How is Chipageddon affecting you?

[mikeselectricstuff]

Shorter cycle: Imagine ASML not getting ICs to build the factories to build more ICs.

I've seen reports that some semi manufacturing equipment companies are having issues

So solution: Everyone allocate production to industrial clients. No exceptions. Make it a law.

Totally impractical - legislating out of a problem never ends well. And the supply chain is worldwide.

[IDEngineer]

Top down economic planning doesn't have a great track record.

[tszaboo]

Top down economic planning doesn't have a great track record.

Yeah, well, if this issue was in a 4X strategy game, even a 12 year old would be able to solve the problem.
Reduce the slider that produces morale, and increase the one that increases production.

The issue is that collectively we are dumber than a 12 year old.

[cortex_m0]

A couple of weeks ago on this thread, someone said there was no shortage of passive components. I disagree.

I took a look at one of my designs that my purchasing guy is having trouble with, and ran it through a BOM tool at one of the major US based distributors. It's a large design with a lot of line items.

Integrated Circuits: 30% in stock
Resistors: 42% in stock
Capacitors and Magnetics: 44% in stock
Discrete Semiconductors: 60% in stock

In normal times, I'd expect at least 95% of these parts in each category to be in stock.

[Howardlong]

A couple of weeks ago on this thread, someone said there was no shortage of passive components. I disagree.

I took a look at one of my designs that my purchasing guy is having trouble with, and ran it through a BOM tool at one of the major US based distributors. It's a large design with a lot of line items.

Integrated Circuits: 30% in stock
Resistors: 42% in stock
Capacitors and Magnetics: 44% in stock
Discrete Semiconductors: 60% in stock

In normal times, I'd expect at least 95% of these parts in each category to be in stock.

For discretes & jelly bean it's rarely a problem to sub. Even in the depths of the cap shortage period, it was possible to figure something out without having to resort to a respin.

The problem with chips is that nowadays there is no second sourcing. The best you can expect is to find a device in the same package with more flash for example, that's an approach I've resorted to even in good times. Or you might have to change package & do a respin, but I suspect it'll only be a short time before that package dries up too.

There seems to be two strands to the chip shortages.

Firstly, the devices with sporadic availability, where I suspect the wafers are already made and in storage, but are awaiting dicing & packaging.

Secondly, there are the devices with long term unavailability, where they're still waiting for wafer fab availability.

[SilverSolder]

Top down economic planning doesn't have a great track record.

Mixed economies (an element of top-down as well as "free capitalism" bottom up) seem to work well, e.g. Scandinavian countries.

In reality, most Western economies are probably a form of mixed economy...

[IDEngineer]

In reality, most Western economies are probably a form of mixed economy...

That's definitely true. What I meant by my comment was having the government pick the winners and losers hasn't proven to be a successful strategy. "Everyone allocate production to industrial clients. No exceptions. Make it a law." Who gets to define "industrial"? What about that startup that, if successful, would revolutionize chip fabbing and solve the problem... are they "industrial" enough? If you know the right people, can you get classified as "industrial" today?

Top-down planning gives you a raging black market, the crime that always follows black markets, price controls, corruption, favoritism, etc. It's a terrible slippery slope. And it's extremely difficult to eliminate once established because Priority #1 for every bureaucracy is self-preservation and self-perpetuation.

Today's situation will pass.

[tszaboo]

In reality, most Western economies are probably a form of mixed economy...

That's definitely true. What I meant by my comment was having the government pick the winners and losers hasn't proven to be a successful strategy. "Everyone allocate production to industrial clients. No exceptions. Make it a law." Who gets to define "industrial"? What about that startup that, if successful, would revolutionize chip fabbing and solve the problem... are they "industrial" enough? If you know the right people, can you get classified as "industrial" today?

Top-down planning gives you a raging black market, the crime that always follows black markets, price controls, corruption, favoritism, etc. It's a terrible slippery slope. And it's extremely difficult to eliminate once established because Priority #1 for every bureaucracy is self-preservation and self-perpetuation.

Today's situation will pass.

It's not like this needs a new definition. When you register a company, you need to define what that company does, for a variety of legal reasons.
Besides, it's not like the industrial clientsare going to eat up all the production capacity, since the scale of it is much smaller. You need to maybe give up 1% the consumer market, to make the industrial market not starve of resources. In exchange it keeps on working, and increasing production for both the industrial and the consumer market.

It's a terrible slippery slope.

No, your argument is terrible logical fallacy, please stop using it.
https://en.wikipedia.org/wiki/Slippery_slope

[IDEngineer]

Ease up a bit.

My slippery slope was in the context of trying to manage a national economy from the top. Once they meddle with one aspect and it doesn't "work", they argue that they have to meddle with another part, and another, and another. This is where things like rent control, wage control, and rationing originate; they're never proposed at first but they're the natural end result of such "good intentions". This is history, not theory.

Not trying to argue, just reviewing history so we hopefully don't repeat the bad aspects of it.

[Microdoser]

Personally, I would hate the thought that chips or components for medical, or safety critical, systems/devices were not available because companies with no more a noble aim than profit were stockpiling what seems to currently be a finite resource.

