Global chip shortage: US says firms' stocks have plunged

[silvrsvt]

Not exactly car related but is

 

https://www.bbc.com/news/business-60135905.amp

 

A survey of more than 150 firms found supplies had fallen from an average of 40 days' worth in 2019 to just five days in late 2021.

The research also found that demand for semiconductors was as much as 17% higher last year than it was in 2019.

 

At least there is some numbers to work with...

Edited January 27, 2022 by silvrsvt

[jcartwright99]

I feel like there is way more to this story than what is being told.

 

Why is demand surging? Why are some companies not being impacted?

[akirby]

39 minutes ago, jcartwright99 said:

I feel like there is way more to this story than what is being told.

 

Why is demand surging? Why are some companies not being impacted?

A lot of it is driven by people working from home and cell and broadband buildouts.

[silvrsvt]

54 minutes ago, jcartwright99 said:

I feel like there is way more to this story than what is being told.

 

Why is demand surging? Why are some companies not being impacted?

 

I really can't think of a company that hasn't been impacted by it. Companies that more vertically integrated like Apple (who basically makes everything for their phones and PCs component wise) aren't as impacted. 

 

Also something else to consider-Auto manufactures use ICs that are old tech and lower profit. There is a demand, but not much profit I'm assuming. The auto manufactures screwed themselves when they cut production and overall demand went up. 

Other things like high end GPUs (Computer Video cards) are getting sucked up for crypto mining and there is a concerted effort by the two major manufactures to make GPUs suck at crypto because of this, but they are still laughing all the way to the bank because they can sell cards all day and the prices on a high end video card have gone up from $800 to $3K. 

 

I haven't heard if the telecommunications industry has been impacted by rolling out 5G and its associated network hardware-they might be in the Goldie locks range-decent profit but easy to make and no hiccups in demand. 

[Harley Lover]

8 hours ago, jcartwright99 said:

I feel like there is way more to this story than what is being told.

 

Why is demand surging? 

 

I saw this asserted elsewhere and tried to find some facts: China is hoarding chips in response to the 'trade war' with the U.S.:

 

Quote

As TSMC chairman, Mark Liu, indicated in his recent interview with the Time magazine, the ongoing chip crisis could be partially attributed to chip hoarding, as firms feared to be engulfed in the Sino-American trade war. The TSMC chairman was certain that people were accumulating chips somewhere along the supply chain, since “more chips were being sent to factories than were leaving them in products.”

Huawei itself began to stockpile chips before the sanctions took effect in September 2021. For instance, TSMC reportedly received a hike in Huawei’s orders to produce approximately 2 million “Tiangang” chips – Huawei’s chips for 5G base stations. Facing the sudden surge of orders, TSMC officials even casted doubts on their own estimations of global demands.

As an expert from Taiwan’s Industrial Technology Research Institute pointed out, the tension and uncertainty around Huawei sanctions had also prompted many Chinese electronics suppliers to stockpile chips as a precautionary measure. The recent U.S. demand for chipmakers, among them TSMC, to provide confidential information regarding their supply chains might also be an attempt to identify China’s hoarding practices. Unprecedentedly, China imported US$32 billion of chip manufacturing equipment from countries like Taiwan, Japan, and South Korea in 2020 – a 20% jump from 2019.

Apart from precautionary measures, some malpractices among Chinese chip distributors further exacerbated the shortage crisis, as they stockpiled and maliciously inflated chip prices. For example, certain microcontroller units (MCUs) have seen their prices soaring from US$6 per unit to US$50 within one year. In other sectors, automakers have complained about chips soaring to 20 times of their original prices.

Quote

Last week saw seven more Chinese supercomputer entities added to the same list "for conducting activities that are contrary to the national security or foreign policy interests of the United States," while SMIC was hit with sanctions last year. With the threat of being cut off from American companies, firms in China are stockpiling chips, a practice exacerbating the global shortage issues that have already reached crisis levels. (April 2021)

 

This is a complicated issue, but I don't see much discussion of this aspect of the problem.

Edited January 27, 2022 by Harley Lover
https://techtaiwan.com/20211013/china-chip-hoarding/#:~:text=Huawei%20itself%20began%20to%20stockpile,chips%20for%205G%20base%20stations. https://www.techspot.com/news/89284-china-imported-359-billion-worth-semiconductors-march-amid.html

[slemke]

15 hours ago, Harley Lover said:

 

I saw this asserted elsewhere and tried to find some facts: China is hoarding chips in response to the 'trade war' with the U.S.:

 

 

This is a complicated issue, but I don't see much discussion of this aspect of the problem.

Thanks for the research on this.

 

Ford was impacted greatly by the Renesas plant fire.  That has been up and running for 6 months now, so Ford’s supply woes should be easing.

