Frying Pan Into the Fire -- Chip Shortage

[365 Saleen]

That is interesting, i wouldn't think the extra labor would be worth it. Unless they are taking that out of the destination fee for the dealership cut.

GM might figure it is cheaper for them to pay the Dealership than to pay for the Union guy at the Factory. IDK.
The Ford Dealership I worked at had a $125 "Document Fee" on every vehicle sold. This Chevrolet Dealership charges a $250 "Document Fee"
Why? Who knows. Maybe they think their clientele will willingly pay the higher costs.
Maybe because then can get away with it.
Lots of differences in the way those two franchises are run.

 

[Weather Man]

GM does a lot of dumb stuff. Like ship Trucks and SUV's with Transport wheels/tires, and then ship the wheels and tires that actually go on the truck or SUV separately. Then at the Dealership a tech has to remove the transport wheels/tires and install the wheels/tires that belong on the truck. Then the Dealership has to ship the transport wheels/tires back to GM to be used again.
And it is not like the transport wheels/tires are generic items. They are alloy wheels with Michelin tires on them.
They will ship a Truck or SUV that was ordered with a "Black Out" option. The tech at the dealership has to remove all of the chrome badging (it gets destroyed in the removal process) and install the "Black-Out" badging. This sometimes requires the removal of the entire front fascia so a "Black-Out" grill can be installed.
Why the truck or SUV can not be shipped as ordered is beyond me. When I worked at Ford Dealerships I never saw this practice.

Worked at a long time GM dealership. The owner told us that in the late 70's into the early 80's every car and truck they received was sent directly to his body shop to have the panel alignment and other workmanship issues fixed before he could sell them.

 

[Weather Man]

Samsung Electronics Co. plans to build a roughly $17 billion chip-making plant in Taylor, Texas, according to people familiar with the matter, a mega investment by the South Korean tech giant, as the Biden administration pushes for an expansion of U.S. semiconductor production.

An announcement could come as early as Tuesday, people familiar with the matter said. Gov. Greg Abbott is scheduled to make an "economic announcement" Tuesday at 5 p.m. local time.

The Taylor facility, located in central Texas, plans to create around 1,800 jobs, though chip production isn’t expected to start until the end of 2024, according to documents Samsung had previously filed with Texas authorities. To woo Samsung, Taylor had offered incentives that include the equivalent of property-tax breaks of up to 92.5% for the first 10 years, with the write-offs gradually declining over the next several decades.

 

[Weather Man]

Toyota has announced it will be back to full global production capacity in December. In fact, the company says it anticipates churning out 800,000 vehicles next month, up from the 760,000 it made in December of 2020.

 

[Weather Man]

BERLIN (Reuters) - Daimler Truck Chief Martin Daum expects the global chip shortage to hit revenues by several billion euros this year and sees the problem continuing into next year, Automobilwoche reported on Sunday.

The world's largest commercial vehicle maker, to be spun off from Daimler on Dec. 10, has outlined cost-cutting measure aimed at boosting profit margins as it struggles with chip shortages hurting the entire sector.

Daum said there would be a significant financial hit.

"It is a huge sum," Daum told Automobilwoche, saying the company would sell a "mid five-digit number" fewer vehicles than it could have.

With an average price of 100,000 euros ($113,170) per vehicle, this means several billion euros in lost revenues, reported Automobilwoche.

"We also have many vehicles sitting in the factory where just one part is missing. These deliveries are a priority because they are already sold," said Daum.

He also told Automobilwoche that supply problems are likely to continue in 2022.

 

[Weather Man]

Hewlett Packard Enterprise CEO says end of chip shortage could happen in 2H2022​

HPE +1.87%Dec. 02, 2021 9:12 AM ET

• Hewlett Packard Enterprise (HPE) CEO Antonio Neri told CNBC that the global chip shortage will continue to impact the world in the near term and navigating it won't be easy, but they should be in a much better spot in the second-half of 2022.
• “It’s not going to be easy but I actually believe we’re going to be in a much better shape after the summer of 2022,” Hewlett Packard Enterprise's (HPE) Neri told CNBC on Wednesday, adding that as new chip fab plants come online, it could help alleviate supply chain crunches.
• In recent memory, several new chip plants have been announced, from Taiwan Semiconductor (NYSE:TSM), Samsung (OTC:SSNLF) and Intel (NASDAQ:INTC), but none of these are expected to be operational next year. German technology and engineering company Bosch has built a new fab that has already started producing chips, CNBC added.
• The 54-year-old Neri said that Hewlett Packard Enterprise (HPE) has a global supply chain and is "becoming smarter" in how it builds its products, notably PCs, as it looks for ways to source components.

