27 ms·

A big hurdle to fixing the chip shortage: substrates

114 points by noir-york 5y ago

neonate 5y ago
https://archive.is/EdmX9 https://archive.is/EdmX9
Robotbeat 5y ago
It’s strange that this happened. Did COVID just cause everyone to stop investing for a bit, leading to all these downstream problems? Or was this gonna happen anyway?
- cronix 5y ago
  Let's say that all Banana growers were shut down for 8 months and during that time all existing supply was bought up that were sitting on store shelves. After they were allowed to start growing again, how long until you see a Banana in your local store? You better be there when they arrive, because everyone else who has been wanting Bananas is waiting too. On top of that, can the Banana grower even get all of the items needed to grow the same sized crop as last year? All of the fertilizers, etc.? Those companies have been shut down during this time too. Oh, you're not the only company who needs those exact same supplies and the Potato farmer down the road is trying to purchase it too? After you've grimaced that the price has risen due to short supply and you had to source the items from 3x as many suppliers as you used to, now, you're relieved that your Bananas are almost done growing. You call the trucking company to deliver them to the distributor, who you learn is short staffed and prices have risen in order to attract truckers who are now in short supply, and factor in the gas price increases. Every single segment of the economy that the Banana grower relied on is going through the same thing, at the same time. Making chips is several orders of magnitude harder/more complex than growing Bananas. Think about how many different companies products must be purchased to make a wafer. How many different highly specialized chemicals are used in addition to solid materials? If any single one of them is having supply or labor issues...
  - nostrademons 5y ago
    Also imagine that there are no truck drivers to drive the bananas from the plantations to your local stores, and no ships to bring fertilizer to the banana plantations. Even when they start growing again, it's going to be a while before you can get one. Supply chains in general are in shambles. We had mass COVID outbreaks at the ports that shut down unloading, as well as outbreaks at see. Truck drivers are quitting because it ain't worth their while anymore. Countries closed their borders. Patterns of consumer demand changed, so all the containers got stuck in North America. Chips are the most obvious manifestation of this because the supply chains for them are long and complex, but we're going to see it in many other products as well once inventory buffers run out.
    - vkou 5y ago
      Countries have closed their borders to casual travel, but not to shipping.
      - thehappypm 5y ago
        China, notably, closes ports to end outbreaks.
    - avs733 5y ago
      Chips are also obvious because they are a discrete thing that is at the end of one long supply chain and then beginning of other long supply chains.
    - mschuster91 5y ago
      > Also imagine that there are no truck drivers to drive the bananas from the plantations to your local stores, and no ships to bring fertilizer to the banana plantations. In the UK, the situation is even worse: because there is an acute shortage of truckers to truck pigs from farms to slaughterhouses and a lack of butchers, 100k pigs are set to be killed and burned - they simply grow each day, and butchers have limits on how big/heavy the pigs may be: https://www.dailymail.co.uk/news/article-9958663/Farms-set-kill-burn-100-000-pigs-post-Brexit-butchers-shortage.html https://www.dailymail.co.uk/news/article-9958663/Farms-set-k... Turns out, no one but immigrants wanting to send or set aside money for their home country wants to do the job for the wage the companies are paying. And companies can't pay better wages because customers are conditioned on cheap meat. And politicians haven't done anything to curb that because tolerating rising food prices is one of the fastest ways of not getting reelected. Brexit really hit at the worst possible time, and now innocent pigs have to suffer for society's failures. What a damn tragic waste.
- fidesomnes 5y ago
  Supply change disruption before a major war.
- davidw 5y ago
  IIRC, some industries did stop or slow investing, foreseeing a dip in the economy. The dip proved to be briefer than expected though, which is good, but left people scrambling for inventory. The guy who runs my local bike shop is saying they still won't have enough bikes next year.
  - danielodievich 5y ago
    I just came back empty handed from bike shop trying to buy some spare tubes. No supply. I better not get too many flats!
    - davidw 5y ago
      If it's a MTB or gravel bike you may want to invest in a tubeless setup.
      - frenchy 5y ago
        A tubless setup definitely requires some supplies as as well.
- joe_the_user 5y ago
