8 ms·

The semiconductor bust – still coming?

97 points by picture 4y ago

B1FF_PSUVM 4y ago
""" [... ] and people seemed to have enjoyed it. And by "enjoyed it", I mean that they screamed at me in the comments that I had no idea what I was talking about. Which is par for the course here. """ Ouch.
- thorncorona 4y ago
  Asianometry's humor tends to be of the dry sort so don't take it too literally haha
frinxor 4y ago
https://www.youtube.com/c/Asianometry https://www.youtube.com/c/Asianometry lots of cool videos on his channel about chips - i've definitely learned a lot watching these.
haberman 4y ago
I have no expertise in this, and can't even claim to have followed the entire article or video. But the PS5 has been out of stock ever since its release in Nov 2020. That is an astonishing fact to me. I can't think of anything like this in my lifetime. The flagship product of a multinational corporation has been sold out for 18 months. Empty shelves where a product should be. It's just one isolated data point, but it's hard for me to understand how we could be seeing a coming bust when we are still in the midst of such a shortage.
- savant_penguin 4y ago
  Switches and raspberries got really hard to find for a while too
  - reissbaker 4y ago
    Raspberry Pis are still widely out of stock. And not just Pis! The car industry has been facing chip shortages, Fujifilm's flagship digital cameras and lenses are still impossible to find and have been for years since the chip shortage started... Two years after Nvidia released their flagship GPUs they're finally able to be purchased, but they're only six months away from releasing the next generation, which will also likely be sold out immediately. No one has been able to use TSMC's latest fab tech other than Apple, because just Apple's demand for chips maxed out their entire production capacity. This is the largest chip shortage in my lifetime certainly, and possibly since the invention of the semiconductor. Predicting an oversupply any time soon when chips in the leading, middle, and trailing edges are in an unprecedented shortage is like predicting that someday California will have too much housing. I mean, on a long enough timescale, maybe... But that's well into the "being too early is the same as being wrong" territory.
    - jorl17 4y ago
      We desperately need raspberry pis for our product! Does anyone happen to know where we can find more? We are currently drifting back to x86 to deal with the immense shortage of Pis!
      - bschwindHN 4y ago
        Just curious, what's your product?
        jorl17 4y ago
        The product I'm working on is in the smart locker space
        bschwindHN 4y ago
        Is that something you could get away with using an ESP8266 or ESP32 for? If so, that might solve your supply issue.
- ninkendo 4y ago
  The Nintendo Wii had the exact same problem at launch. For the first 2 years or so they were near impossible to find in a store. I remember having to buy a used one for more than retail from some random dude in a parking lot, around a full year after it was released, and it was still hard to find for a long time after that.
  - SirHound 4y ago
    What are their relative (stock-suppressed) sales though?
- Falkon1313 4y ago
  Similar for graphics cards. For about a year there just weren't any. One of the manufacturers set up a waiting list to sell direct to customers, but it was still taking a year on the waiting list for people to get them and they had to shut down the list. Even now two years into it, the low quantities available retail are still selling at double or triple MSRP. I wonder how many years the companies can keep running without producing or selling much. Also what the situation is with employees. Here in the U.S. a company would be quick to start layoffs if there's no revenue and no work to do, and after years passed it wouldn't be easy to quickly restaff and rebuild capacity.
