How is Chipageddon affecting you?

[MT]

Seeed is now offering to store your extra parts.

Isn't that an Inverse Bernie Madoff scheme? Using your stock to cover other customers. Works great until they can't find replacements for your stock that they "loaned" to other people....

The Australian banking system says hi.

Australian? its the banking system cabal.

[tom66]

There is no basic increase in demand for electronics. It is hoarding and hoarding.

You must be fast asleep .  There is a huge increase in demand for electronics!  People are snapping up graphics cards, CPUs, laptops, webcams, etc. as and when they can get them, often many models are out of stock.  Apple had its best year for revenue in its history - beating 2019 by almost 30%.  New vehicles have lead-times going back months, and used cars have seem price increases too.

[peter-h]

Not quite the same thing. Apple +30% on 2019 is probably expected; it's a valued fashion accessory

People are "snapping up" stuff because everywhere they hear it is hard to get.

New vehicles have lead-times going back months because they can't get chips

[SiliconWizard]

I mentioned Apple a while ago. I don't know if it was expected, but the demand has risen significantly. Same for other smartphone companies.

With the worldwide deployment of 5G being done kinda concurrently to the pandemic, and the pandemic having triggered remote working (and all the tools required for it), the demand HAS exploded, at least for anything related to network and mobile communication.

[tom66]

Work from home is a big reason.  People buying laptops & monitors & such for home working.  But also company smart phones, for example.  And, whilst people have been stuck at home, they've been spending more time in front of their TV (so they want a bigger one), want to play video games (so they bought a games console/graphics card/VR headset), and are using more of the service economy (which requires technology to enable) or buying gadgets/toys instead of going on holiday or eating out. 

Then there's the added cash from all of this: people buying more luxurious vehicles, for example, as other costs have been offset.  I live in a modest neighbourhood, but around 5% of homes here have had extensions added in the last year.  That's really, really unusual.  Contractors have lead times going on for 6+ months around here.  The economy shows signs of strain in some areas, but in others, it's weirdly bursting with growth.  (STEM for instance - a recent survey I saw showed engineering salaries have gone up by 12% in the last year alone, on average.)

Basically, a big shift from one market segment to another, and in a market that's historically ran on razor-thin margins due to just-in-time.

https://www2.deloitte.com/xe/en/insights/industry/technology/consumer-electronics-sales-growth-covid-19.html

[peter-h]

I don't buy that.

People who are actually able to work from home (most aren't; they just muck about) are upper/middle class employees who already have all that gear.

The biggest problem has been hoarding, by mid size and above (whatever that means) companies. Plus a lot of opportunistic cowboy activity.

[Mangozac]

I don't buy that.

And, whilst people have been stuck at home, they've been spending more time in front of their TV (so they want a bigger one), want to play video games (so they bought a games console/graphics card/VR headset), and are using more of the service economy (which requires technology to enable) or buying gadgets/toys instead of going on holiday or eating out. 

Then there's the added cash from all of this: people buying more luxurious vehicles, for example, as other costs have been offset.

Work from home may or may not be a large factor (I know plenty of people who have purchased electronics to work from home), but even ignoring this the other reasons tom66 listed are enough to throw the supply chain into disarray. Sure, stock hoarding doesn't help but I'd bet that it's a contributing factor rather than the primary issue.

[AndyC_772]

I think it's the reason why the situation will persist, having already taken hold for other reasons.

My workflow right now has become:

- identify suitable component for a new / revised design based on in-stock availability (from a reputable supplier) that will cover the next 'N' months' worth of production, for some value of N.
- send supplier's link to customer with recommendation to purchase said component
- *then* design component into new schematic
- do not commit to new PCB until customer has confirmed that all components are already physically in their possession

Yes, that means my customers are hoarding stock, for which I make no apology whatsoever. Our livelihoods depend on it, and the only other alternative is a continual cycle of re-design, re-qualification and re-approval which would cripple us all.

[nctnico]

I think it's the reason why the situation will persist, having already taken hold for other reasons.

