back to article China tightens distributor cap after local outfits hoard automotive silicon then charge silly prices

Chinese antitrust watchdog, State Administration of Market Supervision (SAMR), announced Tuesday it has started investigating price gouging in the automotive chip market. The regulatory body promised to strengthen supervision and punish illegal acts such as hoarding, price hikes and collusive price increases. SAMR singled out …

  1. Pascal Monett Silver badge


    It's curious how, as soon as there's a law against doing something, there is always somebody willing to go to any extent in order to do just that.

    Is this tendancy for crime hard-wired in our brains, or what ?

    1. Denarius

      Re: Smugglers

      isnt it the other way round in this case ? However, the forbidden fruit syndrome is pervasive. Merkin booze consumption fell after Prohibition was repealed. What is curious is that PRC acts against "big business" exploitation of markets in a way that supposedly capitalist nations pretend to. The world is getting weirder

      1. martinusher Silver badge

        Re: Smugglers

        Its a clash of perceptions and reality. Although much of our stuff is made in China (or uses China sourced components) our politics and culture still treat both China and the Chinese as an undifferentiated mass living under the thumb of the CCP and the autocratic rule of one person. (How many times have you seen this word used in connection with China recently?) The reality is that its a large country -- its bigger than Europe -- that's got a huge population, all individuals with many who aspire to be entrepreneurs. Since the line between 'enterprise' and 'crime' is often a matter of opinion or interpretation its not surprising that given the opportunity to make a fast yuan then someone's going to take it. So the disconnect is the gradual realization that the place is just another country with all the quirks, foibles and shortcomings of a country. Its 'just like us' -- but different.

        This kind of media imprinting is endemic in our culture. For exmaple, there are two Reg articles that together with their comments illustrate this. (These deal with Russia but as you may have noticed these days 'Russia' and 'China' are interchangeable, seemingly at random.) This kind of Cold War era image manipulation should be difficult to maintain these days but constant repetition keeps it front and center.

        1. gandalfcn Silver badge

          Re: Smugglers

          Very true. Precious few people who make disparaging comments about the PRC actually know very much and next to none have actually lived and worked there. They get their "facts" from the likes of the Mail and Fox. They also seem to know very little about the histories of their own countries.

    2. Peter2 Silver badge

      Re: Smugglers

      The thing is that as soon as something is made illegal the supply collapses, and the demand mostly doesn't.

      Via the immutable laws of supply and demand the prices then leap. If your earning the minimum wage and somebody offers you ten years worth of your wages in exchange for smuggling a small packet with little risk of getting caught then many people tend to be willing to give it a go, especially if they don't think it's harmful. (ie; many people won't smuggle hard drugs but will cheerfully smuggle computer chips, prohibited books in workers paradises and the like.)

      1. Version 1.0 Silver badge

        Re: Smugglers

        Look at the effects of the western Wars on Drugs - they have raised prices, demand, and supply, with the "bonus" of jailing people that were not voting for the governments - we may see the same thing happen in China.

  2. batfink


    Can we have a State Administration of Market Supervision to investigate price gouging here too please?

  3. Flightmode

    Can we all just stop for a moment and admire that glorious headline pun? One of the best in a long while.

    1. Jim Mitchell

      I think it also tells you what age El Reg thinks its readers have achieved. I haven't even seen a distributor cap in person in ... decades?

  4. elsergiovolador Silver badge

    Oopsie daisy

    Someone said "Never let a good crisis go to waste".

    They know very well what's going on and a PR piece describing an attempt to curb the gouging does not look genuine.

    It is very convenient for China to cripple businesses in the west. Once company in the west goes bankrupt, they'll have "oven-ready" replacements.

    They masterfully outplayed us.

    1. Paul Crawford Silver badge

      Re: Oopsie daisy

      They masterfully outplayed us.

      Don't you mean our "short-sighted profit-grabbing stock-market following directors lets move factories to China for a few pence extra profits" masterfully screwed us all?

      1. elsergiovolador Silver badge

        Re: Oopsie daisy

        That's in the past. Now China has technology and know-how, so they no longer need any directors to move factories. They just need that company to go bankrupt, so they can replace it with their own.

    2. bombastic bob Silver badge

      Re: Oopsie daisy

      recently had this problem with a simple IC sold by TI, which has no direct substitutes, but price+features made it an excellent fit for the design. At the time it went into the design it had plenty of worldwide supply. Now it doesn't.

      So I re-designed the firmware so it could use another one with the same footprint on the board (but with negative logic) so it could be built without having to spin a new board. Otherwise, the ONE supplier (in Hong Kong) wanted $23 EACH for something that normally costs less than 1/100th of that... and lead times for normal distribution channels are well out into 2022.

      (yes - fixed it in firmware - works great now, using new design in system testing)

      Next time I do a design (even the simple ones like that) the parts will have MANY possible substitutes, and not just be cheap and available at the time. Some things like CPUs and FTDI USB aren't possible to do that with, but those aren't the problem. It's that ten cent part that's readily available from a major manufacturer who happens to have their foundry behind the "Great Wall" and suddenly this popular component is short for the next YEAR.

      I suggested to 'the boss' that this distribution company (that was gouging prices) purchase some ketchup to go with their "chips".

  5. Tron Silver badge


    Bonus points to anyone who convinces Reddit users to invest in the world's dwindling supply of 287 maths co-processors. Absolutely key to banking systems, ATMs and nuclear power station safety systems. Known in the trade as the Homer chip.

    1. elsergiovolador Silver badge

      Re: D'oh!

      Is it worth investing 2 years into making a drop in replacement?

      1. bombastic bob Silver badge

        Re: D'oh!

        it might be cheaper and better to do a drop in replacement for the entire motherboard, even if it's ARM-based and running x86 emulation. Or maybe PC-104 which (I think) may still support ISA peripherals

  6. Archivist

    Welcome to capitalism

    And why is this hoarding any different than futures trading?

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