[varispeed]

How did they manage to get STM32s?

My friend's small business had to close, because key MCU is not available anywhere and Chinese sell it for the price of the end product. Makes business no longer viable. He spent over a month designing board for another MCU that was available at the time, but as soon as he was ready to produce more the alternative was gone too. It's like chasing own tail.

Big corporations can post huge back-orders, but small business can't tie up that kind of sums of money for unknown period of time. He placed orders for that MCU over a year ago and distributors still tell the production is delayed. Meanwhile Chinese don't seem to be short of supply and are milking the desperate market.

Seems like a state intervention would be welcome here.

[throw827474737]

> Seems like a state intervention would be welcome here.

And that should look like how??

> can't tie up that kind of sums of money for unknown period of time.

Seriously curious now, must have a real cash cow with little development or huge volume?

Because what my company would have needed to pay for the MCU to put in stock for say 3 years is still dwarfed by one developers salary for a year (and the software team alone is varying 5-10, not including electro engineers or all other kinds). So in the aftermath just ridiculous to not have invested that money for the stock when the demand and MCU was clear (and for us it was at that point back already).

Also, nothing would have been better than tieing money that way, it could have made more profit by also becoming a broker now, lol :D

[varispeed]

It is a small business, one guy does EE the other does SE.

Their model was to buy parts as they are needed depending on order volume (JIT).

Now with the shortages it is not possible. You can calculate how many orders you may get within a year and place a back order for these parts. 1000 MCUs alone is like £20k. They were looking at spending £50k total and facing no income at all until the parts arrive.

[kragen]

Probably the beginning of that month of designing would have been a better time to order the microcontrollers than the end of it. The answer to "how did jpieper get STM32s" is "he ordered them from Mouser in early 02021": https://news.ycombinator.com/item?id=32383312

What kind of state intervention are you thinking of? I spent some time trying to think of a state policy that would reduce the risk that small businesses would lose access to parts crucial to their products, rather than increasing it, but I couldn't think of one.

[varispeed]

The simplest intervention would be to offer state backed loans that could be used for back orders and to be repaid 3-6 months after the delivery.

It's not ideal, probably it will create further delays, but it would put small business on the level playing field with the big corporations when it comes to orders.

The criteria for eligibility may be difficult to define too, so that fraud is minimised.

Maybe such surge of demand could incentivise MCU manufacturers to secure more fab capacity.

State could also make scalping illegal. For instance buying MCUs with a sole purpose to hold on them and then resell at inflated price would be illegal. This could be done by setting maximum margin someone could ask, that should be no higher than Mouser or Digikey have. So anyone selling MCUs at 10x the price would have them confiscated and get fined. Foreign online stores that facilitate such sellers like Aliexpress would risk being sanctioned and banned.

[kragen]

The loan idea might work, but it might not. Generally big corporations are better at fulfilling criteria for eligibility than small businesses are (they can afford larger legal departments), and it might just drive up prices without increasing supply. That seems to be what happened with state-backed loans for higher education in the US, for example.

The price-controls idea would create shortages, at least locally; Mouser and Digi-Key, prohibited from allocating scarce parts to those with more willingness to pay, would allocate them according to other criteria, such as customers with the largest established volume. Companies in other countries would have a major edge because they'd have access to distributors who weren't at risk of having their stock confiscated. The upshot would be that companies in whatever country instituted those price controls would be unable to compete on the global market because they couldn't buy on Aliexpress. (I've seen this kind of thing a lot up close and personal because I live in Argentina.)

[varispeed]

Fair points!

[m-ee]

From my experience there’s nothing to do but order in advance with as large of a stack of cash as you can manage and pray. It’s hardly worth writing code these days until you have supply sorted. Bugging your suppliers frequently can help, it’s how we got enough STM32s for development, but for production quantities it’s a waiting game. Upper management at my company balked at tying up capital for a large chip order about a year ago. Guess what? Now we’re paying even more for fewer chips to keep the lines up.

[glonq]

I hope your friend's other MCU wasn't GigaDevices, because we are currently switching two products over from STM32 to that!