back to article Now that's wafer thin: Some manufacturers had less than five days of chip supplies, says Uncle Sam

Hardware manufacturers hit hardest by the global semiconductor shortage had less than five days of chips in their inventories last year – and should expect supply chain issues to continue throughout 2022 – the US Department of Commerce said this week. Demand for semiconductors skyrocketed during the pandemic as folks purchased …

  1. Gene Cash Silver badge
    FAIL

    I'm confused

    Isn't that known as just-in-time inventory? Which was all the rage? Inventory is BAAAAD, according to all the beancounters.

    1. Anonymous Coward
      Anonymous Coward

      Re: I'm confused

      Badly implemented/managed JIT.

      Explained here:

      https://youtu.be/b1JlYZQG3lI

      1. Ciaran McHale

        Re: I'm confused

        That's a very informative video. Thanks for the link.

        1. David Hicklin

          Re: I'm confused

          Except for the blatant advertising !

  2. guyr

    How to strengthen the chip supply chain within the US

    Hmmm, how about actually making chips in the US? Or perhaps the US Department of Commerce is unaware that over the last 2 decades, just about all state-of-the-art production has migrated to the Far East? I'm surprised that we have constrained (or no?) domestic capacity for 40nm to 250nm production. The US had lots of equipment with that technology 20-30 years ago. But I guess fabs can't just sit idle waiting for customers to show up.

    1. Anonymous Coward
      Anonymous Coward

      Re: How to strengthen the chip supply chain within the US

      All that is needed is for every domestic commercial purchaser to pledge to pay 10+% more per chip - domestically-produced - than before, to make domestic production feasible again.

      Of course the gov't can't mandate that, because international agreements. And multi-national corporations won't do that, because manifold national interests to please. And no one else, because company profits.

      There's no will for this, cuz too many will nots.

    2. katrinab Silver badge
      Meh

      Re: How to strengthen the chip supply chain within the US

      20 years ago the latest chip from Intel was the Northwood Pentium 4, which was 130nm.

      AMD was shipping the Palomino Athlon XP at 180nm, and would launch the 130nm Thoroughbred about three months later.

    3. pavel.petrman Silver badge

      Re: fabs can't just sit idle waiting

      Some thirty-five years ago Czechoslovakia bought licences and technology for production of CDs. The plan was to refurbish the EOL'd factory in Lodenice and upgrade it from vinyl records to CDs. Shortly after that, things happened, and for some years (a decade and a half, iirc), the machinery vinyl record production did exatly that - sat idly and collected dust, while the rest of the works languished and worked hard to get some stable commercial footing.

      Then other things happened, namely the reneissance of vinyl records in Europe, and suddenly the factory started turning huge profits. All it took was to dust off the robust vinyl presses and cutting machines. As of 2022, the factory still produces vinyl records. One wonders whether they bet on repeating their trick and keep the now disused CD machinery around, too.

      Edit to add: the company, GZ Media, with its two thousand employees, is now the world's biggest producer of vinyl records, and their production capacity must be booked at least 12 months in advance, same as with today's chip production.

    4. Ace2 Bronze badge

      Re: How to strengthen the chip supply chain within the US

      When you make PCBs in China or Malaysia (in some cases) you just dump the resulting acid sludge in the river.

      We don’t tolerate that here, so prices will never be competitive.

      1. fredesmite2
        Mushroom

        Re: How to strengthen the chip supply chain within the US

        When you pay underage children to make PCBs in China or Malaysia (in some cases) -- and they get sick of the toxins produced ... you just dump them in the acid sludge in the river too.

        Win WIN FOR THE WALMART CONSUMER !

        HEALTH-CARE IS A PRIVILEGE !

    5. hoola Silver badge

      Re: How to strengthen the chip supply chain within the US

      I am not sure how making chips in the country the uses them helps if the supply chain is JIT.

      Much of this was increased demand for one type, reduced demand from another and then difficulties in prodution.

      Moving the point of production only removes shipping delays.

  3. DS999 Silver badge

    How much of that 17% demand increase

    Is companies ordering a lot more than they need to keep more on hand than they have been? Perfect example of tragedy of the commons - if everyone was only ordering what they need the shortage would be over a lot sooner. What's worse, when it really is over, foundries are going to end up with slack capacity between companies slowly working through their overly large quantity on hand, and new capacity that comes online by then. And thus the boom/bust cycle of the chip industry lives on...

