When is the Semi Conductor Chip Shortage going to end?
Discussion
Hey everyone,
What are your thoughts on this semi conductor chip shortage, clearly been going on for 2 years now I would have thought it would be resolved by now, was speaking to a colleague about this & he mentioned that he went to place order for a car & was told he couldn't spec certain things on the car due to the chip shortage, there could also be a delay in when the car arrives!
How hard is it to produce this little chip which controls literally everything, I did read that a factory was burnt down etc but that was 2 years ago!
One problem is that the Fabs that are trying to expand to feed the demand can’t get hold of the required, very complex equipment, due to the chip shortage. The lead time on new equipment is currently off the scale as is the lead times for some parts, the lockdown in China is still having a serious impact.
Where I work we were trying to push an equipment supplier to pull in a lead time but were told they couldn’t due to the chip shortage. When told they should pressurise the chip supplier they responded that we were the chip supplier!
Where I work we were trying to push an equipment supplier to pull in a lead time but were told they couldn’t due to the chip shortage. When told they should pressurise the chip supplier they responded that we were the chip supplier!
Add into the mix one of the factories making them burnt down in China, add in supply chain issues and staff shortages across the world in ports etc.
Add in demand that these factories don’t just make chips for cars, I work in electrical fire protection, we have trouble getting hold of fire alarm panels due to chips, now can’t get smoke detectors, nor sounders.
The weird one, there’s a global shortage of the red pigment they use to make plastic call points (the red thing next to the door) so you can’t get them now
Add to the mix that those call points are all made by 1 company (KAC) but are used by at least 10 different system suppliers.
Add in demand that these factories don’t just make chips for cars, I work in electrical fire protection, we have trouble getting hold of fire alarm panels due to chips, now can’t get smoke detectors, nor sounders.
The weird one, there’s a global shortage of the red pigment they use to make plastic call points (the red thing next to the door) so you can’t get them now
Add to the mix that those call points are all made by 1 company (KAC) but are used by at least 10 different system suppliers.
It will be at least 18 months before any stability begins to return to the market (barring any new setbacks).
There is now relaxation on lead times for some surface mount capacitors and connectors following a softening of the consumer electronics market, but advanced semi conductor supply has many moving parts and frankly the world was caught out by all the challenges.
The auto firms relatively low demand coupled with their intense requirements regards keeping margins low etc have really exasperated their position in all this, they wanted and created cheap supply chain solutions, not robust or sustainable ones…..
There is now relaxation on lead times for some surface mount capacitors and connectors following a softening of the consumer electronics market, but advanced semi conductor supply has many moving parts and frankly the world was caught out by all the challenges.
The auto firms relatively low demand coupled with their intense requirements regards keeping margins low etc have really exasperated their position in all this, they wanted and created cheap supply chain solutions, not robust or sustainable ones…..
With such a critical component, you'd like to think that major economies would consider the long term strategic benefit of building capability at home.
Skilled STEM jobs, supply chain resilience, high value manufacturing, etc. What's not to like
Boris's government allowed the sale of the UK plant (Newport Wafer Fab) to a Chinese firm for pennies.
Skilled STEM jobs, supply chain resilience, high value manufacturing, etc. What's not to like
Boris's government allowed the sale of the UK plant (Newport Wafer Fab) to a Chinese firm for pennies.
Not directly car related, but the company I work for buys standard 'off-the-shelf' industrial PCs.
For the batch we ordered earlier this month we're being told delivery will be end of October at the earliest due to supply issues with the microchips.
Therefore a 4 month lead-time minimum.
For the batch we ordered earlier this month we're being told delivery will be end of October at the earliest due to supply issues with the microchips.
Therefore a 4 month lead-time minimum.
RDM said:
One problem is that the Fabs that are trying to expand to feed the demand can’t get hold of the required, very complex equipment, due to the chip shortage. The lead time on new equipment is currently off the scale as is the lead times for some parts, the lockdown in China is still having a serious impact.
Where I work we were trying to push an equipment supplier to pull in a lead time but were told they couldn’t due to the chip shortage. When told they should pressurise the chip supplier they responded that we were the chip supplier!
I assume making such chips abroad would cost pennies but if manufacturers are struggling why not produce here in the UK & then supply etc to everyone else, I thought china was out of lockdown & covid was finished etc guess not!Where I work we were trying to push an equipment supplier to pull in a lead time but were told they couldn’t due to the chip shortage. When told they should pressurise the chip supplier they responded that we were the chip supplier!
The best date I can find is around the end of 2023. This is solely based on the expected delivery date for one of the most popular microcontroller chips, the Atmega328P
https://www.mouser.com/c/?q=atmega328
Other chips may be the same.
https://www.mouser.com/c/?q=atmega328
Other chips may be the same.
