Semi-conducted Shortage - Global Auto Production Prob

[glend (Glen)]

There have been a few news stories lately concerning a serious emerging issue for the Auto industry, a global shortage of semi-conducted chips, which are integral to the advanced electronics in modern cars. Most active safety system need processors to function.
There was a story on the US news channels about 10,000 Ford trucks parked out in a field in Kentucky, because they can't be sold, missing chips. Ford does not want to shut down the factory, so they keep producing vehicles which they cannot sell. Their idea is that they will recover these Utes once they get a chip delivery and make them road worthy for sale.
Closer to home, my daughter and her husband are trying to buy a new European SUV, but some manufacturers, BMW in particular are suffering from a semi-conductor supply chain problem too. They will let them order a car, for may be January 2022 delivery, There is no stock inbound. The situation at Mercedes is similiar, a few high end models in stock, but others must wait until next year. And we are still in May.
Korean car makers, like Kia and Hyundai, seem to be coping ok, as Korea has an in country semi-conductor industry and is getting priority on supply. The largest semi-conductor producer is in Taiwan. Together they make up over 80 percent of global production- might be a big reason China wants Taiwan, regardless of what they say about politics.
The moral of this story, might be to keep what you have.

[iborg (Philip)]

Hi


I agree about keeping what you have, but, my little car was written off a month ago. Used car prices are currently insane!


Philip

[Rainmaker (Matt)]

Maybe Australia could start a car industry here... I hear places like Broadmeadows have skilled labour out of work..... and in place of all the acronyms that have replaced driving skill we could teach people how to drive once again.

I drove 15kms yesterday and had to take evasive action 5 times to avoid collisions with people who "only drive from A to B"

[Camelopardalis (Dunk)]

The more pricey brands have a greater reliance on more sophisticated chippery because of features like semi-autonomous driving, night vision, etc., so it’s common for them to use “desktop class” processors and GPUs as parallel compute units.

Both of these types of chips are under some degree of supply constraint from the current situation we have with currency mining mostly. Neither Nvidia nor AMD are that bothered by the limited supply as they make a healthy margin from selling at RRP. I don’t say this critically, they’re entitled to make a profit for their wares.

It’ll sort itself out eventually, but it goes to highlight the level of processing we have in our cars these days. It’s a shame we couldn’t show them our FITS files and process them for us

[MortonH]

Guess I'll be keeping my old Corolla for a while longer then. The only chips in it have salt on them.

[AdamJL]

The chip production issue is massive but I didn’t realise the impact on the car market. That’s nuts

[gary]

The number of unique active part numbers for components in the electronics
industry is in the tens of millions.

Some parts can be actively manufactured for a decade or more.

This presents challenges in inventory like few other industries.

Original equipment manufacturers (OEMS) obtain parts in one of two
ways. With direct purchase from the part manufacturer or via wholesale
electronics distribution companies. The main players in the later category
are companies that few outside the industry have heard of but they are
multi billion dollar Fortune 500 enterprises.

With so many unique parts and and giant volumes being shipped, the
industry for years operates on a Just In Time (JIT) model.

Both the manufacturer and the distributors want to keep stock on
their shelves for as short amount of time possible.

Even during normal times, this JIT model can often be tenuous.
Those who have worked in the industry for a long time come to appreciate
that semiconductor lead-times act as an indicator of what the market thinks
about the economy in the future.

When an OEM orders parts, they are doing so for product they are about
to build or will build at some time in the future, perhaps up to a year from
now.

When lead-times are short and components are available off-the-shelf
'ex-stock', it reflects that OEM's forecast that the demand for their products
in the foreseeable future will be low. Collectively, they are pessimistic
about the global economy. What the Wall Street crowd world refer to as
"bearish".

When the lead times are long, and it is not uncommon to see them stretch
out to 16 weeks, 25 weeks, 52 weeks, it says that OEMS are ramping up
to build lots of product because they forecast the economy is looking
good.

There are several reasons for the current supply chain disruption.

The COVID crises saw some manufacturers such as the automotive
industry reduce their output and reduce their chip orders.

At the same time, the movement of people out of city offices and into
home offices saw a surge in demand for laptops, PC's, screens,
printers, conferencing cameras, home coffee machines, etc. etc.

Then in March there was a fire in a clean room at a Japanese semiconductor
manufacturer called Renasas, some of whose chips were used by some
auto makers.