    This is very much like the toilet paper shortage in the US when the pandemic started. The root cause was that tp for residential and commercial is made differently, and it wasn't quick or easy to switch. When everyone had to stay at home instead of going to the office, they needed more at home and shelves started to get bare. That caused hoarders to grab all they can, and limits on how many you can buy came too late. I remember riding my bike through a residential neighborhood in the midst of this and went by a house where someone was working in their garage and they must have had 1000 rolls on a huge shelf on one side. They are probably still working through that "inventory" lol!

    1. AndrueC Silver badge
      Happy

      Re: How much of that 17% demand increase

      I already had a TP stockpile. Nowt to do with Covid though. It's just that in order to meet the minimum £40 order size for free delivery I often buy non-perishable stuff to make up the total. TP is one obvious candidate for that.

      1. adam 40 Silver badge

        Re: How much of that 17% demand increase

        I've just bulked up my TP stockpile, which was initially got because I predicted a Brexit angle to this.

        So I was s(h)itting pretty when the great bog roll "runs" of 2020 happened.

        1. David Hicklin

          Re: How much of that 17% demand increase

          Same here, we pretty well rode out the 2020 shortages due to our Brexit overstocking

    2. codejunky Silver badge

      Re: How much of that 17% demand increase

      @DS999

      "What's worse, when it really is over, foundries are going to end up with slack capacity between companies slowly working through their overly large quantity on hand, and new capacity that comes online by then. And thus the boom/bust cycle of the chip industry lives on..."

      Thats why I am so glad the UK isnt jumping on this train. Let the US and EU tax payers subsidise the chips we use. With our gov I did expect them to do something stupid and join in.

      1. DS999 Silver badge

        Re: How much of that 17% demand increase

        Increasing domestic capacity is as much about protecting your country in case of trouble as it is about assuring supply during normal times.

        While I think either are extremely unlikely, if Russia/Ukraine broke out into a larger land war in Europe, or China decided it was time to invade Taiwan and TSMC's fabs ceased operation, you want to at least be able to supply the needs of military and important domestic sectors necessary for keeping the lights on, etc.

  4. andrewmm

    Bog Chips, little chips , ....

    So manufacturers of chips could not produce chips on the larger / older geometries ?

    or

    was it may be that they could make more money on newer / smaller geometry chips,

    and as a business, are law bound to concentrated on profit for their investors ?

    Uhm,

    1. Electronics'R'Us Silver badge
      Holmes

      Re: Bog Chips, little chips , ....

      Different process nodes are an interesting problem.

      The processes in question define [1] the minimum feature size but it doesn't mean that larger features are not available. [2]

      I have, however, seen devices moved from one system to a different feature size and they promptly failed to operate in the manner we expected. [3]

      [1] Feature sizes lost a lot of meaning a long time ago and now we really have 'equivalent feature sizes' which compares (usually) transistor densities.

      [2] On a new expensive system with small feature sizes that would not be a good use of machine time, though.

      [3] TI bought Unitrode in 1999 and gave assurances that the existing fabrication plant would remain open for 10 years (which they did). In 2009, they moved all the products from there to another plant and although the parts met the datasheet [4] the circuits we had were not operating as they had for several years.

      [4] The datasheet in question was so loosely specified you could drive the proverbial truck through it.

    2. imanidiot Silver badge
      Boffin

      Re: Bog Chips, little chips , ....

      Not easily no. (Warning, the following is a noobs understanding of lithography optics and since I am by no means an optics engineer, I might be wildly off base. This goes on MY understanding of Photolithography imaging from working in that field on related machinery as a Mechatronics engineer)

      Lithography machines have a minimum feature size, but (although this is not a hard spec) also an upper limit on how large of a feature they can image. This has to do with the fact that what they project isn't an "image" of the reticle as we expect it to be but a diffraction pattern of the reticle where only the 0th and 1st order refraction of the wavefront are projected sharply on the wafer. To do this the refracted light must "fit" through the lens column and if the features get too big, this doesn't really work anymore.

