How is Chipageddon affecting you?

[IDEngineer]

There's always hydraulic logic....

[Siwastaja]

I essentially threw in the towel a while ago.

I find that somewhat weird. I have read your posts in the past and you seemed like a very capable one-man-show who definitely would have the edge over the competitors in this era due to all the flexibility you get by your do-it-all-yourself attitude.

After all, everybody's struggling with part availability. Larger organizations where redesign takes years of paperwork are going to die. But those who can make quick prototype runs and quick redesign cycles, can survive and even thrive.

[tom66]

It's definitely a challenge to be an engineer right now but that's where great engineers shine above the others (I'm not trying to toot my own horn here!)  It gives those who practice engineering as an art instead of just a career/day job an advantage.

I'm seeing a lot of job ads come through where customer X or Y wants someone with knowledge of alternate component sourcing and redesigning for availability.

It sucks if you're trying to do 1's and 2's, but if you're making hundreds then bring on the challenge

Let's just hope it doesn't get so bad that things slip into a downturn.  At the moment I'd say it's still reasonably healthy but longer term there are inflationary concerns on the horizon and no one knows how UKR/RUS will go which is leading to a huge amount of uncertainty in Europe.

[rx8pilot]

I essentially threw in the towel a while ago.

I find that somewhat weird. I have read your posts in the past and you seemed like a very capable one-man-show who definitely would have the edge over the competitors in this era due to all the flexibility you get by your do-it-all-yourself attitude.

After all, everybody's struggling with part availability. Larger organizations where redesign takes years of paperwork are going to die. But those who can make quick prototype runs and quick redesign cycles, can survive and even thrive.

I didn't thrown in all the towels, just the electrical engineering ones.
My focus right now is designing and manufacturing purely mechanical products. This is an easy pivot that earns a similar amount of money on average. I spent many years purely focused on mechanical engineering and manufacturing before I got serious about electronics. Electronics really started to become important to me (as a business) around 2010 or so. The mechanical products and services slowly went away until pretty much everything I was doing was electronics.

I am thankful that I could just revert back to what I was doing 10 years ago while my friends and competitors in my little industry are tripping over themselves looking for components. Many of them have closed shop or shrunk substantially. I have not really missed a beat as far as the overall business is concerned. I am very disappointed that projects with hundreds or thousands of hours landed on the shelf to collect dust.

The 'one-man-show' element is helpful in that I can react quickly, but it was more important that I could do something productive that did not require any electronics design/manufacturing at all.

[floobydust]

While your SME is waiting for parts to come in, a final knife in the back is manufacturers obsoleting the "out of stock for a year or two" parts. A reason your back-orders are now likely  never to come in. Check the production status of your parts, that is being changed in the background.

I'm keeping busy writing firmware through the chip shortage. Energy prices being so high has created work there.
I see the chip drought continues and the industry is mute about it, with no signs of things improving. The US CHIPS Act funding is dead in partisan dispute, political squabbling. Hail china the CCP can mandate this stuff in an eye blink.
Companies are holding off now esp. in Texas, let me just uh take that ASML order and tell them to uh wait a bit 

[VK3DRB]

...
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.

As for CEO greed, Richard Templeton (TI CEO) raked in a king's ransom in 2021, despite treating us small fry engineering customers with contempt.
https://www.salary.com/tools/executive-compensation-calculator/richard-k-templeton-salary-bonus-stock-options-for-texas-instruments-inc

[tom66]

CEO pay has never been well correlated with how customers are treated or even long term business success, just quarter-to-quarter performance.

I will be very much avoiding TI in future designs due to their behaviour and many other engineers I know will be doing the same.

[voltsandjolts]

I didn't thrown in all the towels, just the electrical engineering ones.

Hmm, got any equipment goodies up for sale, or scopes to give away

[Karel]

Order Cancellations Strike, 8-inch Fab Capacity Utilization Rate Declines Most in 2H22, Says TrendForce

According to TrendForce investigations, foundries have seen a wave of order cancellations with the first of
these revisions originating from large-size Driver IC and TDDI, which rely on mainstream 0.1Xμm and 55nm
processes, respectively. Although products such as MCU and PMIC were previously in short supply, foundries’
capacity utilization rate remained roughly at full capacity through their adjustment of product mix. However,
a recent wave cancellations have emerged for PMIC, CIS, and certain MCU and SoC orders. Although still
dominated by consumer applications, foundries are beginning to feel the strain of the copious order
cancellations from customers and capacity utilization rate has officially declined.

https://www.trendforce.com/presscenter/news/20220707-11292.html

[rsjsouza]

...And just like in 2000/2001, the slow but certain chain of events that configures a recession starts to propagate from the end customer to the primary industry, where everyone starts to carefully tune their foldback mechanism to avoid ending with excess inventory.

