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There are a several factors that conspire to make the shortage worse: - These legacy chips fabbed at legacy nodes are made with legacy equipment. In many cases

• erosenbe0 5y ago
  Paging a semiconductor engineer. Isn't it not necessarily possible to do die shrinks and get drop-in compatibility, particularly for Q rated automotive chips? Moreover, some of these chips eat 5 volts by design and I don't think 28nm or 14nm or 7nm will provide enough resistance for that. Plus, some have pmic or internal power mosfets that are specific to various processes.
  • Kliment 5y ago
    It's almost never possible to do a function-compatible die shrink for anything that needs to work over a large voltage and/or temperature range. Many automotive chips operate at 80V or more, 5V and 12V parts are ubiquitous, and indeed lots need bulk area to be able to switch large currents. Making them on small processes is not only an enormous design effort where it's possible at all, it also doesn't make sense because there's still way more capacity on larger processes than on smaller ones, and the only way small processes win is by packing so many dies on a wafer that they can get away with their terrible per-wafer cost and awfully bad defect rate.
    • erosenbe0 5y ago
      Thanks for the informed reply.
  • ip26 5y ago
    Think of it this way. You could probably design something logic-compatible, voltage-compatible, speed-compatible... but a chip is fundamentally an analog device with sensitivity. You can't change the mask, let alone the process, and still have the same device. Something will be different. Certification is the process of saying the difference is OK.
    • erosenbe0 5y ago
      Right right. I see a lot of pmic parts, newer MCUs, 3.3V and 5V tolerant parts, as well as various FPGAs out of stock. All of these are fabbed on >40nm or more, sometimes much more. Not going to ram 5V through a 7nm finFET.
• iancmceachern 5y ago
  100% on the hoarding thing. Everyone I know of is making larger buys than ever, enough for years or production if not a products lifetime worth. This has t have an impact on the available supplies.
  • blibble 5y ago
    nice to see companies having behaviour as stupid, short-sighted and damaging as the people hoarding toilet paper
    • lnsru 5y ago
      While you could use newspaper as a substitute for toilet a paper some company has nothing as as a replacement. New part means costly re-certification of the whole product. No parts means one is out of business. So buying everything that is available on the market looks like very good decision from business perspective.
      • hvidgaard 5y ago
        If you're that dependent on components that there is no replacement for, then perhaps buy enough stock to last you through a redesign and recertification is in order. Having a contingency plan for such scenarios seems like a no brainer.
        • lnsru 5y ago
          There are sooo many no brainers, that bureaucratic monstrosities also known as Big Corps just can’t get right. I work for one and more than half of the daily problems are home made and were simple no brainers elsewhere. I got all my electronic parts on time for my private development and first small manufacturing run. It is indeed no brainer.
          • hvidgaard 5y ago
            It's because they value short term gain over long term gain and stability. I see it all the time in software development too.
• jabl 5y ago
  > Many chips are fabbed at 1 place only. The chip company owns the IP and has a defacto monopoly on the features of that chip, or even class of chips. If that fab is shut down, no more are being produced and customers have to buy up what brokers can scrounge. The more warehouses get picked out, the higher the prices go. In one extreme example, a chip made at Infineon's Kulim fab in Malaysia, that sold for $0.47, was purchased for $100 @ by (ironically) a chip equipment company. Perhaps this is an opportunity for FOSS silicon? Everybody understands that currently FOSS tooling/PDK's/etc isn't up to the task of creating a cutting edge CPU on a leading edge fab process, which is the usual retort when somebody brings up FOSS silicon. But commodifying a sub-$1 chip? Yeah, why not?
  • thrown_22 5y ago
    It's the tooling you're making that chip with, not the chip design. You can buy used equipment from a few nodes back for basically scrap value, but building that machine today would cost more than building it when it was new. You'd need to bootstrap a whole "old nodes" industry that does nothing but build obsolete machines to build obsolete chips once all the second/third/forth hand old node machines are gone. In short: we've climbed the ladder and set it on fire behind us.
    • hughrr 5y ago
      I think in retrospect you can use the former eastern bloc as a metric for how this can go. They built a whole semiconductor industry from scratch and were never financially competitive. Parts were significantly more expensive and generally less reliable than the western made ones. You’d be doing the same as them but with less budget and fewer customers. The risk really is entirely that we single source parts. A few years back I designed something using only generic multi sourced parts and it was large and inferior. So there’s trade offs everywhere.
