Reaction to Semiconductor Supply Chains Trouble Could Bring Future Glut

[BoredSysAdmin]

On Steve's IC Editorial - I have some reservations about his pricing logic on B&M vs. ID companies. That shouldn't be too surprising considering that Steven spent most of his professional career in B&M brands, if I understand correctly.
The most egregious points are around operational, administrative, and advertising parts costs. I am willing to bet that ALL of the above are much lower for most ID brands. I do agree on ID brands paying more (likely much more) for parts/components due to the much smaller scale.
Furthermore, I also agree on the real danger of rethinking the urge to upgrade. I still own and love my 2007 Onkyo 805 AVR, which may seem almost vintage as a record player. But so far, there hasn't been a single killer feature that made me upgrade. If (or when) I upgrade to 4k TV, I could always use digital out to continue using the same avr. etc., for any gaming consoles and such. At worst, it would be a minor inconvenience.

 

[jinjuku]

I can tell you this, we just order $8M in Cisco gear and are being told to expect 6-8 months delivery time from the date the PO is issued.

Same here for HPE Aruba and Ruckus (Arista). I have campus refreshes that I'm literally sitting on my hands waiting for equipment when I should already be halfway through.

We had to push one customer to sign a P.O. just so their copper rewire of CAT6 didn't increase by 15% due to materials costs increase.

 

[bladerunner6]

FYI- Father Guido Sarducci started out in the late 1970’s.

I remember him from the original SNL. Although he did appear in various places well into the 1980’s.

 

[BoredSysAdmin]

@Stanton, is there a particular reason for dislike vote? Perhaps someone who claims to be a writer could make some effort to express his opinion in a bit more than one-click emoji?

 

[EpsilonZer0]

I don't know, sound bars seem to have no problem selling. Best Buy and other retailers seem to keep a steady supply of sound bars available. But at the same time they have zero stock of AVRs, shelves literally left empty for a year. There is a reason.

Sound bars are the new mass market gear that has taken energy away from traditional low to mid range AVR equipment. These sound bars use a lot of the same components that AVR have but they keep pushing them out because there is simply more demand. Retailers also actively bundle sound bars with new TV purchases with great success.

I honestly don't know if AVRs will return to retail. The future may be build to order directly from manufacturers.

 

[bladerunner6]

I don't know, sound bars seem to have no problem selling. Best Buy and other retailers seem to keep a steady supply of sound bars available. But at the same time they have zero stock of AVRs, shelves literally left empty for a year. There is a reason.

Sound bars are the new mass market gear that has taken energy away from traditional low to mid range AVR equipment. These sound bars use a lot of the same components that AVR have but they keep pushing them out because there is simply more demand. Retailers also actively bundle sound bars with new TV purchases with great success.

I honestly don't know if AVRs will return to retail. The future may be build to order directly from manufacturers.

People are buying AVR’s. They exist in short supply right now but they certainly haven’t gone away or are going away.

That being said soundboard have become a more mainstream item.

 

[RXP]

Wasn't aware of that NFL ratings. The great resigniation and stories like that tell me that people are truly questioning their lives, which is good.

For AVRs it's really a done deal now that 7.1.4 recievers are common place - I can't see myself upgrading until it breaks. At that point it might become painful to consider increased costs. I'm not expecting TV prices next year to be like this years either due to shipping issues so bit on a 77" C1 this month. Kinda nice to be saited and not constantly in a consumerist frenzy. Can actually enjoy content, rather than tweaking Audyssey!

 

[gene]

AV Companies Didn’t See a Post-COVID Correction Coming

The way we consume goods and services changed during the pandemic, but now that supply chains are back to normal will the global marketplace ever be the same? Read how this impacts our AV hobby.

www.audioholics.com

 

[lovinthehd]

AV Companies Didn’t See a Post-COVID Correction Coming

The way we consume goods and services changed during the pandemic, but now that supply chains are back to normal will the global marketplace ever be the same? Read how this impacts our AV hobby.

www.audioholics.com

Do we have a return to normalcy in the supply chain what with the conflicts in the middle east? Seems not from what I've seen. Another industry suffering from trying to ramp up to temporary covid demands was the bike industry....

 

[Hobbit]

I've spent a career in the semi-industry. It's always been feast for famine. Hiring or laying-off on about an 18-24mo cycle. What is normal? Covid, and other world events, clearly threw more wrenches into the works.

