Comment by hristov | Hacker News Reader

Comment by hristov | Hacker News Reader

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It is amazing how much incorrect analysis this global chip shortage has brought about. The situation with intel is complex but I will bring out the simplest error in this analysis.

Chips are not like oil, or steel or wheat. A chip shortage is a very different beast than an oil or wheat or iron ore or copper shortage.

Lets say that there are 500 different chips in a device. This is not an exaggeration. If you are short of chip #203 you cannot throw an extra couple of pieces of chip #205 instead. These chips are different and the exact ones are needed. Furthermore, many of these chips are made using different processes in different fabs, so you cannot slow down manufacture of chip #205 to make some extra ones of chip #203.

So that is the first thing to keep in mind in terms of the chip shortage. Currently the chips that are in shortage are mostly things intel does not make. To the best of my knowledge chips in shortage are power electronics, power discrete, power management ics, networking ics and industrial/auto/medical grade microcontrollers. If someone had updates to this list, please comment below.

The thing about the chip shortage is, that if there is a shortage in something you do not make, it is not necessarily a good thing. That may mean that your client will make fewer devices because they do not have that chip #203, and you will be able to sell them fewer of your chip #205.

Of course intel has some very serious issues but this chip shortage argument is just wrong.

An analogy that might work for most people:

Cars?

Intel is one of the manufacturers of engines, but they only make the literal engine block, maybe some pistons too. However cars have all those other tubes, wires, and side bits in the engine compartment and in the hidden parts of the body.

It's not the engine, but the specially sized and specially rated tubes around the engine. Those parts that everyone thought were dirt cheep, so people stopped making enough of them.

> Those parts that everyone thought were dirt cheep, so people stopped making enough of them.

Not only that, but because (in this analogy) tube making machines are very expensive, low-volume machines made by only a couple of companies in the world, take a long time to make, make only single very specific kind of tube each and take a long time to install and commission, you can't just up and start making more tubes.

And on top of that, the machines cost so much and tube technology moves along so that if you're not careful, you may never turn a profit on the tubes at all if, by the time you're tooled up, you've missed the window of opportunity and no one wants that many old-style tubes anyway.

This is pretty good and helped me understand.

And FPGAs. You may be literally looking at 100x pricing and higher, if you can even buy them at all.

Not a big component in many consumer items, but when you need them, you need them.

The chips used Raspberry Pi's.

The great rasppberry pi shortage is probably caused by shortages of power electronics and networking chips.

If that was the case the compute modules would be unaffected. You can't get even those right now either.

The compute modules only has a 5V input, which it must convert to the voltages used by the CPU, RAM, peripherals, etc. using aforementioned power ICs. A modern CPU like the BCM2711 usually has several different voltage domains that must be supplied by the PCB designer, ranging from 1.2v to 3.3v.

There is a fab space shortage. The cost to manufacture goes up and so only the highest volume, highest margin chips get made.

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