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Transportation Hardware

A 'Debilitating' Shortage of Computer Chips is Closing Auto Factories Worldwide (msn.com) 152

Posted by EditorDavid from the chip-wrecks dept.
"American automakers are asking the U.S. government to help solve a debilitating shortage of computer chips that is closing auto factories worldwide and could restrict production until the fall," reports Bloomberg: The American Automotive Policy Council — a lobbying organization for General Motors Co., Ford Motor Co. and the U.S. operations of Fiat Chrysler Automobiles NV — is agitating with the U.S. Commerce Department and the incoming administration of President-elect Joe Biden to press Asian semiconductor makers to reallocate output away from consumer electronics and build essential chips for cars.

"We have requested that the U.S. government help us find a solution to the problem because it will diminish our production and have a negative impact on the U.S. economy until it's resolved," Matt Blunt, president of the AAPC, said in an interview Friday. "We are not primarily concerned with where blame may lie for this global shortage, if it lies anywhere, but we just want a solution. And the solution is more automobile-sector semiconductors."

The shortage forced Ford to shut a sport-utility vehicle factory in Kentucky this week, and it is closing a small-car plant in Germany for a month. Fiat Chrysler has had to temporarily stop output at plants in Mexico and Canada. More production is expected to be idled in the coming weeks.
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A 'Debilitating' Shortage of Computer Chips is Closing Auto Factories Worldwide More

A 'Debilitating' Shortage of Computer Chips is Closing Auto Factories Worldwide

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  • Huh? (Score:2)

    by Dogers ( 446369 )
    And just what special essential chips are these that aren't available in the market?

    • Exactly what is unavailable? (Score:5, Insightful)

      by bagofbeans ( 567926 ) on Sunday January 17, 2021 @11:48AM (#60954866)

      Every article does vague hand-waving and no specifics. WHAT IS NOT AVAILABLE? And why? Auto contracts have penalty clauses for late shipments, particularly for custom/ASIC and single-source products. This doesn't make sense.

      • You mean other than the fact that a pandemic has disrupted many global markets and global shipping--other than that nothing really.

      • I'm guessing custom automotive stuff - ECUs, various body control modules - these are unique to specific automotive product lines or even specific car models and aren't sitting on a shelf ready to be ordered by the hundreds on Aliexpress.

      • Imagine needing certain chemicals, not sourced under automotive contacts, for processing of automotive wafers, which can't be supplied due to a lockdown at the manufacturer's location. Using another supplier is not possible without doing the paperwork and perhaps, depending on what kind of chemical, a bunch of testing. This is just one example that comes to mind, based on my personal experience in 2020 with automotive IC manufacturing. There are supply shortages and logistics problems everywhere. Another po

    • Re:Huh? (Score:5, Informative)

      by Distan ( 122159 ) on Sunday January 17, 2021 @11:59AM (#60954900)

      It isn't that other markets are taking up chips that could go into automobiles, it is that other markets are taking up production capacity leaving less capacity for automotive chip manufacturing.

      An implied problem here is that automakers want to pay bottom dollar for their supply. My company designs chips and we don't have problem getting production capacity because we pay what the market demands to get our chips made. Our volume is in the millions of units per month.

      Because the automakers are cheap they also want to use older manufacturing processes because they are cheap. But when the auto industry slowed down due to COVID they all reduced their forecasts, leading to some of these manufacturing lines being shut down. There is no way to restart them because they relied on obsolete equipment that once scrapped can't be easily replaced.

      Underpinning all of this is the lack of vision that allowed semiconductor manufacturing to be concentrated in 2-3 locations worldwide. Political leaders in Europe and America should be absolutely ashamed for not understanding how semiconductors underpin everything and allowing this critical technology to be moved outside of their borders.

      • Re:Huh? (Score:4, Insightful)

        by SWPadnos ( 191329 ) on Sunday January 17, 2021 @12:16PM (#60954964)

        mostly agreed with you, except:

        Underpinning all of this is the lack of vision that allowed semiconductor manufacturing to be concentrated in 2-3 locations worldwide. Business leaders in Europe and America should be absolutely ashamed for not caring how semiconductors underpin everything and allowing this critical technology to be moved outside of their borders, due to short-term financial concerns.

        FTFY.

        • Re:Huh? (Score:4, Interesting)

          by apoc.famine ( 621563 ) <apoc.famine@g m a i l . com> on Sunday January 17, 2021 @01:08PM (#60955120) Journal

          And not just business leader - how about automotive business leaders. If your business relies on a supply chain, it's your job to secure it as much as you can. Nickeling and diming your suppliers and playing games with them is fucking stupid if your entire business relies on one of them.

          As much as you can rag on Tesla for, they are producing their own chips and own batteries. Their valuation always seems a little crazy to me, but then shit like this happens due to the incompetence of the existing auto manufacturers, and I have to admit that Tesla looks very well run in comparison.

