How is Chipageddon affecting you?

[IDEngineer]

I worry that any modern SOS (Save Our Semiconductors) government effort will be nothing more than a replay of SEMATECH from the 80's. Same concerns (except Japan was the boogieman), same drum beating, same general lack of results.

The loss of Taiwan to China would deal an almost killer blow to the IC industry. TSMC is a unique resource. Having its assets and abilities behind the bamboo curtain would be great for China but awful for everyone else. Yes, their infrastructure could be replicated but that would take at least a decade and lots of commas and zeroes.

[Marco]

If you think things are bad now, just wait until China invades Taiwan. It's not a matter of "if" but of "when".

Even if Taiwan only manages to sink one troop transport or battleship for every plane the Ukraine shot down, it's a problem for China ... the water does offer them some protection. China has to bully Taiwan into surrender some other way.

[coppice]

I'm predicting a fail at on-shoring semiconductor fab because it's extremely rooted in Asia and advanced technology takes a long time, years, to establish.
china doing the same as putin right now "reclaiming their rightful clay" yup it's going to happen and nothing can stop it.

Just as no one individual has the knowledge and skills to build anything more than a very simple thing, countries are now in the same position. If you capture Taiwan, but not the Netherlands, how long will it take for local suppliers in your new empire to master deep EUV machines, so TSMC's plants can move forwards. In my youth we lived in a time of mutually assured destruction. Now we live in a time of mutually assured stagnation. A war might end when you run out of spare parts, because you've severely screwed up the supply chain.

[nigelwright7557]

What a fiasco.

Its not the chip sellers who are at fault the problem is with chip makers who cant make them fast enough.
Most chip production was short sightedly put to the likes of TSMC.
This is not wise as one problem with China invading and we lose all our chip production.

I found 30 chips in stock at mouser and they sent 1 chip and 29 on back order !

I found 30 chips in stock at Microchip and they have all been put on back order.

The only sensible company is IBM who just started building their own fab at a cost of billions.

[floobydust]

I fear a mass die-off, an extinction event for the small businesses that really need the semiconductors. If even automotive industry big fish are struggling for parts, small-medium businesses are done for. Supply seems to be trickling in but you have to be lightning fast ordering, and everyone is panic (over) buying as well and it worsens.
Who wants to be designing hardware nowadays? You spend most of your time/stress finding parts that can work and it's a constant crisis.

russian surveillance drones in Ukraine, full of Western electronics parts , Maxim, Digi, Xilinx Spartan FPGA etc. illegal exporting interesting that russian semiconductor production is tiny since the '90's and over 10 years $50 million semi's procured from one path alone.

[Marco]

I think EU and US should get together.

For designated components buying/preordering more than X$ or 2 months projected supply, whichever is larger, of a component should be forbidden. All distributors should be licensed to not sell for more than X% over manufacturer quoted prices for given order size, buying from an unlicensed distributor forbidden.

Let the Chinese and other non cooperating countries hoard if they want, but make it impossible for Western companies (or their suppliers) to legally hoard or buy from scalpers. With large enough penalties this will kill the hoarders and scalpers. Start of business hours for distributors and manufacturers will get busy though, if they don't want to deal with it maybe they should implement some type of rationing.

[coppice]

russian surveillance drones in Ukraine, full of Western electronics parts , Maxim, Digi, Xilinx Spartan FPGA etc. illegal exporting interesting that russian semiconductor production is tiny since the '90's and over 10 years $50 million semi's procured from one path alone.

You can build a pretty sophisticated drone entirely from EAR99 parts.

[floobydust]

I meant it's about another large purchaser of Western semiconductors, the russian military. People wonder where are the accelerometers, FPGA's have gone.
How they spoof an American buyer and what contracts they have, or do they just raid a distributor. Not sure.

On the one hand semi's are viewed as a commodity item, and on the other, they are golden eggs. We'd have to be extra strict about who gets what.

[SilverSolder]

[...] mutually assured stagnation [...]

LOL

Yes, that's pretty much exactly what we have.  After the freezing of international relations, we are seeing inflation and shortages everywhere, outbreak of open hostilities, etc.  We are moving backwards.

[nctnico]

[...] mutually assured stagnation [...]

LOL

Yes, that's pretty much exactly what we have.  After the freezing of international relations, we are seeing inflation and shortages everywhere, outbreak of open hostilities, etc.  We are moving backwards.

Recently somebody told me: things have to get worst first before things get better.

[tom66]

The only sensible company is IBM who just started building their own fab at a cost of billions.

You say sensible but they sold off their fabs to GlobalFoundries in 2014!  One thinks they lack some kind of long term strategy but then maybe I'm biased knowing someone who is a former executive there the company is an utter shit-show.  They didn't have email access for nearly two weeks due to a bodged transition from one service to another.

[tom66]

I think EU and US should get together.

For designated components buying/preordering more than X$ or 2 months projected supply, whichever is larger, of a component should be forbidden. All distributors should be licensed to not sell for more than X% over manufacturer quoted prices for given order size, buying from an unlicensed distributor forbidden.

I would rather over pay for genuine parts.

We are in a market shortage situation right now.  If people are hoarding parts because they fear they will run out, the price for the parts is too low.   You cannot fix this any other way but let Digi-Key, Mouser, etc. charge actual market price for these parts.  This is not exploitative, it's just market economics.

If this means $25 STM32's then that's the price ... but this will also mean you have a legitimate, traceable way to get parts.  It will also shift demand to parts that are in good supply or made with fabs that have plenty of capacity.

And the prices will come down once more supply comes on-line, and this would lead to a cooling of the market.  Forget about trying to prevent hoarding, it just is not going to be possible. Some of these parts resellers are buying from people who just have garages full of parts.