      • FeepingCreature 5y ago
        If you, for instance, only 3D printed plastic parts you could find in stores, you'd also find that your prints were generally significantly more expensive and less reliable. The upside is the ability to get anything you want at any time, as long as it's sufficiently far from the cutting edge, whether production setup for it exists or not. The point here would not be to replace traditional manufacturing but to augment it by acting as a backstop for total supply failure.
• hughrr 5y ago
  This is worrying really. Back when I used to work as an engineer consuming parts it wasn’t unusual for some parts to disappear entirely with no notice. This usually turned out to be some legacy piece of equipment that broke at the manufacturer for which there was no replacement. There was no replacement because the whole manufacturer had been limping along with 1980s equipment. One of the parts was devastatingly expensive to substitute. It was a very low noise JFET which was being used as a high impedance amplifier buffer. We had to evaluate ten different parts from other manufacturers then hand select a suitable part with the right curve and noise figure parameters. To get 10 usable parts meant we had to buy 10,000 parts in, buy $40k worth of kit (HP FTW) and spend a month doing it. The BOM cost went to $6000 a FET from $50. Fortunately being in defence sector they just burned the cash while we redesigned the entire front end of the device which took months of qualification and test. Automating this test process actually started my software career. Edit: also I’ve got to stab Six Sigma and other process methodologies in the face here. They pushed elimination of waste and metrics that drove that to the front of business success. This meant eventually relying entirely on just in time manufacturing and supply chains. Coming from a defence background this was a disaster from the old days of buying in stock for the entire lifetime of the devices in the field.
  • panda88888 5y ago
    I also had defense background and the the idea of buying enough components for lifetime of the device comes up regularly as part of the project obsolescence process. There are teams that would look at the supply of materials, and if one was going obsolete/limited availability, we would buy up as many as we need for the project plus safety margin and just store them.
    • deleted 5y ago
      [deleted]
  • thereddaikon 5y ago
    Agreed on Six Sigma. I also worked at a major defense contractor for awhile and Six Sigma was a blight on us all. Not only did it cause the problems you listed but we also wasted so many hours from required "quality meetings" every week.
• headmelted 5y ago
  Wouldn’t it make a lot more sense to have ICs that aren’t space-constrained be modular in these applications? In a phone or laptop, obviously it would take too much physical space to have such components be changeable, but for vehicles and machinery couldn’t you regulate that common boards/chips/memory be easily accessible and interchangeable to a standard? (Kind of like how you have a fuse panel for your car or a fuse box for your house). I get that this wouldn’t solve this issue, but it would certainly help by making parts that are susceptible to supply shocks be easily recoverable and reusable.
  • hughrr 5y ago
    They’re pretty much doing this with MCUs and power at the moment apparently. Designs are moving to modular so you can respin a carrier board for the available stock rapidly rather than have to respin the entire product and stock.
  • exmadscientist 5y ago
    A lot of parts are modular, if you'll accept "standard packages and pinouts" as "modular". And this helps a lot! The problem is that the parts themselves aren't standardized. So often a very careful selection process followed by a requalification is required.
• fruit2020 5y ago
  I have no clue how things are built in this field, but can’t you put the same design of a 180nm one on a 7nm one?
  • Kliment 5y ago
    Not really. You can't reliably make large features with a small process node, and because the smaller processes are dramatically slower and more expensive and have lower yield, unless you can counter all that with more dies per wafer you end up with a whole lot of defective parts at enormous expense. The bigger the die, the higher the chance of a defect landing on it, and making it useless. Also small feature processes have much lower capacity than larger feature processes, so even if you were able to switch there wouldn't be nearly enough wafer capacity. The fact it's 4-5 orders of magnitude more expensive doesn't help either.
    • amelius 5y ago
      > You can't reliably make large features with a small process node Why is that?
      • Kliment 5y ago
        Because (very very roughly) the way you make small features is by scaling down your projection area to a tiny size and then stepping it across the wafer. Your projection area boundaries are where errors are most likely, and the bigger your features the more such boundaries they cross. The details are quite involved, but this is the general problem.
        • amelius 5y ago
          But then the errors are only along the boundaries of a very large feature, which was originally designed for a less precise process. Also, you could use the design files from before any compensation you apply (to compensate for lithography errors), and use those files to derive a new compensation.
