Thread by @trengriffin

1/ A orders chips. Supplier says "supply is getting tight." A triples order to store them in a warehouse. Supplier tells other customers supply is even tighter. They order extra chips. Quickly there are more chips in warehouses than toilet paper in garages during the pandemic.

2/ Intel's Gelsinger: "I don’t expect the chip industry is back to a healthy supply-demand situation until ’23. For a variety of industries, I think it’s still getting worse before it gets better.”

Are chips in warehouses the prime cause of the shortage? No. Demand is higher.

3/ "Software eating the world" means rising demand for chips.

I'm skeptical that this increase in chip demand is "transitory."

Fabs and backhoes don't increase with Moore's law. hartenstein.de/EIS2/Nathans_L…

4/ If you invert Nathan's 1st Law:

Software can't expand faster than the chips and memory that enables its magic.

Broadcom's CEO believes chip production is a mature industry that will return to lower growth. I disagree in the medium term at least. bnnbloomberg.ca/intel-ceo-says…

5/ Supply chain anecdote?

I am typing this on my phone because my ISP "can't get parts" and so I do not currently have land line Internet service. The next fake promise of a fix by the ISP is that I will have service by Monday at 5 PM.

6/ "The lesson of the beer game is that human activity systems, not individual mistakes or external forces, cause their own problems..." linkedin.com/pulse/20140901…

7/ "Multi-month container-ship charters continue to be signed at jaw-dropping rates above $100,000 per day. The market is getting even tighter, pushing charter rates and durations higher still." The S Santiago was chartered at $135k per day for 45-90 days.google.com/amp/s/www.frei…

8/ "We have just fixed [chartered] a 2,800-TEU vessel at above $100,000 per day for 65 to 80 days. We bought that ship, which was [built in] 2008, for $8 million. This charter alone pays $8 million....There are almost no ships available."

9/ "In the Pacific Northwest, it's become such a clusterfest that the US Coast Guard has been redirecting boats to anchor off the coast of Whidbey Island and other places they typically don't park. Ship crews are having to wait days, even weeks, to dock." npr.org/sections/money…

10/ Tractor Supply is having supply chain issues, of course.

"It's really in all facets of the supply chain... access to containers and them being in the right locations, ships, truck drivers, labor to run distribution centers, you could go on and on." news.google.com/articles/CAIiE…