How is Chipageddon affecting you?

[tom66]

But unlike an SME, a company like ASML can probably afford to buy a $1,000 PIC24 from a broker if they need to, after all, the business has something close to a 50% gross margin.

Interesting. You think a business like ASML can survive on a 50% gross margin?

That's what they made last year.  They have a monopoly on EUV, so it's a licence to print money.
https://www.asml.com/en/investors/annual-report

It was just an example. When the loop like this becomes larger, the willingness to pay scalpels are becoming less and less. I'm in one of these loops, and for example I cannot build a temperature controller for the transport company, that carries the paint for your car.

Sure, this is true.  And I think about agriculture or down-hole oil kit (I used to work in this sector, the 'consumption' rate of hardware is high).  That does pose a risk.  But eventually money talks.  There isn't an actual shortage (well, not really any more): just excessive demand, chasing too few goods.   If something is really essential, the customer WILL pay (or most likely, they will try to keep existing kit running, or limit expansion, or run their kit for longer shifts).  Unfortunately, for semiconductors, SMEs are just at the bottom of the food chain on this.  It will get better for us soon enough, but it will take time.

[Kasper]

[...]This is a sucky time to be an individual engineer [...]

I agree but one nice thing is I've been seeing a few more job ads lately for HW engineers. 

[Kasper]

A friend of mine works in a lumber mill and it sounds like they are going through similar pains.  Saw blades are hard to get (~1 year lead time), some mills stocked up and should be ok.  Other mills could be in trouble and might end up with lower quality blades that slow down production.  Some of their grinders are out of commission waiting for electronic repairs.  They are also facing a shortage of new apprentices to replace retirees. 

[tszaboo]

A friend of mine works in a lumber mill and it sounds like they are going through similar pains.  Saw blades are hard to get (~1 year lead time), some mills stocked up and should be ok.  Other mills could be in trouble and might end up with lower quality blades that slow down production.  Some of their grinders are out of commission waiting for electronic repairs.  They are also facing a shortage of new apprentices to replace retirees.

Plastic lead times are getting longer and longer. I bought a dozen toothbrush by accident, maybe I'll be the lucky one.

Imagine ASML not getting the ICs that are necessary for the machine to make the ICs. This can spiral out of control very quickly.

https://www.eevblog.com/forum/chat/how-is-chipageddon-affecting-you/msg4098640/#msg4098640

Yes, I might have heard about it. I hope the 4 teenager is happy with their wireless earbuds, and a multi billion dollar factory needs to shut down, because the headset company ordered first and has better lawyers.

[tom66]

I agree but one nice thing is I've been seeing a few more job ads lately for HW engineers.

Yes, the job market for engineers is *hot* right now.  I know a recruiter (the devil you know and all) and he tells me that employers are really struggling to find good engineers.  Make hay while the sun shines - this might not last forever but this is a great time to be in the field.

In part, this is reflective of the high demand for components - more engineers implies more electronics sales of course.  Everyone and their nan wants the latest technology, latest 'gadget' - especially as they've spent more time at home during lockdowns.  High inflation here is just a sign of a market correction.  In general, technology hasn't really increased in price, and many things have fallen in price, over the last decade.

Here's one example... I recently replaced my keyboard as it had died due to a water spill.  I paid £19.98 for a Logitech wireless keyboard/mouse combo.   In 2016 I bought the same one... for £20.  And that's not an anomaly.  In 2012 when the product was first on the market, it was £25. 

https://uk.camelcamelcamel.com/product/B00CL6353A?context=search

I've seen this pattern with quite a few things.  Put a few electronic products into camelcamelcamel and see if you can find one that consistently increased in price.  They haven't - which is really quite counter-intuitive, given even ignoring the recent high inflation,  means we've seen an inflation of about 37% since 2010 to 2020.  So perhaps we're just seeing a correction.  Technology is too cheap, and people are throwing their money into it.

[tszaboo]

I agree but one nice thing is I've been seeing a few more job ads lately for HW engineers.

