Biden Team Says Global Chip Shortage To Stretch Through 2022 (bloomberg.com) 45
The Biden administration has concluded that a global semiconductor shortage will persist until at least the second half of this year, promising long-term strain on a range of U.S. businesses including auto makers and the consumer electronics industry. From a report: U.S. officials plan to investigate claims of possible price gouging for chips used by auto and medical device makers, Commerce Secretary Gina Raimondo said Tuesday. "We aren't even close to being out of the woods as it relates to the supply problems with semiconductors," Raimondo said in a briefing with reporters discussing the findings of an industry report her agency conducted that was released Tuesday. The report, based on information from more than 150 companies in the chip supply chain, shows "there is a significant, persistent mismatch in supply and demand for chips." The companies "did not see the problem going away in the next six months," according to the report. "The semiconductor supply chain remains fragile," the report said, despite months of work by the Biden administration to try to relieve shortages. "Demand continues to far outstrip supply."
You ain't seen nothin' yet (Score:2, Interesting)
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I wouldn't be surprised.
But the shortage is now so bad that even some DIL memory chips that used to be common are on back-order.
I do however suspect that in some cases it's due to the severe lockdowns in Asia.
Re:You ain't seen nothin' yet (Score:5, Interesting)
Well there you go... and AC makes sense.
You know all these changes with fabs coming to the US, Intel opening it's fabs to other companies, and all on the latest process- this is preparation for losing Taiwan.
Does anyone think that companies with fabs think the USA is is the most economically vital place to build a fab? No they don't. They are sequestering their assets, IP, and manufacturing processes someplace they consider safe.
But when the big show starts, that Taiwanese tech infrastructure is going to be ashes. Doesn't even matter if the USA tries to defend the island. This is about tech primarily. And re-acquisition of the island by China secondarily.
I feel horrible about the people of Taiwan. They are the ones who will suffer.
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ah l'€rope !
Nope (Score:5, Interesting)
2024 is a much better time frame. We have orders from April of last year which still haven't been produced. Not shipped, not in transit, not produced.
Private industry has completely failed in this regard. Guaranteed the shortage will go into 2024.
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Yep. Us smaller manufacturers are really hurting now. Some parts are no bid now, meaning they cannot even be ordered. This means expensive redesigns, emc testing etc. If anything, it’s getting worse. Most of engineers now just deal with alternate part issues for purchasing.
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This is hardly something new. Since the end of the Second World War, diversifying supply chains across the globe has been the underlying strategy; with economic liberalization came not only the hope of spreading democracy, but just as critically, of making as many countries as possible interdependent. The theory, at least, was that economic interdependence even between traditional rivals would make the likelihood of conflict far smaller. The fact that it would isolate Communist competitors like Russia was s
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oh please, that's just the cost of 40 capital class ships in the USN and the supply train needed for it.
if we need the chip manufacturing here, we can easily pay for it.
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That would have the support of a half a dozen Congressional Democrats and Rand Paul
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Consoles are loss leaders, they don't want this! (Score:5, Interesting)
There is also an echo between car makers and game console makers too. Make fewer items, blame it on something, and even though scalpers/dealers make a mint from the item, it ensures that every unit is sold, and people view what would be a common item, as something of more value than it is worth, allowing for more price gouging in the future.
Most console makers lose money on console sales but make it up in-game purchases. I think you're quite incorrect. I know Microsoft is VERY interested in selling you cloud computing and Games Pass and XBox live and Sony wants the same. This is excluding the cut they get from their marketplace purchases.
A major factor why Apple is a giant and every top phone maker from 2007, like Erikson and Nokia aren't has a lot to do with iTunes and the App Store and the massive cut Apple gets for doing very little.
The shortages are a huge kick in the nuts because people are holding off buying consoles. For everyone who wants a PS5 or XSX, that means they're not buying 1st party games at $60+. They're not buying monthly subscriptions. They're not buying old consoles because #1 you can't buy them in stores and #2, they know they'll be obsolete soon. They're not buying the overpriced peripherals...like Microsoft's official battery that is 3x the cost of similar ones on Amazon or that $150 controller. My guess is that by 2023, half the new games released won't work with XBox One.
If you rely heavily on service revenue, the last thing you want is a device shortage.
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This may not be all a bad thing. For an indie developer, it would mean focusing efforts on PCs (or Windows/Mac/Linux to be specific), where there are a lot more instances of hardware that can play the game. Yes, the PC market does have piracy (while consoles, there is a 0% piracy rate), but there is still quite a lot of money to be made by selling a game on app stores (Microsoft Store, Ubuntu repositories, Apple's App Store, Steam, GOG). Among Us comes to mind of something that runs on a lot of platforms
yeah, but PCs have shortages too :) (Score:2)
This may not be all a bad thing. For an indie developer, it would mean focusing efforts on PCs (or Windows/Mac/Linux to be specific), where there are a lot more instances of hardware that can play the game.