My workflow right now has become:

- identify suitable component for a new / revised design based on in-stock availability (from a reputable supplier) that will cover the next 'N' months' worth of production, for some value of N.
- send supplier's link to customer with recommendation to purchase said component
- *then* design component into new schematic
- do not commit to new PCB until customer has confirmed that all components are already physically in their possession

Yes, that means my customers are hoarding stock,

I don't see it that way. The components will need to be bought at some point so it is not like more components are taken off the market.

BTW: my way of working is the same as your describe.

[GridWork]

Haven't read through everything, but did read through the last few pages. For me, I do some small volume design/production and Chipageddon is really sucking. I have stock for what I need (for the moment) but with lead times on EVERYTHING stretching out for a year, I'm not to optimistic. A particular stepper IC that I use has no foreseeable production schedule, so a redesign for that. Then the microcontroller is 1 year lead, still trying to figure out if a redesign and port of code would be worth it. Of course it extends to power controllers, linear regulators, and even yes passives. On a complicated design if one part becomes unavailable it forces a scramble to find a workaround.

I'd still like to understand WHY everything is being affected. From my day job, production through the pandemic stayed around, we kept everyone employed, some worked from home. Essentials came in and kept things going. I'd like think that the fabs and other factories were similar. These shortages aren't just chips, it extends into raw materials (steel, aluminum, copper, etc.), food, fuel, housing, building materials. AAARRRGH.

[AndyC_772]

It's the lack of transparent communication that's so disheartening.

Do I buy parts that are in stock today, then spend the next 6 months redesigning something to substitute an unobtainable microcontroller?

Or place an order, expecting that the one that's already tried and tested will, in fact, be delivered in 6 months' time?

Either way, I don't have a product until 6 months from now - but I could have spent that time doing something worthwhile instead of just treading water.

[T3sl4co1l]

Work from home may or may not be a large factor (I know plenty of people who have purchased electronics to work from home), but even ignoring this the other reasons tom66 listed are enough to throw the supply chain into disarray. Sure, stock hoarding doesn't help but I'd bet that it's a contributing factor rather than the primary issue.

I mean, economically speaking, it can only be a contributing factor; when else is there money in holding stock, except when the supply is limited or uncertain?

Well, legally speaking, anyway.  Manipulation can create a market run, artificial oversupply and shortage.  But that's [supposed to be] illegal with most anything, so there are consequences......well, there can be consequences if that happens.  So, add that to the business calculus.

Tim

[Kasper]

I don't buy that.

People who are actually able to work from home (most aren't; they just muck about) are upper/middle class employees who already have all that gear.

The biggest problem has been hoarding, by mid size and above (whatever that means) companies. Plus a lot of opportunistic cowboy activity.

Because nothing encourages productivity like commuting, bag lunches, delayed dinner, noisy bright environments which are full of distractions and encourage headaches and water cooler babbling. [/sarcasm]

I am significantly more productive at home, more likely to work after dinner and before breakfast much more likely to stick around.

Consumer demand was increasing before 2020. Things like cars and watches have more electronics in them, people are buying more of them and they are replacing them more often. 

Even pet food bowls and lego have become electronic. Used to be very simple, just plastic, then they added programming, cameras, laser pointers, etc.  Each time they add a feature, some people replace their 'old' one.

E-waste totals show evidence of this.  As did shortages of capacitors, etc before 2020.

Another contribution to the increasing demand is the fact that our seniors who grew up before computers are less interested in electronics than the younger generations who are replacing them.

On top of all that, 2020 came around and people spent less on eating out and travelling and more on electronics. It increased the increase in demand.

[GridWork]

It's the lack of transparent communication that's so disheartening.

Do I buy parts that are in stock today, then spend the next 6 months redesigning something to substitute an unobtainable microcontroller?

Or place an order, expecting that the one that's already tried and tested will, in fact, be delivered in 6 months' time?

Either way, I don't have a product until 6 months from now - but I could have spent that time doing something worthwhile instead of just treading water.

Lack of transparency and that the "Big Guys" are making sure to get theirs. If I were donning a tin foil hat, I'd suspect that there might be a push to make life "difficult" for small businesses and operations.

