Global Chip Shortage -- the thread

[avatar! | 1,820]

https://spy.com/articles/gadgets/electronics/chip-shortage-gaming-consoles-ps5-xbox-1202778918/

A bit of a click-bait title, since at the end they say people will just wait for the PS5 and Xbox, which is true. Still, it's an interesting discussion in the sense that I wonder if the wait is causing attrition among fans? Perhaps some people are saying "screw it I'll go digital" and perhaps others decided to pick-up a Switch instead.

[Tanooki | 4,940]

Not going to read clickbait, but to answer the question, I doubt it.

Game developers due to this crap are not making the money they should from those systems and that's a huge problem, and the hardwaer makers are gettinb boned even worse.  If anything it should make the generation hold on even longer, not just total, but also until some Pro thing pops up too.  The companies will have to make up for the lost time sitting on the hardware a bit longer to rake in the profits they're being denied due to chip problems.  I don't see a formula that makes sense to say, oh well, short on chips, let's just make a new system...that'll also maybe be short on chips.  Seems stupid.

[phart010 | 1,708]

I think this chip shortage will lead to other countries getting into the chip manufacturing biz.

Its not like Southeast Asian countries are the only ones that know how to manufacture them. Western countries get how to do it, they just don’t because it’s less expensive to source them from Asia than to make the chips themselves. When you factor in all of the costs associated with delays in manufacturing completely assembled goods because we don’t have the chips we need, it will probably make financial sense to have a secondary supplier for the chips over here in the West.

As for the raw materials, the stuff is just made of sand. Pretty abundant stuff

Edited July 27, 2021 by phart010

[MrWunderful | 2,927]

Other countries dont make them because we have labor laws. 
 

And I looked for a ps5 for a year (at a reasonable price) and couldnt find one so I said fuck it and went in on PC gaming for current/future Gen. 

[spacepup | 2,405]

@Gloves This is why you can't have nice things!

[Brickman | 3,995]

6 hours ago, phart010 said:

I think this chip shortage will lead to other countries getting into the chip manufacturing biz.

Its not like Southeast Asian countries are the only ones that know how to manufacture them. Western countries get how to do it, they just don’t because it’s less expensive to source them from Asia than to make the chips themselves. When you factor in all of the costs associated with delays in manufacturing completely assembled goods because we don’t have the chips we need, it will probably make financial sense to have a secondary supplier for the chips over here in the West.

As for the raw materials, the stuff is just made of sand. Pretty abundant stuff

This won’t happen because it’s actually incredibly hard to make chips and costs a lot of money. Even if you throw a lot of money at it you will still take years to catch-up to TSMC and Samsung. Intel is falling farther behind because they can’t make the same chips as TSMC and Samsung right now. Sure they may catch-up in a few years but their current track record is crap.

The only plants that could possibly show up are for the cheap car chips but the profit margins are very thin on that. 

[phart010 | 1,708]

20 minutes ago, Shmup said:

This won’t happen because it’s actually incredibly hard to make chips and costs a lot of money. Even if you throw a lot of money at it you will still take years to catch-up to TSMC and Samsung. Intel is falling farther behind because they can’t make the same chips as TSMC and Samsung right now. Sure they may catch-up in a few years but their current track record is crap.

The only plants that could possibly show up are for the cheap car chips but the profit margins are very thin on that. 

US can do it technology-wise. We invented the processes for manufacturing these chips. We know how to do it. And we can probably setup the processes more efficiently than other countries as well. 
 

The problem is that the economics of it doesn’t make sense. Given the amount of money that has to be paid to US salaried employees to manufacture, the chips would be more expensive than Asian made ones. Also, US companies tend to cripple their own robust manufacturing processes by making stupid decisions motivated by cost savings. We definitely have the technical ability, it’s just a matter economics that causes it to not be a reality.

Now, the manufacturing industries are getting hit really hard because of chip shortages. Lead times for many manufactured goods are going through the roof because of this. If the manufactures can’t ship product, they can’t realize revenue on their financial statements.

Even though it costs more more to make chips in the US, companies may be willing to pay the higher price if it means they will be able to start making money like normal again.

[Brickman | 3,995]

3 minutes ago, phart010 said:

US can do it technology-wise. We invented the processes for manufacturing these chips. We know how to do it. And we can probably setup the processes more efficiently than other countries as well. 
 

The problem is that the economics of it doesn’t make sense. Given the amount of money that has to be paid to US salaried employees to manufacture, the chips would be more expensive than Asian made ones. Also, US companies tend to cripple their own robust manufacturing processes by making stupid decisions motivated by cost savings. We definitely have the technical ability, it’s just a matter economics that causes it to not be a reality.

Now, the manufacturing industries are getting hit really hard because of chip shortages. Lead times for many manufactured goods are going through the roof because of this. If the manufactures can’t ship product, they can’t realize revenue on their financial statements.

Even though it costs more more to make chips in the US, companies may be willing to pay the higher price if it means they will be able to start making money like normal again.

If the US knew how to do it Intel would already be doing it. They currently don’t know how to make the best chips in the world.

Sure, the US could catch-up in a few years but that’s going to take a lot of resources and money.

As it stands TSMC and Samsung are the kings of making the best chips and as efficiently as possible. The US has no hopes of catching up for at least 2-3years.

