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Global chip shortage may soon turn into an oversupply crisis
- hwers 5y agoThis is why I don't care about following any 'supply chain' worries the tech community is for some reason worried about. It'll undershoot, it'll overshoot, it'll balance itself out eventually and my interaction with it won't make a lick of difference.
- jdrc 5y agomaybe if our supply chains were't Just-in-time we wouldnt be talking about these all the time
- skybrian 5y agoLong term contracts are important. The buyers who had them didn't have to scramble so much. That doesn't mean stockpiling, necessarily.
- wyager 5y agoThere are a lot of things we could have done differently to prevent the current issues. Reducing capital efficiency by requiring massive stockpiles isn't necessarily at the top of the list of good ideas. I'm not saying it's a bad idea, just that this isn't necessarily the first thing we want to jump to across the market.
- adam_arthur 5y agoThink we are well past that. Even if these companies had huge stockpiles, they would have been depleted long ago. No company is going to hoard multiple years worth of inputs. Supply has remained high in semiconductors too, it's more of a demand than supply problem. But of course, elevated demand and normal supply leads to shortages just the same as normal demand and shortened supply. Retail Sales: https://fred.stlouisfed.org/series/RSXFS https://fred.stlouisfed.org/series/RSXFS
- xondono 5y agoMaybe, but part of the issue is the massive shift of component stocks from suppliers to manufacturers. JIT allowed a lot of different manufacturers to “share” stocks, by keeping inventory in a supplier instead of in house. In the end we traded in risk tolerance for better efficiency, and most companies are now doing the opposite trade. > No company is going to hoard multiple years worth of inputs. I actually work with companies who have done this.
- tonyedgecombe 5y agoI hope not, I like the cheap goods that just-in-time produces. If you look back at what many were saying at the start of Covid you would have thought we would have all been eating our neighbours by now. The reality has been completely different, an artificial shortage of toilet paper and a slight tightening of supply on consumer goods. If anything this tells me our supply chains are quite robust.
- Nowado 5y agoTheir loss is my (consumer) gain or am I missing something important?
- rjsw 5y agoIt is only your gain if the oversupply is of chips that you want.
- belval 5y agoIsn't that obvious? If there is an oversupply of GPU, as a customer I win. If there's an oversupply of some niche ARM chip I might not win but I'm not losing either...
- xadhominemx 5y agoI don’t know if there will be an “oversupply” of GPUs, because now they are all manufactured at foundries and the chip companies can just cut their orders. But with Intel coming into the market, Samsung switching to TSMC, and TSMC putting in $120b of capex, the shortage should be alleviated pretty soon.
- acdha 5y agoIf there's an oversupply of GPU chips _and_ everyone builds them into products and sells them. There's a fair amount of demand in that specific instance but that doesn't translate into capacity for everything else and companies aren't going to be quick to lower prices.
- cplusplusfellow 5y agoI’m just looking for the basic, “there are enough chips to make stoves and automobiles that I am wanting to buy” amount of supply.
- Nowado 5y agoYeah, not GPUs, maybe cars, surely fridges.
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- driscoll42 5y agoWhere's the article? I click on the link and it gives a headline, picture and... that's it
- adregan 5y agoI suppose you have JS disabled? Just turned it off and could replicate your experience.
- progval 5y agoIt depends on third-party requests which are blocked by uMatrix by default. Specifically, you need to enable JS from code.piano.io and experience-ap.piano.io, and XHR to c2-ap.piano.io; in addition to the first-party domain.
- neonate 5y agohttps://archive.is/ZPDnd https://archive.is/ZPDnd
- nikanj 5y agoI have no idea how much of the chip supply is soaked by cryptos, but I have a feeling the pop is going to be ugly
- wyager 5y agoOne upside of Bitcoin style mining is that its mining chips can't be used for anything else (no GPUs, CPUs, FPGAs, or SSDs used for Bitcoin mining - only special SHA256 ASICs), so it doesn't have much effect on the supply of semiconductors outside of a small number of older foundries allocating some capacity to BTC chips. Other projects like Ethereum intentionally used GPU-optimized mining algorithms, with the idea that this would help decentralization (which hasn't really worked for various reasons).
