Chip shortage explain this to me

[Mokume]

"Chips" covers a lot of territory. There are probably hundreds of semiconductors in a modern vehicle. Some are commodity parts, some are specialized or even custom. The shortages are across the board: chips that you used to be able to buy off the shelf basically anywhere have disappeared, and the lead time for ordering a small run of a specialized chip has pushed into 2022 or later. Some manufacturers have responded to commodity chip shortages by simply redesigning their products to use whatever's available. Carmakers tend to not be that nimble, and the approvals to substitute components would probably take longer than the chip shortage. They can try to deliver cars with missing pieces. That might work if it's something like the radio that needs to be fixed later, probably doesn't work if it's the ABS or airbag controller. But if they go too far down that road the deferred cost of reimbursing dealer labor rates to finish every car they sell will kill them. The carmakers have got themselves into quite a pickle because most of them canceled orders when production slowed during covid, so they ended up at the back of the line when the put new orders in. And it's a long line. And they're in this weird place where they are dependent on semiconductors to make their product, and they're too big to be able to just buy odds and ends here and there, but they're not big enough consumers of semiconductors to make them a top customer of the chipmakers they way a tech company like apple or samsung is--would a chipmaker prioritize orders from apple (buying parts for 200+ million iphones a year) or ford (buying parts for a couple million vehicles a year)?

I can relate to your statement concerning automakers delivering cars with missing pieces:

When I was much younger and worked as a mechanic at a Lincoln/Mercury dealer I was given a job involving a brand new '76 Cougar XR-7, the 351M shook so violently at idle that the hood would not stay raised. Diagnosis revealed that cyl. #7 was completely dead, no compression at all. Pulling the left bank head showed no piston nor connecting rod, they were never installed at all...I joked with the gang that the 7 in XR-7 must mean a 7 piston V8...lol

I've several horror stories concerning new cars, for another time

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[AZRangerDood]

Really cool manufacturing process with some high tech equipment. You can google EUV or DUV Lithography if you’re interested in seeing how it works!

Very cool. Thanks for sharing!

 

[halligan1201]

I just watched an explanation on this process. There's no shortage of labor or decreased production. The plants are operating at near 100% capacity. Normally they run at about 90% to allow for scheduled down time for repairs and maintenance. The issue we are seeing is that many end manufacturers predicted a down turn in sales due to COVID that never really happened. However, they cancelled their orders, so other orders got moved ahead of them. That's why certain products, industries, and companies aren't being impacted as much. Given that the turn around time for a semiconductor takes 12 weeks for the simplest ones, but can take up to 26 weeks for more complex ones. Another 6 weeks to QA and batch test, and then whatever shipping time. Basically an order for a particular customer can take 3-6 months from start of production until order filled.

Your local pizza shop is running at 100% staffing on a Friday night. You originally place an order at noon, planning on grabbing it on your way home but then cancel it. Then at 6pm you realize you do want pizza; you'll be waiting much longer because now you're at the back of the line - the pizza shop is at capacity and simply can't just make more pizzas or make them faster.

 

[RedlandRanger]

I just watched an explanation on this process. There's no shortage of labor or decreased production. The plants are operating at near 100% capacity. Normally they run at about 90% to allow for scheduled down time for repairs and maintenance. The issue we are seeing is that many end manufacturers predicted a down turn in sales due to COVID that never really happened. However, they cancelled their orders, so other orders got moved ahead of them. That's why certain products, industries, and companies aren't being impacted as much. Given that the turn around time for a semiconductor takes 12 weeks for the simplest ones, but can take up to 26 weeks for more complex ones. Another 6 weeks to QA and batch test, and then whatever shipping time. Basically an order for a particular customer can take 3-6 months from start of production until order filled.

Your local pizza shop is running at 100% staffing on a Friday night. You originally place an order at noon, planning on grabbing it on your way home but then cancel it. Then at 6pm you realize you do want pizza; you'll be waiting much longer because now you're at the back of the line - the pizza shop is at capacity and simply can't just make more pizzas or make them faster.

I'm not sure the "decreased production" comment is quite true. Production HAS been decreased due to the fire at one of the plants last year (poster earlier in the thread here). As with many things COVID related, it isn't just one reason - it has kind of been a perfect storm of events to cause significant issues in supply chains - semiconductors being one of them.

 

[halligan1201]

now I am hungry. jerk

anyhoos...only a problem when there is only one pizza shop.
somewhere, out there, you can get a pizza on a moments notice (no guarantee on quality though)

Correct. That's why they've realized it's time to build more pizza shops, er, semiconductor plants. Demand will only ever increase and this has exposed the issue with running so close to capacity all the time. Problem is the plants take 2 years to come online. It'll be late into 2023 before we stop hearing one industry or another being short products due to chip shortages.

 

[VAMike]

Correct. That's why they've realized it's time to build more pizza shops, er, semiconductor plants. Demand will only ever increase and this has exposed the issue with running so close to capacity all the time. Problem is the plants take 2 years to come online. It'll be late into 2023 before we stop hearing one industry or another being short products due to chip shortages.