That said, IMO no company has more rights to make a profit than any other, be they 'industrial' or not.

[trophosphere]

I usually work on a single project at a time but now with the long component lead-times the new norm is to work concurrently on multiple projects. If the components for a project happen to ship then it's all hands on deck the rails.

[mikeselectricstuff]

It's not like this needs a new definition. When you register a company, you need to define what that company does, for a variety of legal reasons.

That varies a lot by country. In the UK for example it is entirely possible to be a small  "industrial company" without registering anything at all.

[tszaboo]

Ease up a bit.

My slippery slope was in the context of trying to manage a national economy from the top. Once they meddle with one aspect and it doesn't "work", they argue that they have to meddle with another part, and another, and another. This is where things like rent control, wage control, and rationing originate; they're never proposed at first but they're the natural end result of such "good intentions". This is history, not theory.

Not trying to argue, just reviewing history so we hopefully don't repeat the bad aspects of it.

Yes. And tea is communist, and should be avoided at any cost. Freedom!

[Howardlong]

It's a terrible slippery slope.

No, your argument is terrible logical fallacy, please stop using it.
https://en.wikipedia.org/wiki/Slippery_slope

I'm generally one for sniffing out a logical fallacy, but the slippery slope fallacy, like any other logical fallacy, is only valid if used in isolation without supporting evidence.

For example, in the UK there is resistance to mandatory ID despite the vast majority already having driving licences and/or passports. The argument against universal ID is often framed as a slippery slope, however government is notorious for repurposing well-meaning legislation, for example using anti-terror legislation to investigate & ultimately fine individuals for something as mundane as incorrectly using the wrong recycling bin.

[Howardlong]

Ease up a bit.

My slippery slope was in the context of trying to manage a national economy from the top. Once they meddle with one aspect and it doesn't "work", they argue that they have to meddle with another part, and another, and another. This is where things like rent control, wage control, and rationing originate; they're never proposed at first but they're the natural end result of such "good intentions". This is history, not theory.

Not trying to argue, just reviewing history so we hopefully don't repeat the bad aspects of it.

Yes. And tea is communist, and should be avoided at any cost. Freedom!

I think you'll find that is a red herring ;-)

[tszaboo]

Ease up a bit.

My slippery slope was in the context of trying to manage a national economy from the top. Once they meddle with one aspect and it doesn't "work", they argue that they have to meddle with another part, and another, and another. This is where things like rent control, wage control, and rationing originate; they're never proposed at first but they're the natural end result of such "good intentions". This is history, not theory.

Not trying to argue, just reviewing history so we hopefully don't repeat the bad aspects of it.

Yes. And tea is communist, and should be avoided at any cost. Freedom!

I think you'll find that is a red herring ;-)

Quite intentionally so. Talking with an ultraliberal is basically impossible, so using basic reasoning is pointless.
I could argue, that there should be a law for something here in Europe, and he would say that it is "Not possible because that would melt the stars and stripes and second amendment". I had enough from these sort of discussions.

[Howardlong]

Ease up a bit.

My slippery slope was in the context of trying to manage a national economy from the top. Once they meddle with one aspect and it doesn't "work", they argue that they have to meddle with another part, and another, and another. This is where things like rent control, wage control, and rationing originate; they're never proposed at first but they're the natural end result of such "good intentions". This is history, not theory.

Not trying to argue, just reviewing history so we hopefully don't repeat the bad aspects of it.

Yes. And tea is communist, and should be avoided at any cost. Freedom!

I think you'll find that is a red herring ;-)

Quite intentionally so. Talking with an ultraliberal is basically impossible, so using basic reasoning is pointless.
I could argue, that there should be a law for something here in Europe, and he would say that it is "Not possible because that would melt the stars and stripes and second amendment". I had enough from these sort of discussions.

And that's hyperbolic projection. ;-)

[TimFox]

An interesting book review about a book written by a politically-active American economist:
https://www.theatlantic.com/magazine/archive/2020/01/review-paul-krugman-arguing-with-zombies/603052/

[jmelson]

A couple of weeks ago on this thread, someone said there was no shortage of passive components. I disagree.

I took a look at one of my designs that my purchasing guy is having trouble with, and ran it through a BOM tool at one of the major US based distributors. It's a large design with a lot of line items.

Integrated Circuits: 30% in stock
Resistors: 42% in stock
Capacitors and Magnetics: 44% in stock
Discrete Semiconductors: 60% in stock

In normal times, I'd expect at least 95% of these parts in each category to be in stock.

Yup, I think the big distributors are trying to reduce inventory costs.  Lots of items I used to buy from Digi-Key, they no longer seem to even TRY to keep in stock!  I used to buy some Assmann IEEE-1284 cables as accessories for my products, and just buy a couple at a time.  Now, they want me to buy 2000 minimum!  That's a $30,000 order!  They said that was the manufacturer' minimum.  Well isn't that the JOB of a distributor?  Buy a bunch and then sell them in smaller quantity?  Well, sorry, Digi-Key, I found another vendor for the same item at half the price.

