[HN Gopher] Car manufacturing hit by global semiconductor shortage
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Car manufacturing hit by global semiconductor shortage
Author : kjhughes
Score : 95 points
Date : 2021-01-08 16:23 UTC (6 hours ago)
(HTM) web link (www.ft.com)
(TXT) w3m dump (www.ft.com)
| dboreham wrote:
| Just-in-time not so smart now eh?
| bsder wrote:
| Just-in-time inventory has another name.
|
| Always-late inventory.
| karmakaze wrote:
| I was thinking why not make cars like cars, not smartphones. I
| hate when a car after a number of years is still perfect except
| for the extra bells and whistles.
| boddhi wrote:
| Well there's a lot of safety features that require
| semiconductor components. Back up cameras, collision warning,
| lane assist, brake assist, tire pressure warning, etc. Humans
| are bad drivers.
| mywittyname wrote:
| JIT manufacturing predates smartphones by a good decade or
| two.
| [deleted]
| mistrial9 wrote:
| car manufacturing mysteriously hits unsolveable shortage at the
| very same time as industry-wide regulatory changes regarding
| carbon emissions are now inevitable ?
| cassepipe wrote:
| Am I wrong to think it is a good thing ?
| maxerickson wrote:
| It won't mean much long term, it's more of a manufacturing
| shortfall than a shortage.
|
| The distinction I'm drawing is hand-wavy, but the point is that
| it's a planning disruption rather than a resource limit or
| whatever.
| jfoutz wrote:
| Good distinction. The difference between eating all of dinner
| and still being hungry, versus eating all the food in the
| house and still being hungry. Hand waving metaphor, but more
| visceral.
| DoofusOfDeath wrote:
| Awesome multilayered use of "visceral".
| bonestamp2 wrote:
| Not necessarily. Fewer cars is good for the environment. But,
| auto manufacturing, transportation, financing and sales are a
| huge part of the economy.
| andrewtbham wrote:
| paywall?
| mgh2 wrote:
| https://www.usa-vision.com/car-manufacturing-hit-by-global-s...
| airstrike wrote:
| Google the headline and click through. FT doesn't block links
| referred from google.com
| [deleted]
| bradfa wrote:
| At least in the USA, due to COVID there has been lower than
| normal new car inventory at dealerships for the second half of
| 2020. This drove new car prices up which in turn drove used car
| prices up.
|
| At the end of 2020 it seemed like the inventory problems for new
| cars might be coming to a close in early 2021, but if this
| shortage of semiconductors is real then maybe early 2021 still
| won't see new and used car prices come back down for a bit
| longer.
| namdnay wrote:
| The whole "dealer inventory" thing seems so strange as an
| outsider. Is it specific to the US? Or North America? In Europe
| (or at least the European countries I've been in) and Japan,
| you go to the dealer, they will have a few showroom and test
| cars, and then you sit down, spec your car, haggle the price
| (this is changing in Europe with third parties who will
| negotiate for you), and then wait for your car to come out of
| the factory
|
| From time to time there will be a showroom car on sale that
| matches, especially if you're near the end of that generation
| throwaway201103 wrote:
| In the US (and I assume also Canada) it's almost the exact
| opposite. Custom order cars are possible, but rare. The vast
| majority of new cars sold are built with a factory-chosen set
| of options and sold from dealer inventory. Transferring a car
| from another nearby dealer if needed is also fairly common,
| if they had the particular color or option group the buyer
| wanted but the local dealer didn't.
| mywittyname wrote:
| Used car price drops lag new car sales, since used cars cascade
| through the market for years.
| Baeocystin wrote:
| Used car pricing went sideways after the cash for clunkers
| program, and the market still hasn't re-normalized, at least
| here in California. I'm surprised at how long the effects are
| lasting.
| eulers_secret wrote:
| Drove up new car prices, too: https://economics.td.com/us-
| vehicle-sales
|
| "From an automotive standpoint, dealership inventory remains
| lean - currently sitting at a nine-year low and down 22% for
| year-ago levels - which has already led to some reversal in the
| very generous summer incentives", which indicates higher
| prices. I couldn't find pricing data.
|
| This new shortage + current shortages + low interest rates =
| high prices on used/new. I was thinking of buying something
| last year, but now I think I'll wait until '22 or '23. (or if I
| can WFH, never!)
| vecinu wrote:
| > I couldn't find pricing data.