  What I see as explanations of the chip shortage is a combination of factors. One immediate cause was that some manufacturers reduced their chip orders month in advance since they expected less demand but then the demand didn't decrease and they had to scramble, increasing general demand. Another immediate cause was that Covid has made some production lines shutdown or become unreliable. But the reason that now a year or more on, we have problems, seems require more explaining. Larger causes I've heard; The chip supply chain is extremely long, long enough so you get a whipsaw effect or anti-whipsaw effect. A whipsaw effect means by the time demand catches up with supply, it goes beyond it and manufacturers lose money. But what seems to be happening is an anti-whipsaw effect - suppliers are avoiding any panic measures to catch up with demand and so lose money but this means the catching up is a long process. This is something of a product of a highly capital intensive economy pushing manufacturers to only produce, invest and consume in a narrow range. Limiting investment in capital equipment is a way to make the investment you make is 100% utilized. Limiting consumption to the lowest priced items is a way to make sure all of your production is profitable. It seems like a new phenomena. Instead of a "deflationary spiral" these factors pushed to their extreme could result in a "decreasing production spiral" where physical continually declines despite demand. We're not there yet, of course but it seems like an interesting economic phenomena.
- burnte 5y ago
  It's poorly implemented JIT. People simplified Just In Time to mena "no inventory" and then when a disruption hit, it echoed up and down supply chains. JIT doesn't mean no inventory, it means managing inventory and your supply chain to ensure adequate iventory based on needs both current and forseen. One car example, you should ensure you have 4 times as many tires available as you do cars, because an imbalance there becomes either a constraint (too few tires) or a waste (too many tires). But it's not JUST making those numbers match, you have to forecast, how many cars and I going to build, are my supplies for the cars ok, look at normal fluctuations, and then also look at potential supply chain FAILURES and plan for them. Maybe it's easy to get brake pads but the lead time on tires is 4 months. Well then, I don't need to stock as many brake pads in case of a disruption, but I should definitely have enough tires to carry me through a potential disruption (maybe not 4 months worth, maybe I stock 2 and slow down car production, or something). All these companies kept their shelves bare, and when some companies slowed orders, they didn't stop to think that the manufacturers they bought from would look for other customers to take up capacity. They acted like TSMC would sit there by the phone waiting for some customer to come back. No, they're in the business of selling chips, not in the business of servicing DumbCorp. No one planned for what might happen if they stopped ordering parts, they just expected the capacity to be there. I'm bringing 6 new sites online this year, and a 7th early in the new year. I just bought a bunch of network equipment for not just our existing sites, but the 7 to come. I looked at supply chain issues, and said to my CFO, this inventory is going to sit here for 6 months, but we get a larger quantity discount, and we'll get the new sites online faster and not worry about getting this equipment if we buy now. We COULD have saved that money now, but the advantages of having it when we need it is greater than having that money in the bank for 6 more months. JIT means planning ahead, not just micromanaging inventory. Too many MBAs don't get that.
  - runawaybottle 5y ago
    Your description doesn’t sound too different (if at all) from the face mask/ventilator shortage at the start of the pandemic. We didn’t stock up, and everyone tried to JIT purchase the necessary equipment. Maybe we all have something to learn from Doomsday preppers.
- philg_jr 5y ago
  The developer of the O.MG cable has a good Twitter thread describing the issues. https://twitter.com/_mg_/status/1388321639524229120?s=21 https://twitter.com/_mg_/status/1388321639524229120?s=21
  - engineer_22 5y ago
    Unrolled thread: https://threadreaderapp.com/thread/1388321639524229120.html https://threadreaderapp.com/thread/1388321639524229120.html
    - contingencies 5y ago
      This is a pretty good summary. Note on interpretation: it links to people expressing surprise about 12 months after the shit had hit the fan. IMHO a strong mitigation strategy includes (1) have control of your designs (be responsive to your business environment) (2) minimize vendor-specific components (replace sexy ICs with stock-components where possible) (3) keep tested alternatives on the books for major components (redundant supply chain) (4) cache parts where necessary
- xadhominemx 5y ago
  The main thing, particularly for ABF substrates, is that remote work drove PC volumes way higher than anyone thought.
- xyzzy21 5y ago
