TSMC Claims Some Companies are Sitting on Chip Inventories

[lexluthermiester]

So basically at this point, we need DRM for supply chains.

No, what we need is international regulations that outlaw and heavily punish crap like this.

I must say this can either go wonderfully or horribly wrong. On one hand, doing detective work and trying to debottleneck the whole supply chain is commendable but on the other hand that opens to further abuse, be it contractual rights or just further gaming from middlemen.

Exactly, thus the need for heavy international regulations..

 

[DeathtoGnomes]

Exactly, thus the need for heavy international regulations..

that would mean a treatycooperation from too many countries.

 

[lexluthermiester]

that would mean a treatycooperation from too many countries.

It would mean cooperation from nations that already do massive levels of trade with each other. Cooperation in stamping out this kind of nonsense is in everyone's best interest. I foresee government investigations and criminal changes in the future..

 

[Why_Me]

not to be political, but Trump raised tariffs quite high on lumber from Canada before covid was even a thing, it just took time for the prices to be felt.

This didn't help. It also cost my state thousands of jobs.

U.S. to restore protections for Alaska's Tongass forest

President Joe Biden's administration on Thursday said it would propose to restore environmental protections to Alaska's Tongass National Forest, the world's largest temperate old growth rainforest.

www.reuters.com

 

[lexluthermiester]

This didn't help. It also cost my state thousands of jobs.

U.S. to restore protections for Alaska's Tongass forest

President Joe Biden's administration on Thursday said it would propose to restore environmental protections to Alaska's Tongass National Forest, the world's largest temperate old growth rainforest.

www.reuters.com

But it protects something that needs protecting.

 

[Aquinus]

Yeah, stockpiling makes almost no sense.

I'd say a touch too much tinfoil hat here, but yes, it's no doubt that some companies are taking advantage of the current situation.

Yet here we are with GPU prices through the roof. I wonder who has the most to gain by artificially reducing supply.

 

[Why_Me]

But it protects something that needs protecting.

Unlike California which is a perpetual fire hazard, Alaska knows how to manage their forest. The same goes for our oil & gas.

Biden blocks drilling in ANWR, among his first acts as president

The decision came one day after the Trump administration issued oil and gas leases on the coastal plain of Alaska’s Arctic National Wildlife Refuge.

www.adn.com

 

[DeathtoGnomes]

It would mean cooperation from nations that already do massive levels of trade with each other. Cooperation in stamping out this kind of nonsense is in everyone's best interest. I foresee government investigations and criminal changes in the future..

Dont forget there are those yes-to-anything nations and not fulfill commitments. Depending on the government (anywhere) those that get biggest..., oh, lets call it sideline profits, will ofc, tell us they are looking into it and put in limbo. Sorta like our politicians do all the time.

 

[glsn]

Look at it as a short to mid-term investment. If you take something simple like and STM32 MCU, they're using in just about everything these days, as they are were dirt cheap at something like $1 or less for the most basic options. Now those same chips are going for $10 or more for the popular options.
Not all distributors are doing this, but a lot of the parts are no longer in stock with 52 weeks or longer lead times, so those that have stock, are taking advantage of it.

I would actually expect quite a few startups going bust due to this, as it's simply not economically viable to produce a lot of things right now, not just because of the price of some components, but also due to the much higher shipping costs that will eat in to your bottom line.


Well, that's your opinion, but you are clearly not keeping up with who the world is changing. TSMC is likely to continue to be on top of the foreseeable future, as they're building a couple of fabs in Arizona, if you missed it and are considering other parts of the world as well. I guess you simply don't understand how many customers they have outside of Apple.
I honestly don't think TSMC is the least bit concerned about US national security.

which stm32 version?

 

[watzupken]

No it did:

PCs And Notebook Computers - The Unsung Heroes Of The Covid-19 Pandemic

At the first of this year, if any market researchers had forecasted growth in PCs and laptops in 2020, I would have suggested that they were off base.

www.forbes.com

285,000 PCs shipped in 2019 to 310,000,000 in 2020… It’s kind of hard to believe.

While the 2020 number looks shocking, it is not unexpected. In the past, some families only have a single or 2 PCs at most. Most can get away with a tablet or even their phones for their daily usage, but will struggle if they use a small device for work. As COVID hits, almost everyone at home that are working or schooling will need a PC or tablet since everyone needs to use them at the same time. In addition, corporates/schools are also soaking up laptops/ PCs at record speed to facilitate working from home.

But demand will plummet once more people starts going back to office/ school with COVID being less of a concern over time.

Anyway on the topic of some companies sitting on chips, I think that is also not unexpected. The cost of manufacturing have increased quite a lot over the last 1.5 years. So by not "showing hand" and selling off the chips as soon as they are available, they are artificially inflate prices, slow down the need to buy more expensive chips, and thus, increase or maintain their profit.

 

[neatfeatguy]

In your spoiler. I don't know if you know this, but the Price of tuna was being manipulated (A.k.a Price fixing) by all manufactures to profit higher than normal in agreement and all where fined in one big 3 billon dollars at one point Not to long ago.
After this prices returned to normal on Tuna.
This is not a good look for who ever is doing this, because if they can prove a single instant of price fixing their in for a world of hurt in fines.

