371–380 of 720 posts
Still no info on the order, except that the factory in France is on shutdown in August till the 23rd. Except:
> Until now, Toyota had managed to avoid doing the same, with the exception of extending summer shutdowns by a week in France
Which means it reopens in September...
> Toyota is to slash worldwide vehicle production by 40% in September because of the global microchip shortage.
Oh boy. Hopefully my order is in one of the first in the queue.
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The solution to a market inefficiency isn't to involve a more inefficient entity.
We're in this mess due to our never ending quest for more "efficiency" The government needs to recognize the fact that semiconductors are essential to national security and ensure we have the capability to produce our own.
I might be more time efficient by speeding everywhere, but that efficiency gain needs to be understood in terms of how much additional risk it incurs.
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Then what's the solution? Seems like the government is the only entity that can intervene if market forces are counter to supply chain resilience. This is partially the justification for agricultural subsidies in the US, so clearly there is precedent.
> Then what's the solution? Time and capital investment. It's like this generation of people have never heard of production and supply disruptions, and were oblivious to such things being possible. Frankly, this doesn't matter very much, it's not a critical situation. The auto market malfunctioning short-term due to a pandemic doesn't present a strong argument for government intervention. Tesla can't make batteries f…
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A negative feedback loop in semiconductor supply seems like a situation where a government should just step in manage the market a bit.
Just the opposite. Need to let people raise prices to encourage slack in the system. Let’s prices settle where chip makers can produce new chips. There are market failures where the government needs to step in, but this isn’t one. Even with climate change (where they should step in) the government can’t get to the point of saying it’s ok for gas prices to be high. We don’t want the government to pick winners and lose…
2. Price is probably a red herring anyways. I'm willing to bet that fab equipment suppliers are losing out not on price negotiations, but on volume negotiations. I.e., they might even be willing to pay more -- even much more -- than other users, but can't buy in massive quantities so don't go to the front of the line.
3. Is there any (legal) mechanism at the moment that prevents chip makers from increasing prices?
4. Fab equipment producers are small consumers of chips but have such a disproportionately high impact on the rate of future supply. In the midst of a global shortage, we could straight up socialize 0.00...01% of chips produced every year and hand them out for free to fab equipment manufacturers without even effecting the short-term price dynamics. I'm not actually advocating this, but the assertion that earmarking a small number of chips for a particular high-value use fundamentally skew the market in the short-term is probably false.
5. Even if markets can eventually work in this case -- and for the record I'm convinced that this is a perfect example of contract negotiators being extremely myopic -- market dynamics have non-O(1) time complexity and the chip shortage is wrecking havoc on the real economy.
My comment wasn't suggesting price controls or socializing chip fabrication. It was suggesting that we very temporarily give special treatment to a very small consumer of chips that has an outsized impact on production rate, in the midst of a global chip shortage.
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Just the opposite. Need to let people raise prices to encourage slack in the system. Let’s prices settle where chip makers can produce new chips. There are market failures where the government needs to step in, but this isn’t one. Even with climate change (where they should step in) the government can’t get to the point of saying it’s ok for gas prices to be high. We don’t want the government to pick winners and lose…
What makes you think the most critical uses have the most money to pay for chips? I'd imagine there's a lot of crappy (or in any case not critical) consumer products that have much higher margins.
This so-called “transitory inflation” is really starting to seem like it will parlay into full blown inflation.
Just a month ago, HN was rife with lumber apocalypse.
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Apple approach, invest in your supply chain Extra points by diversifying from China/Taiwan In direct opposition, Auto makers approach of minimizing inventory and producing "just-in-time" caused them to be vulnerable to supply chain or big market shifts
> Extra points by diversifying from China/Taiwan Take a look on the linkedin jobs in Shenzhen. The trend IS NOT towards diversification. In the last 5 years since Trump's election, US multinationals were increasing their presence in China, not decreasing. Google for example said to open "a small representative office" in Shenzhen 2 years ago, now it's a full giant RnD centre in the Ping An Tower where they shipped al…
e.g. Foxconn investing in capacity outside of China (India) and Apple being part of it (as customer)
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I wonder how many of these people rant about how bad the government is while using GPS to navigate their way to work on government funded roadways.
As if those things wouldn't innovate in the market? Or because 1 thing came from the government, then all things the government touches are gold?
While a lot of industry seem obvious and worth the investment today, when they were nascent that wasn't the case. Would GPS exist if private companies had to fund the rocket and satellite research just to tell you where you are on the map? Or would the aircraft industry exist?
Most of those types of high-risk, nebulous reward (at least on short-to-near-term timescales) industries are predicated on government investment. SpaceX, as great as they are, probably wouldn't exist if they didn't have NASA as a customer.