|
| https://www.cargurus.com/Cars/price-trends/ is a good
| reference for following used car pricing trends. All signs
| point to them going up and barely flattening now.
| bradfa wrote:
| Yeah, I was also hoping to buy a vehicle in 2020 but ended up
| holding off due to not driving nearly as much now and due to
| the prices going up. I was hoping prices would come back down
| in 2021 but we shall see...
| aNoob7000 wrote:
| I'm complete confused about the economy in the United
| States. You look at the news and all you hear about is the
| enormous amount of financial pain families are going
| through at this time. But then you hear about cars and
| trucks flying off of dealership lots.
|
| I guess I'll be holding onto my 2011 Honda Odyssey until it
| catches fire on the road.
| pkaye wrote:
| I've heard its a K-shaped recovery. Some parts recovered
| quickly but others didn't. For example service and
| tourism didn't. But tech and construction is less
| impacted.
| aidenn0 wrote:
| The average income (including stimulus checks) in the US
| went up, while at the same time lots of people losing
| their jobs. People who didn't lose their jobs (or have
| their hours curtailed), are doing significantly better
| because they aren't spending as much money _and_ got
| stimulus checks.
|
| Meanwhile those who did lose their jobs are screwed.
| These people were probably also poorer before COVID hit,
| so fewer of them would have bought a _new_ car absent
| COVID anyways.
|
| This is also why the stock market can't seem to crash;
| bond yields are super low, and there is more money being
| saved (and thus looking for investments) than ever.
|
| That's been the problem in the US for the past 45 years
| or so. We have a lot of wealth, it's just not
| particularly evenly distributed. Every single financial
| shock in my lifetime has made the problem worse.
| WrtCdEvrydy wrote:
| > my 2011 Honda Odyssey until it catches fire on the
| road.
|
| Good luck, I bought a 2005 toyota corolla with the idea
| of driving it until it died. I am now concerned the car
| will bury me instead.
| wing-_-nuts wrote:
| >I am now concerned the car will bury me instead.
|
| No that's the toyota krushchev
| jcpham2 wrote:
| Family members works in parts quality (PQ) at a major automotive
| manufacturer.
|
| Once they crash the car and build the car to conform to the
| regulatory framework - the manufacturer of the parts in the car
| can't change. You must use the same Nippon semiconductors etc.
|
| That's the simple explanation I was told.
| garyfirestorm wrote:
| only for things that actually affect crash safety. you can
| change radio without any issues.
| taneq wrote:
| So even the small electronic components are locked in after the
| vehicle passes crash testing? That seems weird, I wouldn't have
| thought that the IC you use on the indicator modules (say)
| would affect the crashworthiness, especially if you're
| replacing like with like.
| edwinbalani wrote:
| Crash testing will be part of a wider testing plan. The logic
| there is that you have shown all the tests to pass using that
| particular hardware+software configuration. Only that
| configuration (and any future ones you put through testing,
| verification and validation) is what you're allowed to ship
| to customers.
|
| (I work in a regulated environment, but not automotive, and
| we run into the same barriers, often for even minor changes.
| We work agile, but changes will get released in planned
| batches every few months, rather than shipping instantly. For
| automotive, I'm guessing their update cadence would be every
| model year.)
| colechristensen wrote:
| And if the IC on the indicator gets changed out and the new
| one causes interference which leads to the airbags not
| deploying in a crash?
|
| Building things which can have small defects that kill people
| is just a different game.
| throwaway201103 wrote:
| Yet we allow people to replace almost any part on the car
| themeselves, with varying grades of quality made by
| aftermarket or OE manufacturers. Brakes, suspension
| components, body panels, electical components, etc.
| purchased from Amazon and made somewhere in China. Once
| it's in the customer's hands, it seems a lot of those rules
| go out the window.
| benibela wrote:
| In Germany you are not allowed to change the car
|
| E.g. there are these additinonal brake lights one could
| place at the top of the rear window. For a long time it
| was illegal to use them, even if you just glued them on
| the inside
| seabird wrote:
| These things aren't microservices for a dating app that is
| going to fold in two years. The core of working in any
| safety-critical field is strict empiricism. You have to
| accept how little you know and not believe anything you
| haven't seen with your own eyes (and even then, it's wise to
| distrust what you've seen). To believe that you have
| predicted all of the thousands of scenarios that will arise
| out of "just one small change" and forego testing is a good
| way to surprise somebody an early trip to the pearly gates.