  Chip investment was already down-shifted in 2019 because it was a down year based on historical semiconductor cycles. Then COVID triggered a collapse of nearly all JIT supply chains (not just medical). Try getting ANY industrial or consumer product - the supply chains are all broken right now. Some of this is China intentionally fxcking us. Some of it is over dependence on outsourcing. Most is due to inherent instability of JIT as a fundamental flaw that's long been ignored. Many supply chains have both short and long feedback loops to themselves. For example ALL the equipment required to increase semiconductor capacity always require the very same semiconductor supply chain capacity (chip making requires chips being made).
- dhenneberger 5y ago
  It's a demand shock.
- ec109685 5y ago
  There's also the stimulus that injected demand into the system, so more goods may purchased than if COVID never happpened.
cure 5y ago
From TFA: > By 2025, she foresees demand for around 185 million square feet of advanced substrate manufacturing space against about 145 million square feet built. It's curious that the production capacity for substrate is expressed in terms of manufacturing space. Is that an industry-specific quirk?
- cartoonworld 5y ago
  Seems reasonable, semi is fabbed with a lithographic process, the # of devices on the wafer isn’t necessarily tightly coupled with size, has variable resolution and defects. The work unit is completed wafers that later get binned into different device quality levels. Makes sense when your biz is to blast plasma over mm2 of silicon
  - evancox100 5y ago
    What you're saying seems to make sense if they were referring to output in terms of total area of substrates produced, but instead sounds like TFA is talking about manufacturing floor space
    - CRConrad 5y ago
      > sounds like TFA is talking about manufacturing floor space Does it really? I for one certainly did a double-take at the GP's interpretation. It's a product that's usually measured in surface area, and was reported in surface area. Feels pretty obviously related to the product itself, not the factory floor.
    - cartoonworld 5y ago
      You're right, I didn't pick up on that, thank you.
- smoldesu 5y ago
  "On one occasion, as Master Foo was traveling to a conference with a few of his senior disciples, he was accosted by a hardware designer. The hardware designer said: “It is rumored that you are a great programmer. How many lines of code do you write per year?” Master Foo replied with a question: “How many square inches of silicon do you lay out per year?” “Why...we hardware designers never measure our work in that way,” the man said. “And why not?” Master Foo inquired. “If we did so,” the hardware designer replied, “we would be tempted to design chips so large that they cannot be fabricated - and, if they were fabricated, their overwhelming complexity would make it be impossible to generate proper test vectors for them.” Master Foo smiled, and bowed to the hardware designer. In that moment, the hardware designer achieved enlightenment." - Master Foo and the Hardware Designer: http://catb.org/esr/writings/unix-koans/index.html http://catb.org/esr/writings/unix-koans/index.html
usui 5y ago
Lol every time I see the word "feet" I'm reminded that this article isn't targeted to anyone but Americans, even when talking about manufacturing lines in Asia. My East Asian bias is showing but in all my experience I absolutely have never had to use those units in a serious professional context. Any time I see a technically-sounding article use units like "feet" and "football fields" I subconsciously find it very difficult to take anything afterward seriously. I admit it's irrational since units are arbitrary and orthogonal anyway, but it seems... forced. Is it really necessary to use those units in a technical context in order to relate to your readers? EDIT: Lots of America-centric people are jumping onto me for this initial comment, stating that WSJ is built for its /true/ target audience, /Americans/. What sparked my comment was the fact I was reading this article in Japanese. The aforementioned numbers and graph are expressed in feet, so this kind of forced conversion across industry domain and language barrier seemed contrived and got me started on this train of thought. https://jp.wsj.com/articles/the-chip-shortage-has-made-a-star-of-this-little-known-component-11630992492 https://jp.wsj.com/articles/the-chip-shortage-has-made-a-sta...
- genewitch 5y ago
  The difference between 185 million ft^2 and whatever you pick doesn't matter. It may as well be in hectares or "multiples of some lake somewhere", it's a massive number. You have, and are probably using right now, a voice controlled computer that can convert anything to anything else, by just asking. Is it really worth typing this every time an American site uses American language? We all get it, Americans with their imperial units, ha ha.
  - usui 5y ago
