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Chip shortage leads carmaker Opel to shut German plant until 2022

reuters.com

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

#401

Post by throwawaythekey »

Lord_Baltimore wrote: post #366
Retric wrote: post #349

Earlier quoted context omitted.

> The scalper isn’t going to buy something they can’t sell on That assumes they have perfect information which they don’t they can only estimate demand. It’s perfectly rational for a scalper to regularly purchase more tickets than they sell due to the kind of markup their looking for. At say 4x they could on average sell 1/2 the tickets while doubling their investment. And of course that assumes they never run into l…

1. No one assumes that they have perfect information. No one says this is perfect just better than the other ways to handle these situations! 2. Who do you think will consistently have better information than someone whose sole goal is to sell these tickets? 3. If they are consistently losing money scalping and not selling tickets they won't be a scalper much longer. 4. This is a dynamic process which can account for…

For 5. consider the diamond industry as a real world example of an industry well renowned for aggressively limiting supply.

Scarcity can drive price upwards in an exponential way that ends up making it optimal to not sell all inventory. Sure in an ideal world you would sell everything you can for the maximum price but in the real world the buyer is incentivized to wait until you offer your minimal price.

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

#403

Post by raducu »

yholio wrote: post #282
TeMPOraL wrote: post #231

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…

> Scalpers perform a social service by rationing demand and ensuring availability.

While the fundamental issue is indeed price discovery, even in the most abstract market -- stocks/fx/derivatives there are numerous regulations in place to limit the predatory behavior of certain speculators.

It is astonishing we have no such regulation for real-life items.

Scalpers are compounding a problem, by reselling something at 5X the price they invite others to do the same, they create artificial demand and speculation.

> Think about hospitals paying 10 times more

No, think somali pirates in terms of transportation costs. If you only look at it throught the autistic-economical lens, they are entrepreneurs helping the market find the right price for transportation.

> the problem is low competition not intermediaries

The problem is inelastic markets and high moats. Think New York real estate market where mobsters around the world inflate property price and will destroy the local economy.

Think about drug cartels and drug prices.

Think about the USD and its status as a global currency and its relationship to the Military Industrial Complex.

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

#404

Post by hef19898 »

Kliment wrote: post #399
hef19898 wrote: post #287

Earlier quoted context omitted.

And then what? Just stockpile a year of everything? At every company along the supply chain? It is the first time in my life, professional in SCM and otherwise, that something like Covid and a global trade disruption happened together with a global shortage of one class of products. No way you for see or prepare for something like that. Hindsight in 20/20, just imagine the automotive OEMs would have gotten rid of the…

That's not the issue here. The issue is automotive are capricious, nasty customers. They know they're a big contract so they dictate disgusting terms, like 9 month payment terms and extremely strict delivery windows and changing deliveries on very short notice. Suppliers get fined at certain auto manufacturers for not delivering within a 15 minute window, forcing their truck drivers to circle around the facility for…

Pretty sure 9 months payment terms are illegal in the EU, everything above 90 days is an issue already. Not defending the supplier squezzing that auto OEMs conduct. Also, trucks aren't circling around facilities, they are waiting at parking lots.

Seriously, I don't know what kind of axe you have to grind with automotive and JIT. It does seem to be a larger issue if it is affecting all industries, and all companies. Chip shortages are affecting Aerospace, Google reportedly has issues getting chips as well for things like the Pixel 4a.

Also I am not sure if you have hands on experience with SCM or procurement, automotive or otherwise.

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

#405

Post by avianlyric »

ekianjo wrote: post #352
jrockway wrote: post #342

Earlier quoted context omitted.

It's not really NVidia's fault. The problem is that you can buy a GPU for $1000 and use it to print $2000 of money. That's annoying because most people just want to play a computer game, not print $2000 worth of money. The other thing NVidia could do is keep all their GPUs for themselves and mine crypto.

> The other thing NVidia could do is keep all their GPUs for themselves and mine crypto. Who says they are not already doing that in some capacity?

That sounds like a lot of work, and a PR nightmare if the public ever found out.

Nvidia is already a money printing machine, and their margins are growing. I doubt it’s worth the time investment and risk exposure to the crypto markets for Nvidia. Better off using that time a money inventing better money printers.

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

#406

Post by bsder »

hef19898 wrote: post #374
bsder wrote: post #332

Earlier quoted context omitted.

