1. Yes, everyone cancelled orders and idled capacity. Everyone was anticipating a deep and long recession until the fiscal/monetary bomb of March/April 2020. See #7 above.
2. The 120nm legacy nodes and similar are right at the center of the whole shortage. This has been underinvested for years because it has been low demand growth and low margin. Automakers are particularly vulnerable, because for years, every new feature has gotten its own cheap microcontroller to run it. There are now dozens in new cars.
3. Graphics cards have been affected by crypto miners sucking up supply at any cost, and everyone not named “Apple” competing for TSM’s top end processes.
4. iPhones don't just come with Apple A-Series chips made on TSM’s top-end node, but a host of others, some made on legacy processes where the shortage is. Likely we are talking about some cheap analog power chips or something like that. Apple has decided to push as much supply chain problems to iPad as they can.
5. For the vast majority of what automakers want, 7nm is overkill. Once there are more high end SoCs running multiple systems including self/assisted-driving, that will come into play. But that is not where the shortage is concentrated.
6. Apple was Intel’s 4th biggest customer before they left, so it has had a small impact, but only at TSM at their top node. Samsung has picked up Qualcomm and AMD as a result.
Disclosure: I work for GM, what follows is solely my own opinion and perception of reality.
On #1 also bear in mind that the supply chain is deep and complicated. OEM (GM, Toyota, Tesla, Ford etc) orders a number of COMPONENT X that contains a chip from a Tier 1 supplier. Tier 1 supplier order subcomponents from other suppliers. (Continue this until you have built a very confusing interdependent supply web).
At any level of this, anyone could have (and did) cancel their orders in 2020. As in OEMs cancelled some orders, Tier 1 suppliers cancelled some orders, Tier X suppliers cancelled some orders, etc.
> Continue this until you have built a very confusing interdependent supply web
I like to say that reality cannot be reduced to a single variable. It is a complex multivariate problem.
Most reporting out there on any subject reduces that being reported to a single variable. Example: Container shortage > bad > supply chain crunch. Etc.
The overwhelming majority of people have no practical understanding of business and, in particular, manufacturing. The complexities involved --the variables-- do not exist in their realities. What you explain about the supply chain is a revelation to almost everyone reading it. Even with this, reality is far more complex than what any of us can explain in a couple of paragraphs.
I have lived through a couple serious supply chain issues in the last several decades. This one is a bit different because almost everything in technology products is affected. It's one thing to re-spin a design because one chip becomes 60-week unobtainum, quite another when you can't get 75% of the BOM for 40 weeks.
> Example: Container shortage > bad > supply chain crunch. Etc.
One thing I learned working in manufacturing is to think about movement and management of empty carriers. If you fill something, it will be empty at some point and it doesn't just disappear. You have to get it back to where you fill it again.
> 2. The 120nm legacy nodes and similar are right at the center of the whole shortage. This has been underinvested for years because it has been low demand growth and low margin. Automakers are particularly vulnerable, because for years, every new feature has gotten its own cheap microcontroller to run it. There are now dozens in new cars.
> 5. For the vast majority of what automakers want, 7nm is overkill. Once there are more high end SoCs running multiple systems including self/assisted-driving, that will come into play. But that is not where the shortage is concentrated.
There was a discussion about this a few months ago. It's not just that newer nodes are overkill, it's that auto components apparently have very long and expensive validation requirements, which would be another explanation for why they are still depending on these older manufacturing processes.
Tesla, for the most part, is skipping that validation and just shipping cars. The warranty issues from Tesla have been notorious, but their business model is to ship cars as fast as possible and deal with warranty issues later. They were able to side-step much of the chip supply issues by either shipping cars without certain features (no adjustable seats, no USB-C ports, etc.) and also switching to newer 7nm+ parts, like the AMD Ryzen x86 chips that they've started shipping in the past few weeks. Their direct sales model allows them to easily change the price on the website, and so far, they still have unbelievable demand.
I think some of that is the difference in customer base.
Tesla purchasers, are, to some degree, buying into the idea of the brand. This works if your brand is nice and new and flashy, but I think that traditional automakers would probably suffer reputational damage if they tried this approach, and it is very hard for them to shake old reputations if they manage to get one of unreliability.
