processes technically have two poly layers but one of them is totally crippled and can only be used for flash cells).

baybal2 6y ago
Yes, because doping wasn't surviving second poly

Kliment 6y ago

You understand semi-correctly. Here's my analysis on this from another thread https://news.ycombinator.com/item?id=26659709 https://news.ycombinator.com/item?id=26659709 The suppliers didn't mothball the facilities (which are not at all antiquated, and are massively in use for other things), they just sold that capacity to less capricious customers.