From [1], and lots more commentary there. > 1. During the pandemic, consumer durables went from ~10-11% of consumption to ~13%. 3 percentage points of consumpt

From [1], and lots more commentary there. > 1. During the pandemic, consumer durables went from ~10-11% of consumption to ~13%. 3 percentage points of consumption is about half a trillion dollars annually. Many of these durables come with cheap microcontrollers or even high end SoCs now. New vehicles have dozens of cheap microcontrollers. https://fred.stlouisfed.org/graph/fredgraph.png?g=Ktkq https://fred.stlouisfed.org/graph/fredgraph.png?g=Ktkq > 2. If you look at that chart, you will see that the decade previous to the pandemic was the worst ever for durable goods demand. Supply chains had adjusted to that. > 3. Supply chains had also all gone to a JIT model to keep inventories lower. This was a huge source of efficiencies, but made them vulnerable to a demand shock. > 4. There are new sources of chip demand in EVs. > 5. There are new sources of chip demand for very cheap ARM and RISC-V chips. High volume, low margin stuff that has been underinvested for manufacturing, like the entire auto chip chain. > 6. 2019 was a down cycle, and companies were idling capacity. > 7. When the pandemic hit, companies projected lower demand, and idled more capacity. This put them in a huge hole from which they still have not extricated themselves. > 8. COVID outbreaks in Asian factories complicate things > 9. Transportation bottlenecks complicate things [1] https://news.ycombinator.com/item?id=29781027 https://news.ycombinator.com/item?id=29781027