I did know that. I thought it was interesting to read about it. That's why I had it in my spoiler, because of the shady pricing practices.

 

[TheLostSwede]

which stm32 version?

Plenty of different ones. Ex colleague tried to order his usual parts, was asked 10x the price. Another ex colleague got in touch and asked if I could try and help his employer source a different, slightly more advanced and pricey part, no-one claims to have stock, 52 week plus lead time. That company only buys around 1k at a time or so, since they making farming equipment and only make a "few" machines a year. So if you can find the parts you want, the prices are often jacked up sky high. Some parts are still in stock with distributors, but as you surely know, you can't just swap from one part to another, unless they're pin-to-pin compatible, but even then, it's not sure you get the same features.
The "distributors" that claim to have stock don't even list a price and most of them aren't authorised distributors.
I wouldn't have commented about it, if I didn't have actual cases where I'd seen it.

 

[DeathtoGnomes]

since they making farming equipment and only make a "few" machines a year.

I've seen its cheaper to buy a new tractor than to repair one, but thats been real thing for years now. Falls into that $40 hammer category. Parts prices are ridiculous no matter what industry you're in.

 

[TheLostSwede]

I've seen its cheaper to buy a new tractor than to repair one, but thats been real thing for years now. Falls into that $40 hammer category. Parts prices are ridiculous no matter what industry you're in.

Not that kind of farming equipment
This was specifically for some kind of ventilation system controller.

 

[AusWolf]

I'm going to get a bit unpleasant here, but SCREW the middlemen! If they want to create massive problems the world over for nothing more than greed, they can get a boot up their twats!

That I agree with... except that they need the middlemen, as they are their customers, or at least their customers' customers.

It would mean cooperation from nations that already do massive levels of trade with each other. Cooperation in stamping out this kind of nonsense is in everyone's best interest. I foresee government investigations and criminal changes in the future..

I hope you're right. I just wouldn't count on it, knowing how much governments already depend on corporate influence, which is only going to increase in the future. I foresee governments slowly being phased out by corporations in the next 50-100 years.

While the 2020 number looks shocking, it is not unexpected. In the past, some families only have a single or 2 PCs at most. Most can get away with a tablet or even their phones for their daily usage, but will struggle if they use a small device for work. As COVID hits, almost everyone at home that are working or schooling will need a PC or tablet since everyone needs to use them at the same time. In addition, corporates/schools are also soaking up laptops/ PCs at record speed to facilitate working from home.

But demand will plummet once more people starts going back to office/ school with COVID being less of a concern over time.

Except that nobody needs an RTX 3080, or any Ampere or RDNA2 graphics card to do their office work from home.

 

[Vya Domus]

If there are companies trying to stockpile chips it means they're not particularly successful in their segment, otherwise they'd sell their products for pretty premium and profit from the market situation.

 

[Chomiq]

I've seen its cheaper to buy a new tractor than to repair one, but thats been real thing for years now. Falls into that $40 hammer category. Parts prices are ridiculous no matter what industry you're in.

John Deere tractors? The Apple of farming equipment? No wonder.

 

[claes]

Except that nobody needs an RTX 3080, or any Ampere or RDNA2 graphics card to do their office work from home.

Increased gaming demand during Covid and, if you’ve been paying attention, miners. There’s no need to make this complicated — the PC hardware shortage is well documented. The middleman have even provided documentation — they’re only receiving a few dozen GPUs per shipment. Even AIB partners have setup portals to avoid the bots. Demand is through the roof, as the sales numbers and profits demonstrate.

If there are companies trying to stockpile chips it means they're not particularly successful in their segment, otherwise they'd sell their products for pretty premium and profit from the market situation.

I think 90% of users here didn’t read the article.

TSMC only made the claim about middlemen in regard to some IC used in cars. They made no mention of middlemen in relation to PC hardware, where demand and profits are insanely high. Most of the comments being made here are just conjecture/extrapolation based on a claim that was never made. :shrug:

 

[DeathtoGnomes]

Not that kind of farming equipment
This was specifically for some kind of ventilation system controller.

It still applies tho, just a different industry.

 

[AusWolf]

Increased gaming demand during Covid and, if you’ve been paying attention, miners. There’s no need to make this complicated — the PC hardware shortage is well documented. The middleman have even provided documentation — they’re only receiving a few dozen GPUs per shipment. Even AIB partners have setup portals to avoid the bots. Demand is through the roof, as the sales numbers and profits demonstrate.

Except that gamers can't really get new GPUs because even stores can't get them. Also, just about every single news site and youtube channel has been loud saying that mining is only a small part of the problem (is it really?). If the problem is really a demand problem, then the GPUs are out there somewhere, there's just too many people waiting for more. But they're not (except for the lucky few).

 

[lexluthermiester]

I foresee governments slowly being phased out by corporations in the next 50-100 years.

I see the opposite happening. Corporations are getting to greedy and reckless. I foresee the people of the world forcing governments to rope in big business and force them to play by better rules. I see a few wars being fought over the matter too.

