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This is spot on. I work in the financial world and we have been talking about the number of car manufacturers that canceled chip orders because they did not want to be caught bloated like they were in 2008. Add to the fact that many manufactures now use JIT manufacturing, it has amplified the issues. Now the manufacturers are going back to the chip makers, mainly just the top 3, and say we need our chips. Well, you are in the back of the queue because I need to fill the orders of Apple and Samsung who didn't cancel their orders during the pandemic. The world needs more chip manufacturers to meet the current and upcoming demand. Chips are one area that China is really trying to ramp up to be competitive with the Taiwan Semi-Conductors. It will be a while before it is all sorted out.
Computers are now 40% of the cost to build a new car.
If we guess that the average car worldwide cost $22,000 to build (a quick Google search suggests this is low), at 70 million units, there are $1,540,000,000,000 being spent on vehicle computers per year. That's almost 4x the amount that consumers spent worldwide on all brands of smartphones last year.
Autonomous driving and EV's will certainly drive this number higher.
If they can't get some buying power with numbers like that, it's entirely their own fault.
Well yes, that’s a huge number. But the 40% figure represents ALL costs related to processors and programming during the development of the vehicle. Nothing to do with the cost of producing the vehicle. The average expensive car has almost 200 different processors onboard now, and the massive cost is not in those dumb little computers but in networking and programming them all to work together and not shut one another down with conflicting commands and whatnot. I would imagine the actual hardware, the chips, are a small fraction of the 40% figure.
just placed an order for a 2022 110 (base with a few options) this week - called dealerships all around me in central Texas and they all said November or December.
As for why there is a shortage, two huge factors in play here. First is the "just in time" manufacturing that only gets what is needed as needed. If production calls for a thousand gizmos, they don't order two or three thousand just in case. The gizmos are shipped so as not to require long term storage at the user's facility and also manufacturers don't have to pay for idle parts they don't need for another month or whatever. So, the proverbial "getting caught with the pants down" syndrome is when they don't forecast properly, or there is a glitch in the gizmo manufacturing, or even delivery.
Secondly, the demand for new electronics over the past 18 months pandemic was huge and chip manufacturers shifted production to those chips needed for games, phones, tablets, computers, TV's and all the other in demand consumer items. New automobiles were not selling and manufacturers didn't see the need for additional idle inventory. As much as we can blame JLR for perhaps shortsightedness, Ford and GM ended up with tens if not hundreds of thousands of vehicles on parking lots awaiting chips. Heck, they even used college campuses that were closed for storage of vehicles.
just placed an order for a 2022 110 (base with a few options) this week - called dealerships all around me in central Texas and they all said November or December.
Well yes, that’s a huge number. But the 40% figure represents ALL costs related to processors and programming during the development of the vehicle. Nothing to do with the cost of producing the vehicle. The average expensive car has almost 200 different processors onboard now, and the massive cost is not in those dumb little computers but in networking and programming them all to work together and not shut one another down with conflicting commands and whatnot. I would imagine the actual hardware, the chips, are a small fraction of the 40% figure.
The same math gets applied to phones. Only $181 in parts to build a $1099 iPhone.
The same math gets applied to phones. Only $181 in parts to build a $1099 iPhone.
But no, it’s not actually the same, because you’re talking about what it costs to build each individual iPhone. The “40% of the cost” figure, at least in the article that I read, is development cost. If it cost $2B to develop the new LR back in 2015-2019 or however long it took, then $800M of that was software development. Think about it; it’s utterly impossible that 40% of the cost to build one actual Defender, once the development is done, is chips/processors.
Last edited by NoGaBiker; Jul 11, 2021 at 06:38 AM.
But no, it’s not actually the same, because you’re talking about what it costs to build each individual iPhone. The “40% of the cost” figure, at least in the article that I read, is development cost. If it cost $2B to develop the new LR back in 2015-2019 or however long it took, then $800M of that was software development. Think about it; it’s utterly impossible that 40% of the cost to build one actual Defender, once the development is done, is chips/processors.
Defender ≠ average vehicle. Semiconductors ≠ electronics.
Once you look at how many electronic systems are packed in every car, it's really not that hard to believe.
Everything is electronic from active-leveling LED headlights with auto high-beam, and sensing/sectional dimming for oncoming drivers... to heated, folding, dimming, auto-adjustable memory mirrors with puddle lamps and approach sensors for auto-illumination.
Almost no part of a car is just simple anymore. Could the mirrors and headlights be built for 40% less without all that tech?
Something as mundane as a seat has multiple motors with controllers and sensors, a seat memory computer, heaters with temp sensors and controller, weight sensors and controllers for airbags, cooling fans and controls, and seatbelt sensors. Could that all come together as 40% of the cost to build a seat when the rest is basically steel, foam, and leather?
Well yes, that’s a huge number. But the 40% figure represents ALL costs related to processors and programming during the development of the vehicle. Nothing to do with the cost of producing the vehicle. The average expensive car has almost 200 different processors onboard now, and the massive cost is not in those dumb little computers but in networking and programming them all to work together and not shut one another down with conflicting commands and whatnot. I would imagine the actual hardware, the chips, are a small fraction of the 40% figure.
Originally Posted by _Allegedly
Defender ≠ average vehicle. Semiconductors ≠ electronics.
Once you look at how many electronic systems are packed in every car, it's really not that hard to believe.
Everything is electronic from active-leveling LED headlights with auto high-beam, and sensing/sectional dimming for oncoming drivers... to heated, folding, dimming, auto-adjustable memory mirrors with puddle lamps and approach sensors for auto-illumination.
Almost no part of a car is just simple anymore. Could the mirrors and headlights be built for 40% less without all that tech?
Something as mundane as a seat has multiple motors with controllers and sensors, a seat memory computer, heaters with temp sensors and controller, weight sensors and controllers for airbags, cooling fans and controls, and seatbelt sensors. Could that all come together as 40% of the cost to build a seat when the rest is basically steel, foam, and leather?
Yes, I acknowledged that fact already. But electronics, once developed, are extremely cheap on a per-unit basis compared to engine casting foundries and magnesium crossbars and leather goods and all the rest of the 5000# of steel.
