Free Wheelin'

Or why is it so hard to find some new motorcycles?

Several years back we did a fund-raising ride to buy a 'Little Free Library' that hung outside the entrance to The Chatterbox Drive-In for years. When the place was closing, we moved it to our gym. Now I get to keep half an eye on it on a, more or less, regular basis.

Occasionally I cull the books and sometimes I find something that grabs my eye – such as Britannica’s Science and the Future. Printed in 1983, I was interested to see what they predicted and what has come to pass in the last four decades. One that jumped out at me was an article on the Rise of the Microchips titled “Chips for Everything.”

In this article, they finish with a great deal of discussion on Moore's Law. Back in 1965 Gordon Moore, who would go on to be one of the founders of Intel, stated that the number of transistors in a dense integrated circuit doubles about every two years. This has run from transistors to chips and it is obvious that chips are everywhere and for everything.

When people refer to chips, they're talking about semiconductors. They're in almost everything from cars to smartphones to LED bulbs to household appliances. And that's just how everyday citizens use them. They're also critical to the factories that make all that merchandise, to the military, and in the medical field. 

Semiconductors are circuits made of silicon with built-in transistors. The ones powering your smartphone, laptop, and car are pretty sophisticated. Within the industry, some companies design the chips while others manufacture them. It's pretty common for companies that make smartwatches or dishwashers or programmable thermostats to outsource both the design and the manufacture of the microchips they need. While American consumers make up a huge percentage of the individuals who use products containing microchips, only 12% of them are made in the U.S. We used to make nearly 40% of the chips worldwide. But that was in 1990 – just seven years after Britannic called the future.

But, no – these days let’s hand that business and all the rest to China and see how that all plays out.

A recent article in the Wall Street Journal stated that Taiwan Semiconductor Manufacturing Company accounts for more than half of the global semiconductor foundry market by revenue, according to Taiwanese research firm TrendForce, and it makes more than 90% of the world's most advanced chips.

You might think Intel might try to bring some of that manufacturing back to Santa Clara?

The current shortage isn't just for semiconductors used in automobiles, it's for everything.

Motorcycles are in this messed-up mix as well.

Sure, the pandemic caused many of the problems, but other issues have also come into play. A global shortage of semiconductors stems from a variety of factors including trade tensions between China and the USA, leading to some electronics firms stockpiling Chinese-made chips, and fluctuating demand from tech manufacturers as lockdowns lead to unpredictable sales.

This intensified during COVID-19, when workforces across the globe switched to remote work everywhere possible. People updated their home technology and workplaces rushed to provide remote work options and hardware. Demand for microchips went up. Way up.

Also, motorcycles are coming with increasingly complex built-in computer systems. They need more chips. New models already in the pipeline pre-pandemic were designed with the expectation those chips would be available. 

But during the pandemic, motorcycle manufacturers simply shut down their plants. 

Semiconductor manufacturers adjusted their output. 

Now demand has skyrocketed and the supply chain is struggling to catch back up

Covid’s impact on trade has also left empty shipping containers stranded in some parts of the world and a shortage of them where they’re needed, pushing up shipping costs and causing delays.

These delays had knock-on consequences as all four Japanese brands build some of their line-up in the USA and some are still waiting for components to arrive from Japan. 

Remember the Suez Canal issue when, on February 9th, a cargo ship ran aground and shut the main east-west canal down for weeks? Yamaha had many complete bikes on the Ever Given itself, and the ship was impounded in Egypt until July 12th.

Who needs Moore's Law when we have Murphy's?!

The microchip shortage for the motorcycle industry is expected to continue into 2022 or even 2023. Though it sounds ominous, the good news is that demand continues to climb for motorcycles, which is a welcome thought for motorcycle manufacturers and dealerships – when and if they start getting a steady supply of the many new machines that are waiting to come to the showrooms around the world.

Perhaps it’s time for the United States to stop trying to be ‘Woke Up’ and to simply ‘Wake up.’