[T3sl4co1l]

I think it's the reason why the situation will persist, having already taken hold for other reasons.

My workflow right now has become:

- identify suitable component for a new / revised design based on in-stock availability (from a reputable supplier) that will cover the next 'N' months' worth of production, for some value of N.
- send supplier's link to customer with recommendation to purchase said component
- *then* design component into new schematic
- do not commit to new PCB until customer has confirmed that all components are already physically in their possession

Yes, that means my customers are hoarding stock,

I don't see it that way. The components will need to be bought at some point so it is not like more components are taken off the market.

BTW: my way of working is the same as your describe.

Yeah, this is normal.  When availability is high, stocking isn't needed; when availability is low, stocking is needed, somewhere.  Either you pay that yourself upfront as inventory, potential overstock, and opportunity cost of paying for it now; or you wait, and find it for -- hopefully, approximately the time-difference in cost, from a stock holder (who has paid that opportunity cost for you).  Or indeed, you pay a broker to perform the service of locating stock, rather than taking the time to scour the world for parts yourself.

It's interesting I guess, that such behavior can be described both as parasitic, and as a beneficial service.

The other takeaway is that: presumably, the secondary parts market is also booming, so, if you end up buying well over stock -- there's likely some money to recoup by selling it off there.

Tim

[Kasper]

I think it's the reason why the situation will persist, having already taken hold for other reasons.

My workflow right now has become:

- identify suitable component for a new / revised design based on in-stock availability (from a reputable supplier) that will cover the next 'N' months' worth of production, for some value of N.
- send supplier's link to customer with recommendation to purchase said component
- *then* design component into new schematic
- do not commit to new PCB until customer has confirmed that all components are already physically in their possession

Yes, that means my customers are hoarding stock,

I don't see it that way. The components will need to be bought at some point so it is not like more components are taken off the market.

BTW: my way of working is the same as your describe.

That depends on how good of a designer you are and how focussed the product manager is.

Sometimes designs fail or product managers change requirements after components have been ordered.  Some of those components get removed from the design.  Then what?  Lately I've been ordering extra components and ordering them earlier and the number of unused components in my closet is increasing faster than before. It's rare that I return them.  I have considered ebay but don't have enough to be worth the time to figure that out and for all I know the requirements or designs will change again right after I sell them.  If I did sell them on ebay, it still wouldn't fix this, I'd just be another 'hoarder scalper' contributing to the lack of authorized supply.

[snarkysparky]

Can't be that work from home is the major factor.  Too many parts without use in communications devices are out of stock.

Motor drivers
optocouplers

to name a few

[AndyC_772]

It's interesting I guess, that such behavior can be described both as parasitic, and as a beneficial service.

The other takeaway is that: presumably, the secondary parts market is also booming, so, if you end up buying well over stock -- there's likely some money to recoup by selling it off there.

There's nothing beneficial about a 3rd party buying up large quantities of parts which are in short supply, only to sell them on to companies who need them at a significant mark-up. Nobody is better off than they would have been otherwise, apart from the scalper.

Bear in mind also that provenance and traceability have a great deal of value. If I need a component, I also need to know that it's a genuine part which is guaranteed to actually be what the part number says it is, that it's new and unused, and has never been subjected to poor handling (ESD / moisture / mechanical damage). Buying direct from the manufacturer or a reputable distributor more or less guarantees this, whereas a component sourced from an unknown 3rd party opens up all these risks.

In other words, a part which has left the trusted chain of custody from manufacturer to my desk has inherently lower value than one which hasn't.

[SiliconWizard]

Can't be that work from home is the major factor.  Too many parts without use in communications devices are out of stock.

Motor drivers
optocouplers

to name a few

You realize that the delays are for a large part due to production in foundries being focused on chips for the communication market, thus they just don't have the capability of producing enough chips for other markets? It's not just the already fabricated parts that are being hoarded. It's production itself.

[GridWork]

Can't be that work from home is the major factor.  Too many parts without use in communications devices are out of stock.