 

A 17% increase isn’t that great considering the industry is accustomed to double digit annual growth.  It should be manageable.

 

crypto currency mining popularity is another contributor to demand.

 

Autonomous driving features and EVs are driving increased automotive chip usage.  Everyone wants a piece of the pie and is scrambling to bring new chips and IP to market and capture more revenue from the automotive sector.

[Harley Lover]

13 hours ago, slemke said:

Ford was impacted greatly by the Renesas plant fire.  That has been up and running for 6 months now, so Ford’s supply woes should be easing.

 

I don't get the impression that the chip situation is getting better for Ford - from Farley earlier this week: 

 

Quote

...new vehicle prices are at an all-time high, up about 12% from a year ago, according to Consumer Price Index data.  The chip shortage has greatly contributed to those higher prices, and Farley predicts that challenge will plague the industry through 2023.

"We’re still in the teeth of it," Farley said. "I think this year will be very challenging for semiconductor availability. We’re maximizing production in our most profitable vehicles. That’s helping offset the loss in production, but it’s a very persistent problem."

 

"Through 2023" and "still in the teeth of it" is a long way from getting better - I kind of hope he's just saying this to keep the competition off guard, but I think he's being straight up with the information.

Edited January 28, 2022 by Harley Lover
https://www.foxbusiness.com/politics/ford-ceo-on-white-house-mtg-ev-tax-credits

[slemke]

10 hours ago, Harley Lover said:

 

I don't get the impression that the chip situation is getting better for Ford - from Farley earlier this week: 

 

 

"Through 2023" and "still in the teeth of it" is a long way from getting better - I kind of hope he's just saying this to keep the competition off guard, but I think he's being straight up with the information.

Last summer Ford production was cut in half.  It isn’t nearly as bad now.  Don’t underestimate an executive making the most out of a non-ideal situation.  As long as they can continue convincing customers there is a shortage, the customers will continue buying at high prices all while they try to increase production as much as possible.  It isn’t just chips that are in short supply.  With the new round of lockdowns in China, there will be plenty of supply chain disruptions.

[jpd80]

36 minutes ago, slemke said:

Last summer Ford production was cut in half.  It isn’t nearly as bad now.  Don’t underestimate an executive making the most out of a non-ideal situation.  As long as they can continue convincing customers there is a shortage, the customers will continue buying at high prices all while they try to increase production as much as possible.  It isn’t just chips that are in short supply.  With the new round of lockdowns in China, there will be plenty of supply chain disruptions.

Even though there are still genuine shortages at the moment, part of what you say is true, automakers have seen how people react when the supply of new vehicles tightens. All prices on new vehicles rise, cash incentives disappear and used vehicle prices  rise as a result of increased demand. Everything points to manufacturers and sellers calling the shots for the moment, the only thing that could change that is an economic downturn or recession…..

[tbone]

1 hour ago, slemke said:

Last summer Ford production was cut in half.  It isn’t nearly as bad now.  Don’t underestimate an executive making the most out of a non-ideal situation.  As long as they can continue convincing customers there is a shortage, the customers will continue buying at high prices all while they try to increase production as much as possible.  It isn’t just chips that are in short supply.  With the new round of lockdowns in China, there will be plenty of supply chain disruptions.

This is what happens when you outsource your production of strategic items and otherwise to a foreign adversary.  When tensions rise important items are easily withheld.  
 

Regarding Ford, I love paying higher prices for vehicles with less features. It would be nice if they gave you a discount or some party gifts for their decontenting.   But I have been told I should just thankful I can buy a new vehicle.  

[jpd80]

4 hours ago, tbone said:

Regarding Ford, I love paying higher prices for vehicles with less features. It would be nice if they gave you a discount or some party gifts for their decontenting.   But I have been told I should just thankful I can buy a new vehicle.  

By way of compensation, used car prices have risen too so your current vehicle is probably worth a lot more now. I don’t like silent decontenting, it’s sneaky and leaves a bad taste in buyers mouths.

[akirby]

Ford production is down 20% from pre pandemic levels.  2.5M -> 2.0M.  Significant but not terrible considering ATP increases.

[tbone]

7 hours ago, jpd80 said:

By way of compensation, used car prices have risen too so your current vehicle is probably worth a lot more now. I don’t like silent decontenting, it’s sneaky and leaves a bad taste in buyers mouths.

That may be, but that is completely independent of Ford and not guaranteed.  But one thing you can guarantee, the price of the new vehicles will go up every year, eating into those equity gains.  
 

I just learned last night that I won’t  be getting Bluecruise on the Raptor I ordered.  That was specifically an option I wanted and another reason I was going back to a Raptor.  At least they are discounting for that fiasco.  That feature made the Raptor more enticing to me than the TRX, because we do a lot of driving.  Now that’s about the window.  