Then we have the high costs that you mentioned for labour. The consumer already struggles with justifying high prices on consoles, I couldn’t see them jumping on board because it is US made.

TSMC are working on opening a plant in the US so I think that will probably be the thing that helps bring more chips into the market. That is still around 2 years away. This chip shortage will most likely continue on for this year and possibly first half of next year. 

[avatar! | 1,820]

The US produces just 12% of the world's computer chip supply. Here's why it's trailing China when it comes to manufacturing and how it plans to get ahead.

https://www.businessinsider.com/why-us-doesnt-make-chips-semiconductor-shortage-2021-4

Why the decline in the US? It became cheaper to build chip facilities in countries outside of the US. Those foreign governments offer more attractive financial incentives to construct semiconductor factories, like tax breaks and grants. There's also less regulation in places like Asia. On top of that, there aren't as many jobs in the US created to run such high-tech factories.

President Joe Biden is aware of the issue and the threats posed by relying too heavily on foreign manufacturing.  As part of Biden's $2 trillion infrastructure plan, there's a $50 billion allotment for domestic chip manufacturing incentives. 

We'll see, but I think the USA is finally taking this seriously. Won't happen over night, but if things go well in 10 years the USA will make more chips

[Estil | 1,265]

If PS5 and Xbox Series X die, they die  

 

[Tanooki | 4,940]

8 hours ago, MrWunderful said:

Other countries dont make them because we have labor laws. 
 

And I looked for a ps5 for a year (at a reasonable price) and couldnt find one so I said fuck it and went in on PC gaming for current/future Gen. 

[avatar! | 1,820]

I'm still waiting for a PS5

I gave up on PC gaming a long time ago. There's something more... basic and simple about a console. Prices on the PS5 have gone down, but still a scalpers haven

[Doctornick | 419]

23 hours ago, MrWunderful said:

Other countries dont make them because we have labor laws. 
 

And I looked for a ps5 for a year (at a reasonable price) and couldnt find one so I said fuck it and went in on PC gaming for current/future Gen. 

I can't man, I don't know why but something about console has me stuck.  I was able to get my Xbox at launch thankfully, and if I was without one for some reason I'd just stick to the retro goodness.  Maybe that would be the push I need to find/buy a turbo duo

[MrWunderful | 2,927]

1 hour ago, Doctornick said:

I can't man, I don't know why but something about console has me stuck.  I was able to get my Xbox at launch thankfully, and if I was without one for some reason I'd just stick to the retro goodness.  Maybe that would be the push I need to find/buy a turbo duo

 

13 hours ago, avatar! said:

I'm still waiting for a PS5

I gave up on PC gaming a long time ago. There's something more... basic and simple about a console. Prices on the PS5 have gone down, but still a scalpers haven

I thought the same as you guys until I popped on steam, set my xbox elite controller up and everything worked flawlessly. Much faster than my Ps4, BTW. If using a controller was more difficult I would stick to console (because I hate M and K except for PC exclusive games/RTS etc. )

[Brickman | 3,995]

2 minutes ago, MrWunderful said:

 

I thought the same as you guys until I popped on steam, set my xbox elite controller up and everything worked flawlessly. Much faster than my Ps4, BTW. If using a controller was more difficult I would stick to console (because I hate M and K except for PC exclusive games/RTS etc. )

Agreed. There’s nothing difficult about pc gaming anymore. Buy a pre built gaming box if you know nothing about PCs, install steam and Xbox game pass and you have more than enough games to last a lifetime. No messing around it just works.

[RegularGuyGamer | 2,014]

On 7/27/2021 at 10:40 AM, phart010 said:

I think this chip shortage will lead to other countries getting into the chip manufacturing biz.

Its not like Southeast Asian countries are the only ones that know how to manufacture them. Western countries get how to do it, they just don’t because it’s less expensive to source them from Asia than to make the chips themselves. When you factor in all of the costs associated with delays in manufacturing completely assembled goods because we don’t have the chips we need, it will probably make financial sense to have a secondary supplier for the chips over here in the West.

As for the raw materials, the stuff is just made of sand. Pretty abundant stuff

The thing is there's only 3 companies in the world that produce the chips in any realistic scale. The chips are ordered 16 months out so it's not as much of a shortage as it's a back order. The factories that manufacturer them on average cost $10B+ make and more to maintain every year. 

Imagine if we lived in a competitive country and just took 5% of out infrastructure and made sure problems like this never happened again. 

[inasuma | 1,203]

Anyone remember when products like analogue pocket were gonna release in may this year?

pepperridge farm remembers.

[TDIRunner | 2,744]

As a person who doesn't buy current gen consoles until several years in or later, I didn't even realize PS5s were still hard to get.  I've never even attempted to find one in a store.  I knew they were hard to get when first released, but due to my lack of interest in the situation, I had no idea it was still going on.  I am aware of the chip shortage because I follow the automobile market about as much as the gaming market, but for whatever reason I didn't tie it into the PS5 sales because that's how little interest I have in the current gen at the moment.  

[T-Pac | 7,568]

Chip shortage? Good thing I prefer pretzels!

(I'm so sorry.)

-CasualCart

[Brickman | 3,995]

1 hour ago, CasualCart said:

Chip shortage? Good thing I prefer pretzels!

(I'm so sorry.)

-CasualCart