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Businesses The Almighty Buck Hardware

Carmakers Face $61 Billion Sales Hit From Pandemic Chip Shortage (bloomberg.com) 55

Posted by BeauHD from the computers-on-wheels dept.
An anonymous reader quotes a report from Bloomberg: When the Tohoku earthquake and tsunami ravaged Japan in 2011, ocean water flooded factories owned byRenesas Electronics Corp.Production at the swamped facilities ground to a halt -- a major hit for Renesas, of course, but also a devastating blow to the Japanese car industry, which depended on Renesas for semiconductors. Lacking chips for everything from transmissions to touchscreens, Honda, Nissan, and Toyota were forced to shut down or slow output for months. As the perils of just-in-time manufacturing and the dangers of relying on a single supplier for key components became obvious, automakers vowed to steer clear of similar snafus in the future.

Yet a decade later, the global auto industry finds itself in an almost identical predicament. The catalyst for the breakdown this time is a slower-moving natural disaster: the coronavirus pandemic, which has disrupted the supply chain for makers of the electronics that are the brains of modern cars. That left automakers -- which have long eschewed maintaining costly inventories of parts -- scrambling to secure those components when sales rebounded. The shortage could lead to more than $14 billion in lost revenue in the first quarter and some $61 billion for the year, advisory firm AlixPartners predicts. The industry is "wedded to 'lean manufacturing,'" says Tor Hough, founder of Elm Analytics, an industry consultant near Detroit. "They have gotten in this mode of just managing for next week or next month."
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Carmakers Face $61 Billion Sales Hit From Pandemic Chip Shortage More

Carmakers Face $61 Billion Sales Hit From Pandemic Chip Shortage

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  • Come on reddit ... do it (Score:4, Funny)

    by 140Mandak262Jamuna ( 970587 ) on Thursday January 28, 2021 @10:46PM (#61004456) Journal
    They are shorting the chips... This is your turn.. Long the chips and stick it them...

    • Since when is long the opposite of short? Reddit needs to open the chips.

      (Once upon a time, I could count on basically everyone here to "get" the joke.)

  • How do you get your chips delivered quickly? (Score:5, Informative)

    by NotTheSame ( 6161704 ) on Thursday January 28, 2021 @11:23PM (#61004520)

    The auto industry didn’t have enough semiconductors. Chip foundries were busy supplying gadget makers.

    You pay more for them. It's not rocket science.

    Pay enough and every fab will be desperate to prioritize your chips over everybody else's.

    • I mean, it depends. That might not be true if, for instance, the chips are needed for medical research. Even higher profits can take a backseat to government prioritizing immediate needs either directly or threats to force them to make chips at cost.

      • The government hasn't prioritised anything. This is a problem of their own making.

        • Which government? This is international trade we're talking about here. Chips are made in one country and used in another.

          • Any government. None. There is no shortage of chips being driven by any medical requirement. None. Not China, not USA trading with third parties, not Korea, not Taiwan.

            The problem is the car company's own making, they paid peanuts and got monkeys.

    • Re: (Score:2)

      by sjames ( 1099 )

      Unless they don't have the capacity...

    • Re: (Score:3)

      by AmiMoJo ( 196126 )

      It's not quite as simple as that. Production has to be ordered well in advance so when you have a rapidly developing situation like this it is difficult to manage. Many companies cancelled orders and then suddenly wanted to start them up again as they see an end to the pandemic.

      Worse for Renasas they sold off a bunch of their foundries so were still in a bit of a transition state when they went into this pandemic.

      Offering more money isn't enough, the foundries won't just switch to a different customer the m

      • You don't buy wafers that the foundry has sold to other companies from the foundry, you buy the wafers from a company that has already purchased them so that you can use them instead. If you really do think your use of those wafers is more valuable then it isn't hard to find someone who will be willing to cut back their own production in exchange for a payment above what they had originally purchased the wafers for.

        There is still some lead time that you can't get around, but if you were doing business wi

    • Various carmakers from the US, Germany, and Japan have all gone to their governments, to get diplomatic pressure applied to Taiwanese fabs:
      https://www.bloomberg.com/news... [bloomberg.com]

      Taiwan’s chipmakers have told local government officials they’re doing what they can to alleviate the shortage of semiconductors that is cutting into car production after approaches by the U.S., the European Union, Germany and Japan.
      General Motors Co., the trade group American Automotive Policy Council and other parties in the U.S. contacted Taiwanese officials in December to ask for more chip supply, followed by the EU, said C.C. Chen, Taiwan’s vice minister of economic affairs.
      The Japan-Taiwan Exchange Association, Japan’s representative office in Taipei, made a similar request last week, and German diplomats in Taipei have confirmed to Taiwanese officials they received a letter from German Economy Minister Peter Altmaier about the same issue, though they have yet to officially present the correspondence to the Taiwanese government, Chen said Monday in a phone interview..

