Arthur T Knackerbracket has processed the following story:
After dealing with booming demand and global shortages since the start of the pandemic, the semiconductor industry is facing a sudden downturn.
But even for an industry accustomed to frequent cyclical slumps, this one has defied easy analysis and left researchers struggling to predict how the setback will play out.
The sudden glut in memory chips, PC processors, and some other semiconductors has come at a time when manufacturers in many automotive and industrial markets still lack a reliable supply of chips.
It has also forced some of the biggest US chipmakers to slash billions of dollars from planned capital spending, at the very moment that Washington has passed a long-awaited law to subsidize a huge increase in domestic chip manufacturing capacity.
The speed of the turn, and the conflicting forces at work, had been unprecedented, said Dan Hutcheson, the veteran chief executive of VLSI Research who has analyzed chip cycles since the 1980s.
“I’ve never seen a time when we had excessive inventory and we had shortages,” he said.
(Score: 4, Insightful) by darkpixel on Friday August 19 2022, @09:36PM (12 children)
"Sudden glut?"
I just tried to place an order for 14 2U servers and 9 1U servers.
The vendor said the 2U servers were about 16 weeks out, and the 1U machines had no ETA and might never be back in stock again.
They aren't uncommon servers. They're bog-standard Supermicro machines with 128 GB RAM and 32 GB RAM respectively.
Maybe they have a glut of "I'm a crap Managed Service Provider and every client gets a Dell 'server' with 8 GB RAM, and Windows Server 2022 with an Areca RAID card with two mirrored boot disks regardless of what they actually need", but most places don't seem to have real servers in stock or available for purchase.
(Score: 4, Touché) by MostCynical on Friday August 19 2022, @09:42PM (4 children)
"work from home" meant everyone needed a new laptop.
queue massive delays in laptops, and manufacturers spooling up consumer/ish grade laptops supply.. by which time everyone a new laptop..
Why are you buying servers, anyway? Isn't everything in the cloud now? Just rent some AWS or Azure like everyone else../s
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 5, Interesting) by darkpixel on Friday August 19 2022, @10:59PM (1 child)
Heh. I run a lot of stuff in Kubernetes over at DigitalOcean. About 4 months ago I sat down and tried to calculate what my costs would be if I moved to Google or Amazon.
My ~$700/mo bill with DigitalOcean would turn into a nearly $2,000/mo bill with Google or Amazon. At that price point, I can just buy a handful of servers, load balancers, a nice UPS unit, and spin up my own in-house cluster and get similar uptimes and a better 3-year ROI.
"The cloud" is for devops people who only know how to push a Kubernetes manifest to a cluster, not for people who actually know how to solve problems. /flamebait
(Score: 2) by dwilson on Saturday August 20 2022, @02:52PM
Or:
"The Cloud" is for people who need one server, for a few days or weeks at a time, a few times a year, if that.
And can't be arsed investing in UPS, aircon, rackspace, a dedicated room, etc and so on, for such a low resource utilization.
- D
(Score: 2) by driverless on Saturday August 20 2022, @08:37AM
Yeah, but someone somewhere has to be the static final of the cloud, the actual physical hardware that the VM in a VM in a VM in a VM in a VM in a VM in a VM in a VM in a VM in a VM in a VM in a VM in a VM that everything else is running on, and in this case it must be DarkPixel.
(Score: 2) by JoeMerchant on Saturday August 20 2022, @08:27PM
Surpluses plus shortages in components equals shortages only in finished products.
>I’ve never seen a time when we had excessive inventory and we had shortages
Yeah, you've never seen a WWII level smack on the consumer purchasing patterns like the pandemic perpetrated, either. Forecasting models were all based on the relatively predictable patterns of pre-pandemic consumption. All of a sudden: kids are using a LOT more laptops for school, work-from-homers too, servers for services like Zoom and Teams are spun up to 10x their former capacity, and toilet paper isn't the only thing that gets panic purchased at the first sign of chaos.
So, surpluses and shortages together, because your preciously refined consumption models were basically W R O N G ! when the pandemic hit, and even afterwards too. It's anything but a brave new world, reserve stocking levels probably need to be 2 to 5x what they were pre-pandemic, if you expect to not go into excessive backorder status.
