Looks like higher prices and shortages are here for maybe good.
The Rising Tide of Semiconductor Cost - by Doug (mule) - Fabricated Knowledge
The Rising Tide of Semiconductor Cost - by Doug (mule) - Fabricated Knowledge
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Fabricated Knowledge...title says it all.
East Fishkill, NY, IBM plant, look it up.
Older chips, audio chips, USB controller chips...they do not need cutting edge technology.
I don't think there is a shortage of 555 or 741, or 74 series either.
Car makers need hardened chips, and there may be Covid induced people shortages as the main reason for chip shortages.
Everybody has gone goofy, and the suppliers are getting a higher price right now, because people want material.
As things improve, supply wise, and panic recedes, some price roll backs may be seen.
Historically, any near monopoly always collapses.
East Fishkill, NY, IBM plant, look it up.
Older chips, audio chips, USB controller chips...they do not need cutting edge technology.
I don't think there is a shortage of 555 or 741, or 74 series either.
Car makers need hardened chips, and there may be Covid induced people shortages as the main reason for chip shortages.
Everybody has gone goofy, and the suppliers are getting a higher price right now, because people want material.
As things improve, supply wise, and panic recedes, some price roll backs may be seen.
Historically, any near monopoly always collapses.
No takers there! But now is a good time to be in the foundry equipment supply biz, lots of expansion going on there preparing to oversupply....
I don't think the semi cycle will go away, but they are just saying the days of lower pennies per transistor with every new technology node are gone - Moore's law has reached its end and costs are going back up again as the feature sizes go down. Figures since Greenfield bleeding edge fabs have gone up 5x in cost. In 2000 it would cost $2-3 billion and now its $10-15 Billion.
Fabs are all running flat out now (95% utilization) and supply chains are getting stacked again. No doubt everyone's put 24 months worth of orderbook in place (Automotive are the worst for this - and hoarding inventory too). Once the whole thing settles, the order cancellations will come and business managers will be on the red carpet every Friday morning.
I worked in power semis (mosfets) for 10 yrs and we used depreciated gear from 2-3 generations back memory fabs. We regularly 'de bottle necked' so I don't agree with the author that people don't invest in fabs that make legacy/jellybean products (eg opamps, SMPS controller chips, discretes) - that might apply to the memory guys and CPU people like Intel, but not everyone in the industry.
Fabs are all running flat out now (95% utilization) and supply chains are getting stacked again. No doubt everyone's put 24 months worth of orderbook in place (Automotive are the worst for this - and hoarding inventory too). Once the whole thing settles, the order cancellations will come and business managers will be on the red carpet every Friday morning.
I worked in power semis (mosfets) for 10 yrs and we used depreciated gear from 2-3 generations back memory fabs. We regularly 'de bottle necked' so I don't agree with the author that people don't invest in fabs that make legacy/jellybean products (eg opamps, SMPS controller chips, discretes) - that might apply to the memory guys and CPU people like Intel, but not everyone in the industry.
I have heard and not sure how true it is but TMSC have a whole bleeding edge fab that is supplying only one customer. That's got to cause some twitching in the boardroom!
Back when I was involved with stuff that was in medium volume manufacturing the problem was that, when on allocation you would only get 10% of your order so everyone ordered 10x what they needed. I assume things aren't that daft anymore?
Back when I was involved with stuff that was in medium volume manufacturing the problem was that, when on allocation you would only get 10% of your order so everyone ordered 10x what they needed. I assume things aren't that daft anymore?
I think they are just as daft. Some manufacturers are only accepting irrevocable orders to try and stem that. There's a lot of re-allocation happening too - we had 10k of a part ordered from a major disti, they had their entire allocation pulled (much more than just our order!) -- someone with more clout got them. Happening a lot at the moment.
So, back to find a part, buy it NOW, respin pcb to suit... Ho hum.
So, back to find a part, buy it NOW, respin pcb to suit... Ho hum.
I'm glad to see that companies are looking at manufacturing semiconductors in the US again. It seems like a wise hedge with the ever changing market and recent disruptions.
I read recently in the Wall Street Journal that there's dozens of container ships from China waiting for months to get into the San Francisco port. There's not enough workers to run the port on schedule. Here in the US we have the "Great Resignation" going on; an unprecedented number of workers are quitting their jobs because of low (but rising) wages (and many also get no benefits) along with rapidly rising prices. A lot of people realized that with rapidly rising prices, and the burden of paying for work licenses and certificates (even some low paying McJobs require an expensive government license here in the US and employers often don't pay for that), that they were actually paying to work. It's alarming how fast things got upside down.