I never bought into the "didn't see." It's actually more like you just can't predict or don't want to see or believe. An example is the dot-com bubble in the early 2k. The company I worked for ramped up to supply server chips for the burgeoning internet. We rode the wave and made a lot of money until it ended. We knew it would end and level out, just not when. Then we waited to see what the next enabling technology will be to start the cycle all over (AI appears to be the buzz now).

Moreover, semiconductors are not ball bearings plants. You just don't turn on a high tech factory and start making chips. It can take 6mo-12mo to get to full capacity. Their suppliers need to ramp up too. Which creates short term shortages.

BTW, nowadays we use the term SPOF - single point of failure - to look at the supply chain or the factory line. The object is to mitigate any single supplier or single piece of equipment that can cause production shortages or stoppages.

*Weren't the Allies always trying to blow up a ball bearing factories in Hogan's Heroes?

 

[HTEnthusiast]

There is one aspect to the current environment, that was not really addressed. It is that for some reason, after the pandemic, people don’t want to work. I was working in an IT consulting firm, and projects are now nearly impossible. People (including client employees) simply don’t want to work the way they used to, if at all.

I‘m 61 years old, and know from talking to almost everyone near my age (on both sides), that they are so frustrated they are trying to figure out any way to retire. Whether that is getting a job at Home Depot or Best Buy to cover the gap until Medicare eligibility at 65, or just straight up retiring. Working from home on COVID gave me a glimpse of what home life would be like during retirement.

In my case, I straight up retired about 4 weeks ago, and it has been liberating. When you are working, you think in terms of income, but as a retiree (or wanting to retire)… it is all about expenses. You are naturally going to be much more conscious of spending. I think there are a lot of folks now, mid-50s up, with retirement much more in mind than ever before.

 

[highfigh]

There is one aspect to the current environment, that was not really addressed. It is that for some reason, after the pandemic, people don’t want to work. I was working in an IT consulting firm, and projects are now nearly impossible. People (including client employees) simply don’t want to work the way they used to, if at all.

I‘m 61 years old, and know from talking to almost everyone near my age (on both sides), that they are so frustrated they are trying to figure out any way to retire. Whether that is getting a job at Home Depot or Best Buy to cover the gap until Medicare eligibility at 65, or just straight up retiring. Working from home on COVID gave me a glimpse of what home life would be like during retirement.

In my case, I straight up retired about 4 weeks ago, and it has been liberating. When you are working, you think in terms of income, but as a retiree (or wanting to retire)… it is all about expenses. You are naturally going to be much more conscious of spending. I think there are a lot of folks now, mid-50s up, with retirement much more in mind than ever before.

I have always thought that more people could use a hobby to sell what they make. Sure, the money trail needs to be tracked, but it can really help. Some people start small and grow it into a full-fledged business.

 

[gene]

Are Aging Baby Boomers Spelling the Demise of Hi-Fi Audio?

During COVID people spent money like water, but did audio companies learn anything from the post-pandemic AV recession? Will aging Baby Boomers embrace new technologies designed for younger consumers?

www.audioholics.com

 

[j_garcia]

Are Aging Baby Boomers Spelling the Demise of Hi-Fi Audio?

During COVID people spent money like water, but did audio companies learn anything from the post-pandemic AV recession? Will aging Baby Boomers embrace new technologies designed for younger consumers?

www.audioholics.com

The INDUSTRY drove higher cost/profit products as their audience grew older and could afford them. What many of them didn't really do is continue to offer a value oriented product because margins are lower there and because sales are lower in that segment now. These companies were adapting to the market to some extent, but by the products that they introduced, they also helped steer it in that direction. Not having many stores where you can go and touch/hear/see these products these days also doesn't generate interest in those products.

You can thank Apple also. The iPod and digital music libraries gave everyone convenience. Then that product basically got merged into that little computer that everyone now has in their pocket. Music always at your fingertips outweighed the need to have a system at home, let alone a budget system. If you start out with a phone as your first source of music, chances are people might put off wanting a full home system until a lot further down the road in life.

 

[JustChoIt]

Are Aging Baby Boomers Spelling the Demise of Hi-Fi Audio?