28Kapital said:
I assume making such chips abroad would cost pennies but if manufacturers are struggling why not produce here in the UK & then supply etc to everyone else, I thought china was out of lockdown & covid was finished etc guess not!
I only have a very basic understanding of the process but just to give you a small idea of the complexities involved:1) you can't exactly buy a foundry and start operating independently as the tech for the machines is proprietary to the chip manufacturers running them (of which I think there are only 3 big manufacturers making the modern chips to the highest specifications)
Even if you could set up some kind of franchise deal to get acces to equipment you'd need a few years to get the plant operating just to have a stable process with quality output
2) lots of knowhow required
so you have to convince existing people to come work abroad at huge expense to get the factory running while securing an excess of engineering students to get specialized into electronics production
3) no cheap labour in the UK
Even in Taiwan the chips get assembled & packaged in a cheaper labour country . it requires a supply chain of a higher complexity to peeling shrimps, where they get fished in the UK, put on a plane to Morocco to peel & package them and then back on the plane to the UK to sell
Intel is in the process of setting up their own factories in the EU & US, but they're squeezing governments for maximal grants. The US is voting a grant of 52 billion $ directly for fabs and another 100 billion $ to expand research projects & startups. One Intel fab in Germany will be costing 17 billion to Intel and will be receiving another 6.8 billion € from the European Union.
28Kapital said:
I assume making such chips abroad would cost pennies but if manufacturers are struggling why not produce here in the UK & then supply etc to everyone else, I thought china was out of lockdown & covid was finished etc guess not!
There are several fabs in the U.K. just not even close to the size of the big boys.Intel are building new foundries.
https://www.fierceelectronics.com/electronics/inte...
https://www.azcentral.com/story/money/business/job...
ST and Global are building one in France (Global make the AMD chips)
https://www.networkworld.com/article/3666589/stmic...
And not surprisingly politics has reared it's ugly head, which will probably slow everything down here in the US.
https://www.theguardian.com/commentisfree/2022/jul...
https://www.fierceelectronics.com/electronics/inte...
https://www.azcentral.com/story/money/business/job...
ST and Global are building one in France (Global make the AMD chips)
https://www.networkworld.com/article/3666589/stmic...
And not surprisingly politics has reared it's ugly head, which will probably slow everything down here in the US.
https://www.theguardian.com/commentisfree/2022/jul...
28Kapital said:
I assume making such chips abroad would cost pennies but if manufacturers are struggling why not produce here in the UK & then supply etc to everyone else, I thought china was out of lockdown & covid was finished etc guess not!
I only know some of the tech as I use it for other manufacturing. Plasma etching is used to make some of the tracks, only a few microns deep or less. There are multiple layers of different materials all stacked and etched and precisely aligned. Each etching stage just be calibrated to the machine that does it, it won't always, you can't just substitute another machine. The latest processors are getting down to 2nm track width. You're hair is about 50um wide. That's over 1000x wider. Dirt control is crucial. All of which means seeing this stuff up isn't quick even if you have the kit....Firstly the term semiconductor chip disguises the fact that there are 10's of thousands of different designs used across all applications.
They all have to be individually fabricated, tested, packaged tested again, then distributed. Typically the design-in time for automotive applications is several years and often they may be single sourced (only one supplier). So if one cannot be supplied then there is no solution. Lead time assuming fab capacity is about 3 months.
Pandemic arrives and all auto manufacturers stop building cars. They put all orders for parts on hold. They don't hold stock, as they operate JIT deliveries.
In the meantime demand for other products explodes. pC's TV etc, so the ICs for them get ordered, and fill the lines.
Eventually auto tries to restart building cars but has no parts ordered in the pipeline and semiconductor manufacturing is compromised by then. Booking capacity is a complex decision for semiconductor manufacturers and they are trying to please many customers. Automotive is probably the most demanding with quality and supply agreements, so won't necessarily be the best route to the most profit for the semiconductor manufacturer.
Think about what is electronic in the modern car and you will realise the size and complexity of the electronic system. All the way from the key,to the brake lights. The EMC is the tip of the iceberg and represents perhaps 10% of the electronic system.
They all have to be individually fabricated, tested, packaged tested again, then distributed. Typically the design-in time for automotive applications is several years and often they may be single sourced (only one supplier). So if one cannot be supplied then there is no solution. Lead time assuming fab capacity is about 3 months.
Pandemic arrives and all auto manufacturers stop building cars. They put all orders for parts on hold. They don't hold stock, as they operate JIT deliveries.
In the meantime demand for other products explodes. pC's TV etc, so the ICs for them get ordered, and fill the lines.
Eventually auto tries to restart building cars but has no parts ordered in the pipeline and semiconductor manufacturing is compromised by then. Booking capacity is a complex decision for semiconductor manufacturers and they are trying to please many customers. Automotive is probably the most demanding with quality and supply agreements, so won't necessarily be the best route to the most profit for the semiconductor manufacturer.
