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Impact of Global Electronics Parts Shortage

Discussion in 'TSLA Investor Discussions' started by Doug_G, Apr 6, 2018.

  1. Doug_G

    Doug_G Lead Moderator

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    A global shortage of discrete electronics parts - capacitors, resistors, diodes, etc. - has been brewing for some time. It's now approaching a crisis point, where many companies are not going to be able to build their products.

    Of course whenever there is a parts shortage, large established tier 1 customers get priority with parts manufacturers. I would assume Tesla and many of their suppliers would be considered major customers... but with Model 3 production ramping up it's not hard to see where this could lead to parts supply problems.

    Component Shortages to Last ‘Longer Than Expected’

    Global Resistor Shortage, Economics, and Consumer Behavior

    What might the impact of these shortages be on Tesla's production rate?
     
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  2. Lbkmxp100d

    Lbkmxp100d Member

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    Thats a great question! I have no insight but I'm following post to see if anyone who has insight might be able to weigh in.
     
  3. AudubonB

    AudubonB Investing is fun!

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    ¿Local Radio Shack?
     
  4. DurandalAI

    DurandalAI Member

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    Tesla makes high margin products. The resistors and diodes are of a very small cost in comparison to the rest of the vehicle. If you’re dealing with a cheap electronic device the percentage of these components to the cost is much higher. These diodes and resistors could double in price and amount to a $20/30 difference in price to produce the car which is inconsequential. The expensive electronics are the display, the cameras, etc. This may impact cheap crappy products, but not Tesla.
     
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  5. Doug_G

    Doug_G Lead Moderator

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    You totally missed the point. I’m not talking about cost.

    You can’t buy some commonplace components at all. All suppliers are quoting 52 week lead times. Or even higher. Try finding a reel of 0.1 uF X7R ceramic capacitors. It’s got to be the most commonly used electronic component on the planet, and you can’t buy them.
     
  6. DurandalAI

    DurandalAI Member

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    #6 DurandalAI, Apr 13, 2018
    Last edited: Apr 13, 2018
    Tesla sourced these components far in advance. Those who can’t get parts are those who didn’t source in advance. Plus, money solves most things. Parts aren’t unavailable, they’re unavailable at usual prices. Reminds me of when ammunition was “unavailable” in 2008 after Obama was elected. Plenty of ammo to be had, if you were willing to cough up 3-4x the price of what you would have paid 9 months prior.

    Edit: Even the first article you link to says that suppliers are moving to higher margin items... not that you can’t get them, they’re just going to cost more.

    “You’ll always be able to buy a 220 ohm 0805 resistor”
    “Not taking NEW cheap chip resistor orders”

    From the article:
    “The passive component industry — the manufacturers who make the boring but vital resistors, capacitors, and diodes found in every single electronic device — is on the cusp of a shortage. You’ll always be able to buy a 220 Ω, 0805 resistor, but instead of buying two for a penny like you can today, you may only get one in the very near future.

    Yageo, one of the largest manufacturers of surface mount (SMD) resistors and multilayer ceramic capacitors, announced in December they were not taking new chip resistor orders. Yageo was cutting production of cheap chip resistors to focus on higher-margin niche-market components for automotive, IoT, and other industrial uses, as reported by Digitimes. Earlier this month, Yaego resumed taking orders for chip resistors, but with 15-20% higher quotes (article behind paywall, try clicking through via this Tweet).”
     
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