[VK3DRB]

Brokers like Win Source should be shot. Profiteering from misery. It is not capitalism - it is just pure greed. https://octopart.com/search?q=TPS92515&currency=USD&specs=0

I am looking for a replacement of the TPS92515 buck LED driver 10K pcs per annum. PWM or analogue drive but PWM output driving 1A load. 20V or more input. What make this tricky is I need to dynamcially switch in four LED arrays, RGBW with 3 LEDS each string. The TPS92515 was perfect for the job. Win Source can go and get stuffed (to put it nicely). I have found an alternative chip that will suffice, but it is also a TI part. I am tempted to just use a standard low cost buck converter, a separate constant current driver circuit and switching the output load with a low side MOSFETs. Not ideal at all, as board space is tight. Or just use current limiting resistors and switch them with PWM - it is not as efficient.

I read this article from late last year... TI is the biggest one to blame for the chip shortage. So why is Dick, head of Texas Instruments still there?
https://www.digitaltrends.com/computing/chip-shortage-due-to-the-company-that-makes-your-calculator/

[tom66]

Brokers like Win Source reflect the supply-demand curve shifting more towards demand.  Their prices may seem extortionate but when there is inadequate supply why would prices not rise?  The alternative would be zero parts in stock.   You can't "queue" for parts like you could for bread in the USSR.  Well, not yet

[Bassman59]

Brokers like Win Source reflect the supply-demand curve shifting more towards demand.  Their prices may seem extortionate but when there is inadequate supply why would prices not rise?  The alternative would be zero parts in stock.   

Brokers like WinSource are rent-seeking middlemen who add nothing to the supply chain.

I'd much rather pay the manufacturer a higher price than allow a middle-man to corner the supply market and fuck us on the demand side.

[tom66]

Brokers like WinSource are rent-seeking middlemen who add nothing to the supply chain.

I'd much rather pay the manufacturer a higher price than allow a middle-man to corner the supply market and fuck us on the demand side.

I agree (that they're rent-seekers), but clearly the manufacturers are only willing to raise prices so far for whatever reason. Maybe distribution agreements prevent  them doing so.  Maybe other political or economic concerns have them worried,  like being unable to drop the prices when demand relaxes without triggering a deflationary spiral.

I don't think the 10,000 or so parts that Win-Source keep in stock for some STM32Fx part for instance makes all that much difference in the grand scale of things.   ST probably churn out 10x that in any given month, they're just not going to distributors right now.   If those 10k were at Digi-Key but at $5 a piece then they would last five minutes. 

Perhaps it's going to be a controversial opinion but WS et al. allow people to build prototypes and small runs where price is less critical, then join the queue for normally priced parts.  But I can hear the molotovs being lit now so I'll duck out 

[KE5FX]

Perhaps it's going to be a controversial opinion but WS et al. allow people to build prototypes and small runs where price is less critical, then join the queue for normally priced parts.  But I can hear the molotovs being lit now so I'll duck out 

No question but that the brokers have a legitimate role to play under current market conditions.  It absolutely is a legitimate instance of capitalism in action.  If you're building a $100,000 product and your line is down because of a $2 part, the ability to get them for $200 each is a godsend. 

The problem is, it's not clear how we get off this ride.  Manufacturers are either not building parts at all, or they're allocating everything they make to specific customers.  It's hard to tell which is the case, and it doesn't matter, because either way the parts never make it to the distributor shelves.  When they do, the brokers snap them up and jack up the price, which is annoying... but again, that's just a case of the goods finding their best use in the marketplace.   It's like complaining about there being too many handicapped parking spots at the grocery store.  If the best place in the parking lot were available, what makes you think you'd get it?

At any rate, the manufacturers who are actually building parts are making money hand over fist.  So the TI shareholders aren't about to call for Richard Templeton's head, despite the outcry here.  They're laughing all the way to the proverbial bank.

The elephant in the room is that there are simply too many similar-yet-incompatible parts in too many grades and packages.  Probably 5x more than the market can optimally use.  Manufacturers can be expected to seize this opportunity to pare down their bloated back catalogs.  That is going to suck for the rest of us.  We are probably feeling the effects already (see above), it's just that nobody is talking about it.

[AndyC_772]

If you're building a $100,000 product and your line is down because of a $2 part, the ability to get them for $200 each is a godsend. 

That's an extreme corner case, though, completely unrepresentative of how the majority of parts are sold and used. The electronics industry at large simply cannot continue to haemorrhage money; even if an individual company might be able to take a hit on a component from time to time, the industry as a whole simply doesn't have a massive slush fund that can be exploited by predatory brokers on an ongoing basis.