Edited January 29, 2022 by tbone

[jpd80]

25 minutes ago, tbone said:

That may be, but that is completely independent of Ford and not guaranteed.  But one thing you can guarantee, the price of the new vehicles will go up every year, eating into those equity gains.  

We’re in a really weird situation at the moment where used vehicles that normally depreciate like stones are actually holding their value, folks that got say, $8,000 incentives a few years ago are now seeing values that are more than they paid. So the changeover price is nowhere near as nasty as it could be.

 

25 minutes ago, tbone said:

I just learned last night that I won’t  be getting Bluecruise on the Raptor I ordered.  That was specifically an option I wanted and another reason I was going back to a Raptor.  At least they are discounting for that fiasco.  That feature made the Raptor more enticing to me than the TRX, because we do a lot of driving.  Now that’s about the window.  

Well that’s disappointing but at least there’s a give back which is only right but I get this awful feeling about a big mark up on Raptor, god I hope not but something tells me sticky fingers are going to be all over them……please tell me you have a locked in price,yes?

[jpd80]

51 minutes ago, akirby said:

Ford production is down 20% from pre pandemic levels.  2.5M -> 2.0M.  Significant but not terrible considering ATP increases.

What’s less obvious is that the 500k less sales came from mostly vehicles with lower returns that F Series,  full size Utilities and Explorer. That’s why Ford is on track for $10 billion revenue for 2021.

[tbone]

19 minutes ago, jpd80 said:

We’re in a really weird situation at the moment where used vehicles that normally depreciate like stones are actually holding their value, folks that got say, $8,000 incentives a few years ago are now seeing values that are more than they paid. So the changeover price is nowhere near as nasty as it could be.

 

Well that’s disappointing but at least there’s a give back which is only right but I get this awful feeling about a big mark up on Raptor, god I hope not but something tells me sticky fingers are going to be all over them……please tell me you have a locked in price,yes?

I have an excellent relationship with my dealer, who is also a friend.   I’m getting the raptor a little below MSRP, so the price will be adjusted accordingly.

[jpd80]

13 minutes ago, tbone said:

I have an excellent relationship with my dealer, who is also a friend.   I’m getting the raptor a little below MSRP, so the price will be adjusted accordingly.

Excellent, so glad that you’re getting it for a good price and  please share photos when get her, I’m already jealous as hell

[SoonerLS]

On 1/26/2022 at 10:26 PM, silvrsvt said:

Also something else to consider-Auto manufactures use ICs that are old tech and lower profit. There is a demand, but not much profit I'm assuming.

From the analyses I've heard, it's not so much that they're lower-profit, it's that nobody wants to invest in adding plants or production capacity to produce old technology. From the perspective of the chipmakers, it'd be akin to asking Ford to add production capacity to build the 6.2 V8--there may be a decent profit in it now, but it's on its way out and isn't going to help them in the future.

[Harley Lover]

On 1/28/2022 at 9:57 PM, slemke said:

Last summer Ford production was cut in half.  It isn’t nearly as bad now.  Don’t underestimate an executive making the most out of a non-ideal situation.  As long as they can continue convincing customers there is a shortage, the customers will continue buying at high prices all while they try to increase production as much as possible.  

 

When Ford shuts down F150, MME and Bronco production due to chip supply, there's no "convincing customers there is a shortage" necessary. Friday February 4 Ford announced: 

Quote

Ford Motor is cutting production next week of several key products due to an ongoing global shortage of semiconductor chips.

The automaker on Friday confirmed production downtime next week for the Ford Bronco and Explorer SUVs; the Ford F-150 and Ranger pickups; the Ford Mustang Mach-E electric crossover; and the Lincoln Aviator SUV at plants in Michigan, Illinois, Missouri and Mexico due to the parts shortage.

 

The automaker also is cutting some production of the F-150 and Ford Transit cargo vans at plants in Michigan and Missouri.

The cuts signal the chip shortage that devastated the auto industry last year continues to linger.

 

What does Ford say?

 

Quote

“The global semiconductor shortage continues to affect Ford’s North American plants – along with automakers and other industries around the world,” Ford said in an emailed statement. “Behind the scenes, we have teams working on how to maximize production, with a continued commitment to building every high-demand vehicle for our customers with the quality they expect.”

The fact that Ford is cutting some of its most profitable and in-demand models such as the Bronco, Mach-E and F-150 shows automakers continue to battle with the problem despite many in the industry expecting a gradual improvement in the supply of chips in 2022.