 

[Weather Man]

Local Ford dealer inventory is clearly rebounding.

While Rivals Face Continued Shortages, Ford's Sales Are Booming​

John Rosevear 19 hrs ago

Ford Motor Company (NYSE: F) said that it sold more vehicles in the U.S. than any other automaker for the third month in a row in November, as it continued to reap the benefits of improved supplies of semiconductors and other key components.

Ford said it was "the only major U.S. automaker" to report a year-over-year sales increase in November, a phrase that was clearly aimed at old rival General Motors (NYSE: GM) while carefully excluding fast-growing Tesla.
Ford's U.S. sales were up 5.9% in November from a year ago, but they're still down 5.6% for the year.

What Ford said about its November U.S. sales​

• Ford gained market share again in November. It was able to sustain the momentum it began building with good results in September and October. While rivals continued to struggle to rebuild depleted dealer inventories, Ford was able to gain ground: It estimates that its share of the U.S. market was 13.8% in November, which would be 2.7 percentage points higher than November of 2020.
• Customer orders continued to be strong. With dealer inventories tight, Ford has been encouraging its retail customers to order the vehicles they want, just the way they want them. That's working well: It took about 74,000 retail orders in November, up from roughly 10,000 in November of last year. And 29% of its retail deliveries last month came from customer orders placed earlier in 2021.
• The all-important F-Series is doing well. Sales of F-Series pickup trucks probably still aren't quite as high as Ford and its dealers would like, but they're up. It sold just over 60,400 F-Series trucks in the U.S. in November, up 14.6% from a year ago. Of note: About 4,700 of those were F-150 Hybrids, new this year. Also of note: The November result ensures that the F-Series will retain its title of "best-selling pickup truck line" for yet another year.

© Ford Motor Company Breathe a sigh of relief, Ford fans: F-Series sales are on the rise again.

• The little Maverick pickup looks like a hit. Ford delivered just 2,582 Mavericks to U.S. customers in November, but that number doesn't really tell the story. Here's one that does: Mavericks are "turning" in just five days, meaning that's the length of time they spend on dealer lots after being delivered. That's an extremely low number, even amid the new-car shortage we've seen this year, and it suggests that demand is quite a bit greater than Ford can currently supply. (More Mavericks are on the way, Ford says, including more of the hot hybrid models. Ford delivered its first Maverick hybrids at the end of November.)
• Other new Fords are "turning" quickly as well. The company didn't provide a model-by-model breakout, but it did say that its newest models (the Mustang Mach-E, Bronco, Bronco Sport, and Maverick) are all turning in under 12 days.

© Ford Motor Company Sales numbers are still small as Ford ramps up production, but the little Maverick pickup is looking like another hit for the Blue Oval.

 

[Weather Man]

(Bloomberg) -- Intel Corp. is railing against a proposed import ban on a key chipmaking ingredient, saying the move would worsen an already-perilous shortage of semiconductors.

The company is trying to dissuade the U.S. International Trade Commission from halting imports of so-called chemical mechanical planarization slurries that are sold under the name Optiplane. DuPont’s Rohm & Haas unit makes the products in Taiwan and Japan, and they’ve drawn allegations that they infringe technology owned by Illinois-based CMC Materials Inc. The ITC was scheduled to announce its final decision later Thursday but postponed it until Dec. 16. It gave no reason for the one-week delay.


Intel, the world’s biggest chipmaker, has told the commission that “banning Optiplane slurries from U.S.-based semiconductor chip fabrication lines without a 24-month transition period could conflict with national security and economic interests.”