| iancmceachern wrote:
| You can change them, it just comes with a lot of design,
| testing, V&V and Manufacturing work to satisfy the needs of a
| robust QMS system for a regulated environment.
| _trampeltier wrote:
| Yes, that is true. I work in a factory who makes (mechanic)
| car parts. For example, if we buy a new machine, we have to
| send some pieces to the car company and they do some tests
| again. If think it is more, because who will pay the recall
| of all cars, if the new part is not in spec.
| flybrand wrote:
| PPAP - production part approval process
|
| https://en.m.wikipedia.org/wiki/Production_part_approval_pr
| o...
| sonium wrote:
| Actually there is quite a lot of change going on. German car
| manufacturers have standardised on the so called delta-
| qualification-matrix [1] which basically says what kind of
| tests should be done to before implementing an change (which
| can be anything from nothing if e.g. the label print of a
| semiconductor changes up to a full retest of the whole ECU).
|
| But its probably that there is just no alternatives on the
| market, since Ties Ones have extensive supply chain management
| with second and third sources for the majority of
| semiconductors.
|
| 1: https://www.zvei.org/en/subjects/mobility/product-process-
| ch...
| xvf22 wrote:
| Tesla seem to do a lot of running changes, are they certifying
| each one?
| tobyjsullivan wrote:
| I don't see why they'd be exempt, generally. Obviously they
| only need to certify the changes that make it to production
| but, yeah, that still seems like more than other automakers.
|
| I'm guessing one advantage Tesla has over traditional
| automakers is their entire company has been built around the
| existing regulatory environment. I'd be willing to bet their
| recertification process is quite streamlined compared to
| companies that have iteratively patched it on to their
| tradition vehicle design processes. Just a guess though; I
| have no background knowledge on this topic.
| turbinerneiter wrote:
| The traditional automakers are the ones making the
| regulation, trough lobbying (in the good and bad sense of
| the world). There isn't a regulation passed on the car
| industry that the car industry isn't part of writing.
|
| I highly doubt that the traditional carmakers are slowed
| down by regulations.
|
| Would be cool to find someone who has actual insights to
| ask this.
| mywittyname wrote:
| There are lots of mechanisms to fast-track changes. If
| Ford changes the headlight assembly on the next year
| Mustang, they don't go and crash the car again. They (or
| a supplier) fill out the certification form showing that
| their testing indicates the new headlight assembly abides
| by all the regulations imposed on vehicles, and submit it
| to the relevant state and federal bodies.
|
| You can generally tell what revisions are straight-
| forward to certify and which are not by noting common
| year-to-year changes in a model.
| brundolf wrote:
| "Continuous [Regulatory] Integration"
| vslira wrote:
| Frankly it's a brilliant innovation, assuming that's the
| case. Applying new regulations _quicker_ is definitely a
| moat in a heavily regulated environment, as long as it 's
| not half-arsed
| terafo wrote:
| AFAIK Tesla tries to produce as much as they can in-house.
| They are designing their own chips for their cars, for
| example.
| numpad0 wrote:
| And that contributed to their stupid issues like skipping
| conformal coating and cars getting runaway power steering
| from it
| taneq wrote:
| That sure would make it easier if the regulation is written
| as "you must use the same supplier" and they can just say
| "yup, it me".
| MichaelZuo wrote:
| Perhaps it is the biggest reason why they did that in the
| first place.
| snickms wrote:
| The article was paywalled for me, but if you made your cars in
| lisp, you'd run out of braces way before you ran out of
| semiconductors.
| DoofusOfDeath wrote:
| HN users downvote all but the highest-quality puns.
|
| I'd compile some examples for you, but I'm not sure how you'd
| interpret it :)
| [deleted]
| [deleted]
| [deleted]
| NegativeLatency wrote:
| Maybe they need to pay more then? or it's not actually an issue.
| I wonder what the margin on a car and associated components is.
|
| "The problem is, we are lower in the chain than companies like
| Apple and HP," said one executive. "The automotive industry
| doesn't pay that much for its semiconductors."
| hippich wrote:
| which is weird, because $1k - $2k retail prices per some
| electronic modules, like ECU, are not unusual (couple friends
| had issues with their car where the only solution is the
| replacement of the ECU). That is the price range of pretty
| decent laptops, which includes not only chips and such, but
| also display and batteries.