 

Like others, I perceive mixed messages about the true nature of where things stand with the "chip shortage" but what Ford have announced here is unambiguous in terms of the fact that the problem is continuing and not (yet) getting better.

Edited February 5, 2022 by Harley Lover
https://www.cnbc.com/2022/02/04/chip-shortage-forces-ford-to-cut-production-of-f-150-bronco-suv.html

[slemke]

5 hours ago, Harley Lover said:

 

When Ford shuts down F150, MME and Bronco production due to chip supply, there's no "convincing customers there is a shortage" necessary. Friday February 4 Ford announced: 

 

What does Ford say?

 

 

Like others, I perceive mixed messages about the true nature of where things stand with the "chip shortage" but what Ford have announced here is unambiguous in terms of the fact that the problem is continuing and not (yet) getting better.

The problem continues, but it isn’t like they are cutting production 40 or 50 percent for a quarter as they had in the past.  Sounded more like a few days worth.  So things have gotten better, they just aren’t back to full speed.  Depending on demand, they may not need to get there. They may also be shifting parts around to balance inventory.  I thought the F series was up to 70 days of inventory.  In that instance, it may make sense to shift parts to something that is in even shorter supply.

 

China has been shutting things down recently to control COVID before the olympics causing more supply chain havoc.

 

Used car prices are expected to start falling later this quarter or next quarter.  It is getting better, but still has a long way to go.  I doubt we will see widespread rebates and incentives this year, unless demand tanks.

[rmc523]

7 hours ago, slemke said:

The problem continues, but it isn’t like they are cutting production 40 or 50 percent for a quarter as they had in the past.  Sounded more like a few days worth.  So things have gotten better, they just aren’t back to full speed.  Depending on demand, they may not need to get there. They may also be shifting parts around to balance inventory.  I thought the F series was up to 70 days of inventory.  In that instance, it may make sense to shift parts to something that is in even shorter supply.

 

China has been shutting things down recently to control COVID before the olympics causing more supply chain havoc.

 

Used car prices are expected to start falling later this quarter or next quarter.  It is getting better, but still has a long way to go.  I doubt we will see widespread rebates and incentives this year, unless demand tanks.

 

I know my Bronco's production has been pushed back 3 weeks since my official Ford email/VIN notification - but 5 since I was "unofficially" following it's schedule (was able to access the timeline before I got the official Ford email).

[jpd80]

Ford running into more chip shortages recently

 

Ford idles, cuts output at 8 plants with chip supplies still tight 

Ford warned the ongoing car chip shortage would lead to a decline in first-quarter vehicle production.

February 05, 2022 02:30 PM UPDATED 10 HOURS AGO

Reuters

https://www.autonews.com/automakers-suppliers/ford-idles-cuts-output-8-plants-chip-supplies-still-tight
 

SAN FRANCISCO — Ford Motor Co. plans to suspend or cut production at eight assembly plants in the U.S., Mexico and Canada throughout next week because of microchip supply constraints, a spokeswoman said.

The plants produce some of Ford's biggest sellers and most popular vehicles, including the Ford-150, Ranger, Bronco, Explorer and Mustang Mach-E.
 

The changes come a day after the automaker warned the ongoing chip shortage would lead to a decline in first-quarter vehicle production.
 

Output at factories in Michigan, Chicago and Cuautitlan, Mexico, will be suspended. In Kansas City, production of the F-150 pickup truck will be idled while one shift will run to build the Transit van.

 

The company will also operate a single shift or a reduced schedule at factories in Dearborn, Kentucky and Louisville, while eliminating overtime at an Oakville factory in Ontario, Canada. All of the production changes will be in place during the week beginning Feb. 7, Ford said.

 

Ford shares slumped on Friday, after the automaker posted smaller-than-expected quarterly net profits

and forecasts a slower recovery in 2022 vehicle production than rival General Motors.

 

 

 

 

 

 

 

 

 

 

 

[tbone]

Since Ford has chosen the decontenting route in the F Series again, I was reading another thread on another forum about how to add back the cup holder and storage compartment ambient lighting and glovebox light.  The reason I mention it in this thread, is because it was my understanding the lights were being removed for the purposes of saving chips.  
 

After reviewing the thread it was determined that you need the following parts: cup holder with light rings. Media bin light, and the Glove box light.  To reconnect these OEM parts you need a custom wire harness that doesn’t appear to be complicated, which is made by a forum member.   So, the question I pose, is where are the chips related to these items that were removed?  This isn’t meant to be another rant, it is a genuine question posed to those with the knowledge to answer the question. 

[akirby]

Pretty sure that was done before the chip shortage.

[tbone]

20 minutes ago, akirby said:

Pretty sure that was done before the chip shortage.

The 2021 F150 had these features. They removed them for the 2022 model year.