How is Chipageddon affecting you?

[rsjsouza]

TI broke ground on their 300nm Sherman, Texas fab, expected production in 2025.
What excellent foresight and planning, literally 2 years to make that decision, it was so hard

It is EXTREMELY hard to make new fab investment decisions. They can exceed a year's total revenue for even a fairly large semiconductor maker, and they have a very limited life as a high revenue operation. The time it takes to build and ramp a fab can easily take you from a boom to the next bust, and the semiconductor industry has frequent deep destructive busts. Everyone committing to a new fab lives in fear of it coming on line in the next slump.

Exactly. Saying that a manufacturer sits on their hands waiting for the market to collapse and burn only reveals a complete ignorance of the extreme investment that is fully chained by the whims of such environment. Depletion happened and panic buy took place; did the market actually increase to make such new fabs operate at 100% capacity or there'll be simply an excess stock that will deflate demand?
There are many examples of industries and companies that collapsed (or almost) due to investments when markets clamored for demand/help only to be left for dead when supplies resumed or a shift took place and the demand was emptied - masks anyone?

[VK3DRB]

Out of interest I checked to see if Bosch is still selling vaporware. Yep!

Botch continue to advertise their chips when they are clearly not available now or in the foreseeable future. Their big glossy advertisement of BMA456 (and others) is a waste of bytes. Of course the BNO055 is still nil stock after two years. Their should be laws where companies like TI and Botch are fined for misleading the market by advertising product that does not exist. In any case, I will won't ever be using Bosch Sensortec products again.

https://www.bosch-sensortec.com/

[VK3DRB]

I might need to stick to the AD chip. At least AD is a trusted company and I know you can get engineering samples from them, where TI could not care less.

I've found ADI to be just as bad, if not worse.  They completely screwed us by cancelling several production orders we made for a new design, all of which had verified leadtimes.  To make matters worse, we got stuck with the inventory we already purchased, which we can't use, because the later orders were canceled and we changed the design of the product.

Screw ADI.

Maybe I can sell them on the secondary market.  Anyone need ADAU1451/2?

That is pretty bad. I went to an AD webinar about a new buck-boost converters, and I asked the question about supply. The AD webinar presented said they have a backdoor to getting samples for development purposes where they can supply up to 100 chips for R & D design purposes (eg: V & V). This path is not via distributors. They have a cache of spare parts, or can get some parts from volume builds. That is MUCH better than Microchip who were not smart enough to keep spares for R & D. But for volume quantities, join the far queue.

Ironically, Microchips technical support is far better than AD's. For example, I had an ADuM4160 chip interfacing to the high end Microchip processor and there was a bug in the USB communications path. It ended up a design bug in microcode within the Microchip, caused by a propagation delay in the AD chip. Microchip advised a software workaround. Microchip was responsive and the issue went all the way to a Microchip R & D lab in France. In contrast, AD's response was hopeless. That is because Microchip has a well defined escalation path, where AD's support "process" just falls of edge of a cliff.

[floobydust]

[...] Saying that a manufacturer sits on their hands waiting for the market to collapse and burn only reveals a complete ignorance of the extreme investment that is fully chained by the whims of such environment. Depletion happened and panic buy took place; did the market actually increase to make such new fabs operate at 100% capacity or there'll be simply an excess stock that will deflate demand?
There are many examples of industries and companies that collapsed (or almost) due to investments when markets clamored for demand/help only to be left for dead when supplies resumed or a shift took place and the demand was emptied - masks anyone?

It's nothing to do with the "extreme investment". TI has $156B market cap, ADI $88B, Intel $178B, NXP $48B - these companies have the money, it's one reason they are on the stock exchange in the first place, for investor's money. Double-digit growth, record revenues despite "shortages" they aren't running out of products it seems.
US taxpayers now footing some of the bill for new fabs does de-risk somewhat - but really the time constant is so long to build a fab, 3-5 years that it's obvious the semi manufacturers screwed up and are too late in deciding to grow now. Multi-billion dollar projects with bird brains planning it "uh we shud build a fab".
The USA had no plan for the semiconductor industry, unlike china.  They lost ground from 40% in 1990 to 12% in 2020 of the global semi market - and why did that happen, people are clueless why.
Bottleneck ASML order book Q1-2022 backlog is €29 billion. Let that sink in.

[JPortici]

Two, what happens if the customer misses payments?

x% is added every day.
Then, they do have your address.. or at least the address you gave. Guess that's that guy's problem then

[tom66]

It's nothing to do with the "extreme investment". TI has $156B market cap, ADI $88B, Intel $178B, NXP $48B - these companies have the money, it's one reason they are on the stock exchange in the first place, for investor's money.

