Comment by eande | Hacker News Reader

Comment by eande | Hacker News Reader

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Old article May 5th of this year, which in that industry is a long time. Nevertheless the situation since did actually get worse as predicted. Not only is it chip shortage we should call it component shortage. A standard 10k 0406 package resistor is sold out around the world. Many high quality, high density capacitor you can't get. The same goes for the standard semiconductor parts like diodes, MOSFET or TVS. Semiconductor sales rep give you now +50 weeks lead time for the many ICs meaning no real forecast at this point. They generally tell you 2022 will be tough maybe Q4 will ease up.

Many of the major semi companies are running at fairly high capacity, but supporting elements like IC package build capacity, sometimes materials can't keep up as well.

We looked at some boards to redesign, but when you are short hundreds of parts it gets nearly insurmountable to manage a hardware redesign. Interesting and challenging allocation period, definitely worse than 2003-2005.

Shortage in supply is everywhere. Even in labor market. While walking around I cannot pass by without a desperate plea for staff needed. I see businesses closing down literally because of shortage of staff. It’s as if half of humans suddenly disappeared and other half decided to consume massively.

Truck driver. Besides Walmart (my major shopping store, because you can park a truck up in there), truck stop convenience stores are chronically short of things in the last N months. I know, the irony ...

Unflavored half and half single servings for coffee go early. The bulk half and half dispensers are usually empty these days. (The flavored side is often still available.) Then coffee lids. Then large coffee cups. Gatorade Zero often goes, and then regular Gatorade. The Power Aide seems to always be available. The open cooler boat with yogurt and sandwiches often runs low or empty.

Vicious cycle of staff shortages everywhere, thus unable to source, produce, deliver and stock at former rates.

Echoing /u/mrkstu, Casey's across the Midwest is generally not in stock of the medium cup for soft drinks, which is normally available in styrofoam or plastic.

Local QT regularly running out of syrup and various cup sizes for soft drinks.

Turns out there is no shortage of people wanting to work. But there is a shortage on people wanting to be a slave of their job for a misery as compensation. So restaurants here keep complaining how come nobody wants to work with them.

EDIT: I'm not joking, the salaries for mostly any position in a bar or a restaurant in Spain tend to be a joke with long hours and shameful conditions. Paying in cash to avoid taxes is a common thing. Doing extra hours without extra compensation as law requires. You don't like it? Ok bye, you're fired, and we'll complain to the news reporter on TV, about how nobody wants to work any more nowadays.

In most cases I would agree but right now I am seeing actual shortages. In just web development, it seems like this year every single company decided is the time to expand. And when every company decided to expand at the same time, there is a shortage of workers to fill those roles since you can't just pull senior developers from thin air or unis.

I was making a comfortable wage previously but this year most of my coworkers have left for other jobs and I'm on the way out too since the current job listings are close to double what I make currently. An eye watering amount of money is on the table right now.

But paying more is a zero sum game. To gain developers you have to be draining them from some other company and it will take years for new supply to come in.

No, this is not a shortage of people. This is a shortage of seniors willing to work for your "very competitive compensation".

Prices are up because you're starting to actually have to compete with major players due to all the remote work normalizing the playing field.

It is a shortage because there are more open positions for senior developers than there are senior developers here.

Paying more won't bring senior developers out of the void because there do not exist enough to fill all positions. If all companies expand at the same time they can not possibly all fill their positions no matter what they pay.

What does "here" mean? If it's not "on Earth" then your issue may be that senior developers aren't willing to relocate for you when remote jobs exist.

I'm talking about the whole of Australia right now (remote but country based). I can see job listings have all exploded in listed salary and every company I talk to is looking to expand.

My aussie counterparts are still always migrating to the US because of the huge pay disparity.

It's virtually impossible to move the other way right now due to covid. So there can be a genuine shortage as it is not possible to pay to pull people from other countries.

As a senior developer that's semi-retired, maybe this is the time for me to unretire.

Labor shortages weren’t a very big thing a month before the pandemic, so you have to ask yourself what changed. In many cases it’s that people got comfortable being paid a decent amount to not work, from the pandemic payouts. It’s a really interesting time to be looking at the economics of everything and see how this will play out over the next 12-18 months.

Perhaps it’s only that, for the first time, they got some time to reflect on their job and actually notice the impact it had on their lives and health, realised it had never been worth it, and want to find something else?

I think it is closer to that. A lot of people were complacent in their jobs, and not nearly tapping their potential (market or otherwise). I can't tell you how many people I know or heard 2nd hand got furloughed or laid off, then landed a significantly better paying gig and never went back (sometimes wildly different industries). If they were never forced to change, I guarantee most would have stayed.

Or got laid off, took the stimi, got more education to switch careers. I know 2 and I don't have a bunch of friends.