Think about what is electronic in the modern car and you will realise the size and complexity of the electronic system. All the way from the key,to the brake lights. The EMC is the tip of the iceberg and represents perhaps 10% of the electronic system.
Was quoted 9 months from order to delivery last weekend by a Ford main dealer for a Puma.
Plus, a couple of options (powered tailgate was one) can’t be ordered at the moment due to the chip shortage.
Powered tailgates aren’t essential, but 9 months wait time for a fairly run-of-the-mill car? Mental.
Plus, a couple of options (powered tailgate was one) can’t be ordered at the moment due to the chip shortage.
Powered tailgates aren’t essential, but 9 months wait time for a fairly run-of-the-mill car? Mental.
911hope said:
Firstly the term semiconductor chip disguises the fact that there are 10's of thousands of different designs used across all applications.
They all have to be individually fabricated, tested, packaged tested again, then distributed. Typically the design-in time for automotive applications is several years and often they may be single sourced (only one supplier). So if one cannot be supplied then there is no solution. Lead time assuming fab capacity is about 3 months.
Pandemic arrives and all auto manufacturers stop building cars. They put all orders for parts on hold. They don't hold stock, as they operate JIT deliveries.
In the meantime demand for other products explodes. pC's TV etc, so the ICs for them get ordered, and fill the lines.
Eventually auto tries to restart building cars but has no parts ordered in the pipeline and semiconductor manufacturing is compromised by then. Booking capacity is a complex decision for semiconductor manufacturers and they are trying to please many customers. Automotive is probably the most demanding with quality and supply agreements, so won't necessarily be the best route to the most profit for the semiconductor manufacturer.
Think about what is electronic in the modern car and you will realise the size and complexity of the electronic system. All the way from the key,to the brake lights. The EMC is the tip of the iceberg and represents perhaps 10% of the electronic system.
Agree.They all have to be individually fabricated, tested, packaged tested again, then distributed. Typically the design-in time for automotive applications is several years and often they may be single sourced (only one supplier). So if one cannot be supplied then there is no solution. Lead time assuming fab capacity is about 3 months.
Pandemic arrives and all auto manufacturers stop building cars. They put all orders for parts on hold. They don't hold stock, as they operate JIT deliveries.
In the meantime demand for other products explodes. pC's TV etc, so the ICs for them get ordered, and fill the lines.
Eventually auto tries to restart building cars but has no parts ordered in the pipeline and semiconductor manufacturing is compromised by then. Booking capacity is a complex decision for semiconductor manufacturers and they are trying to please many customers. Automotive is probably the most demanding with quality and supply agreements, so won't necessarily be the best route to the most profit for the semiconductor manufacturer.
Think about what is electronic in the modern car and you will realise the size and complexity of the electronic system. All the way from the key,to the brake lights. The EMC is the tip of the iceberg and represents perhaps 10% of the electronic system.
What also doesn't help, is that automotive typically takes older technology chips - especially for safety-critical functions. Covid happens, automotive customers all declare force majeure, and semiconductor Tier2/3 suppliers shutdown the "old tech" production lines. Demand is spiking for consumer electronics, so "new tech" lines to feed this demand are brought on-line to replace the automotive stuff - which can be done quickly because they're non-automotive non-safety critical, so much less hoops to jump through from quality assurance etc.
To fulfil automotive demand means building new manufacturing lines which means overcoming a fair amount of inertia. I was told by someone in the industry that this is typically a 24-month timeline - hence why most suppliers are quoting end of Q4 2023 before things are settled again.
tribbles said:
This was a component on Farnell in December last year - luckily, not one I needed at the time.
I checked a few months later, and it had calmed down a bit. It was mid-2023.
Edited to fix some 4AM typos!
I think you have found a website error. 5 years lead time!!I checked a few months later, and it had calmed down a bit. It was mid-2023.
Edited to fix some 4AM typos!
Edited by tribbles on Monday 25th July 07:02
I can advise auto manufacturers don't buy from Farnell. In fact they buy whole sub-systems from dedicated manufacturers.
The supply chain is long broad and complex. It was completely emptied as the industry shut down.
911hope said:
I think you have found a website error. 5 years lead time!!
I can advise auto manufacturers don't buy from Farnell. In fact they buy whole sub-systems from dedicated manufacturers.
The supply chain is long broad and complex. It was completely emptied as the industry shut down.
Might've been an error, but everything else was July 2023.I can advise auto manufacturers don't buy from Farnell. In fact they buy whole sub-systems from dedicated manufacturers.
The supply chain is long broad and complex. It was completely emptied as the industry shut down.
I know they'll probably use some supply chain provider who'll look at the quantities and timescales involved, and they'll be unlikely to use Farnell, but if they happen to have stock of anything that's cheaper than the rest, then they could use them...
In any case, Farnell probably will be towards the end of the priority list for suppliers to supply.
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