You will not bore us tech geeks in the room. I can understand if the automotive manufactures cut back on orders during the pandemic, some of that has already been reported while some automotive manufactures did not cut back and they are fine.I see guys don't want to talk about this topic, but it's real. I have to present in a meeting next week at work about the overall economic impact of this silicone shortage in everything from laptops to cars. This was a short turn around and is a red flag meeting for my industry.
What my folks have been researching now for a couple of weeks is exactly why? There are several theories, which is all boring and speculative, but the prediction is the impact may last for a few months due to backlog.
Can't get this current economic situation over fast enough!
TAIPEI -- Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, and Taiwanese peers are considering another round of price increases mainly on automotive chips, Nikkei learned Monday, as a global semiconductor shortage puts pricing power firmly on their side.
The hikes of up to 15% are being considered by Vanguard International Semiconductor, a TSMC subsidiary that makes auto chips, along with other Taiwanese players including No. 4 foundry United Microelectronics Corp.
If the Taiwanese suppliers do successfully negotiate higher prices, that would mark the rare case of two substantial hikes within just a few months, after a round of increases that began last fall. Their aggressiveness shows how they now occupy the driver's seat in price negotiations with automakers.
You're correct. It's the Build just in Time model that has created the backlog. Too many economists (like me) and analysts predicted a widespread economic disruption; this did happen, but didn't last as long as predicted. idling these factories and the subsequent influx of new orders and restarts have created a perfect storm.You will not bore us tech geeks in the room. I can understand if the automotive manufactures cut back on orders during the pandemic, some of that has already been reported while some automotive manufactures did not cut back and they are fine.
One key is the foundries, like TSMC (Taiwan Semiconductor), if their incoming orders were cut they needed to find work to keep the line moving, billions of $$$ of CapEx equipment cannot sit idle.
Now depending on the contracts the automotive manufactures have with them, or a go between like Arrow Electronics, what contract language did they have to protect them from unforeseen events, most likely not much.