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

[Jimmy Moore]

Hypothetically speaking, what does this mean for semiconductor ETFs in
the worst case scenario?

This is not a request for financial advice.

On Fri, May 21, 2021 at 10:32 AM <synth1 at airmail.net> wrote:

> The wafer fab process uses millions of gallons of water a week. The main
> water storage for the Taiwan fabs is below 5% left
>
> Paul S.
>
>
> -----Original Message-----
> From: Didier Leplae <didierleplae at yahoo.com>
> Sent: Friday, May 21, 2021 11:14 AM
> To: synth1 at airmail.net
> Cc: MTG <grant at musictechnologiesgroup.com>; Synth-diy at synth-diy.org
> Subject: Re: [sdiy] this chip shortage thing is crazy...
>
> I curious to know, how does the rain (or lack thereof) impact chip
> production?
>
> > On May 21, 2021, at 9:10 AM, synth1 at airmail.net wrote:
> >
> > 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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