1) once in a century severe droughts in Taiwan force water rationing, chip production needs A LOT of water
2) stockpiling from China manufacturers (eg. Huawei) who want to mitigate real or potential US sanctions
3) generally higher demand in some sectors due to covid situation (incl. WFH and stimulus)
(1) is probably the major factor, with others exacerbating it, see https://www.bbc.com/news/world-asia-56798308
[1] https://www.bizjournals.com/phoenix/news/2021/03/02/taiwan-s...
[2] https://www.azcentral.com/story/news/local/arizona-environme...
You have to put your new fab someplace useful or you have to import everybody.
So, that cuts the number of places to a handful in the US.
Texas, because TI, AMD, NXP nee Freescale nee Motorola. Idaho, because Micron. Oregon, because Intel. Arizona, because Intel and NXP. New York, because IBM. California, because everybody.
If you're not doing massive R&D at the fab, you want cheap workers more than you want location to universities. That knocks out California and New York.
As we just found out, Texas has weather so maybe not a great place for a 24/7 fab.
Can you imagine TSMC personnel dealing with winter? So, probably not Idaho.
So, Oregon or Arizona. I suspect Oregon is more expensive than Arizona in the places you want to put a fab.
Why is that? I would expect chip production to be a relatively small scale process compared to almost any other industries, simply due to the small amount of material involved.
For example, how many CPU dies can you fit in a shampoo bottle or a pack of printer paper?
[1] https://www.sustainalytics.com/esg-research/investors-esg-bl....
For some reason in early 2020 all the car industry execs were convinced that people would buy dramatically fewer cars in 2020, due to pandemic crashing demand. Because they have a religious aversion to holding any stock they decided to shift the risk over to their suppliers, fucking said suppliers over, as the car industry normally does when they expect demand shifts. The thing that made this particular time special as opposed to business as usual is that the car execs all got it wrong, because people bought way more cars due to pandemic rather than less, due to moving out of cities and avoiding public transit. So they fucked over their suppliers a second time by demanding all those orders back.
Now, suppose you're a supplier of some sort of motor driver or power conversion chip (PMIC) in early 2020. You run 200 wafers per month through a fab running some early 2000s process. Half your yearly revenue is a customized part for a particular auto vendor. That vendor calls you up and tells you that they will not be paying you for any parts this year, and you can figure out what to do with them. You can't afford to run your production at half the revenue, so you're screwed. You call up your fab and ask if you can get out of that contract and pay a penalty for doing so, and you reduce your fab order to 100 wafers per month, so you can at least serve your other customers. The fab is annoyed but they put out an announcement that a slot is free, and another vendor making a PMIC for computer motherboards buys it, because they can use the extra capacity and expect increased demand for computers. So far so normal. One vendor screwed, but they'll manage, one fab slightly annoyed that they had to reduce throughput a tiny bit while they find a new buyer.
Then a few months later the car manufacturer calls you again and asks for their orders back, and more on top. You tell them to fuck off, because you can no longer manufacture it this year. They tell you they will pay literally anything because their production lines can't run without it because (for religious reasons) they have zero inventory buffers. So what do you do? You call up your fab and they say they can't help you, that slot is already gone. So you ask them to change which mask they use for the wafers you already have reserved, and instead of making your usual non-automotive products, you only make the customized chip for the automotive market. And then, because they screwed you over so badly, and you already lost lots of money and had to lay off staff due to the carmaker, you charge them 6x to 8x the price. All your other customers are now screwed, but you still come out barely ahead. Now, of course the customer not only asked for their old orders back, but more. So you call up all the other customers of the fab you use and ask them if they're willing to trade their fab slots for money. Some do, causing a shortage of whatever they make as well. Repeat this same story for literally every chipmaker that makes anything used by a car. This was the situation in January 2021. Then, several major fabs were destroyed (several in Texas, when the big freeze killed the air pumps keeping the cleanrooms sterile, and the water pipes in the walls of the buildings burst and contaminated other facilities, and one in Japan due to a fire) making the already bad problem worse. So there are several mechanisms that make part availability poor here:
1. The part you want is used in cars. Car manufacturers have locked in the following year or so of production, and "any amount extra you can make in that time" for a multiple of the normal price. Either you can't get the parts at all or you'll be paying a massive premium.
2. The part you want is not used in cars, but is made by someone who makes other parts on the same process that are used in cars. Your part has been deprioritized and will not be manufactured for months. Meanwhile stock runs out and those who hold any stock massively raise prices.
3. The part you want is not used in cars, and the manufacturer doesn't supply the car industry, but uses a process used by someone who does. Car IC suppliers have bought out their fab slots, so the part will not be manufactured for months.
4. The part you want is not used in cars, and doesn't share a process with parts that are. However, it's on the BOM of a popular product that uses such parts, and the manufacturer has seen what the market looks like and is stocking up for months ahead. Distributor inventory is therefore zero and new stock gets snapped up as soon as it shows up because a single missing part means you can't produce your product.
