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The semiconductor bust – still coming?

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Re: The semiconductor bust – still coming?

#51

Post by carom »

silisili wrote: post #29
whichquestion wrote: post #27

Earlier quoted context omitted.

The US Government did precisely that with the CHIPS Act (2021). It allocated something like $40B for US manufacturing of semiconductors and $10B for R&D [1]. Intel is planning a megafab in Ohio that is estimated will cost $100B when it’s completed. The State of Ohio is giving $2B for the first two plants that are estimated to cost $20B [2]. Chip companies are making new fabs in the US and the US gov is helping to spo…

Excellent, thank you! I suppose I should have researched more recently before commenting. The fact that this doesn't make front page national news is mind boggling to me.

There are a few new fabs being built in the south west US.

Re: The semiconductor bust – still coming?

#52

Post by barry-cotter »

strogonoff wrote: post #44
barry-cotter wrote: post #35

Earlier quoted context omitted.

> Hoarding or panic buying is an example of bad-faith behavior. Panic buying hurts buyers without means to hoard. Yeah, if you’re not very profitable you won’t be able to afford it. You’re not the best use of the good in question, i.e. the one that makes the most money. Cornering a market in anything is incredibly hard. Doing it motivates others to find substitutes or secure supply. That’s capitalism. If you don’t wa…

Capitalism (the way I understand it, free market and all) does not imply participating in bad faith. The fact that in the West there are bad-faith players that take advantage of the system does not mean it is normal. See the grocery example. It works for everybody, suppliers, sellers and consumers, as long as no one abuses the system. However, if one does want to go that route, it’s achievable; in a small market a si…

Who is participating in bad faith? If you want long term security of supply pay for it. Suppliers love long term contracts and orders. Buyers usually don’t go for them because it’s cheaper on average not to. No one signed a contract. The market price moved. That’s capitalism. If you want to prevent it happening again you can pay for it, by having a long term contract, stockpiling or multiple suppliers.

Many, many markets work fine without enduring personal relations. If you want security of supply of commodity parts buy a stockpile.

Re: The semiconductor bust – still coming?

#53

Post by reissbaker »

silisili wrote: post #29
whichquestion wrote: post #27

Earlier quoted context omitted.

The US Government did precisely that with the CHIPS Act (2021). It allocated something like $40B for US manufacturing of semiconductors and $10B for R&D [1]. Intel is planning a megafab in Ohio that is estimated will cost $100B when it’s completed. The State of Ohio is giving $2B for the first two plants that are estimated to cost $20B [2]. Chip companies are making new fabs in the US and the US gov is helping to spo…

Excellent, thank you! I suppose I should have researched more recently before commenting. The fact that this doesn't make front page national news is mind boggling to me.

In addition to the current chip shortage economic concerns, it's also a national security issue. Many of the chips American tech companies depend on are built in Taiwan, and geopolitically that's pretty dicey given China's ambitions. It locks the US into effectively needing to defend Taiwan militarily if it gets invaded, or else the US economy would get crushed.

(I mean, I think we should make sure Taiwan is never invaded and remains independent, but it's also not great to need to commit forces against a rival nuclear superpower if it does get invaded, given that said rival superpower continuously and loudly proclaims that Taiwan is part of its territory.)

Re: The semiconductor bust – still coming?

#54

Post by raxxorraxor »

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…

That could bite them in the back though. The reality is that western nations depend on cheap labor and producing chips domestically isn't feasible. With a unit price of $2.50 or $0.10 for low-powered CPUs you would have to sell billions or trillions of units to make it viable to develop and produce them. But if these prices would rise significantly it could become viable again.

Re: The semiconductor bust – still coming?

#55

Post by inglor_cz »

rhn_mk1 wrote: post #40
barry-cotter wrote: post #35

Earlier quoted context omitted.

> Hoarding or panic buying is an example of bad-faith behavior. Panic buying hurts buyers without means to hoard. Yeah, if you’re not very profitable you won’t be able to afford it. You’re not the best use of the good in question, i.e. the one that makes the most money. Cornering a market in anything is incredibly hard. Doing it motivates others to find substitutes or secure supply. That’s capitalism. If you don’t wa…

The main point of the parent is that free market is not fair. If developing a substitute takes ages, the market will remain awful for that long. Perhaps that's a game you want to play, but some pefer not to.

IDK if "fair" is the right word here. Perhaps the word should be "completely flexible".

Re: The semiconductor bust – still coming?

#56

Post by strogonoff »

barry-cotter wrote: post #52
strogonoff wrote: post #44

Earlier quoted context omitted.