| maxerickson wrote:
| Huge markup on the ECU. They are sold into a market where
| $1000 for an ECU restores thousands of dollars of other stuff
| to working condition.
|
| There's also a whole lot of other chips in cars these days.
| HeyLaughingBoy wrote:
| Don't assume that the retail price of a replacement part is
| the BOM cost used by the manufacturer. It's likely integer
| multiples (if not an entire order of magnitude) higher.
|
| e.g., the replacement cost of a control board in my furnace
| is around $800, IIRC. I could probably build it for about $30
| in parts (ignoring the software in the microcontroller).
| However, to someone who's evaluating buying a new furnace vs.
| repair, that $800 is a hell of a lot cheaper than a new
| furnace.
| extrapickles wrote:
| The control board for my furnace is ~$150 (gas/condensing).
| $800 sounds like that includes labor of installation since
| they are somewhat annoying to replace as you practically
| need to take half the furnace apart to do so.
| bluGill wrote:
| When you buy a replacement you are paying for their entire
| replacement parts chain. Try buying a replacement part for
| a 10year old computer, if you can it will be more than a
| new computer.
| aidenn0 wrote:
| I have witnessed automotive companies looking at shaving
| fractions of pennies off of BoMs for ECUs. Obviously cost
| savings is only somewhat related to margins, but that's a
| datapoint.
|
| It would not surprise me to find out that Apple makes more
| money per iPhone manufactured than Toyota does per Corrolla,
| but I could definitely be wrong about that.
| WanderPanda wrote:
| If I remember correctly VW makes 400 Euro per car they sell
| in Germany (pre covid). I believe its just another example of
| Parkinsons Law
| (https://en.wikipedia.org/wiki/Parkinson%27s_law) and hope
| the legacy oems go bust rather sooner than later to free up
| the massive ressources they allocated inefficiently all the
| time.
| ChuckNorris89 wrote:
| Budget car makers are more like gaming console
| manufacturers and SaaS subscription services every year.
| They make almost no money when they sell you the car but
| they make all of it back from overpriced optional extras,
| the maintenance services you have to take at the overpriced
| authorized dealer and through their financing services.
|
| I live in Europe and keep pondering moving to a bigger city
| and downsize just to give up the need of a car since the
| maintenance and the rest of the costs are going up faster
| than my pay. I can see a lot of low-middle class people
| getting screwed by the rising costs of car ownership long
| term.
| notJim wrote:
| How is that Parkinson's law and not a success story of
| market competition? Isn't it that the highly competitive
| car market forces legacy manufacturers to accept lower
| margins? If anything, we should welcome greater competition
| to drive down the margins of electric car makers.
| ahepp wrote:
| Yes, it's true that the margins were low, which is a
| strong indicator for competition. However, I think the
| weakness in electrification and software makes it clear
| that there's little true innovation. Legacy automotive
| turned into a stable market, and participants were happy
| to fight over pennies. Eventually US manufacturers
| realized they couldn't compete and needed to change, but
| even then decided to retreat into trucks and SUVs rather
| than truly innovate.
| boddhi wrote:
| I work for a Semiconductor distributor. Seeing huge orders from
| car manufacturers since December. I guess they are stockpiling.
| agumonkey wrote:
| What would explain the supply shock and the stockpiling ?
| airstrike wrote:
| For what it's worth, my somewhat educated guess from someone
| who covers Autos slightly:
|
| 2019 was expected to be a "peak" year in the automotive
| cycle, so everyone in the supply chain adjusted accordingly
| by modeling in lower demand following that peak. I'd wager
| with COVID-19 the trough came significantly faster (and
| deeper) than anticipated, and as we gear up for an equally
| fast (expected) recovery, inventory levels aren't adequate.
|
| Just a hypothesis, but perhaps worth considering.
| boddhi wrote:
| When car manufacturers open up after Covid shutdown, they
| started seeing massive demands. We couldn't keep up with
| their demands since July. They learned their lesson from
| Covid and not taking any chances this year.
| agumonkey wrote:
| oh yeah.. I didn't foresee covid effects (obv in
| retrospect)
| WanderPanda wrote:
| Do you think that this can be attributed to the bullwhip
| effect?
| kazinator wrote:
| They sure learned a lesson in 2020 from toilet paper!
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