  - carom 4y ago
    >Even now two years into it, the low quantities available retail are still selling at double or triple MSRP. BestBuy had fine stock when I went in a week ago. Next gen is dropping soonish so miners are holding off. I got my 3090 from a miner who was hooked in to the scalpers. They weren't so over priced, a lot of people just look at the cheapest possible 3090 and compare to that, not realizing there are different levels.
xwdv 4y ago
Cloud computing growth is in no way going to decelerate anytime soon. We have not reached peak cloud.
- thematrixturtle 4y ago
  Second order differential: he's saying acceleration is not going to continue, but the absolute numbers installed will still be huge and increasing year over year.
swamp40 4y ago
Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of electronic components. Then they marked them all up 100x and are now selling them back to us. Supposedly they are just "Chinese brokers", but the scale is far too large not to be government sponsored. Here's an example: MKL27Z128VFT4 NXP Kinetis ARM Cortex M0+ Microcontroller. You haven't been able to buy these for over a year now. And it will be another year before you can buy any. They used to go for $2.50. Brokers have 215,000 pieces in stock[0]. Mostly in China. (The US brokers have tied themselves into the Chinese broker inventory.) Average price now: $100 each. [0] https://www.netcomponents.com/results.htm?flts=1&t=f&sm=&r=1&lgc=begins&pn1=MKL27Z128VFT4 https://www.netcomponents.com/results.htm?flts=1&t=f&sm=&r=1...
- sidewndr46 4y ago
  I'm not trying to advocate a pro-China stance here, but is there any business that is done in China that isn't in part sponsored by the government? One book I read even told the story of a grey market manufacturing operation that had to go legit not because of a government "bust" but because the local figurehead wanted the output of the factory included in his productivity figures.
  - monocasa 4y ago
    Correct, there's not really any businesses legitimate enough to have a domain name that are large enough to get major city or province level attention that aren't implanted with direct CCP oversight.
  - Taniwha 4y ago
    Of course there is - I've gone to Shenzhen several times and hired people to build my kickstarter - including supplying of most of the parts, building the PCBs, assembling the boards etc - the only time I ever interacted with the government was the guy behind the immigration desk on the way in and out again (I have an APEC business card so I don't need to apply for visas, just show up at the door and show it)
BirAdam 4y ago
I think it is rather easy to say that the rapid buildout of more and more fabrication plants may be fruitless if the entire industry is still going to rely exclusively on ASML for EUV and even more so if there are no new ingot providers. Apparently, the fab companies know something we do not in those regards. Beyond that, while we are facing high demand now and low supply, a ton of new fabs will increase supply and… possibly crash the market. This is especially true as AMD and Intel now face greater competition not just from one another but also from RISC-V, ARM, Power, and Hygon. These competitive pressures will erode the margins and thereby also the incentives.
- totalZero 4y ago
  EUV and raw materials aren't the bottlenecks, with respect to most devices. There's a correlation effect whereby a shortage of minor components will halt assembly of finished products, so the tail risk scenario likely starts with more mundane chips (legacy nodes, 200mm wafer) rather than flagship processors on leading-edge nodes.
- flyinglizard 4y ago