Market cap != accessible cash.  Tesla should be a pretty good example of the insanity that market caps can represent.   Do you really think Tesla could spend $700B overnight?
They would still need to use cash-on-hand or borrow at commercial rates,  or they'd need to dilute their stock by selling more to raise cash, which could panic Wall Street.

[Bassman59]

It's nothing to do with the "extreme investment". TI has $156B market cap, ADI $88B, Intel $178B, NXP $48B - these companies have the money, it's one reason they are on the stock exchange in the first place, for investor's money.

Market cap != accessible cash.  Tesla should be a pretty good example of the insanity that market caps can represent.   Do you really think Tesla could spend $700B overnight?
They would still need to use cash-on-hand or borrow at commercial rates,  or they'd need to dilute their stock by selling more to raise cash, which could panic Wall Street.

Exactly.

[floobydust]

I don't think the project costs are a valid excuse to "not do it".
The market value of the companies- high enough for securing big loans from lenders. Tesla has spent multi-billions on Gigafactories, market cap $753B and taken many loans, subsidies from all over the place. The MBA fad of growth through debt, running on loans because interest rates are low and borrowing is inexpensive, is still popular. Just look at Keysight.

Bosch Dresden 300nm fab has been running for about a year now, it was an expansion $1.2B started in 2018, $200M in grants and subsidies. Strangely cheap.

[cortex_m0]

It's likely there are tons of fake orders for semiconductors. Why not order all over the place and just cancel the order if you find some better priced parts or you end up not needing them. You don't have to pay until product is actually received. This would drive the 'pay in advance' policy.

The Sherman facility is the third fab TI has under construction in the United States, so this project is in fact forward thinking. The first of the three was launched in 2018: https://finance.yahoo.com/news/texas-instruments-plans-add-facility-131901488.html

[VK3DRB]

The Sherman facility is the third fab TI has under construction in the United States, so this project is in fact forward thinking. The first of the three was launched in 2018: https://finance.yahoo.com/news/texas-instruments-plans-add-facility-131901488.html

Maybe they should have forward thought about three years earlier. Easy to say in hindsight. Note that TI went dead as soon as the big Texas freeze and power outage hit... coincidence maybe? Irrespective of that, they should provide us meaningful forecasts of when chips will be available for R & D purposes and manufacturing, rather than the "50 weeks" which translates to "Go to the far queue."

One might feel a bit sorry for Digikey and Mouser, not getting any decent supply information from manufacturers about when parts will be available again. They are the meat in the sandwich and I am sure they have felt the pain of being told next to nothing by some chip vendors. I have found mainstream distributors can't even get info. It makes life hard for them too.

[JPortici]

Apruve *seems* legit at first search:
https://apruve.com/

...so this is indeed a concerning message.  There doesn't appear to be any "affiliate" link so I can't see how the rep is benefiting from this, it's just how TI are managing credit now.  But they're essentially saying that to avoid the stock being bought up by others with more capital, borrow money so you can buy these parts instead.  Way to go on actually solving the problem (sarcasm).  And this will just lead to further inflation... just like extending mortgage affordability doesn't really allow more people to buy homes, as the prices go up in line with affordability...

answer from support

Hi Jacopo,

Thank you for contacting TI Customer Support.

We have received your request and upon checking the email you forwarded this has been sent by F******* ******** who is a TI employee. You can respond directly to F******* in the email you received if it will let you feel more comfortable and so you can confirm that this is not phishing.

I believe I have completed your request. Therefore, I have set the status as resolved.
If I have not completed your request or additional clarification or help is needed, please reply to this email and let me know.
Should you need support about any other TI-related questions, please do not hesitate to submit a new request via www.ti.com/csc.
It has been a pleasure supporting you. Thank you and have a lovely day ahead!
Regards,

H***** ******

Texas Instruments | Customer Support Center

"TI’s published lead-times are for reference only and subject to change based on availability. 
Estimated Shipment Dates (ESDs) are assigned based on actual Product availability at the time of purchase order acceptance.  This document and any sale of TI products by TI are subject to TI’s Terms of Sale."

I don't know if i want to bother telling the guy how i feel about his email, certain things shouldn't be put in writing

EDIT: Now i will be super worried whenever a part has "4k" ESD in the datasheet

[coppice]

Bosch Dresden 300nm fab has been running for about a year now, it was an expansion $1.2B started in 2018, $200M in grants and subsidies. Strangely cheap.

Not strange at all. As far as I know Bosch doesn't produce any super fine geometry parts. They make a lot of things like MEMS sensors and SiC parts, which don't require a highly expensive state of the art fab.

Not quite state of the art fabs can be quite cheap to equip if done right. People like DRAM makers have a lot of used equipment for sale quite regularly, which has plenty of life left in it, but is too coarse geometry for the super fine parts that make up most of their business.

