I found that the chips for a project that I am working on are no longer available and I got the lead time of 13 months, without guarantee. It essentially means that I have to redesign the project using different part which may take me few months and I have no guarantee the other chip I choose will be available.
The problem is, however, that I can see those chips available in their thousands on aliexpress and similar sites for 10x the price. I also read on forums that Chinese entrepreneurs buy all the chips and stockpile them.
Is this some new kind of war?
Those AliExpress chips may not be genuine. Buying from unauthorized distributors has always been risky, and some companies (especially Chinese ones) have been know to stamp blank or generic parts with whatever part number you're looking for. The really tricky vendors will put a few (10-50) genuine parts at the beginning and end of a reel (to pass validation testing), with defective or fake ones in between. Non-genuine parts may also be lower-spec versions of what they are labelled as (like a slower microcontroller or a higher offset op-amp).
Its not war, just a good way to make a lot of money now. You buy cheap and sell absurdly high (10-20x the price). People still buy because they have no other option.
> I also read on forums that Chinese entrepreneurs buy all the chips and stockpile them. Is this some new kind of war?
I suspect it isn't just the Chinese speculating right now.
I do suspect that the Chinese are probably the only place in the world that had rolls of random semiconductors tucked away in various factories not being used. So, some of these are genuine--most are probably fake. Caveat emptor.
However, I'm am totally down with everybody who depends on Always Late Inventory(tm) getting a rude awakening. The problem is that the lesson won't stick.
China def is stockpiling more chips I think. The Huawei situation really brought home to china how the US or others could basically try and cut them off and they are doing a lot of things to reduce that potentially impact (all out on chip mfg, chip orders etc) so having stock may be of benefit to them in that environment.
I had the same thing. 18k available on digikey. I even still had the browser window open, and the next day 0 available. I found arrow had 26 and everyone else zero. I managed to get enough for testing but will have to redesign now, but how to redesign for a chip I know will be available. I guess I need to buy a reel before designing. This sucks tbh
Old-new stock and "unofficial" chips and parts has been a thing for like ever. Now I hear of more "mainstream" projects having to tap into that market but it has always been there.
according to one news outlet, I heard, the chinese have a long history of double ordering chips. Now, the strategy final pays off, as they can continue development. Most businesses don't double order because of the additional costs, now they're hurting more.
> I can see those chips available in their thousands on aliexpress and similar sites for 10x the price. I also read on forums that Chinese entrepreneurs buy all the chips and stockpile them. Is this some new kind of war?
Sadly I would not trust those Chinese chips. This is where 99% of counterfeit chips come from and often they either are sub-par to original specs or they don't function at all.
We have a similar situation - 13 month lead times. In one case we were able to substitute a $1 part for a $150 military version. The other situation can't be fixed so easily: Xilinx FPGAs. Each unit of our product has 120 of them and we are building dozens just for orders this year.
We've already had our assembly house lose $10K of parts through employee theft as well. They still don't know "how it happened" but honestly only a handful of people would know they were valuable and know how to fence them! Probably not minimum wage employees to be honest.
It probably is an angle to the war.
That and shutting down low-tech supply chains for routine things like TP - just so people know, the dominant standard supply chain for paper products is to use US/Canadian and Malay/Indonesian or Brazilian (tropical) wood chips, shipping these to China to make raw paper rolls, then bringing it back to the US to be cut into TP et al.
It's easy to disrupt things without even shutting down the supply chain - MOST JIT (just-in-time) supply chains (which are 99% of all supply chains today) are tuned to accept no more than 5%-10% volume variance so you can shut down supply chains by forcing the variance to 20%-30% without even going to 100% off.
This is part of what happened to TP in 2000; the other part was the fact that commercial and residential TP supply chains can not be mutually substituted - BY LAW.
To that point, this issue is already painful for anyone making electronics, and is going to hurt the small electronics manufacturers more (if you aren't in a position to buy a million parts, good luck getting any priority as things come back on line).
So this seems to be about increased demand for high end components driven by increased IT equipment purchases during the lockdown as people depend on this stuff more. That's the implication from the article.
Meanwhile I'm also reading about chip shortages affecting car manufacturers, and possibly some other industries. The dynamic there seems to be that car makers (and possibly others) cut orders drastically early in the lockdown, which means component makers shut down manufacturing capacity and it's taking a long time to ramp it up and also clear the backlog of orders as demand came back earlier than expected.
So this seems to be two completely different effects going on. I know very little about these industries, but I wouldn't be surprised if there's a meeting of these effects in the middle. High end devices often have some lower end components (peripheral and glue logic on desktop motherboards for example) in addition to the potentially pricier main CPU.