      Hopefully Taiwan will at least get something in exchange, though:
      https://www.spiegel.de/wirtsch... [spiegel.de]
      Google Autotranslate (from German):

      Taiwan is apparently asking Germany for help with the supply of corona vaccine. The federal government Taipei had previously called for support with the chip shortage in the German auto industry.

  • Don't want to saturate the market...

  • Pay me now, (Score:4, Interesting)

    by jenningsthecat ( 1525947 ) on Friday January 29, 2021 @12:30AM (#61004648)

    or pay me later. Your choice - but be aware that paying later may cost you more in the long run. Oh, and say hello to your shareholders for me when you're telling them that your efforts to squeeze out that last fraction of a penny in dividends by sailing so close to the wind just cost them a bundle.

    Sometimes it's fun to watch cutthroat capitalism - pass the popcorn please!

  • Honestly, my only (yes, I donâ(TM)t care about cars depreciating in value) concern about new cars is that they try to lock you into expensive subscriptions. No thanks. Remotely starting my car should not cost $300/year.
  • I suspect they roll their own for all of the chips used in the car, except maybe a few standard touch-screen computer chips.

  • Hamster: 2, Masters of the universe: 0

    BZZT,OW!....BZZT,OW!...BZZT,OW!

  • Their own fault... (Score:5, Insightful)

    by bradley13 ( 1118935 ) on Friday January 29, 2021 @04:22AM (#61004888) Homepage

    As has been noted elsewhere: There is no chip shortage, except what the automakers themselves created. They cancelled orders, capacity was moved to other customers. Now they want that production capacity back, basically overnight, but it's occupied by other customers. They kept no stock of the affected parts, relying on JIT delivery. So they've screwed themselves.

    Poor planning on the auto makers' part does not constitute an emergency on the chip makers' part.

    • What chip that can control automatic transmissions and touchscreens is unavailable? None of these articles seem to say, and we here at Slashdot would be the ones to understand what it does. Is it the 555 timer?
      • I've seen a few sources like this https://www.icis.com/explore/r... [icis.com] indicating it is ECU's. Not sure how reliable the source is though, never heard of most of them including the one I linked. I also wonder if SMIC and some other Chinese fabs may have been producing some parts and the tier 1's like continental and bosch got caught when the sanctions hit those fabs. I do know GM put on constraint some odd options like trailer control due to chip shortages, and those are definitely not ECU's.

        • An ECU is not a chip, it is a device built around a chip, a microcontroller. These days it's usually a fairly big and fat microcontroller. An automatic transmission has several solenoids whose job is to control fluid flow through the fluidic computer that actually controls the clutches and/or bands, presumably modern 8+ speed transmissions have more of them than classic oldsters. The ZF5HP42A in my Audi had like eight of 'em and that had only five speeds plus reverse. Same for the five speed in our Sprinter

          • P.S.

            ECU == Engine Control Unit
            PCM == Powertrain Control Unit, OBD-II mandated term for ECU. Sometimes also controls transmission, but rarely.
            TCM == Transmission Control Module

            PCM and TCM typically communicate today, at minimum by a torque reduction request signal wire from the TCM to the PCM which requests torque reduction during gear shifts. The engine backs off output while the line is raised high, or whatever. But I presume that they're using CAN bus for this by now, as well.

          • I worked on one microcontroller circa 1987 that was being designed for the automotive and controls markets, that had hardware functional units that were specifically designed for cyclic sensor/effector operation at sub-millisecond rates. Anything on a rotating shaft, like antilock brakes or injection/ignition timing. I would expect that most automotive parts are customized variants from some baseline design, and will always be long leadtime. The controller in my 90s BMW climate control looked like a cust

      • Look at things like power-pc (previously Freescale, no NXP and ST) and Infineon based automotive microcontrollers; AEC qualified and functional-safety targeted. These are SOCs that can run at -40C to +125C with passive cooling, have just about every error correction feature you can imagine (ECC memory, ECC on-chip buses, multiple lockstep cores to ensure a fault in an ALU can be caught, etc.), built in ADCs, complex timer controls, etc.

        These are the real workhorses of automotive, not "desktop class" or "ph

    • Re: (Score:3)

      by tflf ( 4410717 )

      As has been noted elsewhere: There is no chip shortage, except what the automakers themselves created. They cancelled orders, capacity was moved to other customers. Now they want that production capacity back, basically overnight, but it's occupied by other customers. They kept no stock of the affected parts, relying on JIT delivery. So they've screwed themselves.

      Poor planning on the auto makers' part does not constitute an emergency on the chip makers' part.