Yes, the job market for engineers is *hot* right now.  I know a recruiter (the devil you know and all) and he tells me that employers are really struggling to find good engineers.  Make hay while the sun shines - this might not last forever but this is a great time to be in the field.

That statement by the recruiter is just untrue.
If the company would just make an ad, EE wanted, salary: competitive with FAAMG software engineers, they wouldn't have any issue filling up that HW position. The correct statement is: "employers are really struggling to find good engineers for how much they are willing to pay" or "employers are really struggling to cope with reality on how much engineering salaries are"

[tom66]

That statement by the recruiter is just untrue.
If the company would just make an ad, EE wanted, salary: competitive with FAAMG software engineers, they wouldn't have any issue filling up that HW position. The correct statement is: "employers are really struggling to find good engineers for how much they are willing to pay" or "employers are really struggling to cope with reality on how much engineering salaries are"

It's not.  I don't know about the US, but in the UK most positions are advertised without salaries, just "competitive salary".  It's a bug-bear of mine.  The point is, the CVs that we do get, are just no good at all.  We see a few good candidates now and then and are snapping them up when we get them, but it's rare.  We've had a position open for an FPGA engineer for 6 months...  It's not the advertised salary (because almost no one posts a salary); engineers are just staying put.  They're either happy with what they've got, or fearful of moving, but either way, it's a really brutal market to recruit in.

As a small company it's difficult to pool resource into junior engineers but we do that too where we can, but that has limits.    End result is we just use contractors instead.

[Kasper]

I agree but one nice thing is I've been seeing a few more job ads lately for HW engineers.

Yes, the job market for engineers is *hot* right now.  I know a recruiter (the devil you know and all) and he tells me that employers are really struggling to find good engineers.  Make hay while the sun shines - this might not last forever but this is a great time to be in the field.

That statement by the recruiter is just untrue.
If the company would just make an ad, EE wanted, salary: competitive with FAAMG software engineers, they wouldn't have any issue filling up that HW position. The correct statement is: "employers are really struggling to find good engineers for how much they are willing to pay" or "employers are really struggling to cope with reality on how much engineering salaries are"

Any guesses how long this will last?  I've heard of large companies doing some trimming already and I expect many small businesses to be crushed by chipageddon.  The startup I work at is running out of runway and struggling to secure more funding.

[tszaboo]

That statement by the recruiter is just untrue.
If the company would just make an ad, EE wanted, salary: competitive with FAAMG software engineers, they wouldn't have any issue filling up that HW position. The correct statement is: "employers are really struggling to find good engineers for how much they are willing to pay" or "employers are really struggling to cope with reality on how much engineering salaries are"

It's not.  I don't know about the US, but in the UK most positions are advertised without salaries, just "competitive salary".  It's a bug-bear of mine.  The point is, the CVs that we do get, are just no good at all.  We see a few good candidates now and then and are snapping them up when we get them, but it's rare.  We've had a position open for an FPGA engineer for 6 months...  It's not the advertised salary (because almost no one posts a salary); engineers are just staying put.  They're either happy with what they've got, or fearful of moving, but either way, it's a really brutal market to recruit in.

As a small company it's difficult to pool resource into junior engineers but we do that too where we can, but that has limits.    End result is we just use contractors instead.

Then start posting salaries. I also hate when they don't, but here they often times do.
At my place, we got a new manager, and I've seen the open positions that they want to fill in. I am also interviewing candidates, and I can tell that it is hard to fill those positions. But guess what, because of that manager, the salary range for that position is like 20% lower than my salary. I wonder, why it is not filled up... I wonder why?
Also get candidates, that only want a job that will fast track them to management, and have the interest to do engineering, but you know, management is where the big buck is. At least until we get rid of this 1990s mentality, nothing is going to change.

[Kasper]

Salaries are rarely posted in Canada either.  It is really annoying, specially when trying to set my salary expectations.  I found glassdoor.ca and the Randstad salary guide helpful but would rather see what is actually out there being offered.

I suspect it's either so low they try to hide it from potential applicants or it's so high, they try to hide it from current employees who are making less.