1. Car Manufactures canceled their order (X) for 6 months.
2. Fab sold those capacity to others
3. Demand for All electronics increases because of WFH ( and possibly bitcoin )
4. Demand for Car actually raised during COVID.
5. Now Car Manufacture want X, their original order, another X for their next 6 months, as well as 0.5X where 0.5 was the increase in demand. So total 2.5X
2.5X increase in order to catch up with their production All while other electronics such as iPhone 5G, Tablet, PC are selling record number in recent years.
It also doesn't help when Samsung's yield are failing yet again
Now let's take this even further. Apple is predicted to sell record number of iPhone, Mac, and iPad. TSMC will do preferential treatment to all orders relating to Apple with Apple courting their suppliers. So that uses up those bigger nodes as well. You end up having industry fighting for whatever that is left.
And just like any product or commodities, you have people hoarding them for profits. It is the same with PS5, Switch, Graphics Card or any other with limited quantities and high demand. This will attract interest to trade them and make money. Which add even more strain to supply chain.
From a Supplier perspective, all of a sudden you are looking at a market with seemingly unlimited demand and you have limited supply. This scenario is similar to what happened with DRAM and NAND in 2015 - 2019. Although the cause is different.
> component makers shut down manufacturing capacity and it's taking a long time to ramp it up
Not really. The component manufacturers canceled their fab time contracts with fab companies as they could not afford to hold onto them if their customer (the car manufacturers) were not buying from them. And once they did that fabs just sold the capacity to the next buyer.
So now the component manufacturers only option is to buyout the contract from someone else (really really expensive with current available capacity) or just wait until the contracts expire to get a chance to bid for them again. Also as fab time is auctioned if the shortage still continues then the fab time will be really expensive even then.
Component makers did not shut down manufacturing capacity, they just re-allocated the timeshares formerly set aside for car manufacturers to other customers.
Notice that there's no shortages of Intel CPUs, and few serious shortages of console gaming systems. That's where the manufacturing capacity went.
US-China tech war: China becomes world’s top semiconductor equipment market as Beijing pushes local chip industry
Mainland China topping the list for the first time ever. South Korea is investing a lot more than usual. Taiwan is stable. The US is down.
Will be very interesting how the chip situation will look on the other side of the current shortage. The shortage is all over, not just for high end processes. The high end processes will probably still be done by SK, Taiwan and the US but a lot of the lower end will go to China.
If anybody been watching the second hand semi equipment market, all kinds of opportunistic players from China been scouring the market clean for last 5 years.
Though, there is notion that those are just manoeuvres to get giant tax subsidies from the state. Semiconductor companies in China pay near no tax, even if they have 1 wafer per month fabs.
I mean there was no signs of anything ending anytime soon so not surprising. The real tragedy is the US has let the ability to produce such critical technology lapse and we fall onto almost solely TSMC for chip production.
I'm glad we seem to be ramping that back up but with at least a 5 year lead time I'll be crossing my fingers the entire time that nothing else happens.
Maybe one of the ultra billionaires could make a competitor, but the amount of expertise built up over time in those companies seems insurmountable. Possible maybe, but quite a tall order, people would rather just build a space company it’s easier
Interesting chart. For someone who doesn't follow the industry, does it show current capability, or capability at the time a given node was cutting edge? If the latter it really does show a tremendous winnowing. To what extent is that winnowing attributable to consolidation (M&A) vs dropping out?
The above quip came from TJ Rodgers of AMD/Cypress. It was popularized by Jerry Sanders, CEO of AMD.[1]
There were many fabs back in the day. Now they're mostly EPA Superfund sites in Silicon Valley.
The IC industry has done thru many many boom/bust cycles. This cycle could be one of the worst because fabs are so expensive that everyone has chosen to simply buy their chips from the few remaining "real men" who still have fabs.
I'm a bit confused; the linked article talks about TSMC's profits and makes no mention of the chip shortage or any predictions related to it. Am I missing something?
The strange thing is, it affects so many different chips. In a current project, we use an FPGA (XC7A35T-2CSG324I), an USB controller (CYUSB3014) and a GPS module (MAX M8C) - all of them are now unavailable until end of the year or early next year. During the past few weeks, you could literally watch how stocks dropped to 0 at Farnell, Mouser, Digikey. I'm very concerned about the impact this will have in the coming months.
Damn, at this point I might just wait until zen 4 stuff comes out before replacing my current desktop (circa 2012) since it still seems fine for most stuff.
This is the result of something called just-in-time manufacturing. The geniuses who created this method of manufacturing always thought that there would be no interruption of supply chains, and that we could forever produce only what we could consume at the moment.
Shocking to absolutely no one. When you are the only game in town and everyone wants the latest greatest (high demand), shortages are going to last into the foreseeable future[1].
On the bright side, this might encourage reuse of used/old parts and care about being more efficient with what we currently have, which is a form of innovation on its own
It is interesting to me that if someone were to say "labour shortage" there would be many people arguing whether 'shortages' are real concepts, but if someone were to say "chip shortage", 9 hours later there will be no comments of the sort on the topic.