> In many cases it’s that people got comfortable being paid a decent amount to not work

Americans got a paltry few thousand dollars. So you certainly agree that if a single payment amounts to more than their shit job then that shit job isn't paying enough.

Not quite right. Yes, America had two stimulus checks, but also Enhanced Unemployment benefits.

Many people who made 20-30k/year working full-time, were suddenly making close to 50k/year without having to work for close to 2 years.

Wasn’t unemployment boosted?

one thing that changed that often gets overlooked is that covid killed off 648k people so far in the US. that's a lot of people. I would fully expect there to be a labour shortage after approximately the population of las vegas is killed off.

and i know that a lot of the deaths have been in older people who may have already been retired, but they are often the childcare providers who enable others to work.

The other half doesn't need to consume massively, just at the same rates they always were. When every step along your just in time supply chain is running at 50% capacity, the end output is even lower than 50% capacity.

Come on, it's obvious what the cause is. We meddled with and shut down large parts of the world economy. What hubris wouldn't expect there to be problems of rubberbanding supply and demand when we so deigned to restart them?

This was a problem that was forecasted by many heterodox shutdown detractors. These "shortages" are caused by our politicians and bureaucrats making terrible decisions unilaterally.

What percentage of the world economy was really shut down, though? Looks like US GDP was down 3% in 2020.

This is downstream effects of housing crisis. Rents have finally hit a point where even slaving away at minimum wage is not enough. Why live and work in a place where even after full time you will only further go in debt. How about just move to cheaper area or do go in debt but might as well do something less stressful. Either way financial situation is gonna be same.

I'm constantly surprised that so many things in IKEA are out of stock. I've been shopping at IKEA for 20 years and never experienced this before.

Or... Everyone has decided to consume massively because a lot of people feel rich after COVID (same income, no holidays, travel or social expenses)

Both halves are consuming massively thanks to pandemic relief funds and bonus unemployment. Why do you think there’s a labor shortage? You can get paid more money to sit on your ass and order things on Amazon.

Reasonable speculation, but if you look into it you'll see that right now the most popular hypothesis is a lack of fit between job seeking and hiring. Warehouse jobs for example are taking a lot of workers away from other industries right now.

The most convincing piece of evidence for this IMO is that if you compare the states that ended relief funds and bonus unemployment early to try to combat this issue with those that let it keep going, there was no statistically significant difference between the two halves of the USA in terms of hiring shortages.

Where in the world are they still paying pandemic relief funds 18 months into the pandemic?

The whole United States, at least to those who qualify or have chosen to game the system. Federal boosted unemployment funding is finally ending this week, assuming it doesn't get yet another last-minute extension. PPP loans are still being drawn down and forgiven too.

Canada, and it's not ending anytime soon...

To businesses, in NL. Will end this year.

USA

Though it's ending this week

Is the shortage of common components (such as the 10k 0406 resistor you mention) due to: increased demand that can't be met due to unavailable capacity or because the manufacturers scaled production down during the past year and now there is no capacity to scale it back up? Or because supply chain shortages that feed the fabs (raw materials)?

With consolidation, some of the less common component values are being discontinued. I would imagine the same may be happening with standard values in larger sizes and 0406 is kinda big these days.

Longer term this shutting out of companies not on the leading edge will result in other changes. Components fabricated integral to the PCB being one such change.

> Components fabricated integral to the PCB being one such change.

I hadn't heard about this, and it sounds interesting. Do you have any references?

I only saw it in a presentation from a high end board house. And then only for limited use and probably wide tolerances? But the idea is still in my head and makes some sense. Imagine something like a silk screen laying down passives. No, they didnt say how they do it, that was just my thought.

(Layperson's opinion)

I get the impression looking at the electronics industry from the outside over decades, that techniques seem to be moving from "level to level".

That is, you now see single silicon chips made like entire clusters of computers, with on-board network connections between surprisingly independent cores and modules. It's almost like a bunch of silicon chips all within one monoilithic silicon circuit board, with no external wiring.

Then, several of these chips are in turn mounted on a physical board that is "just" another silicon wafer, possibly made on a very old node size, something still measured in microns. But nonetheless, it's a full silicon chip in its own right, with high-tech chips riding on top of it like circuit elements.

And then the motherboards seem to be miniaturising too. I remember when designers hesitated to use chips with much more than 20 pins because it would need to many traces that were too fine. Now? Thousands of pins are the norm for mainstream processors. Soon? Maybe tens of thousands, or even hundreds, and I wouldn't be surprised if circuit components start getting printed directly into the motherboards, like you said you saw.

I remember going into a library and picking up an old edition of Scientific American, from the 1960s I think. It had a full-page ad from Texas Instruments advertising their record-setting integration, because they could pack ten (10!) transistors into a single chip. They had an "actual size" picture in the ad, so you could see for yourself and count all ten transistors. The metal layer wires looked thicker than I've seen on some small PCBs these days, which should blow your mind...

