How is Chipageddon affecting you?

[floobydust]

Riddle me this - What's out of stock, in short supply yet makes money fall from the sky?
Look at the financial reports of semiconductor manufacturers - the numbers show revenue is spectacular, margins up- for two years now. They also break out the dollars according to sales regions. 6:1 Asia verses North America.
Pick a manufacturer, many have not been supplying to distributors- showing zero stock for a year and another year+ for lead-time.
Strange that the industry is mute saying nothing as allocation rules discriminate against and damage customers, as well as sell to brokers over disti's. The Adafruit videos asking youtube-space for a reel or two of (paid for) semi's is terrible. Allocation (greed?) favouring the whales, yet semi corps all about "innovators, makers" and it should be illegal for them to use the term, given their non-support.

Strikes roll on at STMicroelectronics Nov. 2020 and appear to be three unions and one-day strikes? and no idea if or when that ended or if it escalated. I'd read the disgruntled union workers were sabotaging things for ST but the French labour market I don't fully understand the drama.
ST CEO 2021 Annual Report "We have not experienced any significant strikes or work stoppages in recent years." Is that a crock when a CEO covers his ass despite 2020 increase in compensation +28.5% to $5.74M up +$1.28M, union is still complaining.

[TimFox]

In elementary economics, we learn that if the market is supply-constrained ("inelastic supply"), the net profit to sellers is higher than when it is demand-limited.  As I stated earlier, farmers learned many years ago that their earnings actually increased in years of bad harvest (drought, etc.), and we see the same thing now with petroleum vendors. 

[SilverSolder]

Riddle me this - What's out of stock, in short supply yet makes money fall from the sky?
Look at the financial reports of semiconductor manufacturers - the numbers show revenue is spectacular, margins up- for two years now. They also break out the dollars according to sales regions. 6:1 Asia verses North America.
Pick a manufacturer, many have not been supplying to distributors- showing zero stock for a year and another year+ for lead-time.
Strange that the industry is mute saying nothing as allocation rules discriminate against and damage customers, as well as sell to brokers over disti's. The Adafruit videos asking youtube-space for a reel or two of (paid for) semi's is terrible. Allocation (greed?) favouring the whales, yet semi corps all about "innovators, makers" and it should be illegal for them to use the term, given their non-support.

Strikes roll on at STMicroelectronics Nov. 2020 and appear to be three unions and one-day strikes? and no idea if or when that ended or if it escalated. I'd read the disgruntled union workers were sabotaging things for ST but the French labour market I don't fully understand the drama.
ST CEO 2021 Annual Report "We have not experienced any significant strikes or work stoppages in recent years." Is that a crock when a CEO covers his ass despite 2020 increase in compensation +28.5% to $5.74M up +$1.28M, union is still complaining.

It would appear that somehow, it has become more attractive for the semiconductor industry to supply China than "the West".  So, unless you are getting your semiconductors from China...

[T3sl4co1l]

What do you mean?

Where do you think most of "The West"'s assembly services are located..?

Tim

[PlainName]

If most stuff is made in China then surely most chips will go there, even though the products are being manufactured by Western companies.

[Huh. 61 secs in it]

[floobydust]

In elementary economics, we learn that if the market is supply-constrained ("inelastic supply"), the net profit to sellers is higher than when it is demand-limited.  As I stated earlier, farmers learned many years ago that their earnings actually increased in years of bad harvest (drought, etc.), and we see the same thing now with petroleum vendors. 

This is the problem, as economists are useless professionals. It's not a farmer's market following the antique supply/demand curve theory. You can't sell what you don't have.
Semiconductors are not commodity items. I'm not talking about flyshit discretes, but ASICS or 32-bit MCU's etc. which are sole-sourced. You're locked into that particular manufacturer. Wheat, crude oil, natural gas, gasoline - multi-sourced across the globe anybody can buy some. Not at all the case with semi's.

As far as sales to china, I'm not sure how the purchasing/procurement chain works. Ford contracts Continental to make their electronics, who buys with what dollars despite the boards being stuffed in a low cost country. Is Foxconn buying on behalf or Apple, not sure.

[Mangozac]

You can't sell what you don't have.

But it's not that the semi manufacturers don't have stock because they're not making any chips. They have no stock because every single chip they make is immediately sold and they still can't keep up with demand. So it's logical that they're making massive profits.