It appears that the prime determiner of whether something is a shortage or not in the HN community is if it negatively affects tech workers negatively or not.
It looks interesting to me. It am kinda skeptical about it, most of the small chips which are under shortage are small chips, and definitely not made with latest 5nm/7nm node sizes.
Most of this chips can easily manage to fall at 22nm node size, where TSMC is no monopoly.
I think its just a PR stunt by TSMC, to overprice and prebook their production capacity for increased margins.
[+] [-] varispeed|5 years ago|reply
[+] [-] nickff|5 years ago|reply
[+] [-] pojzon|5 years ago|reply
[+] [-] bsder|5 years ago|reply
I suspect it isn't just the Chinese speculating right now.
I do suspect that the Chinese are probably the only place in the world that had rolls of random semiconductors tucked away in various factories not being used. So, some of these are genuine--most are probably fake. Caveat emptor.
However, I'm am totally down with everybody who depends on Always Late Inventory(tm) getting a rude awakening. The problem is that the lesson won't stick.
[+] [-] latch|5 years ago|reply
People in Bolivia and Peru struggle to afford local food (e.g., Quinoa) because they're outbid (by money, but certainly not necessity).
[+] [-] tkinom|5 years ago|reply
[+] [-] temp667|5 years ago|reply
[+] [-] Badfood|5 years ago|reply
[+] [-] foobarian|5 years ago|reply
[+] [-] pvarangot|5 years ago|reply
[+] [-] thorwasdfasdf|5 years ago|reply
[+] [-] cbozeman|5 years ago|reply
No, this is just good old-fashioned capitalism.
[+] [-] _wmhc|5 years ago|reply
No, that's capitalism.
[+] [-] coliveira|5 years ago|reply
No, this is called capitalism! Everyone should be proud.
[+] [-] throwaway4good|5 years ago|reply
[+] [-] xyzzy21|5 years ago|reply
We have a similar situation - 13 month lead times. In one case we were able to substitute a $1 part for a $150 military version. The other situation can't be fixed so easily: Xilinx FPGAs. Each unit of our product has 120 of them and we are building dozens just for orders this year.
We've already had our assembly house lose $10K of parts through employee theft as well. They still don't know "how it happened" but honestly only a handful of people would know they were valuable and know how to fence them! Probably not minimum wage employees to be honest.
It probably is an angle to the war.
That and shutting down low-tech supply chains for routine things like TP - just so people know, the dominant standard supply chain for paper products is to use US/Canadian and Malay/Indonesian or Brazilian (tropical) wood chips, shipping these to China to make raw paper rolls, then bringing it back to the US to be cut into TP et al.
It's easy to disrupt things without even shutting down the supply chain - MOST JIT (just-in-time) supply chains (which are 99% of all supply chains today) are tuned to accept no more than 5%-10% volume variance so you can shut down supply chains by forcing the variance to 20%-30% without even going to 100% off.
This is part of what happened to TP in 2000; the other part was the fact that commercial and residential TP supply chains can not be mutually substituted - BY LAW.
[+] [-] egeozcan|5 years ago|reply
[+] [-] InitialLastName|5 years ago|reply
https://www.theverge.com/2021/4/15/22385240/tsmc-chip-shorta...
To that point, this issue is already painful for anyone making electronics, and is going to hurt the small electronics manufacturers more (if you aren't in a position to buy a million parts, good luck getting any priority as things come back on line).
[+] [-] simonh|5 years ago|reply
Meanwhile I'm also reading about chip shortages affecting car manufacturers, and possibly some other industries. The dynamic there seems to be that car makers (and possibly others) cut orders drastically early in the lockdown, which means component makers shut down manufacturing capacity and it's taking a long time to ramp it up and also clear the backlog of orders as demand came back earlier than expected.
So this seems to be two completely different effects going on. I know very little about these industries, but I wouldn't be surprised if there's a meeting of these effects in the middle. High end devices often have some lower end components (peripheral and glue logic on desktop motherboards for example) in addition to the potentially pricier main CPU.
Is that the story?
[+] [-] ksec|5 years ago|reply
1. Car Manufactures canceled their order (X) for 6 months.
2. Fab sold those capacity to others
3. Demand for All electronics increases because of WFH ( and possibly bitcoin )
4. Demand for Car actually raised during COVID.
5. Now Car Manufacture want X, their original order, another X for their next 6 months, as well as 0.5X where 0.5 was the increase in demand. So total 2.5X
2.5X increase in order to catch up with their production All while other electronics such as iPhone 5G, Tablet, PC are selling record number in recent years.
It also doesn't help when Samsung's yield are failing yet again
Now let's take this even further. Apple is predicted to sell record number of iPhone, Mac, and iPad. TSMC will do preferential treatment to all orders relating to Apple with Apple courting their suppliers. So that uses up those bigger nodes as well. You end up having industry fighting for whatever that is left.
