Chip shortages still plague carmakers despite weaker semiconductor demand
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- News link: https://www.theregister.co.uk/2022/10/26/car_chip_shortages/
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Despite predictions from [1]some industry watchers that the end of chip shortages is in sight and lead times are falling, shortage of key components is still affecting some car makers. The latest is Volvo, which said this week it is temporarily closing one of its factories.
A Volvo spokesperson told Gothenburg newspaper Göteborgs-Posten that the factory will be closed for seven days, stating that demand for vehicles is good, but ongoing problems with semiconductor shortages are affecting output.
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Toyota also announced just days ago that it is continuing to be hit by chip shortages at its car plants across Japan, issues that have dogged the company for much of this year, resulting in it [3]suspending manufacturing in May and June at many of its production lines.
[4]
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The Japanese car giant issued a [6]statement apologizing for repeated adjustments to its production plan, and said that due to semiconductor shortages, its planned global production volume for November is expected to be approximately 800,000 units.
Intel's Mobileye automotive biz managed to sell 41 million shares at $21 each as part of its IPO this week after being marketed at $18 to $20 apiece.
The result means that Mobileye's market value is about $16.7 billion, more than the $15 billion Intel paid for the company in 2017, but a fraction of the $50 billion figure that was being touted earlier this year.
Intel has reportedly raised $861 million from the IPO. CEO Pat Gelsinger previously said that the company planned to use some of the proceeds to help fund its fab building program.
As a result of this change, the full-year production forecast for Toyota's fiscal 2023 is expected to be lower than the previous forecast of 9.7 million units, the company said.
In its [7]Q3 earnings results , GM said there has been a gradual improvement in the supply chain, including semiconductors. It expects short-term disruptions to continue, but said it was taking steps to minimize these, including signing several strategic supply agreements for mature nodes where semiconductor supply is most constrained.
Meanwhile, chipmaker Texas Instruments signaled during its latest earnings call that it expects revenue and profits for the latest quarter to be below previous estimates, blaming the fall in demand for chips.
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TI expects to see revenue in the range of $4.4 billion to $4.8 billion for Q4, lower than analyst forecasts of $4.9 billion.
[9]GM: Seeing as all y'all like our electric cars, we'll double output next year
[10]Foxconn shows off pair of EVs, boasts of bulk orders for last year's model
[11]Japanese giants to offer security-as-a-service for connected cars
[12]Cops swoop after crooks use wireless keyfob hack to steal cars
For the third quarter just ended, TI's revenue came in about as expected at $5.2 billion, an increase of 13 percent compared with the same quarter last year, and 1 percent up on the previous quarter this year.
The company is a big player in the automotive semiconductor industry, with industrial and automotive making up 62 percent of its revenues, according to Head of Investor Relations Dave Pahl, who said that the automotive market remains strong while weakness is beginning to broaden in the industrial market.
However, Pahl said that TI expected the correction currently affecting the rest of the semiconductor market would eventually hit the automotive sector as well.
"Will that market eventually roll over? It will. I mean, that's just what happens. And we are not trying to predict when that will happen, we will continue to ship product to customers as they request it," he said.
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Richard Gordon, Gartner VP for Semiconductors & Electronics, told us that the chip supply situation continues to improve, but will probably not be fully resolved until next year.
"It only takes a supply glitch affecting one chip type (e.g. power management) to cause a disruption to electronics production, and there are issues specific to the automotive space that are taking longer to re-balance," Gordon said. "These include issues with the shift to EV on the demand side and a need for legacy capacity on the supply side."
Gordon added that he still expects to see demand from the automotive sector weaken in coming months, along with the hyperscale datacenter sector, where shortages have also taken longer to dissipate. ®
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[1] https://www.theregister.com/2022/10/19/the_great_semiconductor_drought_may/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y1lZlz@90f5DlhqMRduawgAAAEE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/05/24/chip_shortages_hit_toyota/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y1lZlz@90f5DlhqMRduawgAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[6] https://global.toyota/en/newsroom/corporate/38118276.html
[7] https://www.theregister.com/2022/10/26/gm_q3_ev_sales/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y1lZlz@90f5DlhqMRduawgAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2022/10/26/gm_q3_ev_sales/
[10] https://www.theregister.com/2022/10/18/foxconn_ev_expansion/
[11] https://www.theregister.com/2022/10/18/ntt_denso_security_for_cars/
[12] https://www.theregister.com/2022/10/18/car_thieves_arrested_keyless_tech/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y1lZlz@90f5DlhqMRduawgAAAEE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://whitepapers.theregister.com/
The automakers cut back their orders - now they are reaping the results
Because of Covid most automakers cut back their semiconductor orders and other companies took their place in the manufacturing pipeline. Now the the automakers want to increase production they find themselves behind many others in the queue for fab time. Because the big automakers believe in JIT (Just In Time) they did not keep a good stock of spares - they assumed that the semiconductor parts would be available when wanted. The automakers are learning the hard way that JIT works very well until it fails horribly.
