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Chip shortage leads carmaker Opel to shut German plant until 2022

reuters.com

381–390 of 495 posts

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#381

Earlier quoted context omitted.

In a civilized society it is the governments burden and obligation to ensure scarce resources are shared responsibly. When this process is disrupted and not quickly remedied you will inevitably discover that people take matters into their hands to get what they need. They might commit white collar crimes or engage in destructive or violent robberies and protests. They might also roll out the guillotines and collect s…

The government is often the cause of scarcity. If price sky rocket, investors will increases production until prices are lower. Government can mess with this by limit prices causing investors to stay away, meaning fewer chips get built, thus ensuing a temporary problem gets worse.

You can't increase production of semiconductors within 3-4 years.

Those assembly lines are highly specialized and extremely efficient. After all this time, the best they can do is 1% extra efficiency per month.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#382
post #363

Earlier quoted context omitted.

They could only do that by cornering the market, but if there are many competitive scalpers, then the price is right and that's just normal supply (at the source supplier, not the scalper) and demand.

Except that your markets are not perfect, your scalpers have overhead and now represent a middleman who wants their cut.

If the buyers could participate in a bidding market directly at the supplier, there would be no need for this overhead. The overhead you speak of is the cost of running a liquid market for a particular good where none existed.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#383

Earlier quoted context omitted.

Negative. Like scalping everywhere, they're middlemen who contribute nothing to society, and make it more difficult for people who do.

They provide short-term, non-committal inventories and buffers to a supply chain that doesn't have them, since it runs on long-term contracts. In some ways, they're capitalizing on the failures of just-in-time inventory dogma

The chips would have been sold in any case!

They're taking advantage of some fluxuations to make money for themselves. That isn't helpful for the producer nor for the purchaser of the goods.

This isn't people setting up futures for 555 timers. This is people scooping up PS5s and immediately selling them for an extra $200.

Of course it's nobody's god-given right to own a PS5 but there's not value being produced here.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#384
post #177

Earlier quoted context omitted.

After a train crash destroyed a few dozen Ford trucks, they sent an engineer who was also handy to pry the chips out of the smashed trucks. They were hand delivered back to the factory. Normally this would be ridiculous--there are many other parts that were probably more valuable. But now we have people cracking open smashed vehicles like walnuts so they can extract a chip nominally worth a few dollars.

Source? I can only see news about the crash, nothing about chip harvesting

This was stated on a Ford all-hands meeting September 29.

I also cannot find an external link, but the meeting was attended by tens of thousands of Ford employees and contractors.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#385

Earlier quoted context omitted.

The "religious reasons" he's talking about are "zero inventory" or "JIT inventory" pioneered by Japanese auto makers in the 80s and 90s. By optimizing inventory management and understanding demand for your product, you can ensure you don't have excess inventory on-site (meaning you don't have money invested in product parts you can't sell and have to pay taxes on). It's the system that virtually every manufacturer (a…

And major manufacturing problems cause catastrophic supply issues some times. manufacturing is part of the supply chain, and it is simply impossible to protect against all eventualities. JIT is not to blame here.

> it is simply impossible to protect against all eventualities.

Of course. No amount of stockpiling will account for a moon-sized asteroid collision.

> JIT is not to blame here.

Kind of. JIT isn't to blame, but the pressures that reward making every level of industry maximize efficiency, such as by using JIT, is. That is the reason for the supply chain crisis.

The market and tax laws pressure companies to optimize for efficiency as much as possible with their supply chains. Another alternative would be to optimize for robustness, but that would naturally be inefficient and would still be unlikely to endure a 100-year catastrophe unless it were completely unable to survive in a competitive market.

That doesn't mean that we need to change anything, necessarily, but it does mean that we have structured our economy to be less resilient than it could be with potentially very little actual upside.

Even so, some supply chains, like food and clean water, really should be robust rather than efficient. Emergency medical supplies, too, should probably be robust rather than efficient. That's why the Obama pandemic plan included warehouses of medical supplies [0] and FEMA stockpiles food and water.

Utility systems, too, should probably favor robustness. Texas has had a horrific year for it's power industry, and it has revealed how a hypercompetitive marketplace doesn't really serve the public best interest.

Consider civil engineering. We could optimize that for efficiency. That would result in a lot more bridge collapses, structure failures, and so on. Instead, we generally try to overbuild when failure would cause injury or death. The same is true in most engineering contexts. In many cases, industry simply doesn't design for robustness until they are held liable for failures. Notice the rise in corporate insurance rates after computer security audits due to the risk of data loss, and the sudden panic of executives to suddenly have secure systems where before they were more than happy to have databases of plain text passwords and so on.

There are alternatives to profit-motivated business efficiency. We have simply chosen not to do that sort of by accident.