- bcrl 5y agoBitcoin ASICs are hardly on older process nodes. Intel's just announced chips are using their 7nm process, Bitmain is on TSMC 7nm and 5nm, while Microbit is on Samsung's 8nm.
- clessg 5y agoFinally some good news, bring on the crisis! /s, I think...?
- okl 5y agoYes, bring it! :D
- marcosdumay 5y agoThe future was much more certain a couple of week ago. But yes, that's expected. After supply-line shocks shortage and oversupply follow each other. If people play their cards right, they get a quickly decreasing amplitude on those crises, if they play wrong, they get always increasing ones until a lot get bankrupt. The chip manufacturers seem well aware of the problem and to be playing it correctly. I wouldn't bet on the oversupply crisis being nearly as large as the shortage.
- mrfusion 5y ago> The future was much more certain a couple of week ago. Turn off the news and you’ll be much happier. Remember they only make money if they’ve scared you into watching.
- mcbutterbunz 5y ago> Turn off the news and you’ll be much happier. Rather, be informed and watch whats happening with a critical mindset. Ignorance may be bliss but its also irresponsible.
- ScoobleDoodle 5y agoI’ve been thinking of splitting the difference and looking at news once a week. I guess that’s like the traditional Sunday newspaper. Now I think it needs to allow for exceptions for events like now with Russia invading Ukraine.
- Tijdreiziger 5y agoI installed NOS's (the Dutch public broadcaster's) app on my phone and turned on push notifications. This way I get informed about important news, but can easily avoid everything else.
- Beltalowda 5y agoWhy don't you just travel in time and get the news from the future?
- kenjackson 5y agoWill this mean car prices will return to normal and wait times to receive them won’t be so long? I feel like the auto industry has directly impacted me the most, as I try to look to get a car.
- mrfusion 5y agoI’m going to go back to all the dealers that ignored me and make them beg for my business.
- brianwawok 5y agoOr just buy a car that has moved past the dealership model. There are a few now, and if the free market wins it should slowly replace the dealer model… Literally 4-5k saved off every car if you order direct from the manufacturer.
- mordae 5y agoThey way I read the article, there is going to be excess supply of things such as power-regulation ICs, 2.4GHz radio chips and so on. I'd guess that consumers will gobble these up all across the world in smart appliances and IoT like never before. GPUs are nice, but they won't regulate your heating amid rising gas prices.
- VWWHFSfQ 5y agoI wonder how AMD and Intel's announcement that they will stop chip shipments to Russia indefinitely will affect this. I don't know how big of a consumer Russia was but I imagine it could have some impact with all that stock now back on the market.
- cyberpunk 5y agoTheir economy is smaller than Italy. Some datacentres and such, but meh, those aren't buying bare chips from intel anyway. They're usually buying complete servers manufactured in other countries anyway. I'd be surprised if it even made a half percent dent.
- eunos 5y agoRussian can and will import those chips from somewhere else
- VWWHFSfQ 5y agoWhere else? People always seem to say flippant things like this as if it's really as easy as just "oh they'll get them from somewhere else then". Maybe it really is that easy. I don't know. But Yandex isn't buying computers off Newegg anymore. That's for sure.
- adam_arthur 5y agoChina, for one. What's to stop them from buying AMD and reselling to Russia? Though it will still increase cost to Russia with another middle man involved.
- pdpi 5y agoThat is not without costs, in terms of both time and money. And I'm sure Russia doesn't particularly want to increase its dependency on China either.
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- flamesofphx 5y agoCrossing fingers we will we be able to pick up 3080ti then for $100 bucks? I still think it may take much more time for the other affected industries to make up.. Which means there still some sort of supply chain communication problems...
