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Japanese Chip Shutdown Causing Shortages
An anonymous reader writes "Japan's natural disasters and nuclear crisis have already caused silicon wafer shortages that are rippling through the global supply chain of semiconductors for everything from your garden variety PC to the biggest Google server farm. The earthquake and tsunami in Japan have shut down 25 percent of the global semiconductor raw materials production, threatening to cause shortages and price hikes in everything from smartphones to supercomputers. Intel and Qualcomm are countering that they have stockpiles and alternative manufacturing plants that can pick up the slack, but dozens of other electronics makers require critical components only manufactured in Japan."
See, this shows how the US has things figured out. If we have a catastrophic natural disaster in the US, we won't run into this problem, because we were smart enough to make sure that we don't manufacture anything here.
Well, depending on the context, 'just-in-time' often is a good idea and does save money. Before shipping got reliable (and before http://en.wikipedia.org/wiki/Operations_research figured out the math in WW2 and beyond), you had to maintain a fairly large stockpile of input and output at every site involved in the entire chain from raw material harvesting all the way to the storefront. Gradually we've figured out how much of a supply each location really needs on hand, so we only keep that (plus maybe a few percent more as wiggle room), thus saving the cost of the extra storage space and employees. So for example, the storefront gets one truckload a week and puts most of that directly on the shelves, instead of getting four trucks at the start of every month and putting all that in a huge back room and then gradually moving it again onto shelves over the month. Plus, the shorter storage lengths are, of course, better for things that have expiration dates, like food that spoils, or high storage costs like food that needs to be refrigerated.
In the case to the quake/tsunami, being oldschool wouldn't have really been any better; stockpiles within japan would still have been damaged, and there would still be exactly the same supply problem once the stockpiles elsewhere were used up. (Or to reword it: the gap in the supply pipeline would still be the same size, even if the pipe was longer). Note that for this tech stuff, the stockpiles are also constrained on both ends: they can't be too small, because the shipment takes a long time to arrive from japan; but they can't be too large because the tech changes quickly, so having a large stockpile would mean starting your own production late, and then been stuck holding obsolete parts when it's time to start making the next new thing. (Or another reword: when the tech moves fast, any stockpile's value depreciates very quickly).
Remember how AMD got into the x86 biz? No? Go look it up.
Excellent suggestion, link for anyone interested.
http://en.wikipedia.org/wiki/Amd#Processor_market_history
Relevant quote for those not interested. Seems like good planning on IBMs part.
IBM wanted to use the Intel 8088 in its IBM PC, but IBM's policy at the time was to require at least two sources for its chips.
You are entitled to your own opinions, not your own facts.