I read recently in the Wall Street Journal that there's dozens of container ships from China waiting for months to get into the San Francisco port. There's not enough workers to run the port on schedule. Here in the US we have the "Great Resignation" going on; an unprecedented number of workers are quitting their jobs because of low (but rising) wages (and many also get no benefits) along with rapidly rising prices. A lot of people realized that with rapidly rising prices, and the burden of paying for work licenses and certificates (even some low paying McJobs require an expensive government license here in the US and employers often don't pay for that), that they were actually paying to work. It's alarming how fast things got upside down.
The shortage was caused by labor and power outages in China.
It seems that silicon wafers have to be zone refined to reach proper purity, a process that can take weeks.
No power means the process has to start from a previous step.
Lock downs are back in parts of Australia, China and Germany.
So my advice is that be prepared for erratic supplies, at least till after the Chinese New Year.
Christmas shipments from China will now be almost over.
The port problems have also meant that ships full of containers are waiting to be turned around.
And empty ones are not getting back in time to be filled again.
It is normally a slack time after Christmas shipments till Chinese New Year there, as most customers for their goods are busy with Christmas... by the time they get back to work, it is first week of January. Orders are placed after that.
It seems that silicon wafers have to be zone refined to reach proper purity, a process that can take weeks.
No power means the process has to start from a previous step.
Lock downs are back in parts of Australia, China and Germany.
So my advice is that be prepared for erratic supplies, at least till after the Chinese New Year.
Christmas shipments from China will now be almost over.
The port problems have also meant that ships full of containers are waiting to be turned around.
And empty ones are not getting back in time to be filled again.
It is normally a slack time after Christmas shipments till Chinese New Year there, as most customers for their goods are busy with Christmas... by the time they get back to work, it is first week of January. Orders are placed after that.
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We also didn't exactly have a surplus of skilled workers to start with, so it didn't take much. I don't foresee this aspect getting significantly better any time soon, at least in some industries.
Part of the problem is that when the pandemic hit, a LOT of boomers who were getting close decided to retire early, and I can't fault them for that decision.
The EE department at the university I'm involved with lost almost 1/4 of its professors over the course of 18 months, leaving only 1 person who was in any way qualified to teach analog and communications courses.
Good luck getting a plumber to replace your toilet, or someone to frame your deck, etc.
This is a problem that has existed for a while, it's just gotten a lot worse very quickly.
Well, that's a laugh. I don't know what parts he thinks are piling up (stuff no one wants?) but I have a long list of stuff that's not available until mid 2022 at best.
Our plumber comes from a long line of families engaged in the craft. He's in his early 50's, two houses, boat and vacations. None of the kids or nephews/nieces want to apprentice in the trade.
The fella who does furniture refinishing in NJ just south of Rt 22 can only employ recent immigrants. He sent his 3 kids to Boston College with no financial aid, also 2 houses a boat and nearing retirement. Doesn't understand that they have no idea how much money can be made in a "skills" business.
Our electrician in NJ, from County Mayo, is hiring electricians from Ukraine because there are no apprentice electricians. He worked for Aer Lingus servicing avionics, he's the only one whose young sons are showing interest.
In a nutshell.
Employers have been getting away with murder in the US for a long time. They are used to having a large pool of workers to exploit, underpay, and overwork. Smart companies have been ahead of the curve, actually offering lower wage workers health insurance and paid days off before we got to this point. Other employers (like my former employer) are still wondering what happened and why all their skilled workers quit within the span of a few weeks.
The straw that broke the camel's back was health insurance. Health insurance is ridiculously expensive in the US. If you don't get subsidized health insurance from your employer, then you're sunk. After I got laid of in 2009, I was unable to get any kind of health insurance until recently. And (ironically) I recently had to quit my nickledick job to qualify for subsidized insurance. Market rate insurance is more expensive than a mortgage for a person my of age and health profile.
THAT is a huge problem that government has been pretending doesn't exist. Official inflation rates NEVER reflect the real expenses facing families. Furthermore, it is beyond disgraceful that our government can spend trillions and trillions of dollars on empire building, while thousands of hardworking people lose their homes and millions go without medical care.
I worked at my last job for 9 years and never earned a single paid day off. I never had health insurance the whole time. I made just enough money to not qualify for subsidized health insurance, and the premiums I would have to pay for market insurance were more than I made (over 100% of my net pay). My boss is still super pissed at me (6 months later) and we still don't speak. But hey, I was paying to work. He can cram it where the sun doesn't shine. He is an exploiter.
I am so glad I can do plumbing, electrical, roofing, painting, drywall. Also most car repair.
I also try to teach my kids these skills so they do not need to pay someone.
Also I am lucky to have worked at the same place for 21+ years and have lots of vacation/free time. No longer driving into the office means another hour in the day to do these things and not rely on hiring someone else.
I also try to teach my kids these skills so they do not need to pay someone.
Also I am lucky to have worked at the same place for 21+ years and have lots of vacation/free time. No longer driving into the office means another hour in the day to do these things and not rely on hiring someone else.