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A Good Explanation of the Semiconductor Shortage
Lawrence Peterson's Battleswarm Blog ^ | 6 Apr, 2021 | Lawrence Peterson

Posted on 04/07/2021 8:57:20 AM PDT by MtnClimber

A semiconductor shortage has been plaguing the automobile industry for several months, and this piece explains why:

To understand why the $450 billion semiconductor industry has lurched into crisis, a helpful place to start is a one-dollar part called a display driver.

Correction: The semiconductor industry itself isn’t in crisis, it’s making money hand-over-fist right now. It’s certain industries relying on semiconductors that have the problem.

Hundreds of different kinds of chips make up the global silicon industry, with the flashiest ones from Qualcomm Inc. and Intel Corp. going for $100 apiece to more than $1,000. Those run powerful computers or the shiny smartphone in your pocket. A display driver is mundane by contrast: Its sole purpose is to convey basic instructions for illuminating the screen on your phone, monitor or navigation system.

The trouble for the chip industry — and increasingly companies beyond tech, like automakers — is that there aren’t enough display drivers to go around. Firms that make them can’t keep up with surging demand so prices are spiking. That’s contributing to short supplies and increasing costs for liquid crystal display panels, essential components for making televisions and laptops, as well as cars, airplanes and high-end refrigerators.

“It’s not like you can just make do. If you have everything else, but you don’t have a display driver, then you can’t build your product,” says Stacy Rasgon, who covers the semiconductor industry for Sanford C. Bernstein.

Now the crunch in a handful of such seemingly insignificant parts — power management chips are also in short supply, for example — is cascading through the global economy. Automakers like Ford Motor Co., Nissan Motor Co. and Volkswagen AG have already scaled back production, leading to estimates for more than $60 billion in lost revenue for the industry this year.

(Excerpt) Read more at battleswarmblog.com ...


TOPICS: Computers/Internet
KEYWORDS: economics; technology
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1 posted on 04/07/2021 8:57:20 AM PDT by MtnClimber
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To: MtnClimber

It is mainly the LCD Display Driver Chips and the Power Management chips.


2 posted on 04/07/2021 8:57:31 AM PDT by MtnClimber (For photos of Colorado scenery and wildlife, click on my screen name for my FR home page.)
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To: MtnClimber

China meddling?


3 posted on 04/07/2021 9:00:37 AM PDT by dangus
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To: MtnClimber

I didn’t know there was one.


4 posted on 04/07/2021 9:01:51 AM PDT by cuban leaf (We killed our economy and damaged our culture. In 2021 we will pine for the salad days of 2020.)
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To: MtnClimber

But, but I just got my stimulus check. I was going to buy a bunch of stuff with display drivers! Now what?!

Well, there’s always ammo...


5 posted on 04/07/2021 9:04:12 AM PDT by cuban leaf (We killed our economy and damaged our culture. In 2021 we will pine for the salad days of 2020.)
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To: MtnClimber

TL/DR: The accursed Just-in-Time business process hit even tiny, little microchips. So when the anticipated economic collapse of Covid-19 DIDN’T happen, no-one had any manufacturing capacity OR inventory to meet demand.

JIT, the grasshopper’s business plan.


6 posted on 04/07/2021 9:10:30 AM PDT by dangus
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To: MtnClimber

thanks. That was interesting.

Once again, its all about the short-term financial view I see all over corporate America. I have no doubt automakers squeezed like hell on pricing for the low-end chips. In the past, chipmakers were willing to run them as it kept plants busy and provided some revenue - but as the article points out, no one is expanding or investing in these low-end products.

As soon as the situation changed, the built-up problems revealed themselves.

I see the same thing in my industry. Everyone was happy to buy cheap inputs from China, even as they became more dependent on them and their choices narrowed. I warned buyers. Trump’s duties were the first warning how dependent they had become. Then came Covid.

No one gets blamed, and no one cares though - because those people who made those decisions 5 or more years ago are all gone. Moved on, fired, merged away, etc….


7 posted on 04/07/2021 9:12:01 AM PDT by PGR88
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To: dangus

it is the gamer apes.

video cards used to be just for that,
now they house AI and more.

just look at the paucity of video boards
where you got your last computer.