Jon

[coppice]

Shorter cycle: Imagine ASML not getting ICs to build the factories to build more ICs.
So solution: Everyone allocate production to industrial clients. No exceptions. Make it a law.

Very funny. It was a joke, wasn't it?

[rsjsouza]

Yup, I think the big distributors are trying to reduce inventory costs.  Lots of items I used to buy from Digi-Key, they no longer seem to even TRY to keep in stock!  I used to buy some Assmann IEEE-1284 cables as accessories for my products, and just buy a couple at a time.  Now, they want me to buy 2000 minimum!  That's a $30,000 order!  They said that was the manufacturer' minimum.  Well isn't that the JOB of a distributor?  Buy a bunch and then sell them in smaller quantity?  Well, sorry, Digi-Key, I found another vendor for the same item at half the price.

Well, until recently distributors were the only way to purchase parts from a given manufacturer - nothing is written in stone regarding MOQs (minumum order quantities) and always depends on their willingness to break apart a reel. Most corporate disties won't even pick up the phone if you are not part of their customer list and these middle tier guys have to balance between a one-shot or staggered sale of parts.

Sure, in times like these it seems a bit nonsensical as people have been pursuing anything they can get their hands on.

At any rate, you voted with your wallet 

[cortex_m0]

I used to buy some Assmann IEEE-1284 cables as accessories for my products, and just buy a couple at a time.  Now, they want me to buy 2000 minimum!  That's a $30,000 order!  They said that was the manufacturer' minimum.  Well isn't that the JOB of a distributor?  Buy a bunch and then sell them in smaller quantity?

Yes, that's the business model, but that doesn't obligate them to buy the MOQ and keep stock for a dwindling set of customers in perpetuity. If the business in that SKU was going well, they wouldn't discontinue it.

If it's true that they were being undercut significantly by a different vendor, that could play into their decision to stop stocking that Assmann part as well.

[KE5FX]

Ease up a bit.  My slippery slope was in the context of trying to manage a national economy from the top.

My favorite answer to those who link to the Wikipedia page on logical fallacies: "Does the world look like a logic classroom to you?" 

Logic is all well and good when applied to logical entities.  But when it comes to understanding and predicting human behavior, a heuristic approach is not only helpful but mandatory.

[rsjsouza]

I used to buy some Assmann IEEE-1284 cables as accessories for my products, and just buy a couple at a time.  Now, they want me to buy 2000 minimum!  That's a $30,000 order!  They said that was the manufacturer' minimum.  Well isn't that the JOB of a distributor?  Buy a bunch and then sell them in smaller quantity?

Yes, that's the business model, but that doesn't obligate them to buy the MOQ and keep stock for a dwindling set of customers in perpetuity. If the business in that SKU was going well, they wouldn't discontinue it.

If it's true that they were being undercut significantly by a different vendor, that could play into their decision to stop stocking that Assmann part as well.

I just realized the part is an IEEE1284 - a printer parallel cable. Given this is past its prime time, that gives more weight to the distributor's position on this. 

[Pack34]

The difference this time is, it's not just limited to the electronics industry. It's across all industries, from raw materials to the delivery of finished products.

Yes. Other parts are becoming problematic. For example we have trouble buying the usual glass filled nylon.
It could be that they have an issue buying one of the additive, or the colorant, and the company who makes those have trouble buying the vat for it.
Because the controller board for the vat has trouble getting the ICs to make it work. And we come full circle.

The only way out of it would be preferential allocation for industrial clients. Apple has no supply issue, because they have more layers than engineers. In the meantime, small, niche manufacturers (like where I work) has trouble getting parts, because we don't sue if they are not delivered. So it is cheaper to not deliver to us. The issue is, at the end of the day, we make the infrastructure for the companies to be able to extend their manufacturing or transportation needs.
So if you ship to machine builders, they build machines, and you slowly build up larger capacity to cover the need. If you dont, instead you use the capacity to build gadgets, then people thow out the old gadgets, and meanwhiel the manufacturing capacity slowly decreases.

Shorter cycle: Imagine ASML not getting ICs to build the factories to build more ICs.
So solution: Everyone allocate production to industrial clients. No exceptions. Make it a law.

We're dealing with a supply chain issue. A big problem is the JIT inventory approach. If your inventory water marks are too low then when there's shortages of raw materials (chips, plastics, etc) you're likely going to be line-down when there's a global shortage due to something like a pandemic. The best solution would simply to be cognizant of issues like this and to increase inventory watermarks/safety stocks in the future.

I always had that battle when working at a startup. Yes, those Spartan6s aren't cheap, but if the specific package we use goes out of stock on DigiKey we can't make the product for a couple months. Just always have six months of material on-hand in the pipeline in whatever mix of final assemblies, sub-assemblies, and raw materials that make sense. If you're an industrial or medical company you really need to be sure to have the proper safety stock protocols in place with your CMs and suppliers to always have sufficient stock of materials in place.

Since this is a global issue and not a national one, the only thing you could likely legislate is that for national security critical applications (military, medical, infrastructure, etc) that they have to maintain a sufficient pipleline of safety stock.