    I think you might have missed that I already stated that it's an irrational thing to complain about because units in nature are arbitrary, but given that no one uses these units for the topic at hand, why use them at all? Just for relatability? > It may as well be in hectares or "multiples of some lake somewhere", it's a massive number. We're saying the same thing but arguing for the opposite. Like I said, no one in a technical capacity uses these units seriously. So then if the number is so conceptually massively big and the units don't matter, why go through the extra forced effort of converting to imperial? Just use the units that the specifications come in and the numbers that the factories use? The more you play with vast unit conversions like this, the more you risk losing information across sources/citations. What if I want to do my own research later on? It's more work if I'm searching for specific numbers on Google. We also know just how terrible Google Search results are getting nowadays, so... > We all get it, Americans with their imperial units, ha ha. I think this is an uncharitable interpretation of my comment. I'm not trying to make fun of Americans, I'm trying to understand what the extra efort is worth for?
deleted 5y ago
[deleted]
lovich 5y ago
>Now major chip companies are resorting to unusual tactics. They are placing orders far in advance and prepaying so that substrate companies have ample cash to build more factories. Some are committing to buying the entire supply of new production lines to give their suppliers confidence to invest. If the chip makers are investing this much money into the substrate businesses, why aren't they just purchasing some of these companies wholesale?
- azemetre 5y ago
  It costs over $5 billion dollars to build a single fab. I can only assume the more complicated chips costs 3-4 times more. It also takes over three years to build the plant itself. We aren't even talking about the people you'd even need to employ, design, and run the place (highly specialized labor). This is such a huge burdensome cost. It's not even a guarantee that that such an investment would even make sense once 5-years pass. I do think there should be more fabs and having them located in one area of the world is already playing out to be a geopolitical nightmare. It's obviously going to become a national security issue for nearly every industrialized country on earth over the next decade if not sooner.
  - deleted 5y ago
    [deleted]
  - lovich 5y ago
    In the article it says they are committing to buying the entire production lines output. Isn't that just committing to spending as much money as building the factories + the profit of the vendor, but with no control over the actual production ?
    - andrewxdiamond 5y ago
      It’s very unlikely that the deal says “we will buy everything you sell us no matter what.” It’s probably a typical purchasing agreement with tolerances and QA, just paid in advance. Thus there is still a lot of risk being taken on by the fabs. The production could go sour, geopolitics could change, resources might be unavailable, etc. The purchasing companies are externalizing all of this risk by purchasing the products instead of the company.
analog31 5y ago
Would smaller wafers help? They're thinner. I was surprised by the thickness of a 300mm wafer.
davidw 5y ago
I am imagining the 'plastics!' scene from The Graduate, but with 'substrates!'.
rpaddock 5y ago
The archive.is link at the top no longer works. This one is currently working: http://www.coppernews.io/2021/09/05/a-big-hurdle-to-fixing-the-chip-shortage-substrates/ http://www.coppernews.io/2021/09/05/a-big-hurdle-to-fixing-t...
blacktriangle 5y ago
Has anybody ever considered that better software may be a part of the solution to the chip shortage? Going back to actually caring about things like efficiency and using the hardware properly instead of living in layers of software abstraction miles high? We put men on the moon with chips that could probably be manufactured in somebody's basement. We easily fulfill society's NEEDs with that level of hardware, we just need to give up streaming gigs of Netflix through our Electron apps to make it happen.
- CivBase 5y ago
  I'm not sure why you'd think software inefficiency has anything to do with it. It's not a significant factor driving demand for new hardware. Demand for gaming PCs and consoles have nothing to do with inefficient software. Demand for automobiles has nothing to do with inefficient software. Demand for servers, networking equipment, and office PCs to support a suddenly-working-from-home labor force has nothing to do with inefficient software. Windows 11 not supporting 5-year-old hardware, crypto booms, and pathetically short support windows for smartphones have nothing to do with inefficient hardware. My 6-year-old laptop and 5-year-old desktop handle Electron apps just fine. It would be nice if the software was more efficient, but practically nobody is rushing out to replace a computer that was any good to begin with because Discord and Skype take up an extra 50 MB. Besides, making software more efficient is a long-term solution to a short-term problem.
- ca01an 5y ago
  Most chips are not processors running software and most of the manufactured processors are small embedded ones, i.e not the kind of processors running extremely bloated software applications
ggalaxximm 5y ago
The reason you can't get a PS5 is because China is deliberately messing with the supply chain, because of Trump's mini-trade-war with them in 2017-2020, which they have not forgotten.