8 posted on 04/07/2021 9:18:36 AM PDT by Diogenesis (Tuitio Fidei et Obsequium Pauperum)
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To: MtnClimber

In the 80’s Ford was very reluctant to incorporate
Intel parts in their controllers. Req’d complete second source agreements with AMD, etc. Times have changed.


9 posted on 04/07/2021 9:22:58 AM PDT by sasquatch
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To: MtnClimber

What about the ketchup shortage? 😏


10 posted on 04/07/2021 9:24:42 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: MtnClimber

as china has learned,, you just cant poop these custom circuits out as easy as we make it seem ..


11 posted on 04/07/2021 9:48:47 AM PDT by ßuddaßudd ((>> M A G A << "What the hell kind of country is this if I can only hate a man if he's white?")
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To: dangus
The accursed Just-in-Time business process hit even tiny, little microchips.

It's stylish now to criticize J-I-T, but the shortages are the fault -- as usual -- of the government's actions which shut down the tourist, cruise, and aviation industries thus switching consumer demand to goods.

Just in time works just fine on its own.

12 posted on 04/07/2021 10:00:05 AM PDT by BfloGuy ( Even the opponents of Socialism are dominated by socialist ideas.)
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To: dangus

In my industry the workers refer to it as “ Just behind”


13 posted on 04/07/2021 10:05:11 AM PDT by HP8753 (Live Free!!!! .............or don't. )
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To: ßuddaßudd

The chip fabrication technology just went through an upgrade from 11 nanometer to 7 nanometer feature size. The smaller size means faster speed and lower power. Much of the 5G products are depending on the 7nm as are the new memory devices for servers. Intel does their own fabrication and were behind the curve at 12 nm and they could not get their 7 nm processes to work. Taiwan Semiconductor Manufacturing (TSM) is the largest and probably the most advanced commercial chip manufacturer in the world. Many chip designer companies have their chip fab done by TSM. I would guess Intel will go to TSM as an interim work around. China tried to build a chip fab plant and it was a total failure.


14 posted on 04/07/2021 10:08:20 AM PDT by MtnClimber (For photos of Colorado scenery and wildlife, click on my screen name for my FR home page.)
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To: sasquatch

Trump was trying to convince Taiwan Semiconductor Manufacturing to build a second facility in the USA to mitigate the impact if there is a China invasion. I don’t know the status if TSM will do that.


15 posted on 04/07/2021 10:20:03 AM PDT by MtnClimber (For photos of Colorado scenery and wildlife, click on my screen name for my FR home page.)
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To: dangus

Yup


16 posted on 04/07/2021 10:21:21 AM PDT by Nifster (I see puppy dogs in the clouds)
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To: MtnClimber

Taiwan Semiconductor Is Expanding Manufacturing in the U.S.

The Trump administration scores a victory.

The world's largest contract chipmaker, Taiwan Semiconductor (NYSE:TSM), announced last week that is expanding its manufacturing footprint within the U.S., in line with rumors that surfaced in recent days. The new facility will be built in Arizona, and TSMC says it received support for the project from the U.S. federal government as well as the State of Arizona.

Evan Niu, CFA (TMFNewCow) May 17, 2020 at 12:00PM

The Motley Fool/a>

17 posted on 04/07/2021 10:31:45 AM PDT by MtnClimber (For photos of Colorado scenery and wildlife, click on my screen name for my FR home page.)
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To: MtnClimber

dang, you know it all. my employer is well positioned in this industry.. hi boss!


18 posted on 04/07/2021 10:55:50 AM PDT by ßuddaßudd ((>> ☼ << "What the hell kind of country is this if I can only hate a man if he's white?")
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To: BfloGuy

>> Just in time works just fine on its own. <<

... providing nothing bad happens ever. The Japanese earthquake and tsunami, for instance, caused $14 billion in damages. The economic gridlock caused by the just-in-time business processes cost another $220 billion. In an earlier era, just-in-time was called eating your seed crop.


19 posted on 04/07/2021 11:20:24 AM PDT by dangus
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To: ßuddaßudd

I used to have work involvement with projects that had chip fabrication at US Trusted Foundries.


20 posted on 04/07/2021 11:36:31 AM PDT by MtnClimber (For photos of Colorado scenery and wildlife, click on my screen name for my FR home page.)
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