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The semiconductor bust – still coming?

asianometry.substack.com

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Re: The semiconductor bust – still coming?

#11

Post by alimov »

swamp40 wrote: post #8

Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of ele…

> “…strategically bought…”

That’s a key phrase here. Did others do the same? If they didn’t then why not? And if they did, then they are surely profiting from the shortage as well. I wonder how long this can go on for… I mean if you can make less of something, and make 2x or more (in your example) profit from it then I’d guess some businesses might not want this kind of arrangement to end.

Re: The semiconductor bust – still coming?

#12

Post by BirAdam »

I think it is rather easy to say that the rapid buildout of more and more fabrication plants may be fruitless if the entire industry is still going to rely exclusively on ASML for EUV and even more so if there are no new ingot providers. Apparently, the fab companies know something we do not in those regards. Beyond that, while we are facing high demand now and low supply, a ton of new fabs will increase supply and… possibly crash the market. This is especially true as AMD and Intel now face greater competition not just from one another but also from RISC-V, ARM, Power, and Hygon. These competitive pressures will erode the margins and thereby also the incentives.

Re: The semiconductor bust – still coming?

#13

Post by swamp40 »

alimov wrote: post #11
swamp40 wrote: post #8

Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of ele…

> “…strategically bought…” That’s a key phrase here. Did others do the same? If they didn’t then why not? And if they did, then they are surely profiting from the shortage as well. I wonder how long this can go on for… I mean if you can make less of something, and make 2x or more (in your example) profit from it then I’d guess some businesses might not want this kind of arrangement to end.

I consider this economic warfare. I suspect disruption and chaos are the end goal, and the monetary gain is just the cherry on top.

Once the supply chain starts to catch up, they will dump everything at once and possibly ruin the manufacturers if they aren't careful. And careful mfgs means supply disruptions will be extended even longer.

I mostly posted because it doesn't seem like anyone is even noticing the coup. There will be laws against this kind of thing some day, in the aftermath.

Re: The semiconductor bust – still coming?

#14

Post by monocasa »

swamp40 wrote: post #13
alimov wrote: post #11

Earlier quoted context omitted.

> “…strategically bought…” That’s a key phrase here. Did others do the same? If they didn’t then why not? And if they did, then they are surely profiting from the shortage as well. I wonder how long this can go on for… I mean if you can make less of something, and make 2x or more (in your example) profit from it then I’d guess some businesses might not want this kind of arrangement to end.

I consider this economic warfare. I suspect disruption and chaos are the end goal, and the monetary gain is just the cherry on top. Once the supply chain starts to catch up, they will dump everything at once and possibly ruin the manufacturers if they aren't careful. And careful mfgs means supply disruptions will be extended even longer. I mostly posted because it doesn't seem like anyone is even noticing the coup. T…

I mean, there is economic warfare going on, but this is probably the most civil fronts of this war. There's been enough tit for tat (particularly at the intersection of the semiconductor space and china) that it's hard to get mad at this. I don't really have a problem with cornering the market, but instead the state sponsored economic espionage and sanctions intended to cut the country off from further development are the root causes here that result in heavy handed techniques like this article is talking about.

Re: The semiconductor bust – still coming?

#15

Post by monocasa »

sidewndr46 wrote: post #9
swamp40 wrote: post #8

Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of ele…

I'm not trying to advocate a pro-China stance here, but is there any business that is done in China that isn't in part sponsored by the government? One book I read even told the story of a grey market manufacturing operation that had to go legit not because of a government "bust" but because the local figurehead wanted the output of the factory included in his productivity figures.

Correct, there's not really any businesses legitimate enough to have a domain name that are large enough to get major city or province level attention that aren't implanted with direct CCP oversight.

Re: The semiconductor bust – still coming?

#16

Post by zozbot234 »

swamp40 wrote: post #8

Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of ele…

The real issue is that these are narrow bottlenecks in very specific components that are used in existing designs. It's not that they can't be substituted with something else, but doing so would require reengineering the product and be just as expensive as the price they're actually paying.

Re: The semiconductor bust – still coming?

#18

Post by cherioo »

swamp40 wrote: post #8

Hard to listen to someone talk about semiconductor/IC supply without mentioning China's cornering and hording of the semiconductor/IC market. There are bottlenecks in all electronic assemblies. Processors, crystals, specialized chips, etc. Things you just can't substitute. China identified many bottlenecks and strategically bought the entire supply. For thousands of items. Hundreds of billions of dollars worth of ele…

I’m not in the hardware industry, but is 215000 microcontroller supposed to be a lot? The case you bring up sounds like run of the mill hoarding for profit. Semi conductor supply shortage can be seen from miles away and building up inventory sounds like exactly the thing broker should do if they foresee shortage to last (and risk losing money if shortage doesn’t last). To me it would only be a problem if NXP, which isn’t even a Chinese company, refuses, or forced to refuse to sell to other broker when new chips get off the line.

This is not to mention how China’s crown jewel Huawei got cut off from supply for sometime due to sanction, so it actually makes a lot of sense for China to stockpile chips in general if they can afford to.

Re: The semiconductor bust – still coming?

#19

Post by jorl17 »

reissbaker wrote: post #10
savant_penguin wrote: post #6

Earlier quoted context omitted.

Switches and raspberries got really hard to find for a while too

Raspberry Pis are still widely out of stock. And not just Pis! The car industry has been facing chip shortages, Fujifilm's flagship digital cameras and lenses are still impossible to find and have been for years since the chip shortage started... Two years after Nvidia released their flagship GPUs they're finally able to be purchased, but they're only six months away from releasing the next generation, which will als…

We desperately need raspberry pis for our product! Does anyone happen to know where we can find more? We are currently drifting back to x86 to deal with the immense shortage of Pis!

Re: The semiconductor bust – still coming?

#20

Post by bschwindHN »

jorl17 wrote: post #19
reissbaker wrote: post #10

Earlier quoted context omitted.

Raspberry Pis are still widely out of stock. And not just Pis! The car industry has been facing chip shortages, Fujifilm's flagship digital cameras and lenses are still impossible to find and have been for years since the chip shortage started... Two years after Nvidia released their flagship GPUs they're finally able to be purchased, but they're only six months away from releasing the next generation, which will als…

We desperately need raspberry pis for our product! Does anyone happen to know where we can find more? We are currently drifting back to x86 to deal with the immense shortage of Pis!

Just curious, what's your product?
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