…Goodbye Mr Chips?
Taiwan’s recent earthquake once again highlighted the dependence on an almost single point of failure in the supply of essential chips.
Notwithstanding that they are used in almost every device we use, from the essential to the comparitively luxury (Our toys), I wonder how Naim are building resilience against a possible shortage, which could be extremely damaging for business continuity, jobs, and so on?
G
A single manufacturer cannot build resilience. That’s being done by countries and economic blocs but building and relocating such expertise is slow and costly.
I recognise that of course Mike, but at company level the risk must be on a register, with mitigation as appropriate.
G
What would the mitigation be? You can’t magic chips frlm factories which don’t exist.
A good friend has moved to Taiwan but often works in Europe - yesterday he sent me pictures of his and his partner’s residence - hoping they got away comparatively lightly but the mess and disruption looked awful.
a very good point. look at Apple. the value of their (relatively) small chip business today could dwarf the rest of it in a few years. I don’t think that’s fully priced in at the moment
that is personal opinion, not investment advice BTW.
I thought this was going to be about Arnold Wesker.
Sadly not, just our dependence on foreign entities for our survival.
Presumably buying shed loads of ‘spares for repairs/servicing’ as Naim has probably done with many things in the past such as CD transports/mechanisms - probably factored in to the original sale price to some extent but it has to be balanced to avoid too much redundant stock and as we know that can eventually be depleted.
If a premium manufacturer sourced ‘similar’ chips from different sources it wouldn’t really work would it as people would argue over which ‘core chip’ they had.
Stockpiling now?
G
A question I’ve often meant to ask, but if Naim stopped doing DR upgrades for suitable lines, are the DR components still available when servicing is required? One would hope so, and supporting (as far as possible) repairs/servicing of DR products should trump those who don’t have them but could potentially upgrade.
A lot of PC and laptop companies have been trying to do exactly this with little success. In work we switched laptop contracts for this exact reason. 6 months to a year for new devices. I see little evidence the change briught about any improvement.
I never understood why Naim stopped providing the DR upgrade.
TSMC is building a megaplant in Japan to offset some operational risk to manufacturing in Taiwan.
My understanding is that Naim stopped offering the DR upgrade to protect stocks of components for DR servicing. As it was, I think Naim offered the DR upgrade for many more years than most companies would have done. for one of their products.
The shortage of chips is down to America, they won’t let the Chinese have there license to the patents America own, and machinery to print them,
America afraid of the economic growth of china, and trying to slow it down,
Makes it sound as though they are military grade components!
Suppose we’ve had that with valves.
I wish it were as simple as that. Demand has been growing hugely. Technology to build has been becoming outdated very quickly. The US ban contributed but then so did the pandemic, a huge storm and a significant factory fire. There is no one single cause nor indeed one which is the main cause.
Valves indeed remain ‘mil spec’ components, especially if you need whatever they’re used for to continue to function post EMP.
Good news for Rega Valve Isis owners I suppose…….
ATB, J
Chips, with everything, yes indeed, except mushy peas I really don’t understand chips with mushy peas.
.sjb
@graham55 I have seen it explained to you here several times in the last couple of months.
Naim stopped offering DR upgrades because they could get very few of the necessary components and they decided to prioritise building new products to sell to meet existing orders than to upgrade products they sold years ago.