[tszaboo]

Salaries are rarely posted in Canada either.  It is really annoying, specially when trying to set my salary expectations.  I found glassdoor.ca and the Randstad salary guide helpful but would rather see what is actually out there being offered.

I suspect it's either so low they try to hide it from potential applicants or it's so high, they try to hide it from current employees who are making less.

I think glassdoor, payscale and other sites are under-reporting salaries. Because it is used by people who are not satisfied with their salary, it only captures the low-end of the payscale. Until we don't get better clarity on how much EEs are payed, we are not going to get the salaries we deserve.
https://blog.pragmaticengineer.com/software-engineering-salaries-in-the-netherlands-and-europe/

This is a good read on how much you can earn as an SW. I think if you feel like you are not payed properly, you probably aren't. I can tell you, getting a job with much better pay was surprisingly easy, I just had to ask for it.

[Kasper]

Salaries are rarely posted in Canada either.  It is really annoying, specially when trying to set my salary expectations.  I found glassdoor.ca and the Randstad salary guide helpful but would rather see what is actually out there being offered.

I suspect it's either so low they try to hide it from potential applicants or it's so high, they try to hide it from current employees who are making less.

I think glassdoor, payscale and other sites are under-reporting salaries. Because it is used by people who are not satisfied with their salary, it only captures the low-end of the payscale. Until we don't get better clarity on how much EEs are payed, we are not going to get the salaries we deserve.
https://blog.pragmaticengineer.com/software-engineering-salaries-in-the-netherlands-and-europe/

This is a good read on how much you can earn as an SW. I think if you feel like you are not payed properly, you probably aren't. I can tell you, getting a job with much better pay was surprisingly easy, I just had to ask for it.

Interesting.  I might start a new thread about this.

[nctnico]

That statement by the recruiter is just untrue.
If the company would just make an ad, EE wanted, salary: competitive with FAAMG software engineers, they wouldn't have any issue filling up that HW position. The correct statement is: "employers are really struggling to find good engineers for how much they are willing to pay" or "employers are really struggling to cope with reality on how much engineering salaries are"

It's not.  I don't know about the US, but in the UK most positions are advertised without salaries, just "competitive salary".  It's a bug-bear of mine.  The point is, the CVs that we do get, are just no good at all.  We see a few good candidates now and then and are snapping them up when we get them, but it's rare.  We've had a position open for an FPGA engineer for 6 months...  It's not the advertised salary (because almost no one posts a salary); engineers are just staying put.  They're either happy with what they've got, or fearful of moving, but either way, it's a really brutal market to recruit in.

As a small company it's difficult to pool resource into junior engineers but we do that too where we can, but that has limits.    End result is we just use contractors instead.

In the end contracting pays better than being employed. Many companies don't have the amount of work to pay a specialist enough for what the person is capable of. And the focus of a company may also shift. At one of my jobs my work shifted from 100% FPGA development to 100% software development. Because I wasn't interested in the latter I left.

[Geoff-AU]

That statement by the recruiter is just untrue.
If the company would just make an ad, EE wanted, salary: competitive with FAAMG software engineers, they wouldn't have any issue filling up that HW position. The correct statement is: "employers are really struggling to find good engineers for how much they are willing to pay" or "employers are really struggling to cope with reality on how much engineering salaries are"

It's not.  I don't know about the US, but in the UK most positions are advertised without salaries, just "competitive salary".  It's a bug-bear of mine.  The point is, the CVs that we do get, are just no good at all.  We see a few good candidates now and then and are snapping them up when we get them, but it's rare.  We've had a position open for an FPGA engineer for 6 months...  It's not the advertised salary (because almost no one posts a salary); engineers are just staying put.  They're either happy with what they've got, or fearful of moving, but either way, it's a really brutal market to recruit in.

As a small company it's difficult to pool resource into junior engineers but we do that too where we can, but that has limits.    End result is we just use contractors instead.

If you're not advertising a salary range you are a part of the problem.

I'm not interested in chasing a role that's offering 20% less than what I'm making now.  And since I'm employed, I frankly don't have the time or energy to apply to every available position just to ask them what the range is.  If you don't publish a range, I don't look at the position.