[0]: https://www.npr.org/sections/health-shots/2016/06/27/4830698...

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#386
post #114

One important part of the chip shortage is the massive amount of price gouging going on. Every IC is being bought up by new 3rd party distributors to scalp to desperate electronics manufacturers. Take a look at this chip we are just now crossing as an example, click on 'Non-authorized stocking distributors': https://octopart.com/tps2052bdgnr-texas+instruments-699312?r... Win Source has a bunch, but you will pay 6x th…

Scalpers are not the problem as they seem, they are like market makers for stock exchanges. They buy low and sell high, always. The factory could tell you that they're currently out of stock for the next few months, but a scalper will never be out of stock, because their prices rises so high that only very few desperate companies would buy. The point is, it's better to have the option to buy something at a high price…

> Scalpers are not the problem as they seem, they are like market makers for stock exchanges. They buy low and sell high, always.

How do you feel about scalpers who do not act in scarcity but instead create the scarcity themselves. Like those who buy up land in popular cities?

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#387

Earlier quoted context omitted.

And major manufacturing problems cause catastrophic supply issues some times. manufacturing is part of the supply chain, and it is simply impossible to protect against all eventualities. JIT is not to blame here.

> it is simply impossible to protect against all eventualities. Of course. No amount of stockpiling will account for a moon-sized asteroid collision. > JIT is not to blame here. Kind of. JIT isn't to blame, but the pressures that reward making every level of industry maximize efficiency, such as by using JIT, is. That is the reason for the supply chain crisis. The market and tax laws pressure companies to optimize fo…

I haven't heard of food or water supply collapsing due to Covid, at least not in the developed world. Agree on medical and desaster plans and supplies, it seems everyone ramped those down after the cold war. besides masks, which became scarce early on due to China shutting down its economy in the early days of the pandemic, medical supply chains also continued to work, hospital resources being a bottleneck notwithstanding. And from experience, even masks were still avaialble as early as February 2020 in large quantities directly from Chinese suppliers.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#388
post #282

Earlier quoted context omitted.

The way I see it, this makes sense in a hypothetical world of perfect theoretical models (you may recognize this world as being the one inhabited by frictionless, perfectly spherical cows). In this world, scalpers cause the market to price in "stickiness" - the more critical an item is to the buyer, the more they'll be willing to pay - so the supply ultimately gets allocated to the most desperate of buyers, for the p…

Scalpers perform a social service by rationing demand and ensuring availability. They don't eat the whole consumer surplus, rather, they must compete amongst themselves and the price you pay is the amount that makes client N+1 walk away if total supply is N. Some of the buyers will find that close to their margin, but others, for which the product is essential in very valuable (thus socially useful) goods or services…

Your describing a capitalist dystopia where people with capital can buy up commodities on the cheap and then resell it for 200~900% markup. No thanks I rather not want to life in such a dystopia.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#389
post #301

Earlier quoted context omitted.

> "Scalpers perform a social service" Good luck finding anyone willing to recognize this absurd point. > "the problem is low competition" Tell that to the GPU market.

I've noticed a new wave of neo-capitalists who seem to be actively sympathising with (if not encouraging) scalping. "It's just the way the free market works!" "That's how retailers always worked!" "It levels out demand!". Such grubby people. In basically all my hobbies, scalping has become the norm now. Computers, Japanese cars, tabletop games, hell even kids toys. It does feel like there's been a massive increase in…

So what's your solution? If there is limited number of 3090 GPUs should they be allocated to those who order them first? By random? Auction?

Scalpers at least ensure you can get it of you really need it (that is willing to pay a lot).

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#390
post #71
post #21

What I'll never understand is why carmakers don't take advantage of this situation and address a market that's been literally BEGGING for decades for a new product: A simple, basic car, with the ONLY electronic control being for: - Valve timing - Fuel injection - Oxygen and throttle - Emissions There's a market for budget and privacy oriented customers that all carmakers seem to have ignored for two decades now. Give…

First of all this "simple" car may end up being more expensive. Doing a lot of the things the old mechanical way requires a lot of labor and labor is expensive nowadays. Having to use turning wires and vacuum tubes for instrument clusters, and a bunch of pull wires for controls... Not only would that be expensive it would require skills and equipment long lost today. Oh and the wind shield wipers -- it is possible to…

I've driven my car with only enough battery to really power the spark plugs and instruments in the dash (alternator failed and I got jump started). It was manageable even with the heavy steering, although to be fair I was driving max 50kph. Perhaps braking at highway speeds would be challenging.

I also much prefer my phone navigation over the in car system (Android Auto/Apple Carplay would solve this). That said, I wouldn't buy the car GP is suggesting, but I could imagine that if you were price sensitive then you might.

No comment around the older systems, I don't really have the knowledge to agree or disagree there.

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