[rsjsouza]

As far as sales to china, I'm not sure how the purchasing/procurement chain works. Ford contracts Continental to make their electronics, who buys with what dollars despite the boards being stuffed in a low cost country. Is Foxconn buying on behalf or Apple, not sure.

This is what happens. Why put a middle man when your demand escalates to 1Mu+/yr? Mind you, the parts are earmarked for Apple, but the route they take is from the A&T site straight to the contract manufacturer, wherever they are located.

Due to this, I suspect the split of sales of parts might be somewhat closer to this in pre Covid era as well. I didn't check, though.

[coppice]

Semiconductors are not commodity items. I'm not talking about flyshit discretes, but ASICS or 32-bit MCU's etc. which are sole-sourced. You're locked into that particular manufacturer.

This was a choice the industry made. Until the late 80s you couldn't get a part into most non-consumer applications without a second source. Big makers had people with titles like "component engineer" who worked with suppliers, checking second sources were real. Checking if two parts actually came from the same production line, just labelled differently at the end; checking if they were using two sources of package, as well as two sources of die; etc. We had two ASICs from two suppliers to do the same job, and the component engineer missed that Kyocera was a SPOF in the supply of both, due to their dominance in ceramic packages. Kyocera had a problem, and we had a major line down for quite a long time.

[SilverSolder]

Semiconductors are not commodity items. I'm not talking about flyshit discretes, but ASICS or 32-bit MCU's etc. which are sole-sourced. You're locked into that particular manufacturer.

This was a choice the industry made. Until the late 80s you couldn't get a part into most non-consumer applications without a second source. Big makers had people with titles like "component engineer" who worked with suppliers, checking second sources were real. Checking if two parts actually came from the same production line, just labelled differently at the end; checking if they were using two sources of package, as well as two sources of die; etc. We had two ASICs from two suppliers to do the same job, and the component engineer missed that Kyocera was a SPOF in the supply of both, due to their dominance in ceramic packages. Kyocera had a problem, and we had a major line down for quite a long time.

Yes, having at least two suppliers seems very sensible...  it might come back in vogue!

[tszaboo]

What do you mean?

Where do you think most of "The West"'s assembly services are located..?

Tim

We source and assemble locally. Sure, it is not in the millions, but thousands, regulatory compliance is difficult, and it is relatively high tech industrial stuff.

[floobydust]

I've had many CM's offer to source components and blank pc boards etc. just give them the BoM and they will manage the build. Anything to value-add and make a few more bucks. It's good for Lazy Co. or a place that expects engineers to look after parts kits, but I find the CM will sub in lower quality parts causing havoc. Why would a CM get chips but not distributors?

There could be second-source agreements between semi manufacturers, but that would threaten their monopoly. I guess there's really no mandates for this, as well as the shortage being across most of the semi manufacturers so a second-source is just as likely to be out of stock.
But the chip makers are to blame for having so many (too many) variants. All that's left in stock right now are the ugly ducklings - MCU's with small memory 2/4/8/16KB crap, or in BGA's or oddball packages. A 555 in VSSOP/TSSOP? Just stupid package offerings or parts nobody really designs down to that price point for MCU memory.

Thankfully, chip demand is cratering fast with the present economic conditions.

[tom66]

Second source is all well and good but in many cases there are shortages of compatible second-source parts.  A good example is CAN transceivers.

[f4eru]

Yes, having at least two suppliers seems very sensible...  it might come back in vogue!

If we could find a solution to the chip makers defining a myriad of totally incompatible chip references with similar function, but totally different pinout.
The worst offender for that is often the simple buck regulator chip. You nearly never find two with the same pinout, what a hassle.

[voltsandjolts]

Vendors want to lock you in to their parts with unique pinouts, they are happy to be single source...even when they can't supply

[madires]

Taiwan just increased the prices of electric power for large-scale consumers by 15% (https://www.moea.gov.tw/MNS/populace/news/News.aspx?kind=1&menu_id=40&news_id=100588 - Chinese). So TSMC and UMC are expected to pass on this rise (actually it's tiny in comparison to their revenues)?

[PlainName]

Tawain just increased the prices of electric power for large-scale consumers by 15%

Ha! Over here the plan is for large-scale consumers to be given an exception, and investors in £26bn nukes to be given their dividend payments even before the thing is built. Where is the money coming from? The poorest - that is, those so poor they survive only by being on benefits - will have £2.12 a month added to their energy bills.

I think Taiwan has the right idea.