During the pandemic, I wanted an XBox for my kids, but had to build a PC instead. I went with embedded graphics for 3 months because I literally couldn't buy a modern graphics card. The PC market is slightly less burdened, but still very much so.
:) A lot of innovation isn't going to happen and a lot of young o
It doesn't negate your point. Many have gaming PCs they built before the pandemic, but yeah, the PC gaming situation is only slightly better than the console one.
IMO, it's bad, really bad.
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> automakers are milking this "shortage" all the chance they get.
I don't blame them. I don't feel guilty when IT seems to pay "too well" because I've lived and suffered down-times also. After the dot-com crash of the early 2000's, nobody was hiring coders on the West Coast because they were a dime a dozen. I had to rely on pre-web legacy knowledge to scrape by, and that was also glutted because other devs had a similar profile: legacy-to-web.
At one place I worked I was asked to lie to help get a sale for
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It's hard to see these shortages being extended as long as possible by manufacturers who are probably as sick as anyone of the global race to the bottom and pressures of relentless capitalism. Who doesn't want a break and the opportunity to book business and guarantee revenue for 3 years out without investing much, if anything, in expansion or competition.
My guess is that once demand starts to slacken, we'll see mysterious increases in production and output.
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Make fewer items, blame it on something, and even though scalpers/dealers make a mint from the item, it ensures that every unit is sold, and people view what would be a common item, as something of more value than it is worth, allowing for more price gouging in the future.
I run a small electronics manufacturing company, and we're almost daily dealing with shortages on some component we need to build our products. So the shortage is definitely "real". The only way your conspiracy theory would work is if the car/console manufacturers are buying up all kinds of unrelated electronics parts in order to purposely cause a larger shortage. Possible, I guess, but not likely.
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I am still waiting on a motherboard I ordered at the beginning of July last year. I went to order a 4"x2" 180W PSU today from RS, back ordered deliveries sometime in 2023. Last year I also waited 6 months for a different 4"x2" PSU and 3 months for a solder in battery (don't get me started why the hell a CR2032 in a holder would not have sufficed god only knows) for the serial console server at work. I was recapping the PSU in an Sun 411 case last year and I was playing a dance to find capacitors in stock. A
Unless... (Score:3)
The dent in production the last couple years was less than half the reduction from the great recession - and they couldn't protect profits by prioritizing production of the highest-margin vehicles then, either.
https://www.statista.com/stati... [statista.com]
People seem to think today's economy is so bad. This isn't bad.
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People seem to think today's economy is so bad. This isn't bad.
Thats what they said right before the great recession.
The way I see it is predictability, and those that ignore the people that are always getting these predictions right.
Its that bad. You just arent feeling it yet.
JIT is now out of time. (Score:5, Insightful)
For decades now, manufacturing had been moving to Just In Time Inventories. For the past generation, companies were able to really cut inventory cost with JIT, But we also had a lack of major disasters. However, with a combinations of tougher trading relations, Covid, Staffing issues (Especially with low pay and/or high stress jobs), and general hording.
So now chip companies which are rather complex items that need a lot of resources to create, as well feed back into the rest of the economy, having its JIT system broken with delays, and often having too much of what they don't need and not enough on what they need, unable or unwilling to try to redistribute with other companies
While we can point to Trump and Biden saying they should had done this or that differently, it really as much as their fault, as for generations now, we have been optimizing our supply chain, to be so lean, that it has lost many of its fault tolerances.
Companies have been so ingrained to save money, vs increasing customers, that they have slimmed to a point where they cannot handle any change, and are not adaptable to even rather minor disruptions.
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Much of IT governance in general is a big battle between short-term versus long-term. In fact, the majority of our conflicts and problems with management (PHB's) stems from this. Our IT managers tend to be there for less than 5 years, and want showy trophy projects, ignoring more important needs.
It's like spending to paint the walls rather than replace known rotting water pipes. They figure the trophy project will give them about a 70% chance of a promotion but the pipe is only about 30% likely to break dur
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Still they have to pay the cost of storing stuff as a buffer, being the pandemic jumps around a lot. And this extra storage increases prices.
Missing half the pieces (Score:4, Interesting)
The thing about JIT is that it drives down costs. Businesses aren't just doing it for fun, they're doing it to have less money tied up in inventory they won't use for a long time.
Go look at what's happening to the cost of things right now. That's *why* they don't just abandon JIT as some seem to think they should.
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With 3D printing getting better, we could take JIT to a whole new level. Not everyone will have a printer, but if they have access to one there's no
Normally you have the Government step in (Score:2)
Off-shoring and outsourcing works great (Score:1, Interesting)
Until it doesn't.
