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> It's fascinating that the response is to close production rather than increase prices. Those aren't mutually exclusive... But you can't keep production runn
by slver 6y ago
> It's fascinating that the response is to close production rather than increase prices.
Those aren't mutually exclusive...
But you can't keep production running when you have no chips. Throwing money at the complete lack of chips doesn't help.
- wmf 6y agoIt sort of does help; chip prices have risen because customers are out-bidding each other. If you're willing to pay 10x 2019 prices you can probably get whatever chips you need. Many companies are deciding that's not worthwhile.
- nemothekid 6y ago>If you're willing to pay 10x 2019 prices you can probably get whatever chips you need. Many companies are deciding that's not worthwhile. The problem as I understand it is a company like TSMC sells capacity for the some time period - like a year. The automakers thought people wouldn't buy cars, so they relinquished their slots. Turns out car demand exploded, so they went back to TSMC and said "hey we need those slots" and TSMC said "sorry your slot already got sold to nvidia". Chrsyler could offer to pay TSMC 10x more, but that that ultimately wouldn't do much, the slot is gone and they would have to buy the capacity from nvidia. nvidia is in no position to sell because they are also facing extreme demand. How would it look to nvidia if, while gamers across the world can't get their hands on 3080s, they sold their fab capacity to Chrysler for $$$$?. So money isn't solely the issue here.
- turbinerneiter 6y agoI think your simplifications could change the logic here. Chrysler does not directly buy from TSMC, they buy from i.e. TI, Renesas, Microchip, NXP, ... Many of those companies do still have fabs, and even if not, they are not competing with Nvidia. They are producing on the old, old fabs, at 40, even 80nm. We would need better numbers on where these microcontrollers are fabbed to be able to tell how this interferes with i.e. Nvidia and Apple on TSMC 5nm.
- Plasmoid2000ad 6y agoI think there is also a substrate shortage https://www.semi.org/en/blogs/business-markets/the-substrate-crisis-deepens https://www.semi.org/en/blogs/business-markets/the-substrate... And an Air Freight shortage even if you do pay 10x to jump the production queue https://www.wsj.com/articles/snarled-supply-chain-trips-up-small-businesses-11618997400 https://www.wsj.com/articles/snarled-supply-chain-trips-up-s... I'm not even sure it's strictly speaking still true that automotive only uses outdated fabs. Tesla seems to have disrupted the use of low-end chips at least in high end cars, like Jaguar Land Rover.
- turbinerneiter 6y agoI think they have a pretty wide spectrum - your ABS controller will probably be on older node than the processor for the entertainment system.
- totalZero 6y agoChange "probably" to "definitely" and I'm with you. Automotive chips need to be a lot more reliable than a PS5 GPU, and that kind of reliability takes time to test and prove. Not to mention that automakers try not to change parts unnecessarily because their economies of scale are only as useful as their ability to use one component across several models and years. If you care little about thermal efficiency and power consumption, and you're not doing extremely abstract computations, there's no reason whatsoever to spend tons of money on a smaller lithography. I was looking into this recently, and the price difference between some of the equipment involved is around two orders of magnitude from the leading edge to the trailing edge.
- baybal2 6y agoNot even 80nm. Most stuff in that space is 130nm+, some extremely old, but still produced ICs from early nineties are on 300nm+ for use on equally old automotive parts.
- deleted 6y ago[deleted]
- ghostpepper 6y agoNot to detract from what you're saying but gamers aren't getting the cards anyway; they're going to bitcoin miners.
- totalZero 6y agoIf you look at the concurrent user numbers on Steam, it seems like there's overwhelming engagement in the gaming space right now. I thought the same as you until I looked into it a bit more. (Also, bitcoin is mined on ASICs nowadays, but I get what you mean.)
- Kiro 6y agoPeople are gaming but they do it on old hardware. Barely anyone I know has bought new hardware in years but they still game more than ever.
- CydeWeys 6y agoNo, they're not going to Bitcoin miners. Ethereum miners, sure.