      • Because the automakers are cheap they also want to use older manufacturing processes because they are cheap.

        You're not wrong but I think more goes into it than just that. I get this from my brother, who was a process engineer at a semiconductor company for decades, including selling chips to car companies. I suspect they want cheap but they also want robust and reliable. When you're shipping millions of cars, you have to think carefully about whether "is this new part better/cheaper enough to be worth the risk of recalls and repairs?"

        In addition, new processes are often cheaper than old ones because they focus on

      • Because the automakers are cheap they also want to use older manufacturing processes because they are cheap.

        In some ways like space vehicles. The latest and the greatest isn't always the best for a particular task. Particularly where failure can cause at best, an inconvenience, at worst injury and death. Cheaper is just a side-benefit.

      • I generally agree but argue the main problem lies primarily with their forecasting. I work at a large chip company shipping millions of units per day. What we saw was, when the auto industry slowed down, auto suppliers cut their backlog to near 0. It practically fell off a cliff. Other industries cut back too since everyone expected an economic dip (if not collapse), but not nearly to the degree of automotive.

        That didn't happen for a variety of reasons, so everyone had to crank back up fast. Compounding tha

    • Custom microcontrollers or asics perhaps. Automotive grade chips have different vibration and temperature requirements. This isn't your old fashioned 555 timer.

      • Isn't that mostly a matter of packaging? Outside of super-specialist hardware such as SOS, the chips themseleves would be the same.

        • I don't know... both vibration and temperature cause significant mechanical stresses within the chip. You can offload some of that to the surrounding package, but not all. I could easily see a bias towards thicker substrates and larger feature sizes for devices intended for such high-stress environments.

        • Isn't that mostly a matter of packaging? Outside of super-specialist hardware such as SOS, the chips themseleves would be the same.

          Not entirely. You need to add compensation circuitry to things like current limiters if you need them to meet spec at extreme temperatures (automotive spec is from -40 to +125 C). Actually, that goes for pretty much anything analog, which includes all sensors, amplifiers, cameras, etc.

          • And this circuitry is present only on chips with automotive spec packaging? One would have thought that these days it's cheaper to *not* have multiple sets of masks for chips heading into different types of packages. Surely it doesn't hurt to have this circuitry present even when operating under average conditions.

            • And this circuitry is present only on chips with automotive spec packaging?

              Probably not as it may be required on uses that have such requirements. The issue is what are the requirements for the chips.

              Surely it doesn't hurt to have this circuitry present even when operating under average conditions.

              And what about cost? It would certainly cost more to have these requirements. Using these chips in consumer electronics may be not very useful unless that gear was made to be in these conditions.

    • What is special is that some companies did not pay the prices when they were quoted higher than they liked and elected to instead wait for market conditions to improve, it didn't so in the end they failed to secure their supplies.

    • 8052 and Z80 microcontrollers. (not joking)

      My products use AVR for 8bit, so no shortage. But I don't have any BMAs trying to squeeze "extra" olives out of my design, either.

      Just check mouser. You cannot buy 8052 or z80 in reels anymore. Only dozens to hundreds are in stock.

  • It's kinda late to worry about the lack of chip fabs in the US. Maybe call up IBM or TI and pay them for priority.

    Since you have lobbying money, why not purchase politicians to remove the barriers to new domestic manufacturing?

    https://en.m.wikipedia.org/wik... [wikipedia.org]

  • It's a capitalist world (Score:5, Insightful)

    by Ecuador ( 740021 ) on Sunday January 17, 2021 @11:46AM (#60954858) Homepage

    It's a capitalist world. Yes, in that respect it applies to Chinese companies too. If you pay the right price, there will be allocation for you - the fact that you need simpler chips at a smaller volume than, say, GPU companies, does not mean you are expected to pay less when there is a production shortage.
    Also, plan ahead, it seems that when the pandemic hit, car companies halted orders for chips, so that capacity was reallocated. I don't see the car manufacturers disputing this, they are just incensed that that capacity they abandoned was allocated to the highest-profit customers (again, exactly how capitalism works), and the chip manufacturers are not bending over backwards to accommodate them now that they remembered they actually need chips to put in their cars.

    • Re:It's a capitalist world (Score:4, Insightful)

      by PsychoSlashDot ( 207849 ) on Sunday January 17, 2021 @12:16PM (#60954968)
      Agreed. Further, we're in a pandemic with plenty of work-from-home and stay-at-home orders. If there's a shortage of new cars... that's fine.

      Most people and businesses can keep driving their existing vehicles or grab one of the zillion excellent used cars out there. Yes, that may mean occasionally idling some car factories and feeder plants. But shifting capacity away from consumer electronics which are enabling many people to keep doing their jobs from home, and keeping many more people sane via entertainment... isn't a great choice. We need laptops and VoIP phones for those who don't have them. F150 trucks? Meh. Use any existing one for the next year.

