The great chip glut of 2028? (16 Nov, 2021)

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The great chip glut of 2028? (16 Nov, 2021)

Postby aardvark_admin » Tue Nov 16, 2021 5:41 am

This column is archived at: https://aardvark.co.nz/daily/2021/1116.shtml

Could we find our selves with a glut of fabrication capacity in a few years' time, once the backlog of orders has been filled by newly built factories?

What would this mean to prices?

And how much of a gold mine is there sitting in the warehouses and containers of e-waste companies now that the price of some chips has gone through the roof and lead-times are stretching out to years rather than weeks?
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Re: The great chip glut of 2028? (16 Nov, 2021)

Postby hagfish » Tue Nov 16, 2021 8:04 am

In supply chain circles, the bullwhip effect is the amplification of demand changes, as they roll through the system. Customers buy 20% more, so retailers order 50% more, wholesalers double their orders, and manufacturers start running 24/7. Those who supply the manufacturers are left scrambling. And then - inevitably - the reverse ripple of decreased demand leaves manufacturers and their suppliers sitting on a mountain of un-sold stock. It turns out there's a limit to how much toilet paper we can eat.

Hopefully - at the high end - crypto mining will have a 'reset', and myriad thrashed-out graphics cards will hit the second hand market (like last time). Hopefully, also, the international container/shipping system will get back on an even keel. They're all desperately searching for a pallet to load their stock onto, a container to load it into, a working truck to load it onto, and a driver to deliver it. Lots of food is going to waste because manufacturers can't find jar lids or whatever. New chip fabs won't solve all those problems.

If some new fabs are built in the USA, it could see them readjust their posture vis-a-vis Taiwan. It would be a shame if we had to have a nuclear war in order to maintain Apple's stock price.
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Re: The great chip glut of 2028? (16 Nov, 2021)

Postby Perry » Tue Nov 16, 2021 5:27 pm

Bruce wrote:Then there's the problem of advancing technology. Many of the plants being planned and built right now are based on present-day fabrication standards and technologies. How relevant will they be to the industry in a few years' time? Will the plants being built today be outdated before they're even commissioned? Fortunately the answer to that is probably "no".

I don't share your optimism.

After clearing away following the death of a Depression-era father, I saw how things have changed. Ever-more rapidly, now. The list of examples would be boring, but the rate of change of technology is almost bewildering. Why stock spares for a product that will be redundant in a few short years? Or less? The new product R&D and production S curve now looks like a monster.

If there's anything potentially worth worrying about, it's what happens if it all fails? Be that EMP or whatever. Who these days can light a fire and cook over it? Presuming they have food and water stored. How man people know what a primus is? A back-yard mechanic fixing a carburettor was once an option. Now, with EFI and whatever . . . Imagine lifting the bonnet to see a large sub-cover over the engine instructing that there are no user-serviceable options there?

What if it's as simple as no electricity? What doesn't "fall over" in that case?
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Re: The great chip glut of 2028? (16 Nov, 2021)

Postby Kiwiiano » Tue Nov 16, 2021 5:44 pm

Perry wrote:
Bruce wrote:Then there's the problem of advancing technology. Many of the plants being planned and built right now are based on present-day fabrication standards and technologies. How relevant will they be to the industry in a few years' time? Will the plants being built today be outdated before they're even commissioned? Fortunately the answer to that is probably "no".

What if it's as simple as no electricity? What doesn't "fall over" in that case?

One good Carrington Event would set the planet back on its arse. No electricity anywhere. If things went totally pear-shaped what could you make completely from scratch? Personally I figure I could make a small fired clay pot that could be used to boil a cuppa. If I could score some tea….
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Re: The great chip glut of 2028? (16 Nov, 2021)

Postby Perry » Tue Nov 16, 2021 5:56 pm

There's always a limiting factor to survival in any disaster.

Fuel, medicines, ammo, food, other supplies - whatever. Being prepared is just one hopeful aspect.

If the tales are true, there will some day be a need to venture out of those buried survival bunkers.

What to, I wonder?
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Re: The great chip glut of 2028? (16 Nov, 2021)

Postby aardvark_admin » Wed Nov 17, 2021 4:49 am

Even in today's world (pre-apocalypse) there are a worryingly high number of people who are unable (or should we say: unwilling) to provide for themselves or take responsibility for their own wellbeing. That, they believe, is the role of "government". Once the shirt hits the fan, how will they cope in a world where WOKE counts for nothing and where results are once again proportional to effort? Oh the humanity?
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Re: The great chip glut of 2028? (16 Nov, 2021)

Postby Perry » Wed Nov 17, 2021 7:23 am

That evil law called survival of the fittest will come in to play and with any luck, they won't.
And with even more luck, the remnant population will be the better for it.
For a while, at least.
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