If the ban is approved, it could thrust an obscure legal battle into the spotlight. CMC’s Cabot Microelectronics sought the move, saying Optiplane was using Cabot’s “cutting-edge” technology for silica particles in a slurry for polishing the semiconductor layers. Cabot uses the composition for its iDiel family of slurries.
A trade judge in July said a component made overseas infringes Cabot’s patent and rejected DuPont’s argument that the patent is invalid.

 

[Fat Boss]

If there's one constant in the semiconductor world, it's that Intel HATES change. The only thing Intel hates more than change, is change they have not approved.

 

[Weather Man]

Semiconductor shortage is getting better, but recovery is uneven, Jefferies says​

Dec. 17, 2021 10:57 AM ETXilinx, Inc. (XLNX), ADI, STM, TXNAMDBy: Chris Ciaccia, SA News Editor1 Comment

Aguus/E+ via Getty Images

• Research firm Jefferies notes that the semiconductor shortage, which has impacted the global economy, is starting to get better, even if the recovery is uneven.
• Analyst Mark Lipacis notes that contracts are not being canceled or pushed out, after speaking with a U.S. distributor and a U.K. component broker. Tier 1 original equipment manufacturers are getting the components they need - and in some cases, extra - but Tier 2 and Tier 3 OEMs are not, which is causing the Tier 1 OEMs to sell their excess.
• In addition, pricing and lead-times are "stable-to-higher; and while power management integrated circuits are tight, microcontrollers are in better supply. Lastly, the Chinese New Year holiday in February could add to tight supplies, Lipacis added.
• Lipacis noted that Xilinx (NASDAQ:XLNX), Analog Devices (NASDAQ:ADI) and Maxim Integrated Products have already raised prices multiple times in 2021 and Xilinx, along with Murata did so from October on.
• Additionally, semiconductor companies are having clients sign non-cancellable, non-returnable contracts, "locking in higher prices over time," he added.
• Lead times are still long and remaining stable, Lipacis explained, citing evidence from U.K.-based distributor for Infineon Technologies parts that quoted a lead time of 99 weeks.
• Shortages relating to STMicroelectronics (NYSE:STM) and Texas Instruments (NASDAQ:TXN) were viewed as "pain points" earlier this year, but those delays have subsided, though broad-based demand for power management integrated circuits continues. Additionally, Analog Devices (ADI) and Infineon could start to see shortages, while supplies from Xilinx (XLNX) "remains in very short supply."
• Jefferies' Lipacis also noted that Xilinx (XLNX) shipments to China are still "limited," citing additional customs clearance delays.
• And while December is usually a "seasonally strong" period, as customers buy for January builds and the Chinese New Year break, the firm does not expect supply and demand to come into balance in 2022, but more likely 2023.
• "Our sense is that over the past 18-months, consensus has believed S/D equilibrium has always been '6 months out,' and that is where we believe consensus is today, Lipacis added. "We expect continued tightness, good visibility, high backlogs and higher prices and profitability for semiconductor companies for the next four quarters."
• On Friday, Chinese antitrust regulator was said to still be market testing remedies proposed by Advanced Micro Devices (NASDAQ:AMD) for its planned purchase of Xilinx (XLNX).

• Now Read: China antitrust regulator is said to still be market testing Xilinx/AMD remedies

 

[Weather Man]

Rachel Warren: Morgan Stanley released a note this past Monday stating that the semiconductor chip shortage for the auto industry was essentially a thing of the past. The report noted that Malaysian fabrication plants are operating at a 100% capacity again. This news is also in line with what some CEOs of major automakers have been saying lately.

This is great news. But there seems to be a lot of mixed consensus out there about whether the broader semiconductor shortage is going to be transitory or whether it's going to be staying with us for a long time. I'm curious what you guys think.

Is this shortage going anywhere or is this something you think we'll be grappling with for a long time? In that vein, is there a stock to buy in this industry that you think is in a strong position to weather these shortages. Connor, why don't you take this one first.

Connor Allen: I used to be on team transitory with inflation in general, and I hopped off that train a couple of weeks ago. I don't think that's going to last or I don't think it is going to be transitory and I think this inflation is something that's going to continue. I understand how specifically with semiconductors there could be a bottleneck that's broken. Now there is the supply that they need and the prices could go back down.