When the automotive and other industrial manufactures came back on
line, the demand has been such that it has been highly disruptive to
the supply chain. The JIT model had relied on a relatively steady
flow of orders.

Plus as I mentioned there is the legacy of the tens of millions of
unique parts. Each year, many new chip designs enter the market but
earlier part numbers still have to be manufactured as well. So the supply
chains have become even more tenuous over time.

Arguably one of the two most important companies in the world is
TSMC (Taiwan Semiconductor Manufacturing Cooperation). Again it
is one of these names that few outside of the industry would have heard
of but chances are a significant percentage of the integrated circuits
in your smartphone for starters were fabricated there. TSMC is important
because it is the embodiment of the most advanced manufacturing
processes of any type on the planet. It contains the type of technology
that spies kill other spies for in the movies. It is vitally important to
the western world.

Taiwan was lucky and managed to weather the COVID pandemic better
than most and TSMC and the other Taiwanese fabs have kept going.

The manufacture of semiconductors requires enormous amounts of
water. Where Taiwan is currently under threat is from climate change.
The worse drought in 56 years is currently affecting the island and with
dams depleting there is fear of disruption to the global semiconductor
supply chain.


Footnote:
In the industry, we always use the word "semiconductor" without it being hyphenated.

[The_bluester (Paul)]

Yep, we are waiting on a new car and the current word is September. I will believe that if it happens. Last we heard it was likely to be hit by the clean room fire. I know that the situation in carland is tight enough that some manufacturers that were moving to "Glass cockpit" arrangements in most of their models have gone back to older style gauges in the cheaper versions to leave more displays for the expensive ones.

Having quite quickly gone from a couple of surplus cars to only the one other than my work provided car (Which I can't use if I go on leave for any period) it is a bit tight at the moment. I might have to tart up the old Crown I have on a historic plate to be able to use that in a pinch!

[Huey (Michael)]

Most people seem to have forgotten that Trump has banned the export of semi conductor chips to China for national security reasons. As far as I know Biden is continuing with this policy. Since many car parts are manufactured in China we have the present problem. China has now started to develop their own chips not just for cars but also mobile phones etc. (think Huawei) so as not to rely on the US and their trade war policies, which seem to have backfired at least in this case. Hopefully astronomy gear will not be affected too much if at all.

My two cents...
Huey

[The_bluester (Paul)]

I suspect it has been. I have been wiating for my ASI2600MM since early march and the current expectation is June. I am steeling myself for that to progress out to August, in the hope of getting a nice surprise instead. The ZWO site stopped showing extimated availability dates about a month ago and just shows "Available on backorder" now.

[FlashDrive (Poppy)]

Give me an EH / HD / HR / HK / HT/ early Holden anytime .... !!

I can easily ' sit ' in the engine bay and work on the motor.

No computers ... just a set of ignition points / spark plugs . 1 x fan belt / an oil filter / air filter ..... and I can easily rebuild the Motor ( Pistons, Rings, Cam and Crankshaft Bearings , Valves) all by myself ( which I have done ) in my earlier years.

All parts can still be bought at Repco... Top VRS Gasket Set / Bottom Oil Pan Gasket Set / Water Pump Gasket ...all of which would set you back roughly $125.00.

Instead today, I have to go to the Mazda Dealership and pay some Mech' to service my Car ... a quick safety check of my Mazda 6 ...sets me back $320.00

I know the Mazda has a nicer ride than the early Holden .... it's a trade off between comfort with bigger expense to doing the work yourself on a much simpler car.

A quick service on the older Holden.... spark plugs / oil + oil filter / Air filter and a set of points .... doing it myself at no more than $60.00 for the parts, and I'm back on the road again for another 10,000ks.

Times certainly have changed .......!!

Sorry , I probably have gotten of the beaten track here .... just there are no chips / software driven devices eg: Apple Car Play / Sat Nav / Climate control Air Con ... etc

Today's cars, invariably have to go back to a Dealership for Servicing ...!! No more do it yourself .....!!

Col.

[The_bluester (Paul)]

But then on the other hand, how many cars of the EH to about HZ area could be expected to do 300,000KM with nothing but basic consumables done like oil, filters, spark plugs and leads?

I do say that with a 77 MS85 Crown sitting in the shed, but it is sitting next to my track car (86 build) with some pretty up to date tech in it.

[FlashDrive (Poppy)]

Originally Posted by The_bluester

could be expected to do 300,000KM.