Icon for the shareholders of the big automakers =========>
Maybe the auto makers should rethink making everything computer controlled
There needs to be a limit to what is automated and even removed from the drivers control. Do we even need a touch screen to set the temperature, or roll down the windows? A simple knob, or mechanical button often works better.
The driver messing with what is packed in a touch screen with menus, is better than using a smart phone, how?
Often it seems too much is not enough, because we can. Somewhere in there is, or should be, a optimal level of computer control. Leave the rest to the driver.
Previously, I'd read that Toyota (the inventor of 'Just in Time') were less affected by this issue in 2021 because they did keep a larger stockpile of chips, as a result of lessons they'd learnt from 2011 Tsunami / earthquake in Japan. So, I'd be interested to know why they are now impacted. Did they also cancel order or are the bottlenecks so bad now, that everyone is impacted, regardless.
Duh?
Cars use chips mostly for sensors.
These chips are chosen when each part is designed. So, for example if there is a temperature sensor on each brake pad of the car, it will have a microcontroller that connects the thermal sensor to the CANBUS of the car.
The brake thermal sensor will be tested extremely well over a long and excruciatingly detailed product approval cycle. It will be tested in the lab and in the road. Once the design is certified, it’s given a slew and things like changing parts will not happen… maybe passive components, but certainly not temperature sensitive devices such as semiconductors.
The car manufacturer will use that same sensor on as many cars as possible and for long as possible because designing and certifying a new part is very expensive and more importantly requires a new SKU. Then every car which uses the old SKU as a replacement part will need to be certified for the new SKU. Distribution of the new SKU will take time and updating all systems to use said SKU as a replacement will need to be updated world wide. Then, even if all you did was move from a microcontroller built on 180nm to one built on 28n with a 1 to 1 compatibility, it will take years to identify, resolve or work around, and catalogue the issues with the new part.
Even now, designing new cars, if you add a brake thermal sensor to the design, shortage or not, the car company will use the old part with the old chip because the engineers who even know the requirements and parameters of such a sensor may already be retired.
That means the automotive industry has to find chips made using the same process.
The problem is, the number of cars using that part has been increasing over the years and the number of replacements parts needed has increased proportionally. So, the demand has increased but the supply has not.
Designing new SKUs is an option, but it takes years and would probably bankrupt the companies needing them.
Also, no one, even under the chips act is scaling availability of manufacturing those parts. Everyone wants to make new and bad ass stuff to be competitive.
China is always willing to scale production of this tech. In fact, they can easily scale 28-250nm production with no supplies from outside of China. But that would require actually depending on China for these chips and why should they scale to help the US car makers when the US is attacking every company that can actually solve the problem?
The chips act is great because it helps the US catch up with Asia in terms of tech. The US companies Intel and GF are willing to produce unlimited amounts of 10nm and are even willing to scale 28nm production. But that would only be helpful if the companies who actually need the chips could cover the cost of changing the process. This is not an option… unless of course the US were to invest in the companies using said chips to get new SKUs designed and certified.
We can’t cry like little babies over this shit when no one actually is listening to the people who actually experienced a real chip shortage.
Coronavirus isn't over, and spin-up takes time
For one thing the coronavirus isn't over so fabs in China, Taiwan (The other China) and Korea for instance are still not all running at full capacity, from what I understand especially the fabs running the older equipment that would be used for the stuff used in cars are still suffering from this.
Apart from that, after car manufacturers suddenly decided to cancel running orders and scale down demand, fabs went in search of other long term customers. There is no new fabs being built for producing in the larger node sizes, so if those fabs are filled up with other customers the car manufacturers will have to go to the back of the line. Even if more fab capacity is opening up (I doubt it) just going from exposing the first layer to having a diced, mounted and packaged chip coming out of a fab takes 3 to 6 months. So a slow increase in fab capacity availability is going to take a while to become apparent to the car manufacturers and others.