114 points by noir-york 5y ago

https://archive.is/EdmX9 https://archive.is/EdmX9

It’s strange that this happened. Did COVID just cause everyone to stop investing for a bit, leading to all these downstream problems? Or was this gonna happen anyway?

cronix 5y ago
Let's say that all Banana growers were shut down for 8 months and during that time all existing supply was bought up that were sitting on store shelves. After they were allowed to start growing again, how long until you see a Banana in your local store? You better be there when they arrive, because everyone else who has been wanting Bananas is waiting too. On top of that, can the Banana grower even get all of the items needed to grow the same sized crop as last year? All of the fertilizers, etc.? Those companies have been shut down during this time too. Oh, you're not the only company who needs those exact same supplies and the Potato farmer down the road is trying to purchase it too? After you've grimaced that the price has risen due to short supply and you had to source the items from 3x as many suppliers as you used to, now, you're relieved that your Bananas are almost done growing. You call the trucking company to deliver them to the distributor, who you learn is short staffed and prices have risen in order to attract truckers who are now in short supply, and factor in the gas price increases. Every single segment of the economy that the Banana grower relied on is going through the same thing, at the same time. Making chips is several orders of magnitude harder/more complex than growing Bananas. Think about how many different companies products must be purchased to make a wafer. How many different highly specialized chemicals are used in addition to solid materials? If any single one of them is having supply or labor issues...
- nostrademons 5y ago
  Also imagine that there are no truck drivers to drive the bananas from the plantations to your local stores, and no ships to bring fertilizer to the banana plantations. Even when they start growing again, it's going to be a while before you can get one. Supply chains in general are in shambles. We had mass COVID outbreaks at the ports that shut down unloading, as well as outbreaks at see. Truck drivers are quitting because it ain't worth their while anymore. Countries closed their borders. Patterns of consumer demand changed, so all the containers got stuck in North America. Chips are the most obvious manifestation of this because the supply chains for them are long and complex, but we're going to see it in many other products as well once inventory buffers run out.
  - vkou 5y ago
    Countries have closed their borders to casual travel, but not to shipping.
    - thehappypm 5y ago
      China, notably, closes ports to end outbreaks.
  - avs733 5y ago
    Chips are also obvious because they are a discrete thing that is at the end of one long supply chain and then beginning of other long supply chains.
  - mschuster91 5y ago
    > Also imagine that there are no truck drivers to drive the bananas from the plantations to your local stores, and no ships to bring fertilizer to the banana plantations. In the UK, the situation is even worse: because there is an acute shortage of truckers to truck pigs from farms to slaughterhouses and a lack of butchers, 100k pigs are set to be killed and burned - they simply grow each day, and butchers have limits on how big/heavy the pigs may be: https://www.dailymail.co.uk/news/article-9958663/Farms-set-kill-burn-100-000-pigs-post-Brexit-butchers-shortage.html https://www.dailymail.co.uk/news/article-9958663/Farms-set-k... Turns out, no one but immigrants wanting to send or set aside money for their home country wants to do the job for the wage the companies are paying. And companies can't pay better wages because customers are conditioned on cheap meat. And politicians haven't done anything to curb that because tolerating rising food prices is one of the fastest ways of not getting reelected. Brexit really hit at the worst possible time, and now innocent pigs have to suffer for society's failures. What a damn tragic waste.
fidesomnes 5y ago
Supply change disruption before a major war.
davidw 5y ago
IIRC, some industries did stop or slow investing, foreseeing a dip in the economy. The dip proved to be briefer than expected though, which is good, but left people scrambling for inventory. The guy who runs my local bike shop is saying they still won't have enough bikes next year.
- danielodievich 5y ago
  I just came back empty handed from bike shop trying to buy some spare tubes. No supply. I better not get too many flats!
  - davidw 5y ago
    If it's a MTB or gravel bike you may want to invest in a tubeless setup.
    - frenchy 5y ago
      A tubless setup definitely requires some supplies as as well.
joe_the_user 5y ago
