M1 is 5nm, those are all factored in 5nm capacity planning. i.e It is part of $delta_X.
>Is there another equally interesting story in the chip fab business that would explain this shortage?
1. I have always thought the toilet roll incident in pandemic would give every one a lesson in commodity and supply chain. The Chip shortage is no different. One can also look Lumber, Steel or any other commodity. But basically instead of having a negative impact on demand, COVID actually make huge increase in demand. PC industry saw ~15% increase than previous projection. One only need to look how a 5% misprojection of Smartphone shipment in ~2018 lead to an avalanche of NAND and DRAM pricing.
2. Old mature node ( sub 28nm node ) has always been in short / tight supply for nearly a whole decade. You just dont hear about it in mainstream media because they are not headline worthy and doesn't drive clicks. Generally speaking the older you are and the more you know about an industry, the more you realise how news are always very late to the cycle.
3. None of these factored in trading. If any market is a simple game of supply and demand one could always balance things out. But you have people betting / trading these commodities. Which are not actually "demand" as in usage but investment. Considering the premium / profit one could gain from chip trading could easily be multiple if not in some cases order of magnitude. This also has a negative feedback loop, as wholesale or channels see difficulty in getting hold of something they will want to stock pile more of it. Something similar to what is described as Bullwhip effect.
4. One often overlooked sector is Crypto. It basically absorb any sort of capacity as long as the Crypto dollar is profitable. Right now this doesn't seems to add much to the constrain. But at one point Crypto players could buy up whole patch of wafer capacity at a much higher premium.
5. Supply will always be much slower to react, the higher capital investment, the more risk there is in over supply. There used to be an old Intel joke about The most expensive Fab isn't leading edge Fabs, but will always be an empty Fab. This is just as true today. It is the same with DRAM and NAND, that is why you see vendors reluctant to build additional capacity until absolutely necessary. ( Whether it is a cartel or not depends on your perspective, so I will leave that part out. But it is absolutely common for any commodity industry to meet and discuss these issues. )
M1 is 5nm, those are all factored in 5nm capacity planning. i.e It is part of $delta_X.
>Is there another equally interesting story in the chip fab business that would explain this shortage?
1. I have always thought the toilet roll incident in pandemic would give every one a lesson in commodity and supply chain. The Chip shortage is no different. One can also look Lumber, Steel or any other commodity. But basically instead of having a negative impact on demand, COVID actually make huge increase in demand. PC industry saw ~15% increase than previous projection. One only need to look how a 5% misprojection of Smartphone shipment in ~2018 lead to an avalanche of NAND and DRAM pricing.
2. Old mature node ( sub 28nm node ) has always been in short / tight supply for nearly a whole decade. You just dont hear about it in mainstream media because they are not headline worthy and doesn't drive clicks. Generally speaking the older you are and the more you know about an industry, the more you realise how news are always very late to the cycle.
3. None of these factored in trading. If any market is a simple game of supply and demand one could always balance things out. But you have people betting / trading these commodities. Which are not actually "demand" as in usage but investment. Considering the premium / profit one could gain from chip trading could easily be multiple if not in some cases order of magnitude. This also has a negative feedback loop, as wholesale or channels see difficulty in getting hold of something they will want to stock pile more of it. Something similar to what is described as Bullwhip effect.
4. One often overlooked sector is Crypto. It basically absorb any sort of capacity as long as the Crypto dollar is profitable. Right now this doesn't seems to add much to the constrain. But at one point Crypto players could buy up whole patch of wafer capacity at a much higher premium.
5. Supply will always be much slower to react, the higher capital investment, the more risk there is in over supply. There used to be an old Intel joke about The most expensive Fab isn't leading edge Fabs, but will always be an empty Fab. This is just as true today. It is the same with DRAM and NAND, that is why you see vendors reluctant to build additional capacity until absolutely necessary. ( Whether it is a cartel or not depends on your perspective, so I will leave that part out. But it is absolutely common for any commodity industry to meet and discuss these issues. )