Force-1

Chip-shortage 'crisis' halts car-company output
BBC, 18 Jan 21

Audi is having to slow production because of a computer-chip shortage it is calling a "crisis upon a crisis".

Boss Markus Duesmann said it was now aiming to make 10,000 fewer cars in the first quarter of the year and putting more than 10,000 workers on furlough.

Its parent company, Volkswagen, announced its own go-slow due to a lack of chips last week, alongside rivals such as Honda.

Mr Duesmann told the Financial Times carmakers had been caught by surprise. After a poor start to 2020 for new car sales, manufacturers cut their orders from the Chinese factories making computer chips.

But then, at the end of the year, "everybody was quite surprised by the strength of the market", Mr Duesmann said.

However, ordering new chips is not simple.

CCS Insight analyst Geoff Blaber said: "Semiconductors have a broad range of applications but a very limited pool of companies capable of manufacturing the silicon.

"Demand is high, and supply is tight" and any sudden needs "can prove very difficult to accommodate".

"Modern cars are becoming computers on wheels, with an abundance of silicon required to control everything from the infotainment system to camera, radar and lidar," he said.
The demand from carmakers "competes for manufacturing capacity with smartphones, servers and a host of other segments".

And a boom in the market for devices such as PCs and new game consoles was making it doubly difficult to book manufacturing time.

The shortages have seen Mercedes-maker Daimler, Fiat, Ford, Honda, Nissan, Subaru and Toyota all reportedly suspend production for days or weeks at a time.

And German car-parts company Continental described "largescale supply shortages", with lead times of six to nine months, adding bottlenecks were expected to continue "well into 2021, causing major disruptions".

https://www.bbc.com/news/technology-55704936

m444

There has been an IC shortage for sometime now. It can take 3-6 months to ramp up IC production when unexpected surges in demand occur. It can take a year or more to transfer products to other Fabs. Assembly, Packaging and Test can also run into capacity issues as the product mix shifts or products ramp up.

>> A Massive Chip Shortage Is Hitting the Entire Semiconductor Industry, Dec 21, 2020: https://www.extremetech.com/computin...uctor-industry

NVIDIA GeForce RTX 30 facing shortages due to silicon, substrate and component supply issues, Dec 3 2020: https://videocardz.com/newz/nvidia-g...-supply-issues

Chinese Auto Chip Suppliers to Jack Prices Amid Shortage, Dec 07 2020: https://www.yicaiglobal.com/news/chi...-amid-shortage

Volkswagen faces massive chip shortages, Dec 21, 2020 : https://www.eenewsautomotive.com/new...chip-shortages

Apple Faces Shortages in Power Chips for iPhone 12, November 05 2020: https://www.bloombergquint.com/techn...-for-iphone-12

BostonS5sb

Anyone into investing aside from your company retirements? Wife and I just got into the game with a brokerage account to etrade idle cash, having a lot of fun and seeing nice returns.....This thread inspired me to think about getting into some chip maker funds.

https://www.investopedia.com/article...onductor-etfs/

JD15

I invest and I would be concerned about buying in at the top of the market. I have investments in a few semiconductor companies and they are already trading at all-time highs. The market's behavior over the past few months has been difficult to rationalize and I am taking a fairly conservative approach for now.

BostonS5sb

Agreed. I'm going to dip toe into the SMH ETF rather than an individual stock...If there is any significant pullback or correction I'll double down. Predictions are for more growth in 2021 than 2020 which was already strong for this sector. Of course we all know the predictions and analysts can be worthless when real events have a say. Nevertheless this global demand crunch seems to be good for the industry to me.

m444

It may be a momentum "investing" gamble. The SMH price has gone up a lot lately.

18A5SB

https://www.autoblog.com/2021/01/18/...ge-automotive/
https://www.nasdaq.com/articles/focu...ort-2021-01-15
https://www.reuters.com/article/us-a...-idUSKBN29K0GA

It will probably a matter of time when auto production in US will also be affected with layoffs. Hope it's not so.

JD15

^
Interesting that SMIC, one of the companies mentioned in the article, was started with processes stolen from TSMC.

18A5SB

Cost averaging works well in up and down markets. Specially in a market going up waiting for a correction one may miss out on the gains. I know from personal experience missed out on the rally after the March crash.

18A5SB

In technology world with complicated manufacturing processes it is difficult to separate stealing from using similar established processes for certain similar steps. Claims of stealing in these cases should be taken with a grain of salt, though politicians and nontechnical journalists for the ears and eyeballs of average people.