  The problem is in much more mundane ICs than cutting EUV stuff. Power regulators, converters, microcontrollers from a year back or 10 years back, everything.
xony 4y ago
throwaway4good 4y ago
"In TSMC's recent Q1 2022 earnings, 41% of their revenues came from High Performance Computing or HPC - where they put their cloud revenues. Just two years ago it used to be 30%. They also noted that HPC grew 26% quarter over quarter - far faster than almost every other category other than automotive, which is a far smaller part of the overall business." AFAIK TSMC list crypto (that is various chips made specifically for proof of work mining) in the HPC category. It is not unlikely that market will correct violently at one point. Plus on the fab/design side there is a lot of stuff happening in mainland China and it one point that is going to hit the market.
- Dunedan 4y ago
  > AFAIK TSMC list crypto (that is various chips made specifically for proof of work mining) in the HPC category. > > It is not unlikely that market will correct violently at one point. That shouldn't affect TSMC at all, as their remaining HPC customers would happily use that capacity as well.
unwind 4y ago
I was better at Web Stuff, I would love to have one of those single-purpose sites that tried to show at a glance the status of the semiconductor industry. I mean everybody knows it's really bad, but it's so hard to get a feel for and to see if anything is changing, unless (I guess) you're seriously In The Trenches doing e.g. component sourcing for some boards. I imagine something like https://dowehavechipsyet.com/ https://dowehavechipsyet.com/ (made-up domain) with current inventory across western and eastern suppliers, price with price trends, manufacturer's stated wait time for orders, and so on. Like an aid in quickly seeing the state of the industry, perhaps for uh I don't know, either some varied selection of components (micros, transistors, power parts, etc) or deeper with perhaps 5-10 chips from each category. Does that exist and nobody told me? :)
- bluesquared 4y ago
  Somewhat. https://octopart.com/ https://octopart.com/ (I'm a hardware guy so take my SWE-speak with a grain of salt) Like many things in tech, each manufacturer/vendor/distributor does not have the same "API" (if it even exists) to broadcast their stock status. Here's some links to parts that have been a pain in my side. We have to result to hoarding brokers with 1000x markups to continue production (not my call, I'm the guy with the oscilloscope not the suit...). https://octopart.com/tps1h100bqpwprq1-texas+instruments-55347276?r=sp#InventoryHistory https://octopart.com/tps1h100bqpwprq1-texas+instruments-5534... https://octopart.com/at25df641a-mh-y-renesas-118506301?r=sp#InventoryHistory https://octopart.com/at25df641a-mh-y-renesas-118506301?r=sp#...
TradingPlaces 4y ago
This article uses the wrong measurements on inventories. -You have to look at inventories in relation to sales, either shipments or new orders (inventory-sales ratio) -Manufacturers’ inventories are up sharply because of materials and works-in-progress. Their finished goods inventories are sill low relative to new orders. It’s the bulges in the durables finished goods-to-new orders ratio that indicate a crash in semis coming. As of March, there are zero signs of that in any of the silicon-heavy categories. -Anyway, wholesale inventory-sales ratios are a better indicator. https://fred.stlouisfed.org/graph/fredgraph.png?g=OVAY https://fred.stlouisfed.org/graph/fredgraph.png?g=OVAY
mc4ndr3 4y ago
1942: no punchcards 1952: no integrated circuits 1962: no war 1972: no pollution 1982: no cellphone 1992: no internet 2002: no sub-quadratic multiplication algorithm 2012: no moore's law 2022: no transistors 2032: no water
- speed_spread 4y ago
  2033: no more laws

