3 ms·

This doesn’t sound accurate. Do you have a source for this? I work with most of the OEMs and “update to newer chips” is not something they are doing. Tesla w

This doesn’t sound accurate. Do you have a source for this? I work with most of the OEMs and “update to newer chips” is not something they are doing. Tesla was effected by the shortage as well even though they expressed willingness to use whatever chip design they could get their hands on. I don’t think your summary is accurate. I could be wrong but my first hand experience tells me the exact opposite.

vxNsr 4y ago
I’ve heard many people repeat that summary, but as you appear to have first hand knowledge: what do you believe or know to be the reason for the shortage?
- onethought 4y ago
  The shortage was the car industry cancelled all there orders for chips (mistakenly, because of bad forecasting) and the chip manufacturers sold that factory time elsewhere, cars tried to take it back and buy more factory time to make up for the shortfall… but they all did it. So it was basically like toilet paper shortages. You are right they are on old architecture and the chip manufactures would prefer to move to newer ones. But I don’t think they ever didn’t take the car industry seriously, the order sizes are a stupid amount of money to leave on the table over “new nodes vs old nodes”
  - adrian_b 4y ago
    The problem with "new nodes vs. old nodes" for the chip manufacturers is that any semiconductor plant has quite large fixed costs. When the production is very high, the fixed costs are divided over a very large number of chips and the cost per chip is negligible. When the production diminishes for an old node because some obsolete devices are no longer used in new designs, there is a threshold where the fixed costs per chip become so large that the chips cannot be sold at a profit. So even if the semiconductor plant would still have orders for millions of chips per month and they could be easily made, the production would not be profitable, because the profitability threshold might be e.g. at ten million chips per month. Because of that, as soon as they see that the old plants are run much below their maximum capacity, the foundries would prefer very much the customers to move their orders to a newer node, to be able to close completely the old plant instead of running it at a very low profit or even at a loss, when they have to satisfy some old contracts, made when the plant was still profitable.
    - onethought 4y ago
      That may be true. I can believe that. But the car industry is monstrously big, each car having 10s-100s of chips. There isn’t really a comparable volume of product that would make it not worth servicing them. I agree you might try and use this opportunity to shift the OEMs onto chips that match other more modern clients… but it’s tail wagging the dog territory.
  - mynameisvlad 4y ago
    Every single manufacturer in the car industry collectively cancelled their orders? Tesla, for instance, would’ve had completely different forecasting as an EV-only manufacturer with multiple new models and lines coming to the market. I have doubts that they would have scaled back orders.
    - onethought 4y ago
      They didn’t, but they got caught up in being unable to scale up as their production scaled up. So they were still buying toilet paper at the normal rate, but suddenly all the toilet paper disappeared Edit: agree it is super weird the entire industry (or at least enough of a critical mass) made the same decision on their Covid forecasting… it’s almost unbelievable/conspiracy territory. But it is what happened.
      - JetSpiegel 4y ago
        Isn't the car industry consolidated to 4 or 5 big groups? It's just a Zoom call or a small table in a Davos chalet to have the entire industry making the same decision, no conspiracy required.
  - timmg 4y ago
    Any sense for when it will "get back to normal" for the car industry?
    - onethought 4y ago
      Q4 ish. It’s returning to normal now in the factories, but there is a back log of orders and logistics that will delay this to consumers for another 6 months minimum

vxNsr 4y ago

I’ve heard many people repeat that summary, but as you appear to have first hand knowledge: what do you believe or know to be the reason for the shortage?

onethought 4y ago
The shortage was the car industry cancelled all there orders for chips (mistakenly, because of bad forecasting) and the chip manufacturers sold that factory time elsewhere, cars tried to take it back and buy more factory time to make up for the shortfall… but they all did it. So it was basically like toilet paper shortages. You are right they are on old architecture and the chip manufactures would prefer to move to newer ones. But I don’t think they ever didn’t take the car industry seriously, the order sizes are a stupid amount of money to leave on the table over “new nodes vs old nodes”
- adrian_b 4y ago
  The problem with "new nodes vs. old nodes" for the chip manufacturers is that any semiconductor plant has quite large fixed costs. When the production is very high, the fixed costs are divided over a very large number of chips and the cost per chip is negligible. When the production diminishes for an old node because some obsolete devices are no longer used in new designs, there is a threshold where the fixed costs per chip become so large that the chips cannot be sold at a profit. So even if the semiconductor plant would still have orders for millions of chips per month and they could be easily made, the production would not be profitable, because the profitability threshold might be e.g. at ten million chips per month. Because of that, as soon as they see that the old plants are run much below their maximum capacity, the foundries would prefer very much the customers to move their orders to a newer node, to be able to close completely the old plant instead of running it at a very low profit or even at a loss, when they have to satisfy some old contracts, made when the plant was still profitable.
  - onethought 4y ago
    That may be true. I can believe that. But the car industry is monstrously big, each car having 10s-100s of chips. There isn’t really a comparable volume of product that would make it not worth servicing them. I agree you might try and use this opportunity to shift the OEMs onto chips that match other more modern clients… but it’s tail wagging the dog territory.
- mynameisvlad 4y ago
  Every single manufacturer in the car industry collectively cancelled their orders? Tesla, for instance, would’ve had completely different forecasting as an EV-only manufacturer with multiple new models and lines coming to the market. I have doubts that they would have scaled back orders.
  - onethought 4y ago
    They didn’t, but they got caught up in being unable to scale up as their production scaled up. So they were still buying toilet paper at the normal rate, but suddenly all the toilet paper disappeared Edit: agree it is super weird the entire industry (or at least enough of a critical mass) made the same decision on their Covid forecasting… it’s almost unbelievable/conspiracy territory. But it is what happened.
    - JetSpiegel 4y ago
      Isn't the car industry consolidated to 4 or 5 big groups? It's just a Zoom call or a small table in a Davos chalet to have the entire industry making the same decision, no conspiracy required.
- timmg 4y ago
  Any sense for when it will "get back to normal" for the car industry?
  - onethought 4y ago
    Q4 ish. It’s returning to normal now in the factories, but there is a back log of orders and logistics that will delay this to consumers for another 6 months minimum