[tom66]

Ultimately the situation will only be resolved when inventories fill up and demand falls back to normal.  It's just like the toilet paper shortage - except there's also a permanent increase in demand - so it's going to take a while to catch up.

Inflation is the force that regulates this.  As electronics (in general) rise in price, demand will fall.  However, it does risk a further fall beyond the 'normal' amount of demand an economy might see in any given year.  That risks a recession, job losses, etc.  Hence the monetary policy in this time is extremely critical... It remains to be seen if the banks will get it right.

I think it's a bit like controlling a PID loop but P, I and D are known only within about 50% tolerance and there's a 3 month delay from your control variable affecting the output value.

[MT]

Brokers like Win Source should be shot. Profiteering from misery. It is not capitalism - it is just pure greed.

Come on now , if you had been around in the spot market shortage circus around 1992 you would had needed a machine gun to clean things up! 
Everyone, inc big guns was buying from mom and pop hoarders! Nothing new under the sun except a lot more Chinese around these days.

Chip shortages turned into a glut in some sectors, taking Wall Street by surprise. By late June, memory chip firm Micron Technology Inc (MU.O) said it would reduce production. The market reversal caught Micron off guard, admitted Chief Business Officer Sumit Sadana
https://www.zerohedge.com/technology/pc-demand-suffers-steepest-decline-years-chip-shortage-turns-glut

[VK3DRB]

Brokers like Win Source should be shot. Profiteering from misery. It is not capitalism - it is just pure greed.

Come on now , if you had been around in the spot market shortage circus around 1992 you would had needed a machine gun to clean things up! 
Everyone, inc big guns was buying from mom and pop hoarders! Nothing new under the sun except a lot more Chinese around these days.

Yeah I was around then. In those days there were few mum and dad hoarders compared to today. But at the end someone will be holding the baby and they will get burnt if and when there is a glut. If the "mum and dad" scumbags are hoarding chips like "mum and dad" investors hoard houses, I hope they lose.

There is a forum here about Win Source brokers who are in Hong Kong According to the posts, their parts are genuine, but they have a reputation of getting buyers to pay a lot more than what they quote.

[floobydust]

Intel CEO Pat Gelsinger interview from a few days ago, a bit interesting:
"... it's become a bit of a political football, and we've made super clear to McConnell, to the Democrats, to the Republicans that if this doesn't pass, I will change my plans."
"... the Europeans have moved forward very aggressively, and they're ready to give us the incentives that allow us to move forward, you know, without limitations, putting euros in our bank. And I think it's embarrassing that the U.S. has started this process a full year before the Europeans, and the complex, you know 27‑member state, Europeans, have moved forward more rapidly."

edit: the US Senate vote is this coming week... fingers crossed. The Bill is scaled down.

[MT]

Intel CEO Pat Gelsinger to Congress: Do not go home for August recess until Chip Act is passed


Gelsinger on state of CHIPS act in Congress.

[BravoV]

... <snip> ... CHIPS act in Congress.

CHIPS .... eh ? 

Not going to happen, at least easily, as Republican camp will not go down without a figh ... err.. big cut. 

Nancy Pelosi Urges Support Of $50 Billion 'CHIPS' Bill Hours After Disclosing $8 Million Nvidia Stake 

Source -> https://www.zerohedge.com/markets/nancy-pelosi-throws-her-support-behind-50-billion-semiconductor-bill-hours-after-disclosing

[tom66]

Private industry holding out for handouts...  Socialise the costs,  privatise the profits.

OK we'll give you $20 billion but we expect the equivalent balance of shares to be transferred into the US Treasury's name.

[rsjsouza]

... <snip> ... CHIPS act in Congress.

CHIPS .... eh ? 

Not going to happen, at least easily, as Republican camp will not go down without a figh ... err.. big cut. 

Nancy Pelosi Urges Support Of $50 Billion 'CHIPS' Bill Hours After Disclosing $8 Million Nvidia Stake 

Source -> https://www.zerohedge.com/markets/nancy-pelosi-throws-her-support-behind-50-billion-semiconductor-bill-hours-after-disclosing

As I mentioned in another thread, both sides only care for their own and their (pretend) enemies of the other side - they are all at the top and will fight tooth and nail to keep it that way. The notion of shame is also gone - all actions are done at plain sight with no attempts to hide anything.

[Mangozac]

The IC situation seems to be worsening again. Microchip Direct orders placed early 2022 with estimated delivery Sep 2022. That than pushed out to March 2023. Order update has come through this morning: December 2023

We'll see how my luck goes with the Microchip Preferred Supply Program...