Motor drivers
optocouplers

to name a few

You realize that the delays are for a large part due to production in foundries being focused on chips for the communication market, thus they just don't have the capability of producing enough chips for other markets? It's not just the already fabricated parts that are being hoarded. It's production itself.

I'm not sure that is the whole picture (partial yes), but the same lines that are running the cutting edge processors are not running power IGBT's or MOSFET's or motor drivers. I have heard (can't remember the source) that the raw wafers are in shortage as well, this would affect everything across the board. This would only impact silicon, not passives as well.

I'm just hoping that I can keep inventory of everything I need to build and ride this wave. Just overlooking one part of a hundred can cost the build.

[SiliconWizard]

Can't be that work from home is the major factor.  Too many parts without use in communications devices are out of stock.

Motor drivers
optocouplers

to name a few

You realize that the delays are for a large part due to production in foundries being focused on chips for the communication market, thus they just don't have the capability of producing enough chips for other markets? It's not just the already fabricated parts that are being hoarded. It's production itself.

I'm not sure that is the whole picture (partial yes), but the same lines that are running the cutting edge processors are not running power IGBT's or MOSFET's or motor drivers. I have heard (can't remember the source) that the raw wafers are in shortage as well, this would affect everything across the board. This would only impact silicon, not passives as well.

That was to point out that it was for a large part a production problem. There would be many details to get into indeed.
And yes, silicon wafers are in shortage: https://semiengineering.com/more-shortages-seen-for-silicon-wafers/

[Bassman59]

I don't buy that.

People who are actually able to work from home (most aren't; they just muck about) are upper/middle class employees who already have all that gear.

The biggest problem has been hoarding, by mid size and above (whatever that means) companies. Plus a lot of opportunistic cowboy activity.

Because nothing encourages productivity like commuting, bag lunches, delayed dinner, noisy bright environments which are full of distractions and encourage headaches and water cooler babbling. [/sarcasm]

Hey, you've just described my office, especially the distractions.

Every Monday morning, it's "DID YOU SEE THE GAME!!" and then a half-hour discussion of said game at Metallica volume levels.

Open office area plans suuuuuuuuuuck.

I am significantly more productive at home, more likely to work after dinner and before breakfast much more likely to stick around.

I'm a night owl, and I was more productive in the evening after the kid went to sleep. The only disadvantage of evening work is I can't play jazz records, as the kid's room is right next to the home office.

[Kasper]

I'm a night owl, and I was more productive in the evening after the kid went to sleep. The only disadvantage of evening work is I can't play jazz records, as the kid's room is right next to the home office.

Headphones can help with that.

[Ed.Kloonk]

I'm a night owl, and I was more productive in the evening after the kid went to sleep. The only disadvantage of evening work is I can't play jazz records, as the kid's room is right next to the home office.

Headphones can help with that.

These are good:
https://www.walmart.ca/en/ip/Kids-Ear-Protection-Safety-Ear-Muffs-NRR-25dB-Noise-Reduction-Hearing-Protection-Kids-Toddler-Ear-Protection-Shooting-Range-Hunting-Season-Kids-Toddl/PRD2F80BINDM79J

You need to use gaffa tape/duct tape to secure it to the kids head. But yeah. Enjoy your Jazz.

[Kasper]

I'm a night owl, and I was more productive in the evening after the kid went to sleep. The only disadvantage of evening work is I can't play jazz records, as the kid's room is right next to the home office.

Headphones can help with that.

These are good:
https://www.walmart.ca/en/ip/Kids-Ear-Protection-Safety-Ear-Muffs-NRR-25dB-Noise-Reduction-Hearing-Protection-Kids-Toddler-Ear-Protection-Shooting-Range-Hunting-Season-Kids-Toddl/PRD2F80BINDM79J

You need to use gaffa tape/duct tape to secure it to the kids head. But yeah. Enjoy your Jazz.

Haha I guess maybe if they are back sleepers.  I was thinking something for the Jazz fan.

https://www.sony.ca/en/electronics/headband-headphones/wh-ch700n

That's what I use.  Way better than the old $40 crap I used to use.  I usually turn off the noise cancelling. It defaults to on and amplifies the sound of wind.