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 2) by RamiK on Friday August 19 2022, @09:48PM (4 children)
The over-supply / lack-of-demand is in consumer products like smartphones, tablets, laptops, PCs and GPUs.
The over-demand / lack-of-supply is in servers gear and microcontroller and related parts.
compiling...
(Score: 2) by krishnoid on Friday August 19 2022, @10:00PM (3 children)
I was talking to some friends recently, and one heard that a lot of people knew that since they were going to be at home for a while, they had time to upgrade/replace their laptop, maybe phone, and ... their playstation/xbox. I bet home entertainment got a major boost during this period, not to mention additional monitors for the home setups.
(Score: 2) by RamiK on Saturday August 20 2022, @09:39AM (2 children)
There's no need to speculate as it's been confirmed: https://psyarxiv.com/8me6p/ [psyarxiv.com]
And the downturn: https://www.cnbc.com/2022/08/08/microsoft-xbox-sony-playstation-nintendo-video-game-earnings-round-up.html [cnbc.com]
Mind you, the big sales were in mobile games and mobile consoles, especially the ad-driven ones: https://econsultancy.com/stats-show-gaming-in-game-ads-ott-entertainment-changed-covid-19/ [econsultancy.com]
Regardless, the specific covid and post-covid cause and effects are easy to quantify and qualify and are confirmed in multiple sources and studies so I really don't see why someone would think just because they can't get their hands on server equipment, it must mean consumer gear is equally hard to supply.
compiling...
(Score: 2) by krishnoid on Saturday August 20 2022, @09:43PM (1 child)
That makes a lot of sense. Consumer gear is an order+ more prevalent than server gear, so companies that pre-bought all of the existing wafer fabrication capacity early and often for the Christmas rush and other consumer demand, would probably shut out the smaller-quantity server-chip purchasers completely.
(Score: 3, Informative) by RamiK on Sunday August 21 2022, @08:13AM
That's right for about half of it: Basically, Intel has fairly specific fab capabilities that are limited to a handful of wafer growers while AMD and co. are on an the same ~18month fab/wafer back-order queue the GPUs and most smartphone SoCs are on.
compiling...
(Score: 2) by krishnoid on Friday August 19 2022, @10:23PM
Along those lines, what's the current market for used servers of that kind? I bet you need something new with an actual warranty, but if you were willing to rely on warm backups and spares (or just using them as compute servers and not hosting persistent data on them), are there good resellers for used/refurbished ones?
(Score: 2) by darkfeline on Friday August 19 2022, @10:48PM
The summary calls this out. There is both excess supply and a shortage. The supply chain got nuked and who knows when it'll recover (I'm sure some people say it's "transitory").
Join the SDF Public Access UNIX System today!
(Score: 0) by Anonymous Coward on Friday August 19 2022, @09:39PM (5 children)
Neat trick to keep prices up. In capitalism, abundance is evil
(Score: 1) by khallow on Friday August 19 2022, @11:29PM (4 children)
(Score: 0) by Anonymous Coward on Saturday August 20 2022, @07:44PM (3 children)
Which apparently you find perfectly acceptable, and profitable?
(Score: 1) by khallow on Sunday August 21 2022, @10:25AM (2 children)
No. Which you can't rid your economic system of. I find it interesting how capitalism is blamed for a normal flaw of human cooperation. And now, I find that fact "perfectly acceptable, and profitable" for some reason that I remain unaware of.
(Score: 0) by Anonymous Coward on Monday August 22 2022, @03:48AM (1 child)
Capitalism was created explicitly to exploit that flaw, amongst other similar flaws. Works like a charm, eh? Capitalism was built on a foundation of fraud
(Score: 1) by khallow on Monday August 22 2022, @12:25PM
No other system does better. Keep up.
We keep seeing this sort of whining. Capitalism does something bad. But when we look at other systems, we find the remarkable problem that nothing else does it any better.
Some are profoundly worse - such as the hydraulic empire [wikipedia.org] which is a government organized around controlling access to an important resource (such as water). At least with capitalism control of important goods and services can be divorced from governance - creating both another democratic separation of power and allowing for the providers of such services to be beholden to law.
