From TFA:

> By 2025, she foresees demand for around 185 million square feet of advanced substrate manufacturing space against about 145 million square feet built.

It's curious that the production capacity for substrate is expressed in terms of manufacturing space. Is that an industry-specific quirk?

>Now major chip companies are resorting to unusual tactics. They are placing orders far in advance and prepaying so that substrate companies have ample cash to build more factories. Some are committing to buying the entire supply of new production lines to give their suppliers confidence to invest.

If the chip makers are investing this much money into the substrate businesses, why aren't they just purchasing some of these companies wholesale?

It’s strange that this happened. Did COVID just cause everyone to stop investing for a bit, leading to all these downstream problems? Or was this gonna happen anyway?

The archive.is link at the top no longer works. This one is currently working:

http://www.coppernews.io/2021/09/05/a-big-hurdle-to-fixing-t...

Has anybody ever considered that better software may be a part of the solution to the chip shortage? Going back to actually caring about things like efficiency and using the hardware properly instead of living in layers of software abstraction miles high? We put men on the moon with chips that could probably be manufactured in somebody's basement. We easily fulfill society's NEEDs with that level of hardware, we just need to give up streaming gigs of Netflix through our Electron apps to make it happen.

I am imagining the 'plastics!' scene from The Graduate, but with 'substrates!'.

Would smaller wafers help? They're thinner. I was surprised by the thickness of a 300mm wafer.

The reason you can't get a PS5 is because China is deliberately messing with the supply chain, because of Trump's mini-trade-war with them in 2017-2020, which they have not forgotten.

Lol every time I see the word "feet" I'm reminded that this article isn't targeted to anyone but Americans, even when talking about manufacturing lines in Asia. My East Asian bias is showing but in all my experience I absolutely have never had to use those units in a serious professional context. Any time I see a technically-sounding article use units like "feet" and "football fields" I subconsciously find it very difficult to take anything afterward seriously.

I admit it's irrational since units are arbitrary and orthogonal anyway, but it seems... forced. Is it really necessary to use those units in a technical context in order to relate to your readers?

EDIT: Lots of America-centric people are jumping onto me for this initial comment, stating that WSJ is built for its /true/ target audience, /Americans/. What sparked my comment was the fact I was reading this article in Japanese. The aforementioned numbers and graph are expressed in feet, so this kind of forced conversion across industry domain and language barrier seemed contrived and got me started on this train of thought.

https://jp.wsj.com/articles/the-chip-shortage-has-made-a-sta...

Let's say that all Banana growers were shut down for 8 months and during that time all existing supply was bought up that were sitting on store shelves. After they were allowed to start growing again, how long until you see a Banana in your local store? You better be there when they arrive, because everyone else who has been wanting Bananas is waiting too.

On top of that, can the Banana grower even get all of the items needed to grow the same sized crop as last year? All of the fertilizers, etc.? Those companies have been shut down during this time too. Oh, you're not the only company who needs those exact same supplies and the Potato farmer down the road is trying to purchase it too? After you've grimaced that the price has risen due to short supply and you had to source the items from 3x as many suppliers as you used to, now, you're relieved that your Bananas are almost done growing. You call the trucking company to deliver them to the distributor, who you learn is short staffed and prices have risen in order to attract truckers who are now in short supply, and factor in the gas price increases. Every single segment of the economy that the Banana grower relied on is going through the same thing, at the same time.

Making chips is several orders of magnitude harder/more complex than growing Bananas. Think about how many different companies products must be purchased to make a wafer. How many different highly specialized chemicals are used in addition to solid materials? If any single one of them is having supply or labor issues...

It's poorly implemented JIT. People simplified Just In Time to mena "no inventory" and then when a disruption hit, it echoed up and down supply chains. JIT doesn't mean no inventory, it means managing inventory and your supply chain to ensure adequate iventory based on needs both current and forseen.

One car example, you should ensure you have 4 times as many tires available as you do cars, because an imbalance there becomes either a constraint (too few tires) or a waste (too many tires). But it's not JUST making those numbers match, you have to forecast, how many cars and I going to build, are my supplies for the cars ok, look at normal fluctuations, and then also look at potential supply chain FAILURES and plan for them. Maybe it's easy to get brake pads but the lead time on tires is 4 months. Well then, I don't need to stock as many brake pads in case of a disruption, but I should definitely have enough tires to carry me through a potential disruption (maybe not 4 months worth, maybe I stock 2 and slow down car production, or something).

All these companies kept their shelves bare, and when some companies slowed orders, they didn't stop to think that the manufacturers they bought from would look for other customers to take up capacity. They acted like TSMC would sit there by the phone waiting for some customer to come back. No, they're in the business of selling chips, not in the business of servicing DumbCorp. No one planned for what might happen if they stopped ordering parts, they just expected the capacity to be there.

