SHANGHAI -- From his small office in Singapore, Kelvin Pang is ready to wager a $23 million payday that the worst of the chip shortage is not over for automakers – at least in China.
Pang has bought 62,000 microcontrollers, chips that help control a range of functions from car engines and transmissions to electric vehicle power systems and charging, which cost the original buyer $23.80 each in Germany.
He's now looking to sell them to auto suppliers in the Chinese tech hub of Shenzhen for $375 apiece. He says he has turned down offers for $100 each, or $6.2 million for the whole bundle, which is small enough to fit in the back seat of a car and is packed for now in a warehouse in Hong Kong.
"The automakers have to eat," Pang told Reuters. "We can afford to wait."
The 58-year-old, who declined to say what he himself had paid for the microcontrollers, makes a living trading excess electronics inventory that would otherwise be scrapped, connecting buyers in China with sellers abroad.
The global chip shortage over the past two years -- caused by pandemic supply bottlenecks combined with booming demand -- has transformed what had been a high-volume, low-margin trade into one with the potential for wealth-spinning deals, he says.
Automotive chip order times remain long around the world, but brokers such as Pang and thousands like him are focusing on China, which has become ground zero for a severe shortage that the rest of the industry is gradually moving beyond.