What I see as explanations of the chip shortage is a combination of factors. One immediate cause was that some manufacturers reduced their chip orders month in advance since they expected less demand but then the demand didn't decrease and they had to scramble, increasing general demand. Another immediate cause was that Covid has made some production lines shutdown or become unreliable. But the reason that now a year or more on, we have problems, seems require more explaining. Larger causes I've heard; The chip supply chain is extremely long, long enough so you get a whipsaw effect or anti-whipsaw effect. A whipsaw effect means by the time demand catches up with supply, it goes beyond it and manufacturers lose money. But what seems to be happening is an anti-whipsaw effect - suppliers are avoiding any panic measures to catch up with demand and so lose money but this means the catching up is a long process. This is something of a product of a highly capital intensive economy pushing manufacturers to only produce, invest and consume in a narrow range. Limiting investment in capital equipment is a way to make the investment you make is 100% utilized. Limiting consumption to the lowest priced items is a way to make sure all of your production is profitable. It seems like a new phenomena. Instead of a "deflationary spiral" these factors pushed to their extreme could result in a "decreasing production spiral" where physical continually declines despite demand. We're not there yet, of course but it seems like an interesting economic phenomena.
burnte 5y ago
It's poorly implemented JIT. People simplified Just In Time to mena "no inventory" and then when a disruption hit, it echoed up and down supply chains. JIT doesn't mean no inventory, it means managing inventory and your supply chain to ensure adequate iventory based on needs both current and forseen. One car example, you should ensure you have 4 times as many tires available as you do cars, because an imbalance there becomes either a constraint (too few tires) or a waste (too many tires). But it's not JUST making those numbers match, you have to forecast, how many cars and I going to build, are my supplies for the cars ok, look at normal fluctuations, and then also look at potential supply chain FAILURES and plan for them. Maybe it's easy to get brake pads but the lead time on tires is 4 months. Well then, I don't need to stock as many brake pads in case of a disruption, but I should definitely have enough tires to carry me through a potential disruption (maybe not 4 months worth, maybe I stock 2 and slow down car production, or something). All these companies kept their shelves bare, and when some companies slowed orders, they didn't stop to think that the manufacturers they bought from would look for other customers to take up capacity. They acted like TSMC would sit there by the phone waiting for some customer to come back. No, they're in the business of selling chips, not in the business of servicing DumbCorp. No one planned for what might happen if they stopped ordering parts, they just expected the capacity to be there. I'm bringing 6 new sites online this year, and a 7th early in the new year. I just bought a bunch of network equipment for not just our existing sites, but the 7 to come. I looked at supply chain issues, and said to my CFO, this inventory is going to sit here for 6 months, but we get a larger quantity discount, and we'll get the new sites online faster and not worry about getting this equipment if we buy now. We COULD have saved that money now, but the advantages of having it when we need it is greater than having that money in the bank for 6 more months. JIT means planning ahead, not just micromanaging inventory. Too many MBAs don't get that.
- runawaybottle 5y ago
  Your description doesn’t sound too different (if at all) from the face mask/ventilator shortage at the start of the pandemic. We didn’t stock up, and everyone tried to JIT purchase the necessary equipment. Maybe we all have something to learn from Doomsday preppers.
philg_jr 5y ago
The developer of the O.MG cable has a good Twitter thread describing the issues. https://twitter.com/_mg_/status/1388321639524229120?s=21 https://twitter.com/_mg_/status/1388321639524229120?s=21
- engineer_22 5y ago
  Unrolled thread: https://threadreaderapp.com/thread/1388321639524229120.html https://threadreaderapp.com/thread/1388321639524229120.html
  - contingencies 5y ago
    This is a pretty good summary. Note on interpretation: it links to people expressing surprise about 12 months after the shit had hit the fan. IMHO a strong mitigation strategy includes (1) have control of your designs (be responsive to your business environment) (2) minimize vendor-specific components (replace sexy ICs with stock-components where possible) (3) keep tested alternatives on the books for major components (redundant supply chain) (4) cache parts where necessary
xadhominemx 5y ago
The main thing, particularly for ABF substrates, is that remote work drove PC volumes way higher than anyone thought.
xyzzy21 5y ago
Chip investment was already down-shifted in 2019 because it was a down year based on historical semiconductor cycles. Then COVID triggered a collapse of nearly all JIT supply chains (not just medical). Try getting ANY industrial or consumer product - the supply chains are all broken right now. Some of this is China intentionally fxcking us. Some of it is over dependence on outsourcing. Most is due to inherent instability of JIT as a fundamental flaw that's long been ignored. Many supply chains have both short and long feedback loops to themselves. For example ALL the equipment required to increase semiconductor capacity always require the very same semiconductor supply chain capacity (chip making requires chips being made).
dhenneberger 5y ago
It's a demand shock.
ec109685 5y ago
There's also the stimulus that injected demand into the system, so more goods may purchased than if COVID never happpened.