[tom66]

The Bosch Sensortec devices are made in Korea.  Since the BNO055 and a few other devices are essentially 4 chips in one package, it wouldn't surprise me if the shortage is just one e.g. can't get the Atmel MCU in it.

The MCU in the BNO055 is similar to ATSAMD20J18 (bare-package of course, but same chip) and you can't buy any of those right now...

https://octopart.com/search?q=atsamd20j18&currency=USD&specs=0

I believe Bosch makes the rest of the device's sensors, the MEMS devices, but the packaging is contracted out.

Not sure what Dresden does, but AFAIK nothing to do with most of the current generation Sensortec chips.

[floobydust]

STMicroelectronics just sent notice, IC (application specific) used for 2 years now in production, orders for it 1 year in advance - sorry, you can't have any now 
About 2 months production worth is the last shipment maybe 20-50kpcs tops.
Brutal to try get an alternate manufacturer's IC, do a PC board change and change firmware and retest regulatory... in 2 months?
F%&#* ST needs to get railed.

ST financials past year:
Automotive and Discrete Group (ADG): Operating profit increased by 175.1%
Microcontrollers and Digital ICs Group (MDG): Operating profit increased by 137.3% <- uh I checked... out of 2,800 STM32 variants 40 in stock at Digi-Key= about 1.4% in stock.
Profit is up 40.8% past year, 2022-Q1 net revenues $3.55 billion +17.6%; gross margin 46.7%; operating margin 24.7%; net income $747 million.
There is no semiconductor shortage, they're just all going to the biggest fish. The Godfather gets the chips.

Then the final insult- they want to set up a new product seminar - let me get this straight, pull the rug out on a current part, and now expect engineers to design in your new parts?!
F^$!@#% are they stupid. No, we're actually designing out ST parts entirely for being treated like shit.

[tom66]

Yesterday we were chatting with one of the contracting firms we work with in Cambridge, who support us and many other companies in the area.   They flat out told me that TI gets a big no from almost every engineer they talk to,  it's next to impossible to source anything from them and creates so many headaches. 

I'm glad I've never seriously used STM32... Never liked the software platforms & documentation... looks like I dodged a bullet or two.

Edit: clarification

[Robotec]

will it's up to them, taking into account how Ti its servicing us we are seriously thinking about stopping working with them after the shortage.

we are redesigning to the more new CC1311/CC1352 or ditching them, my company its a small one and we were using about 20k of their chips per year so if it is a usual trend the may have a real problem in the future..

[AndyC_772]

Shame about STM32 Tom, I picked that family to learn some years back and have always felt it was a good choice. Data sheets are clear and accurate, and even though compatibility between different sub-families isn't as good as I'd have hoped (every generation seems to have annoyingly different peripherals), the overall look, feel and architecture is similar enough that it's never taken long to pick up a new device. There's been the odd technical quirk, of course, but on balance I've found them fit for purpose and not a barrier to getting my job done.

Then, all of a sudden, they disappeared from shelves.

[tom66]

I focused mostly on TM4C123 series processors around then -- though availability for those is also poor.  And the EFM32/EZR32 processors (bloody awful in many respects, but that's a long story.)

I guess this is why I'm not hating on Microchip right now.  While the odd part from them is hard to get they provide actual assurances on when components will arrive.  e.g. I can place an order for a PIC32MM and have stock by August - that's something that can be planned around:

https://www.microchipdirect.com/product/PIC32MM0256GPM064-I%2FPT

Whereas TI give absolutely no clarity on this, the parts just mysteriously appear on their webstore and it's a game of fastest finger first to snap them up.

[f4eru]

Exactly. Saying that a manufacturer sits on their hands waiting for the market to collapse and burn only reveals a complete ignorance of the extreme investment that is fully chained by the whims of such environment.

Sitting on their hands, I don't know.
But they threw a complete class of their customers under the bus, because, it seems that they stopped delivering to all distributors exactly at the worst possible moment, fucking up the supply and grinding production to a halt for all the people using their chips in small to middle volume.
Probably you can get TI chips if you are an automotive supplier taking 40 million chips/yr, but all others have been shafted, and know who not to design in for the next 10 years.

[thinkfat]

The volumes in automotive are not that high, per single buyer. The really high volume markets are mostly entertainment industry, smartphones, TVs, etc. In Q1 this year I worked for an OEM making premium "white" goods. They are in no better position.

The thing with automotive is that they are a key industry in many countries. You better keep those lines moving, or risk a major economical collapse. Chip makers know that.

[f4eru]

The volumes of chips in automotive are actually very high.
When you're Conti or Bosch, Delphi or similar, you buy probably 200 million chips/year.
Most of them are sub-$, but still, it's a very high volume.