 

[claes]

Wow, it’s like you read my post and selectively ignored the parts that don’t fit into your narrative…

Except that gamers can't really get new GPUs because even stores can't get them.

That’s literally what I said… They’re the supposed middlemen that are hoarding cards that you’re referring to…

Also, just about every single news site and youtube channel has been loud saying that mining is only a small part of the problem (is it really?).

I don’t know where you get your news from but I’d say miners play a significant role.

Let Me Google That

For all those people that find it more convenient to bother you with their question than to google it for themselves.

letmegooglethat.com

If the problem is really a demand problem, then the GPUs are out there somewhere, there's just too many people waiting for more. But they're not (except for the lucky few).

If demand is high, and supply is low, then there are few cards available on the market and prices are inflated… It really, really isn’t this complicated.

Did you see the evidence that PC sales increased by 1088% year over year between 2019 and 2020, when Covid hit and strained supply chains and people had to work from home due to quarantine measures? Sure, mostly systems without dGPUs, but what was everyone on this forum saying they were spending their stimulus checks on again? If normal people and companies are buying PCs at that rate, what do you think PC gamers are doing? Why wouldn’t their be a correlation?

And, again, did you read the OP, or the article it’s discussing? TSMC didn’t say anything about middlemen and PC components, and there is ample evidence that the demand is real. How else do nvidia and amd post historic year over year returns if they aren’t selling cards?

In all seriousness, why would a “middleman” sit on a bunch of GPUs to create artificial scarcity when they can A) sell them for twice their retail value because demand is as high as it is or B) start a mining farm and profit? There’s no need to create artificial scarcity when demand is high, unless you have a monopoly on the market, which middlemen do not. Besides, Covid restrictions have been loosening, GPU mining is becoming less lucrative, and new GPUs will date the current generation next year… There’s no incentive to create artificial scarcity in a market where value decreases year over year. It’s a losing proposition.

They still have to buy from one of two competitors or AIB partners… The middlemen are literally the stores that, as you correctly point out/I literally said in the post that you’re quoting, don’t have GPUs to sell to consumers. No need for a conspiracy when there’s a global pandemic to blame…

 

[AusWolf]

That’s literally what I said… They’re the supposed middlemen that are hoarding cards that you’re referring to…

Not exactly. AMD, nvidia and the chip manufacturers claim that production is there and booming. Financial statistics claim the same. Yet, stores can't get GPUs, and neither can gamers. Where are the GPUs then?

If it's really only a demand issue as the whole world suddenly turned towards PC gaming, then why still isn't there a single Ampere or RDNA graphics card in the top 10 of the Steam survey?

I don’t know where you get your news from but I’d say miners play a significant role.

That I agree with, but every time I say it, there's always someone shouting "nooo, you're wrong" back at me. I think youtube channels like JayZtwoCents and Linus also claimed that mining is only part of the problem.

If demand is high, and supply is low, then there are few cards available on the market and prices are inflated… It really, really isn’t this complicated.

But why would demand for gaming graphics cards be higher now than it's ever been? If you compare their price, performance and power consumption to previous generations, they're not even that good. If you say mining plays a key role (like I think as well), fair enough. But 1. there's lots of claims for the opposite, 2. How do miners get their cards? There must be a middleman before the actual middlemen up in the chain.

Did you see the evidence that PC sales increased by 1088% year over year between 2019 and 2020, when Covid hit and strained supply chains and people had to work from home due to quarantine measures? Sure, mostly systems without dGPUs, but what was everyone on this forum saying they were spending their stimulus checks on again? If normal people and companies are buying PCs at that rate, what do you think PC gamers are doing? Why wouldn’t their be a correlation?

What evidence? A few news articles with numbers pulled out of some financial analyst's hat? I don't count that as evidence.

Also, how many people did actually work from home? It only relates to 1. The IT sector, whose demand for PC parts has always been there - so no change there. 2. Teachers - they don't need high-end PCs for home-recorded lectures. 3. Office staff of other areas - same thing, any basic PC will do for them. I don't believe that none of these people had a computer or laptop at home before covid hit. Even if they really didn't, they never needed an RTX 3080 to send a few emails, or to make a conference call - especially not at scalper prices. I can count on one hand the number of people I personally know that actually worked in a home office during covid. Most of us weren't in that lucky position, as most of us aren't office workers.

 

[claes]

K

 

[Franzen4Real]

Liu had a team collect data points to try and figure out what was going on and to see which customers were truly running low on stock and which customers that might be stockpiling for a rainy day.

Exactly what kind of 'rain' are they waiting for?! We've had about 380 days straight of torrential downpour at this point.

Someone please inform the customers that the whole 'cats and dogs' thing...it's just an idiom, it's not going to actually happen...

Customer: "there is a global pandemic wreaking havoc on the supply chain. Customer demand is frothing, and prices are higher than any time in the history of dedicated graphics card. Someone tell Larry to get the forklift and move all those pallets of GPU's off the dock and into the vault, we could benefit greatly if we hold on to these and wait this one out in case something really bad happen soon...I have a feeling on this one, we're ganna get rich!!"