I do understand that. But I think there's also something to consider that consumer's spending is absolutely bonkers right now. Companies have learned that consumers will pay these inflated prices for their products. Will they bring the prices back down? I don't know. Maybe demand requires that they do that, but that's yet to be seen and I'm going to stay on team inflation for the time being.

But as far as a stock that I like, based on this news, I mean, there's a lot of them, but obviously one that a lot of people think about when they hear the word semiconductor is Nvidia (NASDAQ: NVDA). I think it's an obvious choice. As far as GPU, which geographic processors go, they are just years ahead of everybody else.

Their GPUs are absolutely phenomenal. As we've talking a lot about in the news lately with the metaverse and AI, Nvidia is great for all of those things. Especially the metaverse, it could be a huge market opening for Nvidia to hop in on. They create the most powerful GPU out there.

I think that they could definitely benefit from this. As far as Nvidia goes, another reason that I like, here's just a couple of reasons, that they've seen 50% to 100% growth in revenue and free cash flow for the past six to seven years.

Also there's been some estimates that the semiconductor industry is expected to grow at 9% CAGR for the next seven years. I believe personally that Nvidia is going to grow a lot faster than that 9%.

Rachel Warren: Wow. That's awesome. What about you Travis do you have a slightly different take on this, I think. [laughs]

Travis Hoium: Well, I'll take the transitory side of the inflation argument. I think the auto industry is one place to look at this. Auto prices have gone crazy especially in the used car market in large part because of this chip shortage.

If the chip shortage does ease over time and keep in mind the supply chain, the chip producers have known about these shortages for six to nine months now, this is maybe a new story for people buying used cars. But the supply side of it, I think it's going to be figured out faster than we think and I wouldn't be surprised if we overshoot on the supply side, eventually. Now that may be six months away.

But I think it's in sight and when we start to see reports like this, I think that's a really positive sign for industries like the car industry. If we get back to a place where supply is a little bit more in line with demand or as things like electric vehicles start to hit the market and you have new suppliers in the EV industry, you may actually have more supply than you need from the auto industry and we may see prices come down.

The argument would be that the high prices that we're seeing in the auto industry specifically is a short-term thing as this semiconductor shortage is worked through. If we're on the back end of that, then we'd start to get some more of a supply neutral environment, then we should see prices come down a little bit.

 

[kazman]

The only way we'll see prices go down on anything is with a change of administration.

 

[Weather Man]

(Bloomberg) -- Duane Paddock is used to carrying upwards of 800 vehicles at his self-named Chevrolet dealership near Buffalo, New York. But these days, thanks to the semiconductor shortage, he’s selling most of the vehicles General Motors Co. sends him as soon as they arrive.

Since the dealership has almost no inventory, Paddock’s sales staff is selling cars and trucks by showing customers a computer-screen view of what cars will look like and placing orders. Then they wait. It’s working well enough that he doesn’t think he’ll need to carry a huge lot of cars when, hopefully, the semiconductor shortage ends one day.

There’s just one problem: He still has far more interested buyers than he has vehicles coming in, which is why auto-industry sales fell about 20% in the fourth quarter of 2021 and suffered the worst second half since the Great Recession more than a decade ago.

“This will be my lowest volume year in 20 years. We’ll end up around 2,500 units when I normally do 3,300 to 4,500,” Paddock said by phone. “Everything I’ve got coming in, we’re selling before they come in.”

Carmakers likely sold a seasonally adjusted annual rate of about 12.5 million new vehicles in December, down 23% from a year earlier, according to the average forecast of six market researchers. Most automakers will report their latest quarterly and annual U.S. new car sales on Tuesday.

For the full year, auto sales likely came to 14.9 million vehicles, a 2.5% jump from the Covid-stricken days of 2020, according to Cox Automotive. The 2021 total is historically low for an industry that’s used to selling about 16 million vehicles annually. The slowdown reflects a global microchip shortage that forced automakers to limit output or ship some vehicles without fully functioning features.

December is usually a huge month for carmakers, who typically use holiday promotions to fuel a year-end push. But not in 2021, said Cox analyst Michelle Krebs.

“It’s not a demand problem. It’s a supply problem,” she said. “We’re at least 1.5 million units of inventory behind 2020 and 2.5 million units behind 2019.”