      To the auto industry: not our circus, not our monkeys. Time and past to get over the self-entitlement.
      Warehousing costs money - land for the building, construction and maintainance of the building, associated other costs of a physical building, staffing it plus the cost of inventory. The move to JIT realized very significant one-time savings, which is why most industries and large retailers eagerly embraced it. The risk versus benefits calculations support the move - it is cheaper, warts and all, to use

  • If they were forced into using legacy hardware with open standards that didn't require a tech to pay 20k a year just to be able to see what system error threw a check engine light. Wouldn't it be sad if they were forced to use micro processors only to control necessary safety systems and to assure the motor was getting the optimal fuel mixture to maximize economy, performance, longevity and to assure exhaust was as clean as possible.

    Then again, without failures how would dealers make any money [they make th

  • This is what happens when you allow bean counters to run the companies. Add a bit of analytics, and these days AI because it is fashionable and makes for fine bullet points on company reports, and they found they could run the companies at something like peak efficiency with no hysteresis in the system to screw up their yearly bonuses. . .until the spectre of Donald Rumsfeld comes by and pees in the soup. To the bean counters things like second sources mean wasted money because then they cannot squeeze thei

  • Does it cost you less to diversify your suppliers in order to avert production slow-down on rare occasions, or does it cost you less to accept these temporary slow-downs? Cost of course is to be understood in wide terms: money, image, layoffs, lost knowledge...
  • JIT (Just-In-Time) delivery was mismanaged to the point of creating shipping. Some bean counter decided that the benefit of saving 10$ in storage fees for not very bulky chips is a worthwhile benefit to risk production outages and the lean manufacturing system that encourages that type of bone-headed decisions approved the move. This isn't even the result of some truly unpredictable disaster, like earthquake shutting down chip foundries.

    Just like with agile that essentially means you do no QA testing or d
    • I think in semi, the hope is prices go down. Disk drive prices used to drop weekly, so you did not stock them if you could help it. Even semi's drop. I bought some buck converter modules about a year ago (granted small quantities) for around 5 each. They are now 3.50. Digikey also shows the in quantity prices dropped too.

  • Lacking chips for everything from transmissions to touchscreens, Honda, Nissan, and Toyota were forced to shut down or slow output for months.

    Great, I don't want a touchscreen (at least not one from the manufacturer) and I don't want a transmission that needs a computer.

    • Actually you do. Those computers in tranny's work with the ECU in the engine for smooth, reliable, high mpg cars. Next you'll tell me carb's and fixed timing with distributors in engines were better than today's FI and DI engines under variable timing with knock sensors. The good old days were not so great. How many people today could even start an engine on a very cold day without flooding it?

      • Actually you do.

        Actually, GFY.

        Those computers in tranny's work with the ECU in the engine for smooth, reliable, high mpg cars.

        So does the computer in my head. I want a stick, because I've had enough problems with slush boxes and their electronics to know that they are one of the least reliable parts of a car.

        Next you'll tell me carb's and fixed timing with distributors in engines were better than today's FI and DI engines under variable timing with knock sensors.

        Nope, wrong again. You don't know shit about me, but you think you do.

      • liar, no you don't. Transmissions have and can be pure analog hydraulic controlled and work just fine. I could start cars on subzero (Farenheit) cold days in the 70s. Needlessly complicated systems just make for more failure modes and shorter lifespan.

        • Well, they can and they can't. They clearly can, my 1982 300SD has no transmission computer, and it has four gears and also a kickdown switch under the accelerator pedal. But it also lacks a lockup torque converter, so it is wasting 3-5% of energy right there. It also is externally controlled by the engine through a Bowden cable and a vacuum line.

          • I'm sure that bowden cable and vacuum line went to valve body where analog computing was done by valves and hydraulic fluid

            lack of solid lockup would be just as much or little an issue by a transmission controlled by a supercomputer cluster.

            • I'm sure that bowden cable and vacuum line went to valve body where analog computing was done by valves and hydraulic fluid

              Correct. There is also one solenoid for the kickdown, AFAIK.

              lack of solid lockup would be just as much or little an issue by a transmission controlled by a supercomputer cluster.

              No, I mean it doesn't have a lockup TC. If you run it at too-low RPM you'll ruin it, and there are also other times you want to slip it, so TC lockup is an electronic function.

              • Hahaha, I'm sure the first lock-up TCs in the 1940s used purely hydraulics and didn't self destruct. There is no absolute need for electronics at all.

  • You can steal a Lexus in like 3 minutes with a laptop, linux, and $200 device from aliexpress. CLEARLY the auto industry and their lazy, uninformed, shortcutted garbage tech wasn't making responsible use of the semiconductors anyway so I'm glad daddy took the toys away from them.

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