• drawkbox 5y ago
  Once the chip shortage happened, partially due to geopolitical reasons, that changed everything. The West/US will never fully rely on a single point of failure again no matter how hard the HBS MBAs and Chicago thinking push it to trim and be "efficient". Some industries are too important for other industries and leverage on that over those areas is too risky and costly now. I'd pay double right now for GPUs directly from the source, not from some sketchy third party. Right now our EV/auto, space and even AR/XR industries as well as gaming and everything that requires chips, we are at the mercy of an external market that has a slant against the West. It will take some years to get out but we'll never not expect that in the future again. If costs go up costs go up, but availability should never be allowed to be used as leverage again, that is too risky and too costly long term. Availability that is reliable is always more important than efficiency or cost, because right now lack of availability is costing lots of extra time that has the potential to lose entire industries, that is not acceptable in any way. Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity backed near entire market leverage monopolies/duopolies/oligopolies that control necessary supply and you have trouble. HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezed out and with that, an ability to change vectors quickly. It is the large company/startup agility difference with the added weight of physical/expensive manufacturing. The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience [1] > Superefficient businesses create the potential for social disorder. > A superefficient dominant model elevates the risk of catastrophic failure. > If a system is highly efficient, odds are that efficient players will game it. Hopefully that same mistake is not made in the future. It will take time to build up diversification of market leverage in terms of chips for availability. Hopefully we have learned our lesson about too much concentration, with that comes leverage and sometimes a "gaming" of the market. This chip shortage, and all the supply chain problems during the pandemic as well, will hopefully introduce more wisdom and knowledge into business institutions that just because things are ok while being overly super efficient, that is almost a bigger risk than higher prices/costs. Competition is a leverage reducer. Margin is a softer ride even if the profit margins aren't as big. [1] https://hbr.org/2019/01/the-high-price-of-efficiency https://hbr.org/2019/01/the-high-price-of-efficiency
  • AdrianB1 5y ago
• bhouston 5y ago
  There is a formal name for what is going on with the hoarding and an eventual collapse of demand. It is called the "bullwhip effect" and it will be brutal: https://searcherp.techtarget.com/definition/bullwhip-effect https://searcherp.techtarget.com/definition/bullwhip-effect While a lot of people are saying the main issue is the "lean manufacturing" or "just-in-time manufacturing" supply chains, they do not understand manufacturing supply chains. These types of solutions (JIT or Lean) are designed to prevent the bullwhip effect and ensure that suppliers have predictable and constant demand, rather than feast or famine. Without just-in-time manufacturing, there is significant waste and it is even harder for suppliers to predict what they should be making. This current bullwhip is going to be horrible on suppliers after the supply catches up with demand and then the demand collapses as so many have bought years in advance.
  • rootsudo 5y ago
    2024 cars are going to be so cheap, imagine if that's the cause/effect that made EV cars finally affordable.
    • bhouston 5y ago
      I think that the components being hoarded have little effect on the final car price, but are critical to the car working -- e.g. required but not sufficient. These are like $0.50 microcontrollers or similar. I think there isn't a bullwhip effect on batteries, which is the main cost associated with TVs.
      • regularfry 5y ago
        Used car prices probably will collapse, though.
        • Spooky23 5y ago
          Used car lenders will collapse. The 72 month loan for a $50,000, 2019 F-250 will be completely underwater, and the car owners may decide to literally send the cars “underwater” to get out of the loans.
• ptha 5y ago
  You mention JIT, and lead times greater than a year. Are these 2 things not at odds with each other? Are you saying the vulnerable JIT supply chain when interrupted led to hoarding? The hoarding causing lead times of up to year which is what JIT was supposed to minimise in the first place?.
• Spooky23 5y ago
  The other issue that I ran into with printers last year is that the OEMs have to be careful not the sell the future. Everybody wanted small all-in-one devices last year, and nobody wanted big office printers. Companies like HP, Epson, etc won’t invest too much capital in production because that demand will implode later. Those companies probably sold 3-5 years of demand in a year for some SKUs. It similar to the issue in the ports where everyone acts I’m their perceived best interest, which often screws over everyone. My guess is that we’ll see a price collapse in the next 12-18 months for some commodities as the hoarding orders start getting fulfilled and companies are stuck with warehouses and balance sheets full of inventory.
• kurthr 5y ago
  I came here to say exactly the same thing. I'll go one step further... not only are the equipment/fabs fully depreciated, but they are 8" rather than 12" and so none of the new equipment/processes will work with them. It's a huge fight to even get anything older than 90-110nm in 12". That is why the relatively high volume, but very margin constrained, display industry is stuck at those nodes. It doesn't make sense to build and bring up a new fab with new equipment at margins below 30%, but the entire industry is built on that cost structure. Further, a lot of the designs for older processes have been iteratively improved (yield, performance, etc), but the older models (simulations) for them are insufficient to design new chips without explicit reuse or iteration. They are effectively stuck on that node at that foundry, unless they want to incur significant (opportunity) costs.