I'm bringing 6 new sites online this year, and a 7th early in the new year. I just bought a bunch of network equipment for not just our existing sites, but the 7 to come. I looked at supply chain issues, and said to my CFO, this inventory is going to sit here for 6 months, but we get a larger quantity discount, and we'll get the new sites online faster and not worry about getting this equipment if we buy now. We COULD have saved that money now, but the advantages of having it when we need it is greater than having that money in the bank for 6 more months.

JIT means planning ahead, not just micromanaging inventory. Too many MBAs don't get that.

What I see as explanations of the chip shortage is a combination of factors.

One immediate cause was that some manufacturers reduced their chip orders month in advance since they expected less demand but then the demand didn't decrease and they had to scramble, increasing general demand. Another immediate cause was that Covid has made some production lines shutdown or become unreliable.

But the reason that now a year or more on, we have problems, seems require more explaining. Larger causes I've heard; The chip supply chain is extremely long, long enough so you get a whipsaw effect or anti-whipsaw effect. A whipsaw effect means by the time demand catches up with supply, it goes beyond it and manufacturers lose money. But what seems to be happening is an anti-whipsaw effect - suppliers are avoiding any panic measures to catch up with demand and so lose money but this means the catching up is a long process.

This is something of a product of a highly capital intensive economy pushing manufacturers to only produce, invest and consume in a narrow range. Limiting investment in capital equipment is a way to make the investment you make is 100% utilized. Limiting consumption to the lowest priced items is a way to make sure all of your production is profitable. It seems like a new phenomena. Instead of a "deflationary spiral" these factors pushed to their extreme could result in a "decreasing production spiral" where physical continually declines despite demand. We're not there yet, of course but it seems like an interesting economic phenomena.

Chip investment was already down-shifted in 2019 because it was a down year based on historical semiconductor cycles.

Then COVID triggered a collapse of nearly all JIT supply chains (not just medical). Try getting ANY industrial or consumer product - the supply chains are all broken right now. Some of this is China intentionally fxcking us. Some of it is over dependence on outsourcing. Most is due to inherent instability of JIT as a fundamental flaw that's long been ignored.

Many supply chains have both short and long feedback loops to themselves. For example ALL the equipment required to increase semiconductor capacity always require the very same semiconductor supply chain capacity (chip making requires chips being made).

The developer of the O.MG cable has a good Twitter thread describing the issues.

https://twitter.com/_mg_/status/1388321639524229120?s=21

IIRC, some industries did stop or slow investing, foreseeing a dip in the economy. The dip proved to be briefer than expected though, which is good, but left people scrambling for inventory.

The guy who runs my local bike shop is saying they still won't have enough bikes next year.

There's also the stimulus that injected demand into the system, so more goods may purchased than if COVID never happpened.

The main thing, particularly for ABF substrates, is that remote work drove PC volumes way higher than anyone thought.

It's a demand shock.

You started a hell of a flamewar with this, and you contributed to perpetuating it too. That's totally not cool here.

Please follow the site guidelines, which include:

"Eschew flamebait. Avoid unrelated controversies and generic tangents."

https://news.ycombinator.com/newsguidelines.html

We detached this subthread from https://news.ycombinator.com/item?id=28448249 and marked it off topic.

The difference between 185 million ft^2 and whatever you pick doesn't matter. It may as well be in hectares or "multiples of some lake somewhere", it's a massive number.

You have, and are probably using right now, a voice controlled computer that can convert anything to anything else, by just asking.

Is it really worth typing this every time an American site uses American language? We all get it, Americans with their imperial units, ha ha.

Yes, it is necessary to use language that is familiar to most of your audience when writing something.

Well, it is the Wall Street Journal. It shouldn't come as a surprise that an American publication named after an American landmark uses American units.

Americans, myself included, generally acknowledge that the metric system is better but we are already familiar with US units. There's nothing really wrong with US units either in terms of accurate measurement. In an ideal world we would use metric, but transitioning would come at monumental costs - never mind the re-training of an entire population - just so we can make unit conversions a tiny bit easier.

I get it. You're not familiar with US units like we are so you have to do conversions to make sense of the measurements - probably with a calculator since the ratios aren't simple, whole numbers. But remember Americans have to do the same whenever we read almost any foreign publication. Difference is I never see HN or Reddit comments complaining about metric units.

A meter seems to me linked to the human body just as much as the foot.

"The metre was originally defined in 1793 as one ten-millionth of the distance from the equator to the North Pole along a great circle"

That factor of ten is because we have ten fingers. There's no cosmic significance to ten or ten million. Or to the size of a line of longitude on our particular planet.

And a meter is almost exactly a yard, or three feet anyway.

You sir/madam, have mastered the art of saying a lot and yet saying nothing.