by LROBBINS » 27 Oct 2022, 23:02
I think you may be mis-reading the origins of the supply chain snafu. When Covid hit and people stayed home, by choice or by mandate, the demand for some things - automobiles, air travel etc. and the demand for other things - PCs, tablets, smart phones, entertainment gadgets - boomed. Chip manufacturers responded as might be expected; they shut down production of the chips needed for unwanted products, such as CANbus and other automotive and industrial chips, and massively increased production of chips for the things in great demand; memory, central processor chips, motherboards, etc. It takes a good bit of time and investment to switch chip production from one thing to another. Each production run will be for millions of a given item, not for a handful, and production lines and even the machines involved need to be at least modified and oftentimes even replaced. So there's a lag. By the time production of chips for PCs were in full bloom, the PC market tanked and everyone is now left with massive inventories of already getting out of date stuff. Even in the best of times it's not infrequent that things get out of cycle; a few years ago there was a several-months backorder of high quality 3.5mm audio jacks. But these have not been the best of times so when demand for autos or air traffic took off, the manufacturing infrastructure for making the needed components was no longer there. So if you want a car that's not already on a dealer's lot, expect to wait at least a year, same if you just want some CAN chips, or if you're a major airline wanting 100s of 737Max10 just forget it - Boeing can't get the parts needed to make them.
Capitalism works by matching supply (and prices) to demand, but it's a dynamic process, and as with every dynamic process the inputs and outputs don't always run in sync. One sine wave ends up on its positive swing while the other is on the negative. Add to these unforeseen, perhaps unforeseeable, effects of seemingly sensible commercial decisions, full containers sitting in ports because there's no way to load them on already full ships or rail cars, and empty containers sitting at other places unable to get back to where they can be refilled just makes the two oscillators run further out of sync. So far, things are not getting any better. The winners will be the few who, by brilliance or just by luck, manage to match the supply and demand curves.