TRACTOR AND AUTO MICROCHIP SHORTAGE AT CATASTROPHIC LEVELS.
New reports from Bloomberg and conflicting reports on whether the AMD Radeon 6600 XT is available to buy on launch day paint a complicated picture of what’s going on in the semiconductor world right now. The ongoing chip shortage is not one crisis but several, and it has different characteristics depending on the kind of chips you need to buy.
For auto, tractor manufacturers, and other companies that rely on large numbers of comparatively old microcontrollers, graphics drivers, and other types of silicon, things are not improving.
Bloomberg reports that chip delivery times increased by eight days in July, up to 20.2 weeks. This means that chips ordered today won’t be delivered until January 2022 — and that’s the good news. If you drill down into microcontrollers, specifically, lead times have risen to 26.5 weeks. Chips ordered today in these segments may not be available until late February. In more positive news, lead times have decreased for power management chips, specifically.
Earlier this year, when TSMC was under heavy pressure to pivot and give more manufacturing space to automotive companies, the company warned that with its existing capacity fully utilized, it could only give more fab room to car manufacturers by shortchanging other customers. Difficulty filling orders has incentivized companies to overestimate expected sales as a means of ensuring they have enough silicon for the foreseeable future. This makes shortages worse in the short term because fab companies have a limited window into how “real” the demand for any given product is. Overbooking can also lead to a steep order decline at the end of a shortage as companies focus on selling off excess inventory and do not place as many orders.
As for GPUs, the guidance there is mixed. Over at Overclock3D, they’re quite enthused about how UK stores had the 6600 XT available at MSRP on launch day, going so far as to title the article: “The End of Retail Scalping?” At Tom’s, they’re reporting that there are literally zero Radeon RX 6600 XT’s on store shelves for anyone to buy. There is no stock at Amazon and Newegg only has stock as part of its bundles. Given that Newegg now has a proven history of requiring customers to buy power supplies that catch fire in order to buy a video card, we do not recommend taking part in a Newegg bundle unless you are 100 percent certain of the quality of whatever additional components you are forced to purchase. The bare handful of cards that are even listed on various websites are all listed as “Out of Stock” and have been ever since the SKUs went up.
New data from 3DCenter, published earlier this week, suggests GPU prices for Nvidia cards are headed downwards while AMD’s 7nm GPUs have actually ticked up slightly.
GPU prices are substantially better than they were and Ampere could even hit MSRP by the end of the year if the current trend continues. Whether that happens will likely depend at least as much on demand for cryptocurrency mining cards as it does on any other segment. Nvidia now reduces mining hash rates on its GPUs while AMD does not, and that distinction could explain the difference in price movement — or it could be due to limited allocation on TSMC’s 7nm. AMD sells far fewer GPUs than Nvidia, but shipments have been even more lopsided these past 10 months. Much of AMD’s existing 7nm allocation at TSMC has gone to support the Xbox Series X and PlayStation 5, and TSMC doesn’t exactly have a lot of excess capacity to spread around right now.
The general semiconductor shortage is expected to last into 2022 and could persist as late as 2023 in some industries, though estimates vary widely, and no one is certain how all of this will play out. TSMC, Intel, Samsung, and GlobalFoundries have all announced major capacity expansion plans over the next six months, with new factories expected to be built around the globe. All of the companies involved believe that semiconductor demand will be permanently higher following the pandemic and are making plans to address the market need.
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