And just like any product or commodities, you have people hoarding them for profits. It is the same with PS5, Switch, Graphics Card or any other with limited quantities and high demand. This will attract interest to trade them and make money. Which add even more strain to supply chain.
From a Supplier perspective, all of a sudden you are looking at a market with seemingly unlimited demand and you have limited supply. This scenario is similar to what happened with DRAM and NAND in 2015 - 2019. Although the cause is different.
[+] [-] doikor|5 years ago|reply
Not really. The component manufacturers canceled their fab time contracts with fab companies as they could not afford to hold onto them if their customer (the car manufacturers) were not buying from them. And once they did that fabs just sold the capacity to the next buyer.
So now the component manufacturers only option is to buyout the contract from someone else (really really expensive with current available capacity) or just wait until the contracts expire to get a chance to bid for them again. Also as fab time is auctioned if the shortage still continues then the fab time will be really expensive even then.
[+] [-] vkou|5 years ago|reply
Notice that there's no shortages of Intel CPUs, and few serious shortages of console gaming systems. That's where the manufacturing capacity went.
[+] [-] throwaway4good|5 years ago|reply
https://www.scmp.com/tech/tech-trends/article/3129611/us-chi...
US-China tech war: China becomes world’s top semiconductor equipment market as Beijing pushes local chip industry
Mainland China topping the list for the first time ever. South Korea is investing a lot more than usual. Taiwan is stable. The US is down.
Will be very interesting how the chip situation will look on the other side of the current shortage. The shortage is all over, not just for high end processes. The high end processes will probably still be done by SK, Taiwan and the US but a lot of the lower end will go to China.
[+] [-] baybal2|5 years ago|reply
One of those opportunistic players hoping on becoming a n-th tier fab player is for example Galanz — a kitchenware company: https://twitter.com/ogawa_tter/status/1310852850033946624
Though, there is notion that those are just manoeuvres to get giant tax subsidies from the state. Semiconductor companies in China pay near no tax, even if they have 1 wafer per month fabs.
[+] [-] Grimm1|5 years ago|reply
I'm glad we seem to be ramping that back up but with at least a 5 year lead time I'll be crossing my fingers the entire time that nothing else happens.
[+] [-] RicoElectrico|5 years ago|reply
https://en.wikichip.org/wiki/technology_node#Leading_edge_tr...
[+] [-] ip26|5 years ago|reply
[+] [-] taurath|5 years ago|reply
[+] [-] mlinksva|5 years ago|reply
[+] [-] jagger27|5 years ago|reply
[+] [-] KptMarchewa|5 years ago|reply
[+] [-] PhantomGremlin|5 years ago|reply
The above quip came from TJ Rodgers of AMD/Cypress. It was popularized by Jerry Sanders, CEO of AMD.[1]
There were many fabs back in the day. Now they're mostly EPA Superfund sites in Silicon Valley.
The IC industry has done thru many many boom/bust cycles. This cycle could be one of the worst because fabs are so expensive that everyone has chosen to simply buy their chips from the few remaining "real men" who still have fabs.
Not entirely unforeseen.
[1] https://semiwiki.com/john-east/273760-real-men-have-fabs-jer...
[+] [-] sand500|5 years ago|reply
https://en.wikipedia.org/wiki/Moore%27s_second_law
[+] [-] ericwood|5 years ago|reply
[+] [-] tosh|5 years ago|reply
https://www.reuters.com/world/china/tsmcs-q1-profit-rises-19...
[+] [-] justinzollars|5 years ago|reply
[+] [-] aschweiz77|5 years ago|reply
[+] [-] aschweiz77|5 years ago|reply
[+] [-] a9h74j|5 years ago|reply
[+] [-] bogwog|5 years ago|reply
> TSMC's Q1 profit up 19%, beats market estimates
And says nothing about a chip shortage
[+] [-] fest|5 years ago|reply
[+] [-] seiferteric|5 years ago|reply
[+] [-] ArkanExplorer|5 years ago|reply
Could blocking the fiat inroads, and causing a price fall, be a solution to this chip shortage?
[+] [-] coliveira|5 years ago|reply
[+] [-] Yoofie|5 years ago|reply
[1] - Foreseeable future = multiple years on end
[+] [-] e9|5 years ago|reply
[+] [-] renewiltord|5 years ago|reply
It appears that the prime determiner of whether something is a shortage or not in the HN community is if it negatively affects tech workers negatively or not.
[+] [-] j10c|5 years ago|reply
I think its just a PR stunt by TSMC, to overprice and prebook their production capacity for increased margins.
PS: It is my personal opinion.
[+] [-] cm2187|5 years ago|reply
[+] [-] claaams|5 years ago|reply