      • F150 trucks? Meh. Use any existing one for the next year.

        But the styling of the old trucks isn't aggressive enough. I need a taller, edgier, more menacing grill. I need bigger wheel wells.

        I'm going to get PTSD if I have to continue operating such a wimpy vehicle in front of my peers.

        • Then it seems like there's a market for external shells you can bolt to the outside of your truck, to trade performance for style.

          Hey - it worked for the small car aftermarket a few years back. Who cares that the big grill does nothing? It keeps the economy moving.

          You can even repurpose the same assembly lines - just add a trimming stage, add some extended attachment points, and skip final assembly.

          I'm mildly disappointed this post ended up sounding this realistic.

          Ryan Fenton

      • Re: (Score:2)

        by mestar ( 121800 )

        Yes, that is a great choice, however, todays news was written by the big car lobby.

    • the point here is that there aren't chips to buy. Yes, you can spend more and get your chips (and I would expect them to go entirely to high margin luxury vehicles and heavy trucks). But shortages mean they will run out no matter what the price, and that in turns means less production, less jobs, less economic activity.

      The fact is COVID is closing factories left and right and if we just say "fuck it, let 'em die" even that doesn't work because so many get sick you *still* close the factory.

      This is o

      • Well, most of your post is a dumpster fire of off topic and wrong, but you do have some kernels of truth in there.

        the point here is that there aren't chips to buy.

        Incorrect. There are plenty of chips to buy. What aren't available anymore are cheap, old chips. Why is that?

        Do some research into how our food supply works. It is very much not left up to capitalism and for good reason.

        This is the opposite of what the auto makers did, involving a key component in the supply chain that allows them to stay in business. Now they are starving.

        They were paying for a ready supply of cheap old chips, but when COVID hit, they decided to cut their already super low costs by a f

  • ...there are car companies (or at least one) making their own chips, because they knew it would come to this.

    • Re: (Score:2)

      by Distan ( 122159 )

      Who?

    • Re: (Score:2)

      by crow ( 16139 )

      They make one of their own chips. There are hundreds that they rely on that are made by other companies. Even the chip they built themselves is manufactured under contract. However that company also is likely not using as many custom auto-specific chips as other companies, which is likely what this shortage is about.

      • "They make one of their own chips. "

        And that chip does everything what the other companies need 7 or more of them.

  • LOL @ "they asked the government". (Score:5, Insightful)

    by Mr. Dollar Ton ( 5495648 ) on Sunday January 17, 2021 @11:49AM (#60954874)

    I thought that "the invisible hand" of the "free market" solves it all.

    • It does, but the error rhetoriticians make is that the granularity for adaptation is years. [juliansimon.com]

      Just in time manufacturing relies on superior planning and logistics. Oops.

    • I thought that "the invisible hand" of the "free market" solves it all.

      It does, just not in the short term. You don't spin up manufacturing capability like this in a few weeks or months. Mind you until them it's precisely the free market the car companies are complaining about. They want front row tickets but are only willing to pay bottom dollar prices and now are whining to the government for help.

    • I thought that "the invisible hand" of the "free market" solves it all.

      That's because you neglected to actually read Wealth of Nations by Adam Smith, father of Capitalism.

      The "invisible hand of the market" is a phenomenon that arises when the Government both refrains from direct participation in a market, and also regulates the market to protect small and new market players from established market powers. Then, and only then, does Capital and Competition determine the outcomes; only then does the "invisible hand" even exist. What is the invisible hand? The net sum of purchas

  • Chip producers are in a cut throat business. They will produce whatever yields the best margins. Perhaps the automakers could renegotiate and offer to pay more? Or are they too American/entitled? Perhaps the CFO could offer COD terms or Net 30 instead of Net 180? But many big company CFOs would rather watch their company burn before letting a supplier dictate terms.

    • They do this all the time already for aging chips. This is just a stupid mistake on their part. They want to have their low cost cake and eat it too.

    • First of all, this problem is worldwide if you read the title. This story focuses specifically on what the American automakers are doing by asking for help from the government. Second, do you think that no automaker in the world offered to pay more to avoid shutting down their production lines? Again the problem is a worldwide shortage.

      There are two major converging issues that are currently exacerbating the problem:

      1. The just-in-time model where no one keeps a large inventory. It relies on all materials arr

    • But many big company CFOs would rather watch their company burn before letting a supplier dictate terms.

      Walmart burning in 3...2...1.

  • Hypocrisy (Score:5, Insightful)

    by Rick Zeman ( 15628 ) on Sunday January 17, 2021 @11:58AM (#60954898)

    All of the businesses are pro-free market....until it works against them. Then it's all, "Help me, oh government, help me!"