© BloombergChip Dip
Industrywide, carmakers had about 18 days of inventory in December, according to TrueCar, an automotive pricing website. That’s up slightly from the end of the third quarter, when automakers had 16 days worth. But it’s still less than half what they had a year earlier.

GM, which had kept production going early in the crisis, was hit particularly hard by the chip shortage in the second half. Toyota Motor Corp. will likely beat GM in U.S. sales for the year because it was able to sustain higher production, Cox predicted.

TrueCar estimates that GM’s December sales were down 43%, which would be the biggest drop of any automaker. Toyota sales fell about 30% and Ford Motor Co. is likely to report a drop of about 20%, TrueCar projects.

GM had record low inventory at the start of the fourth quarter because of downtime in the third, said company spokesman Jim Cain. The Detroit automaker’s production showed signs of improvement in the fourth quarter as more chips became available, he said.

To help cope with the vehicle shortfall, dealers say GM is allowing them to extend leases for customers who can’t find a new car.


© BloombergAs Inventory On Car Lots Dwindle Sales Take A Turn For Worse
Consumers who are able to find the vehicles they want are being forced to pay up. Automakers are using the semiconductors they get to build more-profitable models and those with the most options packed in, according to car shopping research firm Edmunds. All those high-trim level pickups and sport utility vehicles resulted in a record average price of $45,872 in November, 15% more than a year earlier.

December average transaction prices for GM and Stellantis NV were forecast at more than $50,000 by TrueCar -- the highest among mass-market automakers.

Carmakers have said there’s been some relief in chip supplies and that they’re starting to boost production. Inventory even inched up slightly in late November, reaching 1 million vehicles for the first time since August, Krebs said.

Chip-related constraints didn’t seem to slow the growth of Tesla Inc. in the final three months of the year. The electric-vehicle maker said Sunday it delivered a record 308,600 vehicles in the quarter, smashing analysts’ average estimate for about 263,000.

For the entire industry, analysts expect improved access to semiconductors and increased vehicle production this year. Edmunds predicts 15.5 million vehicles will be sold in 2022 and RBC Capital Markets analyst Joe Spak sees 15.8 million as output ramps up.

That’s welcome news to buyers and sellers alike, who are eager to see a better selection -- especially of less-expensive models. GM dealer Paddock said he hasn’t seen the budget-friendly Chevy Malibu sedan since early last summer and finishes every month with maybe three new vehicles that aren’t already sold in advance.

“When will we get back to having inventory? My guess is two years from today,” he said. “It’s going to be a long time before you see inventory on customer lots.”

 

[Weather Man]

Global semiconductor sales increased 23.5% in November; industry sees annual record for number of semiconductors sold​

UMC -0.51%Now!

• Global semiconductor sales rose 23.5% Y/Y in November to $49.7B, a 1.5% M/M increase, according to new data from the Semiconductor Industry Association.
• SIA represents 98% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.
• SIA disclosed that the cumulative annual total of semiconductors sold through November 2021 reached $1.05 trillion, marks industry’s highest-ever annual total.
• “Global semiconductor sales remained strong in November, increasing substantially on a year-to-year basis across all major regional markets and semiconductor product categories,” said John Neuffer, SIA president and CEO.
• Regionally, Y/Y sales increased across all markets: Europe +26.3%, China +21.4%, the Americas +28.7%, Asia Pacific/All Other +22.2%, and Japan +19.5%.
• On M/M sales growth: Americas 4.2%, Japan 1.1%, the Asia-Pacific/All Other 0.9%, and Europe 3.1%, but fell slightly in China -0.2%.
• In November, Taiwan Semiconductor Manufacturing (NYSE:TSM), ASE Technology (NYSE:ASX), United Microelectronics (NYSE:UMC), Hon-Hai (OTCPK:HNHAF), AU Optronic (OTCPK:AUOTY) registered 10.2%, 14.7%, 2.6%, 12.9% and 1.7% M/M sales growth, respectively, while ChipMOS Technologies (NASDAQ:IMOS) was lower by 2.3% M/M.

 

[SID297]

Worked at a long time GM dealership. The owner told us that in the late 70's into the early 80's every car and truck they received was sent directly to his body shop to have the panel alignment and other workmanship issues fixed before he could sell them.