These are the same chickens coming home to roost as the mortgage and enron crises: failure to identify and appropriately price correlated risk.
And its close cousin: the assumption that average cost and average risk over some time interval is identical with extreme cases likely to occur over that same time interval.
One finds this family of fallacies all over the thinking and writing and decisionmaking of our self-appointed betters, from declarations that long cloudy and windless days are no
the gov't doesn't understand supply chain (Score:1)
Sorry, making speeches doesn't cure the problem. Action solves the problem and FABs take billions in investment and time to build/staff. While I think it's a good thing for the pendulum to swing back from offshore to onshore chip manufacturing we have to also prevent the dumping that allowed it to happen. Don't trust the same uniparty BS on this, they sold us out.
Re:the gov't doesn't understand supply chain (Score:4, Insightful)
> Sorry, making speeches doesn't cure the problem.
Neither does solving problems. Joe got no love from passing the infrastructure bill and getting us the hell out of Afghanistan. Two things that needed to get done and the 2 prior prez's couldn't*.
Politics is a game of bullshitting, not merit. Merit ain't rewarded because success doesn't stay in the news long. I'm just the messenger.
* Yes, the Afghanistan exit was bumpy, but if it were easy the 2 prior prez's would have completed it already. They secretly knew it would be risky.
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The infrastructure bill that spends $1.2T we don't have? Yeah, I'll applaud more deficit spending when I'm dead and buried. Don't get me started on Afghanistan but then again, Old uncle shit stain was part of the administration that escalated it for 8 years and voted for it and to keep us there [politifact.com] It was the last administration that ended it, he just had to implement the plan for which he blamed the timetable all on Trump, it seems it was too aggressive for him.
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> The infrastructure bill that spends $1.2T we don't have?
If conservatives cared they'd tax the friggen rich. Broken bridges and lead pipes are not good, Ralph.
> It was the last administration that ended it
If true, why is the bad ending "Joe's fault"? Odd that Don waited 3.5 years.
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The wealthiest 1% of Americans pay over 40% of all federal taxes collected. The top 10% pay over 70%.
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Nobody needs 100 fucking mansions.
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I agree but its really none of my business what someone else spends their money on. I bet I can find something you like to spend money on that I don't think you need. Should I be allowed to punish you with extra taxes because of it or is it really none of my business?
P.S. Who has 100 mansions? Name one.
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Most billionaires surf on the the network effect, not because they are business geniuses. Plus, the mega-rich have the power to (legally) bribe the laws they want in place, turning us ever more into a plutocracy. It is a slippery slope, look at the GINI score over time.
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They have enough money for 100, even if they don't actually build them. I realize some inequality is necessary to motivate people, but too much is ridiculous.
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You think they keep the money to buy 100 mansions in the mattress or a vault somewhere just to visit and roll around in it from time to time? No jackass, that money is used to build/invest in other profitable ventures that provide you with a multitude of services and luxury items (like the device you are reading this) that you completely take for granted and just assume will still exist in your Communist Utopia.
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That's a myth. Only a very small portion goes to R&D. The top ideas usually come from struggling start-ups or garages anyhow, as oligopolies have a poor track record of actual innovation. They spend their money fending off the competition using shift-and-dump or giving the brass fat good 'ol boy bonuses for fending off the competition.
Price gouging (Score:4, Insightful)
I'm puzzled by the concept of price gouging. If there's a shortage and you don't sell the limited supply to the people who are willing to pay the most then you have less money to deal with the supply problem. If there isn't enough to meet the demand then you're going to have deprive some people. What's the purpose of this government investigation. Do they want to make sure that the people who are willing to pay more for the chips are deprived of them in order to sell them to the people who don't want them as badly?
If the supply is limited then the only sensible thing to do is raise the price until enough people start deciding that they don't need the thing that badly. Everybody who's still willing to pay must really need the thing and they don't have to do without it just because somebody who didn't really want it that badly had a little better luck.
One way or another somebody needs to increase production. Shifting around who gets the limited supply in such a way to reduce the amount of money paid to the people who can increase production doesn't provide any net benefit.
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The other alternative is to fix the price and create a shortage. The government did this in the 70's with gas, and history shows how well that works, or you can just let the market do it's thing.
At least 2023 (Score:3)
I ordered parts back in Q2 2021, many of those orders should have been filled by the end of last year. Some parts got pushed back to Q2 of this year. But the outlook is grim, many microprocessors orders can't be delivered until 2023, and currently many parts can't be bought anywhere but asian 3rd party distributors for 10x their normal value.
The other thing that is kind of disturbing is someone told me that the Asian assemblers bought up large amounts of orders because of tariffs. If so those tariffs have done nuclear damage on US businesses by increasing the cost of electronic components by a factor of 10 or making parts be completely unavailable. And the crazy part is US businesses can also get hit with a duty fee on the way back (I have a few times).