[sdiy] this chip shortage thing is crazy...

[synth1 at airmail.net]

Be glad to (and my last job was at Microchip in the PIC24 group).

1) the shortage is real. And if the rains do not come soon to Taiwan (in
their worse drought in years) it's going to get REALLY BAD.

2) the shortage is due to Covid. Orders for all of 2020 were off in the
first 3 quarters. This means the 5 major silicon wafer suppliers, who build
to forecast,
cut back production. Fabless companies like Microchip (well, MOSTLY fabless)
buy wafers on a 4 month forecast.

3) then 3 things happened all in a short time period.
a) there were 4 major fabs that had fires
b) people got bored...REALLY bored. And Zoom/Teams required a GIANT spike in
laptop demand. Bored people buy stuff.
c) the car companies started seeing demand in Q4 because bored people, even
though DRIVING WAS MINIMAL, upgraded their cars. BECAUSE BORED.

4) so starting October 2021, the wafer forecasts TRIPLED. Well, you can't
make a baby in 1 month by making 9 women pregnant.

5) then it turned out that where the ICs are packaged (ie wafers going into
the IC packages) is mainly Thailand and Malaysia, which were ravaged
by Covid and sorta covering it up and they had problems getting people into
the factories to operate the die-bonding machines.

6) Lastly, here comes THE PANIC. And not talking you sweating over a Mouser
order. I'm talking panic by people needing 100million parts A DAY.
And they started doing this:

a) triple-ordering, because cancelling a back-order is usually free. So,
let's say you need 10,000 parts. You place orders with 3 different
suppliers, all for say 20,000
and then as parts arrive, you simply cancel what you don't need.
b) buying supply out to next year. The big runners (like Apple) only buy out
1 quarter. But in THIS panic, you get what is called 'blankets', which are
long-term POs
(like 1-2 years) where the price is 'locked in' if the buyer takes the order
and CANNOT CANCEL. And I heard from very reliable sources this is what
companies like
Cisco, Peloton, and Tesla started doing WHICH THEY **NEVER** DO. I heard AWS
(Amazon's Cloud division) that designs their own HW bought 90% of all the
Samsung
Flash memory allocation for 2021. 
c) and this is my favorite: shipping container capacity. Companies with DEEP
pockets then went out and bought literally every shipping container AND THE
SPOT ON THE BOAT for like 18 MONTHS.
So, companies that could manufacture and get parts to the dock had NO WHERE
TO GO. Except on a plane. Which is not factored in the selling contract
price.

Again: for a lots of semis, especially ANY microcontrollers from ANYONE, if
it does not rain a shit-ton in June in Taiwan, kiss it goodbye for a FULL
YEAR.

Paul S.


-----Original Message-----
From: Synth-diy <synth-diy-bounces at synth-diy.org> On Behalf Of MTG
Sent: Friday, May 21, 2021 8:20 AM
To: synth-diy at synth-diy.org
Subject: Re: [sdiy] this chip shortage thing is crazy...

No one is commenting on the actual shortage? I don't see any micros I'm
interested in with availability this year.

On 5/21/2021 3:45 AM, Roman Sowa wrote:
> Today I have received one of my orders from Microchip placed in March.
> One part number, but I got it in 9 bags! Each contains chips from 
> different batch with different traceability code so I can understand 
> why they are separate, but it's still crazy. The bags contain between
> 7 to 180 chips. And those are full size 50x20 bags to fit regular 
> tubes. Imagine seven SSOP20 chips in a big bag.
> Looks like they swiped the floor in every warehouse to find them...
>
> It was also great fun to watch them change scheduled shippment date. 
> At the time of ordering they were in stock, so yes, I took them all. 
> Next they've sent me like 10 emails changing delivery date all over 
> the place between April 2021 and August 2022.
> But I finally got them, yay!
> Still a couple more orders expected anytime between tomorrow and 
> summer 2022.
>
> Roman
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