Sounds like the early S550 Mustangs.

Samsung Electronics Co. plans to build a roughly $17 billion chip-making plant in Taylor, Texas, according to people familiar with the matter, a mega investment by the South Korean tech giant, as the Biden administration pushes for an expansion of U.S. semiconductor production.

An announcement could come as early as Tuesday, people familiar with the matter said. Gov. Greg Abbott is scheduled to make an "economic announcement" Tuesday at 5 p.m. local time.

The Taylor facility, located in central Texas, plans to create around 1,800 jobs, though chip production isn’t expected to start until the end of 2024, according to documents Samsung had previously filed with Texas authorities. To woo Samsung, Taylor had offered incentives that include the equivalent of property-tax breaks of up to 92.5% for the first 10 years, with the write-offs gradually declining over the next several decades.

Seems like a good place for a Texas Instruments chip factory.

(Bloomberg) -- Intel Corp. is railing against a proposed import ban on a key chipmaking ingredient, saying the move would worsen an already-perilous shortage of semiconductors.

The company is trying to dissuade the U.S. International Trade Commission from halting imports of so-called chemical mechanical planarization slurries that are sold under the name Optiplane. DuPont’s Rohm & Haas unit makes the products in Taiwan and Japan, and they’ve drawn allegations that they infringe technology owned by Illinois-based CMC Materials Inc. The ITC was scheduled to announce its final decision later Thursday but postponed it until Dec. 16. It gave no reason for the one-week delay.


Intel, the world’s biggest chipmaker, has told the commission that “banning Optiplane slurries from U.S.-based semiconductor chip fabrication lines without a 24-month transition period could conflict with national security and economic interests.”

If the ban is approved, it could thrust an obscure legal battle into the spotlight. CMC’s Cabot Microelectronics sought the move, saying Optiplane was using Cabot’s “cutting-edge” technology for silica particles in a slurry for polishing the semiconductor layers. Cabot uses the composition for its iDiel family of slurries.
A trade judge in July said a component made overseas infringes Cabot’s patent and rejected DuPont’s argument that the patent is invalid.

Dupont involved in shady business???

 

[CobraBob]

Pulled from Weatherman's post above. Wow! Wonder how many dealerships won't be able to endure the crunch. Our local Acura dealership hasn't had more than 3-4 vehicles on their lot in over two months. Whatever they CAN get is sold before it hits the dealership. The showroom is eerily quiet the 3-4 times we've had to go there since my wife got her 2021 TLX in September.

GM dealer Paddock said he hasn’t seen the budget-friendly Chevy Malibu sedan since early last summer and finishes every month with maybe three new vehicles that aren’t already sold in advance.

“When will we get back to having inventory? My guess is two years from today,” he said. “It’s going to be a long time before you see inventory on customer lots.”

 

[Weather Man]

General Motors reports Q4 sales decline of ~43%​

GM +6.29%Jan. 04, 2022 11:04 AM ET6 Comments

• General Motors (GM +4.3%) reports Q4 sales slipped 42.9% Y/Y to 440,745 vehicles due to semiconductor supply chain and low inventories issues.
• Despite inventory pressure, the company reported Chevrolet Tahoe sales growth of 8%, Chevrolet Suburban +3%, Buick Envision +10%, Cadillac Escalade +2% and the Chevrolet Silverado MD+5% for the quarter.
• For FY2021, the company delivered 2.2M vehicles, led by Cadillac Escalade sales growth of 65% Y/Y.
• Enclave, Envision and Encore GX drove Buick sales up 10% Y/Y.
• Fleet sales of full-size pickup trucks were up 10%.
• Sales of GMC Yukon, Chevrolet Tahoe and Suburban were up a combined 26%t to more than 238,000 vehicles.
• The automaker expects economic growth in the U.S. and improving semiconductor availability to help drive U.S. total light industry sales from around 15M in 2021 to around 16M in 2022.
• “In 2022, we plan to take advantage of the strong economy and anticipated improved semiconductor supplies to grow our sales and share. We will also further strengthen our industry leadership in trucks and begin our drive to EV leadership in North America with the rollouts of the GMC HUMMER EV, Cadillac LYRIQ and the reveals of the Chevrolet Silverado EV and GMC Sierra EV", said Steve Carlisle, GM executive vice president and president, GM North America.