- jachee 6y agoIt seems inevitable that "bitcoin" (as opposed to "Bitcoin") is destined to become the "kleenex" (as opposed to "Kleenex") of crypto. Etherium fits the bill: it's a digital (bit) currency (coin).
- oneplane 6y agoThere are contracts that might prevent that from happening, just like lead times don't disappear, even if you outbid everyone else (if it was a bidding issue). Throwing money at a problem to try and solve it can be impossible in various ways.
- impalallama 6y agoChip shortages are at a point in the US were government contractors who already have right by law to jump ahead of anyone else in line when ordering and can probably pay whatever price they want are still being told that new shipments won't come for 16 months. There just are not enough of them being made.
- laurent92 6y agoDoes that make Apple’s M1-in-all-devices announcement twice a demonstration of strength of their supply chain?
- wmf 6y agoYes, Apple has presumably locked in both supply and prices of all their components including Ax/Mx, DRAM, flash, LCD panels, etc.
- Spooky23 6y agoYes. It’s really a testament to the praise of Tim Cook as a master of operations. It’s quite a statement that Apple launched four variants of the same product (M1 Air, M1 Pro, M1 iMac, M1 iPad) in the middle of a supply chain apocalypse, all within a few weeks and is both delivering on schedule and even putting the product on sale. Call your HP rep and try to buy an LCD monitor right now.
- ariwilson 6y agohttps://www.amazon.com/HP-Pavilion-27-inch-Backlight-27xw/dp/B0199W9UMS/ref=sr_1_4?dchild=1&keywords=hp+27+monitor&qid=1619207694&sr=8-4 https://www.amazon.com/HP-Pavilion-27-inch-Backlight-27xw/dp... ?
- Spooky23 6y agoThat’s in the channel. Try getting a few hundred direct. Similar story for small MFPs over the winter.
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- goodcanadian 6y agoWe are having a similar problem, and certain chips simply aren't available at any price.
- 55873445216111 6y agoIt's not correct to think that increased prices solves shortages. I work in automotive chip industry. We have many cases where no amount of money could fix the shortage within the next 9 months. Only choices for carmaker is to produce fewer cars or produce the car without the chip that is short (which is not always possible).
- cigaser 6y agoCapacity is sold out for several months. Next free slots are in several months. Even 1000x price may not get chips manufacturers need.
- dorgo 6y agoSo, it's a market failure? Nobody has predicted the shortage, stockpiled and sold for 1000x the old price?
- SilasX 6y agoYeah, but -- though I haven't run the numbers -- it seems like Jaguar would be better off taking smaller profits while overbidding for the chips rather than just go idle and make something. Even selling at a loss may be preferable to the huge damage to brand from such a discontinuity. (Remember how hard the major internet sites work to avoid downtime.)
- vanviegen 6y agoOn the other hand, the car industry never seemed to care much for catering to instant (or even just somewhat fast) gratification. Even a car from stock usually takes at least a week to make 'road ready', which seems suboptimal from a marketing perspective.
- Kliment 6y agoCar companies are literally paying 6x to 8x 2019 prices right now and still can't get stock.
- 34679 6y agoIt's not just the normal customers, though. A predicted shortage caused a run on chips by people looking for a profit. I've been working on a PCB design for months in which I specifically picked a chip to design around that was newish, in current production, and plentiful at all the major suppliers. I got my first test run done, made a few changes, ordered a second run, which I intended to populate myself, and there were exactly 4 chips left at a single major supplier. Yet, Octopart suddenly lists dozens of new suppliers I've never heard of.
- usrusr 6y agoIf you have a stockpile of your supplies you'll notice that you can't replenish them long before actually running out and you can therefore increase the price of your product to extract the highest amount from whatever limited volume that you can still produce. Except of course when you are working off an order backlog, but then emergency procurement in an empty market will be even more ruinous.
- skeeter2020 6y agoI wonder if it's possible to retool production lines to keep going without the chips, then add them later. It increases WIP but we saw this in the 80's with computers; they soldered sockets for those chips then only needed to snap them in to complete the machine.
- phreeza 6y agoAt some price point, you could probably substitute the chips with FPGAs? Though I'm not sure if that would work for cars without requiring some sort of recertification.