      So in order to get 280nm features you need a machine designed for that sort of feature size and machines in that range (down to about 140nm feature size) were built up until the early 2000s. Everything after that is not really designed to handle it and might have problems sharply imaging large features, depending on the orientation and location of those features within the exposure field.

  5. heyrick Silver badge

    So, let's see...

    The previous administration pisses off the Chinese while there's a completely-not-real pandemic happening, and if that's not enough, all the beancounters of the previous decade or two believe in JIT with only a rudimentary understanding of that that means (hint: not zero inventory), and now there's a supply chain disturbance and now people are wondering why the ventilation device is splattered in diarrhoea...

    1. codejunky Silver badge

      Re: So, let's see...

      @heyrick

      "The previous administration pisses off the Chinese while there's a completely-not-real pandemic happening"

      This administration hasnt gone back on the last administrations attitude though. And its becoming harder to protect the Chinese from their handling of the wuflu and lab theory. Basically because Trump seems to have had it right and defending China was all politics.

      1. Ace2 Bronze badge

        Re: So, let's see...

        “Seems to have had it right”

        Lies and horseflop.

        1. codejunky Silver badge

          Re: So, let's see...

          @Ace2

          "Lies and horseflop."

          Really? You seem to have missed the changes of 'truth' since the new president got into the white house

      2. fredesmite2

        Re: So, let's see...

        yet -

        The Pornstar Fornicator with a Euro Trash Hooker wife certainly didn't stop his tramp daughter from another wife he cheated on from making her sweat-shop shoes in Jina, or his products covered under 30+ copy rights.

        Business 101:

        Consumers pay all taxes.

        1. codejunky Silver badge

          Re: So, let's see...

          @fredesmite2

          Yikes that comment.

          "The Pornstar Fornicator"

          Worthless insults.

          "with a Euro Trash Hooker wife"

          Worthless insults.

          "certainly didn't stop his tramp daughter"

          Worthless insults.

          "from another wife he cheated on"

          Worthless insults.

          "from making her sweat-shop shoes in Jina"

          And whats wrong with this? and what does it have to do with my comment?

          I get you might not like the guy but if you just want to write insults about him you dont need to reply to a comment. I am sure you could get a lot of supportive responses if you did start a new post thread.

        2. heyrick Silver badge

          Re: So, let's see...

          "The Pornstar Fornicator"

          You know, he'd likely take that as a compliment.

          1. the Jim bloke Silver badge

            Re: So, let's see...

            The story is circulating in public, because, to his voter base.. its aspirational..

        3. Anonymous Coward
          Anonymous Coward

          Re: So, let's see...

          Pornstar Fornicator sounds like a Prodigy track.

          "Euro Trash Hooker wife"? That's no way to speak about an illegal immigrant with a chain migration family.

          1. MrDamage Silver badge

            Re: So, let's see...

            I thought Melania was Putin's drag persona?

      3. Anonymous Coward
        Anonymous Coward

        Re: So, let's see...

        "Basically because Trump seems to have had it right and defending China was all politics."

        Soooo then, you must be out there demanding that we all:

        * mask up when in public

        * get vaccinated and boosted

        * isolate if you're sick

        as part of your patriotic duty to defeat the China Virus, right?

        1. codejunky Silver badge

          Re: So, let's see...

          @AC

          "Soooo then, you must be out there demanding that we all:"

          Eh? Wtf you talking about?

  6. fredesmite2

    America's work force is too stupid to contribute anymore

    Mark Liu, Chairman of TSMC, the Taiwanese company leading the world in advanced chip production. told Sixty Minutes America has lost the ability to manufacture highly technical electronics because it abandoned STEM education, and lacks advanced manufacturing engineering skills.

    America cannot build and maintain the manufacturing environments, let alone the designs. They have outsourced everything to Asian countries to be closer to the manufacturing points.

    In other words -- America's work force is too stupid to contribute anymore.

    ..

    Melanoma Anal - 400 dola mour !

    https://uploads.disquscdn.com/images/5414ba0f4417063de1e405578073e76c3e41121b315f5f1a6e7aaa769249cbfa.jpg

    ===

  7. hopkinse
    Coat

    CHiPs act

    Poncherello to the rescue....

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