97 points by picture 4y ago

""" [... ] and people seemed to have enjoyed it. And by "enjoyed it", I mean that they screamed at me in the comments that I had no idea what I was talking about. Which is par for the course here. """ Ouch.

thorncorona 4y ago
Asianometry's humor tends to be of the dry sort so don't take it too literally haha

frinxor 4y ago

https://www.youtube.com/c/Asianometry https://www.youtube.com/c/Asianometry lots of cool videos on his channel about chips - i've definitely learned a lot watching these.

haberman 4y ago

I have no expertise in this, and can't even claim to have followed the entire article or video. But the PS5 has been out of stock ever since its release in Nov 2020. That is an astonishing fact to me. I can't think of anything like this in my lifetime. The flagship product of a multinational corporation has been sold out for 18 months. Empty shelves where a product should be. It's just one isolated data point, but it's hard for me to understand how we could be seeing a coming bust when we are still in the midst of such a shortage.

savant_penguin 4y ago
Switches and raspberries got really hard to find for a while too
- reissbaker 4y ago
  Raspberry Pis are still widely out of stock. And not just Pis! The car industry has been facing chip shortages, Fujifilm's flagship digital cameras and lenses are still impossible to find and have been for years since the chip shortage started... Two years after Nvidia released their flagship GPUs they're finally able to be purchased, but they're only six months away from releasing the next generation, which will also likely be sold out immediately. No one has been able to use TSMC's latest fab tech other than Apple, because just Apple's demand for chips maxed out their entire production capacity. This is the largest chip shortage in my lifetime certainly, and possibly since the invention of the semiconductor. Predicting an oversupply any time soon when chips in the leading, middle, and trailing edges are in an unprecedented shortage is like predicting that someday California will have too much housing. I mean, on a long enough timescale, maybe... But that's well into the "being too early is the same as being wrong" territory.
  - jorl17 4y ago
    We desperately need raspberry pis for our product! Does anyone happen to know where we can find more? We are currently drifting back to x86 to deal with the immense shortage of Pis!
    - bschwindHN 4y ago
      Just curious, what's your product?
      - jorl17 4y ago
        The product I'm working on is in the smart locker space
        bschwindHN 4y ago
        Is that something you could get away with using an ESP8266 or ESP32 for? If so, that might solve your supply issue.
ninkendo 4y ago
The Nintendo Wii had the exact same problem at launch. For the first 2 years or so they were near impossible to find in a store. I remember having to buy a used one for more than retail from some random dude in a parking lot, around a full year after it was released, and it was still hard to find for a long time after that.
- SirHound 4y ago
  What are their relative (stock-suppressed) sales though?
Falkon1313 4y ago
Similar for graphics cards. For about a year there just weren't any. One of the manufacturers set up a waiting list to sell direct to customers, but it was still taking a year on the waiting list for people to get them and they had to shut down the list. Even now two years into it, the low quantities available retail are still selling at double or triple MSRP. I wonder how many years the companies can keep running without producing or selling much. Also what the situation is with employees. Here in the U.S. a company would be quick to start layoffs if there's no revenue and no work to do, and after years passed it wouldn't be easy to quickly restaff and rebuild capacity.
- carom 4y ago
  >Even now two years into it, the low quantities available retail are still selling at double or triple MSRP. BestBuy had fine stock when I went in a week ago. Next gen is dropping soonish so miners are holding off. I got my 3090 from a miner who was hooked in to the scalpers. They weren't so over priced, a lot of people just look at the cheapest possible 3090 and compare to that, not realizing there are different levels.

xwdv 4y ago

Cloud computing growth is in no way going to decelerate anytime soon. We have not reached peak cloud.

thematrixturtle 4y ago
Second order differential: he's saying acceleration is not going to continue, but the absolute numbers installed will still be huge and increasing year over year.

swamp40 4y ago

Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of electronic components. Then they marked them all up 100x and are now selling them back to us. Supposedly they are just "Chinese brokers", but the scale is far too large not to be government sponsored. Here's an example: MKL27Z128VFT4 NXP Kinetis ARM Cortex M0+ Microcontroller. You haven't been able to buy these for over a year now. And it will be another year before you can buy any. They used to go for $2.50. Brokers have 215,000 pieces in stock[0]. Mostly in China. (The US brokers have tied themselves into the Chinese broker inventory.) Average price now: $100 each. [0] https://www.netcomponents.com/results.htm?flts=1&t=f&sm=&r=1&lgc=begins&pn1=MKL27Z128VFT4 https://www.netcomponents.com/results.htm?flts=1&t=f&sm=&r=1...

sidewndr46 4y ago
I'm not trying to advocate a pro-China stance here, but is there any business that is done in China that isn't in part sponsored by the government? One book I read even told the story of a grey market manufacturing operation that had to go legit not because of a government "bust" but because the local figurehead wanted the output of the factory included in his productivity figures.
- monocasa 4y ago
  Correct, there's not really any businesses legitimate enough to have a domain name that are large enough to get major city or province level attention that aren't implanted with direct CCP oversight.
- Taniwha 4y ago
  Of course there is - I've gone to Shenzhen several times and hired people to build my kickstarter - including supplying of most of the parts, building the PCBs, assembling the boards etc - the only time I ever interacted with the government was the guy behind the immigration desk on the way in and out again (I have an APEC business card so I don't need to apply for visas, just show up at the door and show it)

BirAdam 4y ago

I think it is rather easy to say that the rapid buildout of more and more fabrication plants may be fruitless if the entire industry is still going to rely exclusively on ASML for EUV and even more so if there are no new ingot providers. Apparently, the fab companies know something we do not in those regards. Beyond that, while we are facing high demand now and low supply, a ton of new fabs will increase supply and… possibly crash the market. This is especially true as AMD and Intel now face greater competition not just from one another but also from RISC-V, ARM, Power, and Hygon. These competitive pressures will erode the margins and thereby also the incentives.

