Ummm ... RITVT ... perhaps stick to things you know about. Thanks kirkSD for the knowledge.
So, you think think Rivian is one of those special auto companies sitting on a stockpile of computer chips?
Are companies
attempting to stockpile parts, components, chips, etc. and making pre-buys? Sure. That is not what I am debating. If Rivian was sitting atop a stock pile of chips, I highly doubt we would see R.J. Scaringe saying something like this to analysts, investors and customers, but I should stick to what I know:
“The cascading impacts of the pandemic have had a compounding effect greater than anyone anticipated,” Chief Executive Officer R.J. Scaringe said in a letter sent Friday to customers and viewed by Bloomberg. “Everything from facility construction, to equipment installation, to vehicle component supply (especially semiconductors) has been impacted by the pandemic.” -R.J. Scaringe
Worth noting since you have supply chain expertise that the auto manufacturing sector is interestingly also complicit in the initiation of this shortage:
What caused the global chip shortage?
A shortage in the supply of semiconductors first hit the automotive industry during the COVID-19 pandemic and has had a cascading effect, causing global disruption. The shortage can be traced back to the first half of 2020, when overall consumer demand for cars declined during the lockdown. This forced chip manufacturers to shift their focus to other areas, such as computer equipment and mobile devices, which spiked in demand with more people working remotely.
As 5G and cloud-based services grew, more chips were needed for communication platforms like
Zoom and video streaming services.
Part of the problem is that the return on investment isn’t compelling enough to build new foundries—which cost billions of dollars and take years to construct—to satisfy the demand by automakers, according to
IDC. Automakers operate in a just-in-time environment without business continuity planning, according to Mario Morales, program vice president of the semiconductor group at IDC.