(Score: 3, Insightful) by istartedi on Friday August 19 2022, @10:06PM
We're not talking gold or oil here. Once a chip is made for a particular application, it's not easily adapted to something else. It may not even be possible. I suspect the collapse in demand is GPUs, but you can't just plug a graphics card in to your CAN bus and control a truck with it. Demand for crypto-mining rigs has plunged while demand for cars remains strong, and then you throw in the mix that high oil means that people (temporarily) fall out of love with SUVs and trucks and the cars use a different set of chips.
Anyway, the notion of a "chip market" makes sense in the aggregates used by financial guys; but it's really a bunch of different markets on the street. Some are short, some aren't.
Appended to the end of comments you post. Max: 120 chars.
(Score: 1, Interesting) by Anonymous Coward on Friday August 19 2022, @10:20PM
"glut in memory chips, PC processors, and some other semiconductors"
Those expensive, high margin things that people like to saturate fabs with.
Try buying a voltage regulator, or all of the jellybean parts that EVERYONE needs
that were EOL'ed or are on 2yr+ allocations.
(Score: 0) by Anonymous Coward on Friday August 19 2022, @10:20PM
when this pandemic started, I seem to remember that the car companies were blamed for their own problems. Car sales collapsed for some months and naturally they cancelled chip orders, as well as supplier orders across the board. Then car sales came back and by then the changeover to work-from-home products was in full swing. Chips for cars could barely be had for love or money.
Everyone blamed the car companies for poor production planning.
Now, I think it's time to blame someone new, like the laptop companies for not seeing that they could saturate the work at home market.
(Score: 2, Interesting) by legont on Saturday August 20 2022, @02:45AM (5 children)
Socialist economy is always working like this. You have too much shit and not enough shit at the same time. I grew up in one and see it right away.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 0) by Anonymous Coward on Saturday August 20 2022, @04:15AM (1 child)
> Socialist economy is always working like this.
We're (USA) what I think of as "mixed". There may be some lags in responding to a shock (like Covid), but things do get sorted out. Lots of manufacturing can't pivot on a dime, it takes awhile to adjust to a new mix of products.
So my guess is that we won't always be like this, things will improve.
(Score: 2) by legont on Sunday August 21 2022, @01:57AM
Unfortunately, when the adjustment time is similar or longer than the shock time, the reaction does not stabilize the situation, but amplifies it. There will be higher waves of "issues".
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 4, Interesting) by Opportunist on Saturday August 20 2022, @10:08AM (2 children)
It's kinda weird to see the problems that plagued the Soviet system, especially during its final phase, now here in the West too. Even the jokes work now. Like this one:
What was transition of power like in Czarist times?
Power went from grandfather to grandson.
What is transition of power like in Soviet times?
Power goes from grandfather to grandfather.
That joke works pretty well in the US now, too...
(Score: 2) by Thexalon on Saturday August 20 2022, @10:39AM (1 child)
Or another one that works with little modification:
True happiness in America - the police break into your apartment at 2:30 AM, shoot your dog, threaten to shoot the wife and kids as well as you, and the lead guy says "Tyrone? We have a warrant for your arrest!" and you reply "You want the next floor up". That, my friends, is happiness.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by Opportunist on Sunday August 21 2022, @12:41AM
A joke from East Germany that was originally about cars and apartments aside of the elusive and hard to get toilet paper also worked pretty well during the pandemic.
A politician holds a speech.
"And soon we'll all be able to return to work!"
Question from the audience
"Ok, but when are we gonna get toilet paper again?"
"And soon transportation of goods works again, too!"
"Ok, fine, but about the toilet paper"
The politician loses it and yells "Kiss my ass" (literally: lick my ass)
The man shrugs "Yeah, that solves your problem, but what about us?"
(Score: 2) by Username on Sunday August 21 2022, @12:07PM
If you were an electronics company trying to make electronics during the fascist lockdowns, and your suppliers start refusing your order, what do you do? You get new suppliers. Now your previous suppliers that tried to screw you over want to sell you chips again, what are you going to do?