Passives are actually quite quick to produce. I think it's a good proof that a few giant distributors in China keep buying, and flushing them down the drain.

> Passives are actually quite quick to produce. I think it's a good proof that a few giant distributors in China keep buying, and flushing them down the drain.

What are these immense amounts of passives used for?

Everything, but I think they are suggesting that the market for them is being suppressed by hording or destruction of product.

Wait why would anyone buy up a large percentage of something to only destroy it?

I can answer that in the abstract. I don't think that's what's happening, I don't have any reason to think that. Just answering in a vacuum.

Imagine you sell widgets for $200 a pop. Widgets are hard to manufacture, production is limited. Someone else has 10k widgets that they want to sell for $75 per.

If you buy all the stock, people will be forced to buy yours, because of supply constraint.

200-75 = 125 is more income than if you price-matched and sold at 75.

Now why destroy them, and not just sell them back? Well, they're not necessarily identical to the widgets you make. Maybe they have the other brand's logo stamped on them. Maybe the datasheet doesn't quite match.

Either way, your customers might notice. If you just buy and burn, no one downstream of you sees anything, except for higher prices

Note also that the above sounds immoral enough to be illegal in a whole lot of countries, so I would advise you not do that, though I'm neither lawyer nor spiritual advisor.

In the US, doing the latter is a tax write off and perhaps enough to give you a stimulus.

It's crazy for a near-commodity with ample supply, but if there's a supply shortage and (in the short-term) inelastic demand - because it's a relatively cheap thing that's required for a much larger product - then it may easily be economically effective to restrict supply instead of filling it.

E.g. if you can make 100k widgets for all of which you have customers at a dollar each, then in a supply shortage with limited alternatives you may find that if you credibly cut supply to 80k widgets, so that some customers will actually be left out, then they might be willing to pay two dollars per widget (so, 160k instead of 100k for that toy example), so you get more money for less goods.

To hinder competitors? To avoid storage costs?

Apple has been known to buy all of the worldwide supply of a component to destroy it, delaying competitors plans.

They reserve supply in enormous quantity to box out competitors, as you would expect from the top dog. Perhaps they even reserve more than they need sometimes. But have not seen that they would do it just to deliberately destroy.

Source?

I don't think there is one quite so nefarious, the tale I usually hear is that Apple buys out the manufacturing capacity, say, on 8GB ram chips - and then its competitors can't find 8GB chips for their own phones, and have to offer a meager 6GB of RAM instead. (If you think about it, doubling your RAM just so manufacturers don't have the capacity to supply your competitors is pretty ruthless and genius)

Googling aroubd I see other stories of Apple buying all available capacity of 5nm manufacturing or glass or sapphire for smartwatch screens etc, here's one source for RAM tho (2009): https://appleinsider.com/articles/09/02/18/apple_buying_up_a...

And it's not like Apple waltzes in and just stuffs all the RAM that's lying around into a shopping cart. One of their uses of their cash reserves is to pre-commit to buying the components they need far in advance.

In principle, it seems to me that this shouldn't be causing component shortages — on the contrary, it should reduce planning uncertainty for component manufacturers.

The fact that some companies have contracts for reoccurring scheduled delivers of parts means when the SHTF it's going to be really bad for those that don't.

If Apple has a contract to buy 10% of a manufacturers capacitors. But then material shortages drops the manufacturers capacity in half. Apple's share is now 20% and anyone without a standing order is SOL.

The situation would be the same if Apple did not have a contract, since they can afford to pay a higher. The contract lets manufacturers more easily invest in future capacity.

No, without the contract Apple would have to pay more per part. The contracts are x for $y. They do have clauses for price increases so Apple might be paying more, but not what they would pay without the long term contract.

I don't have insight into Apple ,justthis is how contracts work in general

My comment was to note that Apple would still end up with 20% of the production since they can afford a higher price. So the same situation in terms of allocation with or without a contract, in contrast to what I thought Gibbon1’s comment implies.

Buying something to destroy it so someone else cannot have it is nefarious.

Buying something in sufficient quantities that results in others not having it, but still selling out of it is not nefarious.

In 2009 maybe but for the last 10 years there have always been competitors to Apple who have cheaper phones with more ram on them.

Damping.

Journalists are clueless.

Intel doesn't make 10nm chips that you put in a car or bulldozer or telecom box that has to bake in desert heat. Some of their older process stuff, yes, but not the top.

0406 package? That's an odd size, apparently made only by Vishay, and yes, they're out of stock.

It's likely for low resistance and temperature stable precision current measurement so the package design can contribute to stability. Vishay is a leader in that stuff.

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