cure 5y ago

From TFA: > By 2025, she foresees demand for around 185 million square feet of advanced substrate manufacturing space against about 145 million square feet built. It's curious that the production capacity for substrate is expressed in terms of manufacturing space. Is that an industry-specific quirk?

cartoonworld 5y ago
Seems reasonable, semi is fabbed with a lithographic process, the # of devices on the wafer isn’t necessarily tightly coupled with size, has variable resolution and defects. The work unit is completed wafers that later get binned into different device quality levels. Makes sense when your biz is to blast plasma over mm2 of silicon
- evancox100 5y ago
  What you're saying seems to make sense if they were referring to output in terms of total area of substrates produced, but instead sounds like TFA is talking about manufacturing floor space
  - CRConrad 5y ago
    > sounds like TFA is talking about manufacturing floor space Does it really? I for one certainly did a double-take at the GP's interpretation. It's a product that's usually measured in surface area, and was reported in surface area. Feels pretty obviously related to the product itself, not the factory floor.
  - cartoonworld 5y ago
    You're right, I didn't pick up on that, thank you.
smoldesu 5y ago
"On one occasion, as Master Foo was traveling to a conference with a few of his senior disciples, he was accosted by a hardware designer. The hardware designer said: “It is rumored that you are a great programmer. How many lines of code do you write per year?” Master Foo replied with a question: “How many square inches of silicon do you lay out per year?” “Why...we hardware designers never measure our work in that way,” the man said. “And why not?” Master Foo inquired. “If we did so,” the hardware designer replied, “we would be tempted to design chips so large that they cannot be fabricated - and, if they were fabricated, their overwhelming complexity would make it be impossible to generate proper test vectors for them.” Master Foo smiled, and bowed to the hardware designer. In that moment, the hardware designer achieved enlightenment." - Master Foo and the Hardware Designer: http://catb.org/esr/writings/unix-koans/index.html http://catb.org/esr/writings/unix-koans/index.html

usui 5y ago

Lol every time I see the word "feet" I'm reminded that this article isn't targeted to anyone but Americans, even when talking about manufacturing lines in Asia. My East Asian bias is showing but in all my experience I absolutely have never had to use those units in a serious professional context. Any time I see a technically-sounding article use units like "feet" and "football fields" I subconsciously find it very difficult to take anything afterward seriously. I admit it's irrational since units are arbitrary and orthogonal anyway, but it seems... forced. Is it really necessary to use those units in a technical context in order to relate to your readers? EDIT: Lots of America-centric people are jumping onto me for this initial comment, stating that WSJ is built for its /true/ target audience, /Americans/. What sparked my comment was the fact I was reading this article in Japanese. The aforementioned numbers and graph are expressed in feet, so this kind of forced conversion across industry domain and language barrier seemed contrived and got me started on this train of thought. https://jp.wsj.com/articles/the-chip-shortage-has-made-a-star-of-this-little-known-component-11630992492 https://jp.wsj.com/articles/the-chip-shortage-has-made-a-sta...