Also, traditional automakers have full lines (sometimes multiple) of different models. Each with its own refresh cadence. And each which then needs to be supported long into the future. (Yes, there are some common platforms)
I'd say Tesla ignored that future debt, but I think it's more nuanced. I'd hazard they made a wilfull decision that the relative simplicity of electric cars will allow them to avoid a maintenance nightmare down the road by simply replacing whole components (a la Apple).
> It's not just that newer nodes are overkill, it's that auto components apparently have very long and expensive validation requirements, which would be another explanation for why they are still depending on these older manufacturing processes.
Also, if you're on a 7nm process, odds are there's not a decent way to e.g. drive the transistors for your power window actuator. Samsung's 7nm process has an 3 sigma intrinsic breakdown voltage around 4.8V, which precludes any kind of 5V tolerance and driving 2.5Vt power FETs.
Little 3V3, 5V tolerant microcontrollers are good for a lot of things, and they belong on bigger process. While 10nm might be able to do it, there's not really transistors for it in most libraries.
I know it's a nitpick, but I've never heard of 120nm... lots of 130 some 110 (half-node) and lots of 90nm.
Most of the 8inch wafer supply (mostly >90nm) was no where near capacity before the pandemic and supply restrictions. China did buy up a lot of it (actually moving equipment) and perhaps those were closed down?
Much of the legacy 12inch supply was fairly constrained even before the pandemic (especially specialty 55 and 40nm) due to shifts in display driver needs for OLED. The relatively new 10 & 7nm were pretty well dedicated to known customers.
Much of Automotive is in the larger 180nm to 90nm range with some 28nm for SOC due to cost, reliability, and legacy test qualifications. Except for entertainment only Tesla really uses much smaller than 22nm. It's interesting that they seem to have been willing to use commodity processors much more, and that seems to have made their supply chain more resilient (at the prices they were willing to pay).
It's interesting because a lot of mixed-signal analog really doesn't shrink well 28nm, and requires a lot of redesign to be cheaper than 180nm. There are ways to get down to 14nm and below, but the design costs require huge economies of scale to pay off.
The last couple of years in Semi really has been a game of how much are you willing to pay for the old backlog of parts that were hard to sell earlier. Only now are some new designs really making it out a year later. It's supply chain, but it's also price gouging and just taking profits while you can (why build more when margins will only plummet?). I do worry about the risks of concentration of this production in China.
Well, all the devices share a lot of parts. Say there’s a particular power module that goes in iPhone, MacBook and iPad, and that’s the holdup. The choice is to put as many as they can get into iPhone and Mac, and let iPad be delayed. Just checked US Apple Store
iPhone 13: Tomorrow
M1 MacBook Air: Tomorrow
iPad Air: 2 weeks
Honestly, the worst part is we find the short supplies are in these stupid, low-end, cents-a-pop chips that have nothing to do with high end processes. Especially in PSU applications.
Cost is much higher than for the commoditized chips they use. Instead of developing high end SoCs that could run multiple systems, they went for these cheap microcontrollers that controlled a single function or just a few.
To give you an idea of what we are talking about, here’s Infineon’s product page. They are a big automaker supplier, and right in the middle of all this. https://www.infineon.com/cms/en/product/
Not if you want automobile rated durable chips with higher withstanding voltages etc. On many MCUs, the CPU itself is a minority with a large part being 5V tolerant IO etc.
1. Yes, everyone cancelled orders and idled capacity. Everyone was anticipating a deep and long recession until the fiscal/monetary bomb of March/April 2020. See #7 above.
2. The 120nm legacy nodes and similar are right at the center of the whole shortage. This has been underinvested for years because it has been low demand growth and low margin. Automakers are particularly vulnerable, because for years, every new feature has gotten its own cheap microcontroller to run it. There are now dozens in new cars.
3. Graphics cards have been affected by crypto miners sucking up supply at any cost, and everyone not named “Apple” competing for TSM’s top end processes.
4. iPhones don't just come with Apple A-Series chips made on TSM’s top-end node, but a host of others, some made on legacy processes where the shortage is. Likely we are talking about some cheap analog power chips or something like that. Apple has decided to push as much supply chain problems to iPad as they can.
5. For the vast majority of what automakers want, 7nm is overkill. Once there are more high end SoCs running multiple systems including self/assisted-driving, that will come into play. But that is not where the shortage is concentrated.
6. Apple was Intel’s 4th biggest customer before they left, so it has had a small impact, but only at TSM at their top node. Samsung has picked up Qualcomm and AMD as a result.
Crazy times in the semi world.