- atlantas 5y agoOr able to pick up a PS5 for MSRP? It's been sold out since it was released in November 2020.
- mrbonner 5y agoYou could try FB marketplace. I have seen MSRP floating around for quite the last few months. I haven’t purchased one really because most of my friends are either on PS4 or Xbox 1
- dawnerd 5y agoLikely scams FYI
- amir734jj 5y agoAt this point I don't even know if PS5 really exist. It's impossible to find in the store and there are some people whose job is find PS5 at MSRP in the stores and resell it.
- tragictrash 5y agoI've been able to buy two at MSRP in the last month. It's possible, you just have to try.
- erwincoumans 5y agoWhere/how did you buy the ps5 at msrp?
- FpUser 5y ago>"Oversupply crisis" I'll take this any time. I am eyeing new server and laptop but prices suck at the moment for my specs.
- megous 5y agoWell, some capacity will be freed: https://www.washingtonpost.com/technology/2022/02/25/ukraine-russia-chips-sanctions-tsmc/ https://www.washingtonpost.com/technology/2022/02/25/ukraine...
- Zenst 5y agoOr may see a shortage in capacitors, resistors, transistors....there will always be a weak link and for most it has been chips. If we shift towards an oversupply and we will as with such lead time to lets build a fab to lets use that fab, markets change momentum. SO you get growth, then shrink back to balance out supply, then some spike via some event or demand and the pulse of industry moves on. What will be more interested in is how the supply chain changes and will we see a more cautious approach to just in time, offloading warehousing to suppliers or will we see a more granular balance. So that will be interesting going ahead and may well see initial oversupply delayed filling up those buffers.
- Aurelius3 5y agoAlthough I do think there will be an oversupply "crisis", I think the article is too optimistic about the timing. From what I have read the new foundries will start production in 2024-2025, and I don't see demand going down anytime soon, and that's not to mention some of the backlog that has accumulated. Although I am curious as to how amd and nvidia have been handling this. Do they have stockpiles of chips themselves?
- Spooky23 5y agoThere’s alot of stuff stuck in the shipping channel or backlogged. Not the same commodity, but as an illustration, I just got a bunch of 4k computer displays direct from an OEM. Normally we get stuff like this 30-60 days after manufacturing. These devices were tagged as last July and received a week ago. I’ve been told that lots of stuff gets stuck waiting for final package assembly. (Ie the monitor stand, cable or even manual) Although chips aren’t end user products that have to have accessories, many require packaging or other subcomponents that may be lost in the mail. Additionally, contracts prioritize certain customers, and many manufacturers don’t have good processes to deal with diversions. If you order 20,000 widgets, they may not stop shipping until to hit some high water mark. So when the US government say “emergency, ship me your widgets now”, your order gets “stolen”. COVID response activity is winding down, so I’d venture to guess you’re going to see a lot of cancelled orders and chaos. Imo, you’ll see prices of consumer facing IT gear crash in the June-August timeframe as schools and students are flooded with gear, only to surge again as component makers retool. Also, like gas prices (quick to rise, slow to sink), I think you’ll see manufacturers keep prices high in the many markets that are controlled by little cartels. Why sell Ford some chip for $1 when they are paying $12 today?
- jbay808 5y ago> Why sell Ford some chip for $1 when they are paying $12 today? That's a very good point. When you're competing to get your part selected for a new design, you want to sell it cheap, but once they've done all the work of incorporating your part and testing it, you want to make it expensive. It will be interesting to see how this plays out.
- markus_zhang 5y agoHope I can finally pick up dev boards and chips cheaply...
- taf2 5y agoIf it means my designs can be ordered without multiple redesigns I’ll take it :)
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- Saris 5y agoMaybe I'll be able to buy stuff at MSRP then.
- deutschewelle 5y ago
- xondono 5y agoI think this piece is overly optimistic and maybe even ignorant about how semiconductor supply chains work. Semiconductor fabs take years to start production.