[tom66]

Unfortunately, I don't control HR policies.

[floobydust]

Intel kaiboshed yesterday's groundbreaking ceremony for the Columbus, Ohio mega-fab. 1,000 acres of empty land. CEO Pat Gelsinger frustrated with Congress.

I'm not sure where Congress is with the CHIPS Act, America COMPETES Act, Bipartisan Innovation Act May 2022 etc. but the bill funding the $52B in incentives... has not passed. I thought it had 

TSMC founder and former CEO Morris Chang said:
"... we think that the recent effort of the U.S. to increase onshore manufacturing of semiconductors, right now you’re talking about spending only tens of billions of dollars of money of subsidy. Well, it’s not going to be enough. I think it will be a very expensive exercise in futility. The U.S. will increase onshore manufacturing of semiconductors somewhat. But all of that will be very high-cost increase, high unit cost. It will be noncompetitive in the world markets where you compete with factories like TSMC."
"The same product, the Oregon cost, is about 50 percent more than the Taiwan cost".


Equal Pay and Opportunities Act (EPOA) now in three states: California, Oregon, Washington.
"Washington amended its for the second time to require employers to include wage and benefit information in their job postings." "This replaces the prior requirement that employers provide this information to applicants “upon request” after receiving a job offer." Effective January 1, 2023 for businesses with >15 employees. Microsoft said it will disclose salary ranges in all US job postings by next year.

[nctnico]

In my mind chip fabrication (at least the higher end parts) are produced using highly automated processes. I don't see how labour costs are going to be a big factor in production costs.

[rx8pilot]

In my mind chip fabrication (at least the higher end parts) are produced using highly automated processes. I don't see how labour costs are going to be a big factor in production costs.

I would be very interested to gain some understanding how much labor impacts chip fabs. Even though the process is highly automated, it certainly takes some very capable people to setup, program, maintain, troubleshoot, etc, etc. Not sure how that plays out on the books.

The whole system is so complex to an outsider like me....hard to fathom what it takes day-to-day.

[rsjsouza]

24/7 operation with very specialized  people working not only directly with the wafers on the fab, but also on the A&T sites (not the same thing) and on the product engineering and validation teams (the processes don't magically transfer across sites). Add maintenance, facilities and security crews and you start to get a somewhat sizeable population. Labor will play a role on that indeed, not as much as the equipment but it will be significant - also, the need for training means you can't replace/create labor on a snap.

[tom66]

I imagine most of the operators in a semiconductor fab are well compensated engineers with masters or PhDs.    Their labour is certainly a factor in the cost base - maybe a significant one.

Further signs on our end of an easing of chip shortages:  Some Linear Tech parts which have been in stock for most of '20, then out of stock for most of '21 so far, are now coming into stock at larger rates again, without signs of us being at the back of a massive queue.  We get lead times and they're falling, not increasing, and crucially, they're all within this calendar year.  They're still 3-4 months, but you can plan around that.

[SilverSolder]

Copper demand (and therefore copper price) appears to be falling...

So we have a shortage of chips while nobody is using copper...   

[Kasper]

Copper demand (and therefore copper price) appears to be falling...

So we have a shortage of chips while nobody is using copper...   

I'm not familiar with copper or stocks in general but it looks like a similar curve to many stocks over the last 3 years, specially tech stocks.

My guess is copper production ramped up quickly in response to increased price.  It ramped up faster than chip supply.  It's hard to use extra copper if you don't have extra chips.  Now there is an over supply of copper and the prices are reducing so production will decrease.

[PlainName]

I just got shipped some crimp connectors ordered exactly a year ago. OK, not chips but nearly equivalently unobtainium, so things might be looking up

[chickenHeadKnob]

Copper demand (and therefore copper price) appears to be falling...
So we have a shortage of chips while nobody is using copper...   

copper has historically functioned as a leading predictive indicator for the general economy, expect a recession in 3-6 months. This has been true long before microelectronics became a significant portion of the manufacturing sector.

[IDEngineer]

I'd expect copper consumption to be weighted heavily toward building construction and less toward electronics.