[MT]

Massive wire frauds in Chinese supply chain.


Massive blackouts affects TSMC.
https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-struggles-to-keep-new-hires-warns-of-power-supply-risks

US CHIPS act kerfuffled by US congress.
https://www.theregister.com/2022/07/06/intel_ohio_fab_spin/

[madires]

Good news? Order Cancellations Strike, 8-inch Fab Capacity Utilization Rate Declines Most in 2H22, Says TrendForce (https://trendforce.com/presscenter/news/19700101-11292.html)

[Psi]

I'm finding the chip shortage great motivation to redesign my products away from IC's and to discrete components.
You get to remove harder to source dedicated IC, replace them with discrete parts that are easier to get and easier to substitute if out of stock. And as a bonus, you save money

[KrudyZ]

I'm finding the chip shortage great motivation to redesign my products away from IC's and to discrete components.
You get to remove harder to source dedicated IC, replace them with discrete parts that are easier to get and easier to substitute if out of stock. And as a bonus, you save money

Yeah, I'm right on that, redesigning my small processor plus FPGA board with 800,000 discrete transistors.

[VK3DRB]

It seems this semiconductor shortage could go on for much longer than anticipated...
https://www.rdworldonline.com/why-theres-a-neon-shortage-and-why-it-matters/
https://www.bloomberg.com/opinion/articles/2022-05-19/ukraine-war-mariupol-noble-gases-neon-helium-are-suffering-from-putin-s-war

I am starting to wear down from this Chipageddon mess. Getting heaps of work, but quite frankly, finding alternative chips or circuits for clients is a somewhat boring. Also, the once friendly well known chip distributors are not answering calls or they cannot provide any useful info on supply. I think they are wearing down too  .

Early retirement from electronics is starting to look attractive. Sit at home and catch up on Days Of Our Lives maybe  .

[rx8pilot]

It seems this semiconductor shortage could go on for much longer than anticipated...
https://www.rdworldonline.com/why-theres-a-neon-shortage-and-why-it-matters/
https://www.bloomberg.com/opinion/articles/2022-05-19/ukraine-war-mariupol-noble-gases-neon-helium-are-suffering-from-putin-s-war

I am starting to wear down from this Chipageddon mess. Getting heaps of work, but quite frankly, finding alternative chips or circuits for clients is a somewhat boring. Also, the once friendly well known chip distributors are not answering calls or they cannot provide any useful info on supply. I think they are wearing down too  .

Early retirement from electronics is starting to look attractive. Sit at home and catch up on Days Of Our Lives maybe  .

I essentially threw in the towel a while ago. Just couldn't make electronics work. Tons of projects, but no practical way to get them done AND into production in a financially viable way.

I have one project that is still alive, but it is a teeny tiny one. Even that is a pain with numerous re-designs already. Maybe a year, or two, or three.....I will jump back in. Maybe.

[Kjelt]

It seems this semiconductor shortage could go on for much longer than anticipated...
https://www.rdworldonline.com/why-theres-a-neon-shortage-and-why-it-matters/
https://www.bloomberg.com/opinion/articles/2022-05-19/ukraine-war-mariupol-noble-gases-neon-helium-are-suffering-from-putin-s-war

I am starting to wear down from this Chipageddon mess. Getting heaps of work, but quite frankly, finding alternative chips or circuits for clients is a somewhat boring. Also, the once friendly well known chip distributors are not answering calls or they cannot provide any useful info on supply. I think they are wearing down too  .

Early retirement from electronics is starting to look attractive. Sit at home and catch up on Days Of Our Lives maybe  .

I essentially threw in the towel a while ago. Just couldn't make electronics work. Tons of projects, but no practical way to get them done AND into production in a financially viable way.

I have one project that is still alive, but it is a teeny tiny one. Even that is a pain with numerous re-designs already. Maybe a year, or two, or three.....I will jump back in. Maybe.

What are you doing now ? Back tot cnc work ?
What a shame this affected you're business so much it was a treat watching you combine cnc and and electronics. Hope you can get back on your horse soon.

[Psi]

I'm finding the chip shortage great motivation to redesign my products away from IC's and to discrete components.
You get to remove harder to source dedicated IC, replace them with discrete parts that are easier to get and easier to substitute if out of stock. And as a bonus, you save money

Yeah, I'm right on that, redesigning my small processor plus FPGA board with 800,000 discrete transistors.

careful, i'll make you do it with vacuum tubes instead.