[harerod]

...
If this means $25 STM32's then that's the price ... but this will also mean you have a legitimate, traceable way to get parts.  It will also shift demand to parts that are in good supply or made with fabs that have plenty of capacity.
...

If you have a source for $25 STM32F407VG, please drop me a PN. Asking for a friend client. He'll take 200.

[Marco]

I would rather over pay for genuine parts.

Well that's an option too, force manufacturers to sell by auction ... give the little people some access to the source.

What's happening now is that large customers (which didn't have long running contracts) get rationed supplies at low prices directly from the manufacturers, the small customers get screwed by the hoarders/scalpers. It's not a transparent free market.

[SiliconWizard]

I would rather over pay for genuine parts.

Well that's an option too, force manufacturers to sell by auction ... give the little people some access to the source.

What's happening now is that large customers (which didn't have long running contracts) get rationed supplies at low prices directly from the manufacturers, the small customers get screwed by the hoarders/scalpers. It's not a transparent free market.

It's never really been. =)

[Marco]

Which is not so much a problem when the differences are in 100s of percent, but when it gets to 10s of thousands it distorts the market between small and large companies a bit too much.

[tom66]

What's happening now is that large customers (which didn't have long running contracts) get rationed supplies at low prices directly from the manufacturers, the small customers get screwed by the hoarders/scalpers. It's not a transparent free market.

Do you know how much the big OEMs are paying for their parts?
I suspect the reason they have jumped the queue is because they are willing to pay more.

Back in October 2020 Xilinx offered us a $5000 "order expedition" fee which, if paid, would guarantee us parts by March 2021.  If we didn't pay it, there was no guarantee whatsoever.  We were only ordering ~300 FPGAs so per chip it was a significant extra cost.  In the end we got lucky with distributor supply, and were able to source the parts we needed that way... But I am sure the OEMs are paying top dollar for the chips they can't get - and this is one reason that products are increasing in price.

[SilverSolder]

What's happening now is that large customers (which didn't have long running contracts) get rationed supplies at low prices directly from the manufacturers, the small customers get screwed by the hoarders/scalpers. It's not a transparent free market.

Do you know how much the big OEMs are paying for their parts?
I suspect the reason they have jumped the queue is because they are willing to pay more.

Back in October 2020 Xilinx offered us a $5000 "order expedition" fee which, if paid, would guarantee us parts by March 2021.  If we didn't pay it, there was no guarantee whatsoever.  We were only ordering ~300 FPGAs so per chip it was a significant extra cost.  In the end we got lucky with distributor supply, and were able to source the parts we needed that way... But I am sure the OEMs are paying top dollar for the chips they can't get - and this is one reason that products are increasing in price.

"They" want inflation, and "they" are getting it.

[T3sl4co1l]

All that, with challenges to minimum wages on top, seems to suggest they'll simply outlast the workers by signing in the $15/hr request and inflating it down back where we were (or worse). SMH...

(Not that anyone mentioned wages, but hey, wages (in various locations) go directly into these products.)

Tim

[tom66]

Wage-push inflation is definitely a thing,  but I cannot malign anyone for wanting to improve their position in life.  So many people are chronically underpaid yet their work is essential to society.

[T3sl4co1l]

Just means we need to keep pushing for actual parity (closer to, what was it, $27/hr?), or more.

Tim

[SilverSolder]

It doesn't look so much like "wage push" inflation as "supply constraint" inflation...   uncharted territory!

[Ed.Kloonk]

I'm predicting a fail at on-shoring semiconductor fab because it's extremely rooted in Asia and advanced technology takes a long time, years, to establish.
china doing the same as putin right now "reclaiming their rightful clay" yup it's going to happen and nothing can stop it.

Just as no one individual has the knowledge and skills to build anything more than a very simple thing, countries are now in the same position. If you capture Taiwan, but not the Netherlands, how long will it take for local suppliers in your new empire to master deep EUV machines, so TSMC's plants can move forwards. In my youth we lived in a time of mutually assured destruction. Now we live in a time of mutually assured stagnation. A war might end when you run out of spare parts, because you've severely screwed up the supply chain.

I think I need to remind that root cause of the off-shoring in the first place was cost but more importantly, local tedious labor. 

With that said, what I'm expecting to see is a renaissance (re-birth) of local manufacturing in spots simply because of the changed attitude towards critical manufacturing.

And trying not to double down on controversy, I think the only way this will get a leg up is from public money, not private.

[IDEngineer]

The problem with public money is who gets to pick the winners (those who get the public funds) and the losers (those who are deemed unsuitable)?

[coppice]

I'm predicting a fail at on-shoring semiconductor fab because it's extremely rooted in Asia and advanced technology takes a long time, years, to establish.
china doing the same as putin right now "reclaiming their rightful clay" yup it's going to happen and nothing can stop it.

Just as no one individual has the knowledge and skills to build anything more than a very simple thing, countries are now in the same position. If you capture Taiwan, but not the Netherlands, how long will it take for local suppliers in your new empire to master deep EUV machines, so TSMC's plants can move forwards. In my youth we lived in a time of mutually assured destruction. Now we live in a time of mutually assured stagnation. A war might end when you run out of spare parts, because you've severely screwed up the supply chain.

I think I need to remind that root cause of the off-shoring in the first place was cost but more importantly, local tedious labor. 

With that said, what I'm expecting to see is a renaissance (re-birth) of local manufacturing in spots simply because of the changed attitude towards critical manufacturing.

And trying not to double down on controversy, I think the only way this will get a leg up is from public money, not private.

You missed the point entirely. When you move simple low skilled labour, its easy to move it back again. It just costs money. When you've allowed large amounts of high skills, and advanced technologies, to develop somewhere else over decades its a slow and difficult process to replicate those things in your own territory. Also, public money had a terrible track record of getting these things to work.