By the time they get their first chip, the shortage will be over and there will probably be too much capacity.
Six000mileyear
2 years ago
IBM couldn’t make it designing chips so they PAID Global Foundries over $1B to take the division off its hands. GF was struggling 5-6 years ago because it was purchased by a sovereign wealth fund with little understanding of the technology. GM and Ford have very little chance of pulling of designing chips in house with business leaders who have never performed semiconductor designs. They have a better chance of specifying a design since many of their component engineers have qualified chips presently used.
IBM couldn’t pull it off because it regards every division as a profit centre. If it cannot make a division a double digit profit centre, Wall Street will tell it to offshore it.
GM could have other goals in mind, but I wouldn’t count on it.
TexasTim65
2 years ago
Making your own chips is a recipe for disaster for consumers.
5 or 10 years down the line when you need to replace the chip you’ll only have 1 place to get it, if they even make it any more. So expect a 25 cent microchip to cost hundreds of dollars to replace.
Definitely not buying and Ford products if this proceeds.
whirlaway
2 years ago
This has been a problem 40 years in the making. Thanks to relentless offshoring of manufacturing, agriculture and what not, every damn thing has a long supply chain now. Hell, I have been seeing garlic grown in China – when shopping in the SF Bay Area which is home to what is known as the garlic capital of the world!
The blame should squarely be placed on neoliberalism (embraced by both wings of the Corporate Party that have been in power almost everywhere in the US) and the various so-called trade deals that they signed in order to help their corporate masters make more and more and even more profits.
Long supply lines are exactly what you want. It’s just another phrase for specialization.
In functional economies, those long supply lines cluster. Around every big, successful autoplant, a supplier infrastructure grows up. Which then makes the area attractive to other autoplants. Same story with semiconductors, then software, in Silicon Valley, back when it was a technology cluster.
It is making long supply lines difficult to sustain, which kills innovation, resilience and productivity.
Specifically, making up regulations and “laws” which adds to the cost of setting up shop next door in 4 minutes, if you feel you can make an improvement to the status quo on some tiniest little detail.
The more time, effort and money anyone has to spend on anything other than specifically what they are unusually good/best at, the more “size” pays off. Since you end up needing a bunch of people just to comply with such “other.” And the only way to do that, is to be big enough to spread the cost of those guys, across a bigger organization. Which then means fewer, bigger organizations. Less competition, more lockin. And a higher risk of one organization facing trouble, dragging many others down with it. You don’t have that, when there are a million small guys, each doing just tiny variations of one another.
I don’t think the chip shortage is due to the supply chain. Semiconductors have historically gone through boom and bust cycles. Right now, there’s too much demand for low end chips made by companies like TI. The same thing recently happened with video cards because of bitcoin and before that RAM was in short supply due to fires in Asian factories.
GaryL
2 years ago
Necessity is the Mother of Frank Zappa…..or something like that. It’s the quickest way for it to happen.
Chart looks like a classic falling knife…..kinda like Zillow. lol.
Casual_Observer2020
2 years ago
GM won’t be designing chips. They will give features and necessary specs to Qualcomm and NXP and others who will then use GlobalFoundries to manufacture them. The supply chain issues in semiconductors are well documented but this all points to car prices staying high forever. New chips are more expensive to manufacture and require plants that use newer fabs. Maybe at some point it will drive down the cost of cars. Maybe cars could be mostly digital and self driving someday. This will accelerate those processes.
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The blame should squarely be placed on neoliberalism (embraced by both wings of the Corporate Party that have been in power almost everywhere in the US) and the various so-called trade deals that they signed in order to help their corporate masters make more and more and even more profits.