Dec 26, 2021

Fudge Sunday - Cheap as Chips in 2022

This week we are looking ahead to Cheap as Chips in 2022!

Getting Informed

You may recall that I use Twitter in an ephemeral way. I use Tweepy to cleanup after I get my ideas tweeted that might survive being added in an issue of my newsletter and then (maybe one day) on my blog.

Sometimes I’m doing meta commentary on @Techmeme. Sometimes my meta commentary gets picked up by @TechmemeChatter when linked to on techmeme.com from @jaycuthrell even back in the olden times of my original @qthrul handle.

Recently, Techmeme linked to coverage of chipmaker spend reaching $152B which is a +30% Y/Y increase. So, I looked back to 2011 supply chain for hard disk drives (HDD) and contrast this to the supply chain stories around semiconductors.

The $152B spend...

If chipmakers are on track to spend $152B on semiconductor fabrication facilities and the means of production it may mean we’re looking at 2017 era patterns. Arguably, we are very much on a path to being cheap as chips in 2022.

www.techmeme.com

My thinking at the time of this Techmeme coverage revolved around the idea that a pattern from 2011 might mean big things for 2022.

Jay Cuthrell

@JayCuthrell

Flashback: In 2011, Thailand monsoon and rainfall flooding took lives, impacted lives, disrupted global manufacturing supply chains, and led to a year of hard disk drive shortages.

Now: Pandemic.

Soon: A "cheap as chips" future.📉

Images via @BlocksandFiles @Wikibon @backblaze https://t.co/oL636IaPg1 https://t.co/W3mmVNRya2

9:49 PM - 19 Dec 2021

Via @Backblaze via @BlocksAndFiles

Via @BlocksAndFiles via @Wikibon

To put that in perspective...

“Top 10 semiconductor foundries by market share” – @magicsilicon

twitter.com

As I was saying previously...

Be sure to check out my past coverage and shared trends of the semiconductors industry in Three recommendations walk into a bar BONUS section as well as And All Points In Between then Betting Odds and Ends Justify the Means of Production.

sunday.fudge.org

Addendum (Reader Feedback)

Thanks for the rapid feedback from Greg Meyer on my reasoning above.

Here’s how I answered Greg’s questions on my reasons:

I see a few patterns in our modern demands…

Chips are going into everything that has a physical void to fill
Smart(er) devices is impacting wider numbers of supply chains
Chips with radios that can access multiple networking standards are increasingly common

I see a few historical patterns as well…

“Chip Dumping” and past press coverage of the 1980s i.e. https://www.nytimes.com/1986/04/25/business/us-reaffirms-japan-chip-dumping.html
“Copy Exactly” approaches becoming standardized across industry of the 1990s i.e. https://en.wikichip.org/wiki/intel/copy_exactly!
“Tick Tock” becoming an ingrained culture of expectation for technology refreshes in the 2000s i.e. https://www.extremetech.com/computing/127987-deliberate-excellence-why-intel-leads-the-world-in-semiconductor-manufacturing/

Work Plug!

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Disclosure

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Jay Cuthrell @JayCuthrell

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