Capitalism (the way I understand it, free market and all) does not imply participating in bad faith. The fact that in the West there are bad-faith players that take advantage of the system does not mean it is normal. See the grocery example. It works for everybody, suppliers, sellers and consumers, as long as no one abuses the system. However, if one does want to go that route, it’s achievable; in a small market a si…

Who is participating in bad faith? If you want long term security of supply pay for it. Suppliers love long term contracts and orders. Buyers usually don’t go for them because it’s cheaper on average not to. No one signed a contract. The market price moved. That’s capitalism. If you want to prevent it happening again you can pay for it, by having a long term contract, stockpiling or multiple suppliers. Many, many mar…

> Who is participating in bad faith?

Hoarders. (In this instance, as per upstream comments, possibly coordinated, possibly by CCP.) There’re fairly illustrative examples in my comment that you are ignoring. You should address them if you object to that idea.

> If you want long term security of supply pay for it.

A single player cannot outbid a state and/or many players acting maliciously in accord.

Re: The semiconductor bust – still coming?

#57

Post by Dunedan »

throwaway4good wrote: post #48

"In TSMC's recent Q1 2022 earnings, 41% of their revenues came from High Performance Computing or HPC - where they put their cloud revenues. Just two years ago it used to be 30%. They also noted that HPC grew 26% quarter over quarter - far faster than almost every other category other than automotive, which is a far smaller part of the overall business." AFAIK TSMC list crypto (that is various chips made specifically…

> AFAIK TSMC list crypto (that is various chips made specifically for proof of work mining) in the HPC category. > > It is not unlikely that market will correct violently at one point.

That shouldn't affect TSMC at all, as their remaining HPC customers would happily use that capacity as well.

Re: The semiconductor bust – still coming?

#58

Post by strogonoff »

rhn_mk1 wrote: post #40
barry-cotter wrote: post #35

Earlier quoted context omitted.

> Hoarding or panic buying is an example of bad-faith behavior. Panic buying hurts buyers without means to hoard. Yeah, if you’re not very profitable you won’t be able to afford it. You’re not the best use of the good in question, i.e. the one that makes the most money. Cornering a market in anything is incredibly hard. Doing it motivates others to find substitutes or secure supply. That’s capitalism. If you don’t wa…

The main point of the parent is that free market is not fair. If developing a substitute takes ages, the market will remain awful for that long. Perhaps that's a game you want to play, but some pefer not to.

I think free market can and should be fair in an ideal world where no one is trying to game the system. While we should strive to achieve that world, in meantime we need regulations that stop such actors. It looks like in this case relevant regulations are missing or not working as intended.

Re: The semiconductor bust – still coming?

#59

Post by bluesquared »

unwind wrote: post #49

I was better at Web Stuff, I would love to have one of those single-purpose sites that tried to show at a glance the status of the semiconductor industry. I mean everybody knows it's really bad, but it's so hard to get a feel for and to see if anything is changing, unless (I guess) you're seriously In The Trenches doing e.g. component sourcing for some boards. I imagine something like https://dowehavechipsyet.com/ (m…

Somewhat. https://octopart.com/ (I'm a hardware guy so take my SWE-speak with a grain of salt)

Like many things in tech, each manufacturer/vendor/distributor does not have the same "API" (if it even exists) to broadcast their stock status.

Here's some links to parts that have been a pain in my side. We have to result to hoarding brokers with 1000x markups to continue production (not my call, I'm the guy with the oscilloscope not the suit...).

https://octopart.com/tps1h100bqpwprq1-texas+instruments-5534...

https://octopart.com/at25df641a-mh-y-renesas-118506301?r=sp#...

Re: The semiconductor bust – still coming?

#60

Post by sct202 »

alimov wrote: post #42
CamperBob2 wrote: post #33

Earlier quoted context omitted.

Did others do the same? Yes, and that's part of the problem. It's not just hoarding by Chinese brokers. There is a massive, unknown, and unknowable shadow inventory of parts sitting on shelves at EMS facilities right now, far in excess of near-term production demands... just as many/most of us had a garage full of toilet paper last year that we are only now working our way through. Our factory rep says it's getting h…

> “There is a massive, unknown, and unknowable shadow inventory of parts sitting on shelves at EMS facilities right now, far in excess of near-term production demands...” And I’m guessing nobody wants to re-sell (at somewhat regular prices) or there is no mechanism to return excess stock of goods to a distributor that can then mark the price up a little to make it worth their time? I don’t know how this works, so ple…

They'll resell overstock to a broker for a slice of that price gouging.
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