- cengo123456 5y ago
- RONROC 5y agoHow is oversupply a "crisis" (assuming you're not carrying water for board members)? Would love to have a level headed conversation about this, assuming someone here can address, what is, in my estimation, a non-issue.
- koheripbal 5y agoWhat you want is predictability and stability. The bullwhip effect of supply chain disruptions alternate between shortages and gluts, and they both cause economic damage. Having a glut of a product or resource destroys manufacturing capability as employees get furloughed, factories shut down, and talent is lost. ...it then creates a shortage when demand picks up and so on. Markets are good at reacting if the future is predictive, but if it is unexpected, then there is damage in both shortages and gluts. Importantly, the more complex and deep a supply chain is, the more unpredictable and magnified the bullwhip effect becomes, even when you expect gluts/shortages. This is because every participant in the chain attempts to cushion themselves from the shocks by stockpiling and timing their sales.
- RONROC 5y agoIn a perfect system, you are more correct than you give yourself credit for. This is not that. In case you haven't noticed, a GPU costs more than the rest of the components of a PC combined. And that's because of so-called market and or supply chain inefficiencies (which I'm supposed to, as a consumer, take on the chin). In spite of political, personal, or professional neglect, (don't care which one) chip companies are posting gargantuan earnings YOY and seem to be doing fine. On the other hand, my sibling can't afford a car or a non-pre-built computer. I guess it's not clear in your post, but who exactly are we looking out for here? The furloughed talent? The "market"? And regardless, how is that my problem? Again, I would love to have a level headed discussion about this, but please be honest about who truly loses in an oversupplied market. BTW, because I see this here a lot: just because the whole "it's more complicated than you think" rationale is not a commonly accepted logical fallacy, doesn't mean that it's not bullshit all the same.
- yccs27 5y ago
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- stjohnswarts 5y agobetter to have too much than too little. This is just some lean manufacturing people tut-tutting countries trying to become more independent
- spir 5y agoNote that Ethereum is switching to proof of stake this year, almost surely before Q4. It's true that this upgrade has been coming for years, and it's also true that it's actually arriving this year (if interested, see https://eth2.news https://eth2.news). After Ethereum switches to proof of stake, global demand for GPUs will plummet as GPUs are uncompetitive for BTC mining, and beyond BTC, ETH is by far the largest remaining proof of work coin.
- Melio 5y agoWhat's the difference this time?
- binarymax 5y agoRest assured there are many gamers who will pick up the slack, not to mention businesses who want them for training models.
- MisterSandman 5y agoThe main difference is that gamers are consumers, while ETH miners use GPUs to make income. Even though gamers were buying scalped GPUs, I'd imagine GPUs going to back to being treated as a consumable (rather than something that generates income) would help prices.
- jedberg 5y agoCompanies using GPUs to train models are also using them to make money. They will pick up the slack the miners leave behind.
- Animats 5y agoStructurally, electrification, such as the mass production of electric vehicles, and digitalization need semiconductors, mostly of the high-end variety that can only be produced by the most advanced semiconductor foundries There's nothing about electric car propulsion that requires "high end semiconductors". Auto companies have been pricing electric cars as a luxury product, and adding too much crap that has nothing to do with the powertrain to justify that to buyers.
- grogenaut 5y agoAre the power switching components similar to MOSFETs not a relatively advanced and recent device? Peoe usually think of advanced as Nvidia chips, but there are other parts.
- amelius 5y agoPerhaps, but my guess is they don't need to operate at high frequencies, which lowers the bar for complexity.
- sigstoat 5y agothe slower your power MOSFET, the more power you waste and heat you generate.
- baybal2 5y agoI am not an professional EE, but a person who professionally works on circuits from time to time. That's absolutely not the case. The higher is the switching frequency, they higher are the switching losses in a MOSFET. MOSFET is an electrostatic device, the charge needs to both go in, and out from the gate. The more switching, the more current goes through the gate back-and-forth.