The semiconductor industry has always been cyclical. Prices get high because of supply issues, then they crash because of oversupply. Over and over, for 50 years. This is an especially bad time that's hitting more industries because of more widespread reliance on semiconductors, but it isn't new. The manufacturing process has such long lead times, and is so capital intensive, I don't expect the cycling to change any time soon without major changes on the production side, the demand side, and in regulation/national priorities, all of which seem unlikely right now.

 

[halligan1201]

The semiconductor industry has always been cyclical. Prices get high because of supply issues, then they crash because of oversupply. Over and over, for 50 years. This is an especially bad time that's hitting more industries because of more widespread reliance on semiconductors, but it isn't new. The manufacturing process has such long lead times, and is so capital intensive, I don't expect the cycling to change any time soon without major changes on the production side, the demand side, and in regulation/national priorities, all of which seem unlikely right now.

Major changes are definitely needed. Some good reads at the semiconductor industry association site on the topic.
https://www.semiconductors.org/chip...conductor-shortage-heres-why-that-takes-time/

 

[RedlandRanger]

The semiconductor industry has always been cyclical. Prices get high because of supply issues, then they crash because of oversupply. Over and over, for 50 years. This is an especially bad time that's hitting more industries because of more widespread reliance on semiconductors, but it isn't new. The manufacturing process has such long lead times, and is so capital intensive, I don't expect the cycling to change any time soon without major changes on the production side, the demand side, and in regulation/national priorities, all of which seem unlikely right now.

We have a lot of Intel Fabs here in Oregon and it seems like every time they build a new one, it is more expensive and takes longer to do. As designs get smaller and smaller the fabs get more complex and more expensive. It now costs billions to build a new fab plant.

 

[Mastodon]

But let’s not forget that chips are just part of the supply chain issue. Other components are delayed too, but just aren’t making the news. The Bronco’s release was delayed because the company that makes the roof panels had shut down for COVID for a bit. There was a shortage on seat foam earlier this year too.

And because trucking industry has such a high turnover (90% or so) and truck driver schools weren’t “essential businesses”, there’s a shortage of truck drivers to deliver products to stores and factories. Which is impacting availability.

Add in the compounding delays at the port (44 ships are waiting to unload) and overall supply chain issues will take a long time to get back to pre-pandemic levels.

https://www.businessinsider.com/shi...in-record-ships-stuck-california-ports-2021-8

 

[janitorjim]

5 reasons why the world is running out of chips - YouTube

 

[D Fresh]

But let’s not forget that chips are just part of the supply chain issue. Other components are delayed too, but just aren’t making the news. The Bronco’s release was delayed because the company that makes the roof panels had shut down for COVID for a bit.

The Bronco hardtop failures have little to nothing to do with a Covid shutdown.

Webastos manufacturing of the top has been a shit show for over a year. They literally can't figure out how to make it right.

 

[Mastodon]

The Bronco hardtop failures have little to nothing to do with a Covid shutdown.

Webastos manufacturing of the top has been a shit show for over a year. They literally can't figure out how to make it right.

I’m not saying they would’ve made a good roof it hadn’t been for Covid, I’m saying the virus made it worse.

Webasto ordered the tooling from a supplier in Wuhan in 2019. As the pandemic spread through China, the tooling was late reaching the factory. Webasto was the first company in Germany to catch the virus, shut down for a couple of weeks in the beginning of 2020, and then banned employees worldwide from traveling to China, which meant once they did get the tooling, they couldn’t do the traveling needed to make it work properly.

https://www.wardsauto.com/vehicles/ford-bronco-roof-issue-recovering-covid

So, tell me again how the virus didn’t affect roof production?

 

[D Fresh]

I’m not saying they would’ve made a good roof it hadn’t been for Covid, I’m saying the virus made it worse.

Webasto ordered the tooling from a supplier in Wuhan in 2019. As the pandemic spread through China, the tooling was late reaching the factory. Webasto was the first company in Germany to catch the virus, shut down for a couple of weeks in the beginning of 2020, and then banned employees worldwide from traveling to China, which meant once they did get the tooling, they couldn’t do the traveling needed to make it work properly.

https://www.wardsauto.com/vehicles/ford-bronco-roof-issue-recovering-covid

So, tell me again how the virus didn’t affect roof production?

Perhaps I didn't state my point very clearly. Of course Covid had an effect. It's had and effect on everything the last 2years or so. The extent to which that effect has been used as an outright cop-out can be be debated, for every industry.

What cannot be debated, however, is that Webasto is a shit supplier with history, long before Covid, of mucking stuff up. Especially at launch. See Jeep forums if you need to. Then you have the fact that Ford admitted to a problem in the manufactacturing process. A process determined before Covid.

Like many things, Covid is just a convenient excuse. One which will continue to be be used by weak individuals/organizations for quite some time.

 

[halligan1201]

Turns out part of the reason automakers are hurting is that they use old tech.
https://www.autoevolution.com/news/...e-tell-them-to-get-with-the-times-170203.html

 

[ScrappyLaptop]

Turns out part of the reason automakers are hurting is that they use old tech.
https://www.autoevolution.com/news/...e-tell-them-to-get-with-the-times-170203.html

This article mentions similar concerns & discrepancies but the real gold is in the comments where insiders of both industries explain why it's not that simple to just move forward to newer chip processes.
https://jalopnik.com/i-asked-experts-why-carmakers-cant-just-transition-to-n-1847739665

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