totalZero 4y ago
EUV and raw materials aren't the bottlenecks, with respect to most devices. There's a correlation effect whereby a shortage of minor components will halt assembly of finished products, so the tail risk scenario likely starts with more mundane chips (legacy nodes, 200mm wafer) rather than flagship processors on leading-edge nodes.
flyinglizard 4y ago
The problem is in much more mundane ICs than cutting EUV stuff. Power regulators, converters, microcontrollers from a year back or 10 years back, everything.

xony 4y ago

throwaway4good 4y ago

"In TSMC's recent Q1 2022 earnings, 41% of their revenues came from High Performance Computing or HPC - where they put their cloud revenues. Just two years ago it used to be 30%. They also noted that HPC grew 26% quarter over quarter - far faster than almost every other category other than automotive, which is a far smaller part of the overall business." AFAIK TSMC list crypto (that is various chips made specifically for proof of work mining) in the HPC category. It is not unlikely that market will correct violently at one point. Plus on the fab/design side there is a lot of stuff happening in mainland China and it one point that is going to hit the market.

Dunedan 4y ago
> AFAIK TSMC list crypto (that is various chips made specifically for proof of work mining) in the HPC category. > > It is not unlikely that market will correct violently at one point. That shouldn't affect TSMC at all, as their remaining HPC customers would happily use that capacity as well.

unwind 4y ago

I was better at Web Stuff, I would love to have one of those single-purpose sites that tried to show at a glance the status of the semiconductor industry. I mean everybody knows it's really bad, but it's so hard to get a feel for and to see if anything is changing, unless (I guess) you're seriously In The Trenches doing e.g. component sourcing for some boards. I imagine something like https://dowehavechipsyet.com/ https://dowehavechipsyet.com/ (made-up domain) with current inventory across western and eastern suppliers, price with price trends, manufacturer's stated wait time for orders, and so on. Like an aid in quickly seeing the state of the industry, perhaps for uh I don't know, either some varied selection of components (micros, transistors, power parts, etc) or deeper with perhaps 5-10 chips from each category. Does that exist and nobody told me? :)

bluesquared 4y ago
Somewhat. https://octopart.com/ https://octopart.com/ (I'm a hardware guy so take my SWE-speak with a grain of salt) Like many things in tech, each manufacturer/vendor/distributor does not have the same "API" (if it even exists) to broadcast their stock status. Here's some links to parts that have been a pain in my side. We have to result to hoarding brokers with 1000x markups to continue production (not my call, I'm the guy with the oscilloscope not the suit...). https://octopart.com/tps1h100bqpwprq1-texas+instruments-55347276?r=sp#InventoryHistory https://octopart.com/tps1h100bqpwprq1-texas+instruments-5534... https://octopart.com/at25df641a-mh-y-renesas-118506301?r=sp#InventoryHistory https://octopart.com/at25df641a-mh-y-renesas-118506301?r=sp#...

TradingPlaces 4y ago

This article uses the wrong measurements on inventories. -You have to look at inventories in relation to sales, either shipments or new orders (inventory-sales ratio) -Manufacturers’ inventories are up sharply because of materials and works-in-progress. Their finished goods inventories are sill low relative to new orders. It’s the bulges in the durables finished goods-to-new orders ratio that indicate a crash in semis coming. As of March, there are zero signs of that in any of the silicon-heavy categories. -Anyway, wholesale inventory-sales ratios are a better indicator. https://fred.stlouisfed.org/graph/fredgraph.png?g=OVAY https://fred.stlouisfed.org/graph/fredgraph.png?g=OVAY

mc4ndr3 4y ago

1942: no punchcards 1952: no integrated circuits 1962: no war 1972: no pollution 1982: no cellphone 1992: no internet 2002: no sub-quadratic multiplication algorithm 2012: no moore's law 2022: no transistors 2032: no water

speed_spread 4y ago
2033: no more laws