[rsjsouza]

Exactly. Saying that a manufacturer sits on their hands waiting for the market to collapse and burn only reveals a complete ignorance of the extreme investment that is fully chained by the whims of such environment.

Sitting on their hands, I don't know.
But they threw a complete class of their customers under the bus, because, it seems that they stopped delivering to all distributors exactly at the worst possible moment, fucking up the supply and grinding production to a halt for all the people using their chips in small to middle volume.
Probably you can get TI chips if you are an automotive supplier taking 40 million chips/yr, but all others have been shafted, and know who not to design in for the next 10 years.

What I don't understand is why you mention they stopped delivering to distributors - I thought the issue was panic purchases that depleted inventories à lá toiletpapergate? If the manufacturers are being simply dishonest, why did they not raise the prices of their own products to pursue higher profits? After all, retail sales carry a higher profit and, at this moment, it seems that scalpers are taking all of it.

To be honest, I have no idea what exactly triggered this shortage to happen - some blame the automakers, others China, and then some to simply capitalist speculation from people with very deep pockets. What I do know is that manufacturing capacity cannot be turned on with a flick of a switch and it is a pluriannual decision.

[floobydust]

01/2021 Volkswagen was going to sue Continental and Bosch over the chip shortages. I haven't heard anything since.
Fear of lawsuits would explain semiconductor manufacturers catering exclusively to the automotive top customers, but they're high volume, low margin though.
You can sell higher quantity at lower price, or lower quantity at a higher price, and either way have the same money flow. But in a shortage situation it's best to sell fewer at higher prices. Why would you not sell to distributors (at all) to get that higher margin?

I still smell a rat. It still doesn't explain the semiconductor manufacturer's record profits when supposedly they don't have much and are catering to their lowest margin customers.

[Karel]

The volumes of chips in automotive are actually very high.
When you're Conti or Bosch, Delphi or similar, you buy probably 200 million chips/year.
Most of them are sub-$, but still, it's a very high volume.

(Electric) Car manufacturers aren't big customers for semiconductor manufacturers.


"Nope, nobody's interested in dealing with that low a volume. And with good reason. 10K/yr on 28nm for even large chips
isn't a boat of wafers. You never start less than 2 boats, and a big fab will run thousands of boats/day even when idling.
So we have to keep several sets of masks around, calibrate the machines for each set, then run them once a year, deal
with special probe cards and tester programs etc. You're a really expensive customer to keep around, and having to switch
to run just your product will slow down the rest of their production. Then top it off with all the extra paperwork aerospace
chips usually need. You think your chips are special, but to a fab, they're usually nothing but annoying noise in the overall
scheme of things.

This is the same problem we have with cars. For some reason they think they can just waltz in and demand premium treatment.
Sorry, folks, you run on the same old lines as most power electronics, and frankly even a low volume power supply run is bigger
than what a car company needs. If we have to prioritize, we'll make more money on the power supplies than we will on what they
car companies want to pay. And besides, car companies are in love with JIT delivery and as I mentioned above, JIT isn't something
you do on those very low volume runs. It's why when car companies cancelled all their orders at the beginning of the CCP flu,
then decided to reorder, we had to tell them they'd have to wait because the power guys had bought all the slots for over a year.
It's only now they're starting to get appreciable supply.

The economics of a chip fab are nasty, and they're especially bad for small run parts like aerospace or cars. It's what's driving the
incredible consolidation in the electronics industry today. Yes, my company is one of the larger car/industrial chip suppliers,
and in the overall scheme of things, that segment is about 1% of the company."


https://www.theregister.com/2022/02/04/nxp_chip_deals/

[rsjsouza]

01/2021 Volkswagen was going to sue Continental and Bosch over the chip shortages. I haven't heard anything since.
Fear of lawsuits would explain semiconductor manufacturers catering exclusively to the automotive top customers, but they're high volume, low margin though.

Indeed that is a very plausible explanation for redirecting stock away from the mass market. (edit) Karel's post is quite interesting on this regard and, if it is the same across all manufacturers, may reinforce the theory of panic buy.
 

I still smell a rat. It still doesn't explain the semiconductor manufacturer's record profits when supposedly they don't have much and are catering to their lowest margin customers.

Well, in a normal year you might have regular production and some excess inventory that is unrealized gain, thus reducing revenue and profit (to manage all this inventory). In this environment the opposite would happen: product is flying off the shelves and inventory is minimum.

I just thought of something else that might be at play: perhaps the suppliers for the assembly & test fabs might also be in allocation? You know, epoxy for packaging, lead frames and/or gold wiring, etc. I don't know if this is all manufactured internally or subcontracted/purchased.