 

[Weather Man]

Qualcomm CEO: Every car maker wants a direct relationship with a chip provider​

QCOM +1.99%Jan. 05, 2022 12:10 PM ET6 Comments

• Qualcomm CEO Cristiano Amon said Wednesday that the growth of digital components within vehicles has tightened the relationship between automakers and computer chip providers, a trend that will benefit QCOM over the long term.
• "Every car maker wants to have a direct relationship with a chip company," the head of Qualcomm (NASDAQ:QCOM) told CNBC.
• Amon explained that a stronger digital platform will allow automakers to expand their revenue base, by allowing the manufacturers to provide additional services. He predicted that this service revenue will eventually eclipse the profit gained from the original vehicle sale.
• Meanwhile, the Qualcomm CEO sees a similar dynamic fueling growth in the PC space. He explained that consumers will demand added functionality as they expand the uses for products like laptops.
• Amon pointed to the recent pandemic experience as an example. He noted that work-at-home routines turned laptops into communication devices, a process he expects will continue over time.
• "There's a lot of things are completely changing what the PC is," he said. "Number one use case of a PC right now is for communication."
• He added that functions like AI and gaming would also require more powerful chips in standard consumer PCs.
• Earlier this week, QCOM announced a deal with Microsoft to launch custom chips for use in future AR glasses.

 

[Weather Man]

I've been writing about the automotive chip shortage for what feels like forever. It started one pandemic ago, which is a unit of time that spans both the past and the present, and hoo boy, it sure does look like it's gonna be in the future too. Thousands of cars are unfinished as a result of it and although automakers are happily announcing new models with all that good January energy, unfortunately, the situation hasn't changed a ton as we enter 2022.

Some automakers, like Toyota, managed to get around the chip crisis pretty well in its early phases. However, despite announcing at the start of August how well it had coped, by the end of that month Toyota joined basically every other manufacturer in slashing capacity by 40 percent. By October, where I live in the U.K., car production was the lowest it had been since 1956, which you could have chalked up to economic woes and broader supply issues due to our ongoing self-sabotage project known as Brexit. But even British innovation in failure couldn't hit us any harder than the global chip supply issues.

Still, that was all 2021, right? Gotta be getting past that for 2022. Unfortunately, especially if your car is one that's currently sitting idle in lots across the U.S. waiting for chips, that doesn't look to be the case. Automotive News has reported what a lot of analysts have been pointing to: although things might get slightly better, chip supply is going to stay tricky this year.

"Throughout most of '22, we do expect to see sort of a one-in, one-out-type basis," said Tyson Jominy, vice president of data and analytics at J.D. Power, to Automotive News. "Anything produced in at least the first three quarters is going to go directly to customers, and that will set the sales pace."

To back that up, Toyota's Senior Vice President of Automotive Operations Jack Hollis reckons dealer stock won't come back in a big way this year either.

"In terms of the semiconductor supply, we expect challenges to continue through the first quarter of [2022], but supply is improving every day," Hollis told AN. "As for inventory, we will see a steady increase all year. However, we do not believe we will see 100,000 vehicles on the ground in 2022."

By "on the ground," Hollis seems to mean "on dealer lots." One way around all this is to do what Tesla has done for quite a few years--just use non-automotive grade tech in vehicles. One of the reasons it was able to produce its highest output yet, during the shortages of 2021, was that it changed how it builds cars to work with whatever's available. The problem with that for automakers who are expected to build reliable, safe, well-fashioned vehicles is that it's more of a workaround than a solution. And while Tesla made a lot of cars for Tesla in 2021, Toyota delivered more than twice as many in the U.S. alone, despite all the problems.

The automotive market's value is still going up, even as vehicle deliveries go down, in a large part due to the insane price of Tesla stock. And this is all great news for the used car market since that's where people are having to look to get their hands on a vehicle. Just keep in mind that none of it's great for the consumer as average used car payments hit $520 per month in 2021.

 

[lOOKnGO]

When you say writing....you mean copying and pasting.