genewitch 5y ago
The difference between 185 million ft^2 and whatever you pick doesn't matter. It may as well be in hectares or "multiples of some lake somewhere", it's a massive number. You have, and are probably using right now, a voice controlled computer that can convert anything to anything else, by just asking. Is it really worth typing this every time an American site uses American language? We all get it, Americans with their imperial units, ha ha.
- usui 5y ago
  I think you might have missed that I already stated that it's an irrational thing to complain about because units in nature are arbitrary, but given that no one uses these units for the topic at hand, why use them at all? Just for relatability? > It may as well be in hectares or "multiples of some lake somewhere", it's a massive number. We're saying the same thing but arguing for the opposite. Like I said, no one in a technical capacity uses these units seriously. So then if the number is so conceptually massively big and the units don't matter, why go through the extra forced effort of converting to imperial? Just use the units that the specifications come in and the numbers that the factories use? The more you play with vast unit conversions like this, the more you risk losing information across sources/citations. What if I want to do my own research later on? It's more work if I'm searching for specific numbers on Google. We also know just how terrible Google Search results are getting nowadays, so... > We all get it, Americans with their imperial units, ha ha. I think this is an uncharitable interpretation of my comment. I'm not trying to make fun of Americans, I'm trying to understand what the extra efort is worth for?

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lovich 5y ago

>Now major chip companies are resorting to unusual tactics. They are placing orders far in advance and prepaying so that substrate companies have ample cash to build more factories. Some are committing to buying the entire supply of new production lines to give their suppliers confidence to invest. If the chip makers are investing this much money into the substrate businesses, why aren't they just purchasing some of these companies wholesale?

azemetre 5y ago
It costs over $5 billion dollars to build a single fab. I can only assume the more complicated chips costs 3-4 times more. It also takes over three years to build the plant itself. We aren't even talking about the people you'd even need to employ, design, and run the place (highly specialized labor). This is such a huge burdensome cost. It's not even a guarantee that that such an investment would even make sense once 5-years pass. I do think there should be more fabs and having them located in one area of the world is already playing out to be a geopolitical nightmare. It's obviously going to become a national security issue for nearly every industrialized country on earth over the next decade if not sooner.
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- lovich 5y ago
  In the article it says they are committing to buying the entire production lines output. Isn't that just committing to spending as much money as building the factories + the profit of the vendor, but with no control over the actual production ?
  - andrewxdiamond 5y ago
    It’s very unlikely that the deal says “we will buy everything you sell us no matter what.” It’s probably a typical purchasing agreement with tolerances and QA, just paid in advance. Thus there is still a lot of risk being taken on by the fabs. The production could go sour, geopolitics could change, resources might be unavailable, etc. The purchasing companies are externalizing all of this risk by purchasing the products instead of the company.

analog31 5y ago

Would smaller wafers help? They're thinner. I was surprised by the thickness of a 300mm wafer.

davidw 5y ago

I am imagining the 'plastics!' scene from The Graduate, but with 'substrates!'.

rpaddock 5y ago

The archive.is link at the top no longer works. This one is currently working: http://www.coppernews.io/2021/09/05/a-big-hurdle-to-fixing-the-chip-shortage-substrates/ http://www.coppernews.io/2021/09/05/a-big-hurdle-to-fixing-t...

blacktriangle 5y ago

Has anybody ever considered that better software may be a part of the solution to the chip shortage? Going back to actually caring about things like efficiency and using the hardware properly instead of living in layers of software abstraction miles high? We put men on the moon with chips that could probably be manufactured in somebody's basement. We easily fulfill society's NEEDs with that level of hardware, we just need to give up streaming gigs of Netflix through our Electron apps to make it happen.

CivBase 5y ago
I'm not sure why you'd think software inefficiency has anything to do with it. It's not a significant factor driving demand for new hardware. Demand for gaming PCs and consoles have nothing to do with inefficient software. Demand for automobiles has nothing to do with inefficient software. Demand for servers, networking equipment, and office PCs to support a suddenly-working-from-home labor force has nothing to do with inefficient software. Windows 11 not supporting 5-year-old hardware, crypto booms, and pathetically short support windows for smartphones have nothing to do with inefficient hardware. My 6-year-old laptop and 5-year-old desktop handle Electron apps just fine. It would be nice if the software was more efficient, but practically nobody is rushing out to replace a computer that was any good to begin with because Discord and Skype take up an extra 50 MB. Besides, making software more efficient is a long-term solution to a short-term problem.
ca01an 5y ago
Most chips are not processors running software and most of the manufactured processors are small embedded ones, i.e not the kind of processors running extremely bloated software applications

ggalaxximm 5y ago

The reason you can't get a PS5 is because China is deliberately messing with the supply chain, because of Trump's mini-trade-war with them in 2017-2020, which they have not forgotten.