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If everyone buys 4 years of supplies, that exacerbates the problem. The supply chain bullwhip effect will be massive. For the next 3 years, fabs will be swimm
by jnwatson 5y ago
If everyone buys 4 years of supplies, that exacerbates the problem. The supply chain bullwhip effect will be massive.
For the next 3 years, fabs will be swimming in profit. After that, I expect a major correction.
- xxpor 5y agoWill the fabs have the discipline to actually use the extra cash injection wisely?
- monocasa 5y agoThey're the best positioned to do that, they're one of the last classic long tail, high capital investment portions of the industry. Each node is only competitive for a short while, but they have multiple nodes in the development pipeline because of how long it takes, and a misstep on a single node can devastate the whole company if you're not in the #1 spot originally. So the answer is we don't know it, depends on the management currently at the fab, but they have the right external incentive structure to handle it well.
- nickff 5y agoEveryone is suggested to place scheduled orders for the future. Nobody (that I’ve heard) is suggesting that you immediately purchase and carry four years of inventory. People in this market are generally very intelligent, and there have been a number of booms and busts in semiconductors in the last 30 years.