> And then what? Just stockpile a year of everything? Or run a fab. Fabless isn't a God-given right. Vertical integration is a thing. Vertical integration got a bad reputation because financial engineering dipshits like Carl Icahn would come in and strip mine your company for the single super profitable division and destroy the rest (see: Mesta Machinery).

Sure, that's a solution. Or own one as subsidiary. Not sure if would have really helped so, there were decisions to order less. Reasonable to assume that production at the own fans would have been ramped down as well.

Sure, but your own fab will prioritize your own chips in the order that they need to.

TI doesn't care about that 50 cent part that's holding up your ability to produce a car. They're going to run every chip first whose profit per chip is higher than yours.

On the other hand, your own managers will have lots of incentive to produce that 50 cent chip if it is in the way of several thousand dollars of profit from selling a new vehicle.

200/150mm wafer at 180/150nm node fabs are not that expensive to run and maintain. But they have annual capex and MBA types don't like that.

In addition, that fab probably won't compete well in the general market so it's effectively a captive fab. However, you'll have internal managers complaining that they have to use the internal chip which is more expensive than the one from TSMC because their bonus depends upon getting 5% cost savings next quarter and who the hell cares about keeping our fab filled so it's around when everything goes pear-shaped--that's somebody else's problem after I've been promoted and gone.

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

#407

Post by SXX »

orhmeh09 wrote: post #291
yholio wrote: post #282

Earlier quoted context omitted.

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…

When did people start dousing their driveways in antiseptic?

People do all kind of weird shit especially under stress during pandemic. Tons of richer people who are not scalpers bought ventilators for instance. And this is very expensive medical equipment which is completely useless without team of specialists to operate.

So people bought ventilators completely useless for them make supply shortages on them much worse. And unlike scalpers these people who do something like that due to panic are unlikely to sell them back to market when they're most needed.

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

#408

Post by marvin »

mnholt wrote: post #262
speedgoose wrote: post #181

Earlier quoted context omitted.

Many manufacturers had no shame to charge for shitty features in alpha state like the "ping pong" line assist.

Well they aren't going to "ping pong" themselves into a parked emergency vehicle.

My Skoda Citygo's line-keeping assist tries to drive me into the barrier every single time I go driving. Only a firm hand on the steering wheel prevents disaster.

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

#409

Post by christophilus »

raducu wrote: post #403
yholio wrote: post #282

Earlier quoted context omitted.

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…

> Scalpers perform a social service by rationing demand and ensuring availability. While the fundamental issue is indeed price discovery, even in the most abstract market -- stocks/fx/derivatives there are numerous regulations in place to limit the predatory behavior of certain speculators. It is astonishing we have no such regulation for real-life items. Scalpers are compounding a problem, by reselling something at…

> It is astonishing we have no such regulation for real-life items.

We have something close for emergency situations. It’s illegal to price gouge during something like the aftermath of a hurricane.

It’s a well intentioned law. But for some things, it really may be best to let market forces dictate. For example, generators are in high demand and short supply during a hurricane. Folks snap them up so they can play Nintendo. Because they’re inexpensive due to gouging laws, they sell out fast. Now, someone who actually needs that generator for important, possibly life-saving work is SOL. And there isn’t a price incentive to expedite bringing in more supply.

Edit: I still think the scalpers are scumbags. Just wanted to point out an argument I found compelling in the past.

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

#410

Post by hef19898 »

bsder wrote: post #406
hef19898 wrote: post #374

Earlier quoted context omitted.

Sure, that's a solution. Or own one as subsidiary. Not sure if would have really helped so, there were decisions to order less. Reasonable to assume that production at the own fans would have been ramped down as well.

Sure, but your own fab will prioritize your own chips in the order that they need to. TI doesn't care about that 50 cent part that's holding up your ability to produce a car. They're going to run every chip first whose profit per chip is higher than yours. On the other hand, your own managers will have lots of incentive to produce that 50 cent chip if it is in the way of several thousand dollars of profit from sellin…

Automotive suppliers pretty much care about 50 cent parts holding up OEMs, penalties are prohibitively high for a reason. An in-house fab is, as you said, probably more expensive. Simply because it has to rely on a single customer. Show me one company that is not looking at costs, one way or the other, that stays in business in the long run. Not doing so has, yes, something to do with savings on the procurement side (errors were made there as much as everywhere else). It also has something to do with long-term survival, and that does include jobs (even if that turned into a trope by now, there is some truth to it). Not every company can use VC money to bolster competitiveness, most have to compete on cost, and there every cent counts. Especially when we talk about high-volume products.
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