Matt Posted February 2, 2023 Share Posted February 2, 2023 Was out to dinner last night with a friend of mine who works for a leading chip manufacturer that supplies the auto industry. He was saying they're sitting with a few BILLION dollars worth of non-cancelable orders that mostly automotive customers are trying to return. Auto manufacturers are calling down their production forecasts against the headwinds of 8% loan rates and the economic downturn. Makers who couldn't get enough chips in the past couple years are finding themselves awash in surplus silicon they're trying to get off their books. This particular chip manufacturer has gone from running full blast the past couple years to "battening down the hatches" by canceling things like business travel and gearing up for possible cutbacks. Odd times. 1 1 Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Highmark Posted February 2, 2023 Platinum Contributing Member Share Posted February 2, 2023 10 minutes ago, Matt said: Was out to dinner last night with a friend of mine who works for a leading chip manufacturer that supplies the auto industry. He was saying they're sitting with a few BILLION dollars worth of non-cancelable orders that mostly automotive customers are trying to return. Auto manufacturers are calling down their production forecasts against the headwinds of 8% loan rates and the economic downturn. Makers who couldn't get enough chips in the past couple years are finding themselves awash in surplus silicon they're trying to get off their books. This particular chip manufacturer has gone from running full blast the past couple years to "battening down the hatches" by canceling things like business travel and gearing up for possible cutbacks. Odd times. We have components with chips that have been on order for over a year and can't get them. Our customer who dictates who we buy from is going to another supplier who claims to have no issues getting the same parts. Last month we have seen supply chain issues creep back in that are as bad as 2020-2021. Come up very quickly across many types of components that aren't all electrical/comp. Quote Link to comment Share on other sites More sharing options...
teamgreen02 Posted February 2, 2023 Share Posted February 2, 2023 Layoffs picking up in the auto industry. Tech and finance getting hit hard too. Supply chains are catching up but the bigger impact is a slow down in consumer demand (they are out of cash). Quote Link to comment Share on other sites More sharing options...
snoughnut Posted February 2, 2023 Share Posted February 2, 2023 1 minute ago, teamgreen02 said: Layoffs picking up in the auto industry. Tech and finance getting hit hard too. Supply chains are catching up but the bigger impact is a slow down in consumer demand (they are out of cash). I would bet alot are up to their eyeballs in debt, not just out of cash. 1 Quote Link to comment Share on other sites More sharing options...
teamgreen02 Posted February 2, 2023 Share Posted February 2, 2023 6 minutes ago, snoughnut said: I would bet alot are up to their eyeballs in debt, not just out of cash. Not only that but they are pulling money out of their 401Ks to stay afloat. From the WSJ today. Quote Squeezed by higher prices and short on cash, more Americans are tapping their 401(k)s for financial emergencies. A record 2.8% of the five million people in 401(k) plans run by Vanguard Group tapped their retirement savings in 2022 to cope with hardships such as medical bills, eviction or foreclosure, the company said. That is up from 2.1% in 2021 and a prepandemic average of about 2%. CC debt is also above pre-pandemic levels. 1 Quote Link to comment Share on other sites More sharing options...
Mag6240 Posted February 2, 2023 Share Posted February 2, 2023 10 minutes ago, teamgreen02 said: Not only that but they are pulling money out of their 401Ks to stay afloat. From the WSJ today. CC debt is also above pre-pandemic levels. And if they keep listening to the great "news" we hear from the current admin, everything will be fine! LOL - So they keep spending and borrowing... So glad I got out of that cycle years ago. Quote Link to comment Share on other sites More sharing options...
teamgreen02 Posted February 2, 2023 Share Posted February 2, 2023 14 minutes ago, Mag6240 said: And if they keep listening to the great "news" we hear from the current admin, everything will be fine! LOL - So they keep spending and borrowing... So glad I got out of that cycle years ago. Some prefer to be the rat in a wheel. My favorite is the TikTok videos of car dealership employees talking about their payment. Smart move by the employer, keep them broke so they are hungry to sales and have to keep showing up for work. I don't get it, but I'll be happy to buy their stuff when it hits the used market. Invest in appreciating assets. Depreciating assets I just mentally write off the value to $0 when I get it home. 1 Quote Link to comment Share on other sites More sharing options...
ActionfigureJoe Posted February 2, 2023 Share Posted February 2, 2023 Most likely a mild to moderate recession by the end of “23. There’s some good deals showing up in vehicles. I’m in the market for a side by side so I’m hoping they’ll drop from the ridiculously high prices. Next year I’m pulling the plug on vanlife. Housing prices have been dropping rather steady. Looking forward to scoring some good deals. Quote Link to comment Share on other sites More sharing options...
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