- pwr-electronics 5y agoYou're talking about different things. A slow FET has a slow rise time. It spends more time crossing through the inefficient region between fully off and fully on. Switching frequency is how often you cross in one direction. Up to a point, you can decrease total converter loss by trading conduction loss for switching loss by increasing frequency and resizing components. After that point, you start losing efficiency again. There's a sweet spot.
- rossdavidh 5y ago"Cyclically, with so much labor and education shifting online, the pandemic has unleashed strong pent-up demand for electronic products." It's not "pent-up" demand, it's new demand. It would be "pent-up" if people hadn't been allowed or able to purchase before, but now they are. The shifting of labor and education online, if it is a major factor at all, would be creating new demand. "The stockpiling that we saw in 2021 has also resulted in transportation bottlenecks." There are many reasons for the transportation bottlenecks, but stockpiling is a best a minor one, and more likely not really a reason at all. If anything, it works the opposite way, with transportation bottlenecks resulting in stockpiling, as buyers know they cannot assume it will always be available to buy Just In Time. "Structurally, electrification, such as the mass production of electric vehicles, and digitalization need semiconductors, mostly of the high-end variety..." Vehicles, in particular, need a lot more semiconductors that are _not_ "high-end", which is why Intel couldn't use its spare capacity to help out the auto industry as much as they wanted to; their fabs were actually too modern to make the higher-voltage, larger-dimension semiconductors that the auto industry needed, mostly made in older fabs. Ok, three factually inaccurate statements in a row, I am giving the rest of the article a pass.
- atum47 5y agoGood, maybe then I can get the new xbox for a fair price.
- yalogin 5y agoI for one cannot wait for the used car market to crash. The new car prices have gone and I don't expect them to come down. They will keep the prices at the same inflated level and offer deals and/or loans. However there is room for elasticity in the used car market and can see it coming down as new car availability becomes better.
- tonyedgecombe 5y agoPresumably there will be a shortage of three year old cars in a couple of years and six year old cars in four or five years. This is going to ripple through the used car market for a long time.
- mkr-hn 5y agoIt looks like the plane used to move some EUV equipment may be damaged or destroyed, so maintain the hope! The supply problem could continue. https://twitter.com/AntonovCompany/status/1497967836337041409 https://twitter.com/AntonovCompany/status/149796783633704140... Of course, this is the least important thing to move in that plane and probably the easiest to find alternate transportation for.
- dusted 5y agoof course it will, I've chanting that with some glee and happiness for a while :) Imma drown myself in ramz and gupz! :D
- jamesy0ung 5y ago[flagged]
- JCM9 5y agoThis is pattern than falls most supply shortages. Lumber was in seriously short supply during the pandemic and prices skyrocketed. A few months later places has more wood than they knew what to do with and supplies were piling up.
- TameAntelope 5y agoHopefully the strategy teams at these large semiconductor companies are aware of the Bullwhip Effect [0] and the investments we're seeing are being done with that knowledge already in hand. IMO the more interesting part of this article is the prediction that a bifurcation will take place. Still a good thing, but interesting that, as of now, most media talks about the "chip shortage" in terms of "Is there a shortage or not?" rather than a more complex model. [0] https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect
- winstongator 5y agoThis is how the semiconductor industry used to work - boom bust cycles. The author is probably right that lots of supply will come online at the same time, probably overshooting demand. There’s lots of demand still though, and possibly dealt with by not running balls out 24/7. They’ve been at max capacity for a while and not running at that point might be good for everyone. Check the graph at the bottom of this article https://www.electronicsweekly.com/news/business/semi-capex-fall-15-2019-06/ https://www.electronicsweekly.com/news/business/semi-capex-f...
- tonyedgecombe 5y ago>This is how the semiconductor industry used to work - boom bust cycles. This is how the whole economy used to work.
- Karen48 5y ago[dead]
- farzher 5y agogood, we like chips