    • And talk about trying to do tha yourself . . .
      Especially when it's the health and life of actual human citizens in peril. Not just some dickhead's personal masturbation number, counting the amount he stole (profit) from citizens, expressed in dollars on a bank account.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Of course they are. That's what they're supposed to do: jockey for whatever advantage they can get.

      People do the same thing. When you've got a good job you're an anti-tax capitalist. As soon as you lose it, or it looks like you might lose it, you scream for government bailouts for your employer and social security for yourself.

      It's a wonderful combination of greed and lack of foresight.

  • As if that wasn't a capital crime, he acts...

  • Making critical parts domestically.

    • Re: (Score:2)

      by ffkom ( 3519199 )
      That's why Bosch started building their new RB300 semiconductor plant in Germany in 2018, it is planned to start operations in 2022. https://www.bosch-presse.de/pr... [bosch-presse.de]

      • Bosch mostly makes sensor ICs, yes the automotive market is a big part of their sales, but that doesn't help with this.

        Everything they make I can buy similar components manufactured in the US or Asia. That's not the stuff that has a shortage. That's all mixed circuits, with more specialized production lines.

        The shortages are on the single process, high volume digital lines for processors.

        Ignoring that new planned plant, Bosch is already one of the major fab operators in the world. They have more output than

    • Another solution is to use Model T blueprints...no computer needed!

  • It's not just foundaries that are the problem (Score:4, Interesting)

    by wakeboarder ( 2695839 ) on Sunday January 17, 2021 @12:33PM (#60955012)

    I talked to someone in the industry last week about chip shortages, they said that it's also the testing facilities and packaging facilities. Some of these exist in other countries and depending on conditions may still be in some state of lockdown or they are behind. So even if you do get your chips baked, they might not be available.

  • Auto makers want US gov to solve their supply chai (Score:3)

    by anegg ( 1390659 ) on Sunday January 17, 2021 @12:35PM (#60955016)
    The US auto makers want the US government to somehow solve their supply chain problem? Why? And they arenâ(TM)t concerned with âoewhere the blame liesâ? Sounds fishy to me. Private industry should be solving their supply chain woes through market forces. I find it hard to get behind the idea of the US government intervening unless there is blame to be placed on other nation state actors acting against the US. Otherwise this sounds like the auto makers themselves might bear some of the blame and they want the citizens of the US to ignore that inconvenient aspect.

    Are all auto manufacturers globally affected? Are Japanese and German auto factories being idled? Sounds like more detail is needed. Guess I should read the actual article...

    • Comment removed based on user account deletion

    • It is easy to solve their supply chain problems here in the US.

      They could buy their 8 bit micros from Microchip/Atmel, and their 16/32 bit from TI. That's what I do. No shortages. I just got a shipment from Mouser last week.

      They don't need the government's help for that. They just have to improve their R&D hygiene.

  • "is agitating with the U.S. Commerce Department and the incoming administration of President-elect Joe Biden to press Asian semiconductor makers to reallocate output away from consumer electronics and build essential chips for cars"

    In other words, it is OK for Trump's America to put restrictions on Asian tech manufacturers, but it is not ok for America to take any punishment.

    • Re: (Score:2)

      by jonwil ( 467024 )

      Why should Ford or GM get special treatment in the making of chips ahead of Apple or Microsoft or Cisco or any other American companies who need chips for their products?

  • "We are not primarily concerned with where blame may lie for this global shortage,"

    I read this as "yes, this is completely our fault, but please ignore that."

  • Are they paying taxes at all? Are they even incorporated in USA? Did they bear the fair share of their burden maintaining the government in America? Or law enforcement?

    When it comes to profit, it is all private, their hard work, and incredible smartness and super duper brilliance.

    When it come to costs, from cleaning up pollution to covering their ass after they messed up their supply chain, after putting all their eggs in one basket, after driving to bankruptcy every American part supplier by switching to

  • I don't understand why they simply don't finish the cars minus the chips. Stockpile the cars until the chips are ready. If there truly is demand for new cars, the expense of stockpiling shouldn't be high relative to selling value.

    • I wouldn't want to buy a car that was sold as "new" and then find out it had been completely taken apart by hand, and reassembled just to put in a 555 timer for the turn signals. Hell, the car I already have was sold as new, and had a defect in the stereo system. Since it was so new, the dealer technicians didn't have any experience disassembling the dash to get to the component that needed replacing. Instead of taking 2 hours to replace, it took over 4, and now, when I drive it in the winter when it's cold

  • ... that should never have left US shores. Now it's a problem and there is no easy solution. Wow, I'm sure *nobody* saw that coming.

    • Ross Perot, call your office

    • Now it's a problem and there is no easy solution.

      Why should big companies need all their problems to have easy solutions? Why can't they just spend the money? They can have fast, good, expensive, no problem. Or they can have slow, good, cheap. And they get to choose.

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