During COVID people spent money like water, but did audio companies learn anything from the post-pandemic AV recession? Will aging Baby Boomers embrace new technologies designed for younger consumers?

www.audioholics.com

I loved the article, it made me reflect on my buying habits in this hobby as a millennial and how I started out vs where I would start out now. Unfortunately, sound bars and their convenience of just plopping it in front of the TV took over starting with a HTIB. Without the HTIB, you don't have any way to upgrade parts, like I went from an Onkyo HTIB and went on to replace the receiver, then the LCR and so on. That speaker floorspace that may have been used for speakers before is now used for something else. I know my wife wouldn't let me replace my decade old Pioneer sound bar with an AVR, subwoofer, and floor standing speakers in our living room since I have my dedicated space in the basement.

 

[j_garcia]

AI just changed the Semi business model. This is not exactly consumer driven demand, but the demand is very high. Things will be different and that cycle will take longer than the former 18-24 months, which were relatively consumer product market driven. This one will ramp for a few years IMO and that oversupply condition will eventually come, and be larger than the 18-24m cycle.

 

[MrBoat]

I feel it has a bit more to do with things being overdone, the demise, that is. I don't think it's in decline for the consumer/audiophile so much, but for the incessantly greedy marketers. People are just catching on more, perhaps. The marketers have overhyped/outpaced themselves with so much meaningless drivel over the inaudible, that they now have to give a 30 minute speech as to why their product is so good, and yet it still comes out sounding like a rearranged version of the other guy's. Y-A-W-N.

I for one, got tired of having to essentially 'imagine' these overhyped and minutely incremental upgrades asking for thousands of dollars at each interval, while basically obsoleting the last thing I paid too much for.

20 year old stuff is still honestly and audibly kickass. The 'new vintage' market was/is thriving so I didn't have to wait on China.

 

[John Sully]

There are plenty of good A/V receivers available at reasonable price points. Speakers have never been better and objectively good speakers are available at most price points are available today. Someone can put together a decent sounding system for $2500 or so, a couple of pairs of decent bookshelf speakers, a center, and a good sub plus a receiver and Blu-Ray player will get you in the door. For a lot of people this will be enough and way better than a soundbar.

Personally, the last time I made a big upgrade was around a decade ago which went from Boston Acoustics bookshelves and the rather inadequate matching center to SVS towers, center, and surrounds. For my 60th I was given a Denon AVR-X3400H in 2018, and in 2020 I got an LG OLED65CXPUA. I like the SVS speakers and an considering an upgrade to the new Ultra Evolution line for the front stage. Also considering an upgrade to the receiver because it doesn't do 4K overlays. Outside of new surround formats, there really hasn't been that much change in the basic technology in an A/V receiver.

It just isn't that expensive to get into the hobby, and you can get a good sounding system for not a whole bunch of money. My aspirational system is in my car, which is quite a bit cheaper for high-end stuff.

 

[Teetertotter?]

Many manufactures of their electronic products, usually have a life span of 5-8 years, then time for redesign. The reason for these companies having to redesign, as the semi conductors have reached end of life and no longer supported by the semi conductor producers. Many companies lag behind to redesign and are caught off guard with the chip no longer being produced. Or find the programable/non programmable IC, has been upgraded, but will not work. There is a chain of events of makers of the electronic finish products, having to come up redesign of product.....as an example, which means delays.

Remember when the mobil phones became the craze??? The cell phone companies were given preference to raw product they needed, leaving other companies on an allocation basis. If you were a small company with little purchasing power, you were not on the priority list of receiving the semi-conductor/memory products to keep producing product at 80%+ capacity. I was an Electonics component buyer during those years and got through those shortage periods, for the company. We only had $40M in sales during those seller market periods. There were times, we had to pay gray market pricing to get electronic component parts.

There is demand that brings about product shortages. Do you add another shift to keep up with demand and for how long. Has the company trimmed back on number of employees. Companies are caught off guard with increase of product demand and reaction time to regain, can take TIME.

 

[Cambridge]

Audio as we "Baby Boomers" came to know began - in earnest - after WWII. The concept of owning Audio Equipment was part of our Generation's Pride and Maintenance of Ownership. Our Audio became one of the manifestations of what we found beautiful and relevant as were our automobiles. Now, most of my Generation is in its mid seventies and Audio is no longer an indice of ownership. Thus, Audio has become as interchangeable as our leased autos. We have already owned Vinyl, 8-Tracks; Open real to real; cassettes, CDs and perhaps, a bit of streaming. Everything has gone Global so individuality of manufacturer and its distinctiveness is all but forgotten. It is no longer about the panache of ownership, quality, durability or reliability; It is, now, all about flash, convenience, cost and profits.