Today's Car Engines are far more sophisticated with Double Overhead Cams / 4 x Valves per Cylinder / Variable valve timing / Fuel Injection / Computer Chips / Electronic Ignition ...etc

Try overhauling that sort of engine and see how much it will set you back.

An early Holden Motor can be overhauled many times for the cost of 1 overhaul on today's complicated engines and still cover 300,000KMS and be far far cheaper in overhaul cost.... although fuel cost would be higher ( non injection ).... some of us lads in the engine build up section at the Airbase completely stripped a Holden Red Motor and rebuilt it with all brand new parts ( head cylinder re face / valve lapping / a new Crane 25/65 Cam / all Bearings and gaskets / honing the piston bores / new chrome rings / spark plugs and fitted the engine out with Twin Carby's and elected to use the standard Exhaust Manifold.. ( no extractor's ) ....put it back in the HK Belmont with 3 on the tree (Column Change ) , ...so we took it for a lengthy run and we got 28miles to the gallon ( 4.5 liters of fuel in today's terms )...exhaust pipe at the outlet was a nice grey colour indicating it was very well turned ,resulting in excellent fuel burn

That was a big deal in those days....the average 6 cylinder would do some where about 23 to 25 miles per gallon.

I grew up in the 60's ... things were simple then .... today it's more complicated then ever .

We certainly have come a long way ....!!

Cheers ...Col.

[The_bluester (Paul)]

The loss of lead in fuel certainly made tuning a little more involved.

Progress generally only moves one way, I might love my first car back (Datsun 1000 coupe) but the nostalgia would wear off pretty soon if I had to commute in it 5 days a week again.

[Steffen]

Originally Posted by gary

<redacted wisdom>

Thank you for this slice of insight.

For those who are new around here, what Gary opines he either knows first hand or researched in great detail. Take heed.

[glend (Glen)]

Originally Posted by Steffen

Thank you for this slice of insight.

For those who are new around here, what Gary opines he either knows first hand or researched in great detail. Take heed.

Geez, all I did was hypenate two words.

[multiweb (Marc)]

Thank you for this slice of insight.

For those who are new around here, what Gary opines he either knows first hand or researched in great detail. Take heed.

Originally Posted by glend

Geez, all I did was hypenate two words.

What does that have to do with anything?

[Sunfish (Ray)]

Exactly. My EH in 1975 was ready for the scrap heap. Where my 18yo Subaru could do another 220k. I tried to buy a new one but they had none of the model.

Originally Posted by The_bluester

But then on the other hand, how many cars of the EH to about HZ area could be expected to do 300,000KM with nothing but basic consumables done like oil, filters, spark plugs and leads?

I do say that with a 77 MS85 Crown sitting in the shed, but it is sitting next to my track car (86 build) with some pretty up to date tech in it.

[Sunfish (Ray)]

I used to share a building with a local arm of RAE electronics. An old set of squash courts filled with racks of long cardboard drawers of integrated circuits and stepper motors etc. I was always amazed at how old stock was still sold for many many years after manufacture It was treated like gold in the bank and chips counted by weight, with the inventory software a closely guarded secret.

Originally Posted by gary

The number of unique active part numbers for components in the electronics
industry is in the tens of millions.

Some parts can be actively manufactured for a decade or more.

This presents challenges in inventory like few other industries.

Original equipment manufacturers (OEMS) obtain parts in one of two
ways. With direct purchase from the part manufacturer or via wholesale
electronics distribution companies. The main players in the later category
are companies that few outside the industry have heard of but they are
multi billion dollar Fortune 500 enterprises.




Footnote:
In the industry, we always use the word "semiconductor" without it being hyphenated.

[The_bluester (Paul)]

It was actually an interesting point I heard raised on the radio regards the car industry. We are calling them right up to date and using fairly bleeding edge tech, but one of the problems they are facing in the shortage environment is that car manufacturers are very price sensitive and much of the tech they are using to build all this "Right up to date" stuff like glass cockpit dashboards, sat nav, adaptive cruise control, collision avoidance etc is using IC's that the industry considers to be relatively old tech and old processes.

In a nutshell, the industry is concentrating on new process, high margin products and when Ford or whoever else whacks in an order for 5 million chips based on an older process as they suddenly forecast higher sales, not the sales crash they predicted at the start of last year (Leading to orders being cancelled with suppliers) they well and truly have to wait in line, they can't just un-cancel last May's order for 3 million and ask for an extra two million on top, the lead time starts again and is longer than it was before to boot.