So here we are. Shameless plug - email me if you are screwed by this and need help getting your product re-engineered to the new reality. There's a handful of manufacturers, usually obscure companies in mainland China that only really sell to the internal market, that are much less affected. Some have drop-in replacement parts for things that are out of stock, others have functionally similar parts that can be used with minor design adaptation. I've been doing that kind of redesign work for customers this whole year. Don't email me if you work in/for the car industry. You guys poisoned the well for all of us so deal with it yourselves.
If they know they can get away with their suppliers having to front all the cash, why not do it? If all their competitiors get away with it, they'd be fools not to as that is a lot of expense and interest they're eating and they'll need to make up for that somewhere.
I'm not saying the system isn't broken and/or that car manufacturers aren't jerks for monopolizing a scarce resource and putting other demands in tight spots. I'm just reading it as regular free market capitalism level broken, but it sounds like you're saying it's even more broken than that. This is a topic very relevant to my current interests so I truly do wish to understand it.
- When manufacturers change their minds quickly and pay the price to buy up a lot of slots last minute, they are effectively also "burning" some slots that will simply no longer add to worldwide production of anything? and
- Being such a big customer with a high variance in demand, the car industry have are making it nearly impossible for the rest of the market to make rational decisions based on long-term forecasts?
(It might sound like I'm stating the obvious here but I know how often I think I understand something but later turn out to have missed the mark completely anyway.)
" 5.12 ADJUSTMENT IN CAPACITY RIGHTS AND OBLIGATIONS. Unless otherwise agreed in writing by the Parties, any adjustment in the Buyers' Percentage Interests which results in a change in their Adjusted Percentage Interests (as defined in Subsection 1.1.3), shall not become effective for purposes of the Buyers' Basic Purchase Shares until the thirteenth (13th) week after the date upon which the adjustment in Percentage Interests occurs pursuant to the LLC Agreement, and unless agreed otherwise by TSMC and each Buyer under a Purchase Order, no such adjustment in Percentage Interests, when so effective, shall operate to cancel, amend or otherwise affect any Purchase Orders accepted by TSMC prior to the date that such adjustment in Percentage Interests is so effective."
https://corporate.findlaw.com/contracts/operations/purchase-...
It is somewhat the same story as being described here - which is an article about a company that makes display drivers:
https://www.scmp.com/tech/tech-trends/article/3128421/how-sh...
I really want us to stop being so obsessed with cars, because no matter how useful they are to transportation, in my mind they just can't be worth the pain and damage they cause to our society...
Are you saying it's a different kind of bullying? What makes it different? You original comment really piqued my desire to understand this.
Selfish reason, I want to know if my Tesla order will be delayed.
Hard to underestimate the impact of Musk's leadership when you see that result.
Demand does seem to be growing to meet thier increasing production volumes though.
Picking and choosing the scope, scale, and amount of the type of harm you're comfortable with certainly seems worthwhile, but pretending there is any option that is harm free seems like self deception. Even refusing to play (not living?) has side effects most would consider harmful - at least to those around you.
We all do it, directly or indirectly. It’s necessary to survive. It’s common for instance to not worry too much about the earthworms dying on the sidewalk after the sprinklers run. Most people would consider someone pretty weird if they didn’t drive because of the body count of insects on their windshield.
For example - everyone who drives is implicitly or explicitly saying the benefit to them outweighs the harm to those insects. Everything has a trade off.
Most life survives by eating other life (yes even Vegans), and even pure photosynthetic algae has to kill or crowd out (and starve) competitors and things that would kill and eat it, or they would no longer be alive.
It’s easy to be isolated from this reality, especially with modern life meaning we don’t need to gather, raise and/or kill our own food.
Nature is not (just) a national park with carefully curated trails and animals to snap pictures of when they grace us with their presence. It’s wild fight for survival and dominance - full of growth, birth, gore, beauty, and death.
Recognizing that someone’s trade off to make another country less strong (a ‘other’) in exchange for making themselves richer or their country more capable of doing the same in the future is important (one example) - say a defense contractor making a new weapon.
It is a specific mindset and trade off that we might not agree with it even find repugnant, but it is keyed off important survival needs and a fundamental part of the world and nature we are foolish to ignore.
What do you consider ok to harm, to get the benefits for the people or things you care about? At some point it might be worth making it concrete, it can be illuminating.
Presuming that human activity is not zero-sum regarding whatever system of values we take, it's clear cut that some activities are bad, period.
This makes the grandparent's examples clearer: coal production benefits some people now but hurts future generations disproportionately. Wars hurt all sides, and allow some of them partially recover, and never as far as if they joined forces. Car companies throw the whole semiconductor industry under the bus in exchange for not having to keep inventory.
In a huge simplification, it's self-destruction I'm talking about, not sacrificing little things to gain greater ones, like exchanging the lives of insects to feed a human cvilization (presuming you value humans more).
Of course, it's possible to construct an arbitrary system of values to justify your own arbitrary deeds as "survival" or "natural", but I don't find such systems convincing.
My point is that you are constructing your own arbitrary system relying on projections of the results of actions far into the future, and impacts that are purely hypothetical at this point - they might be true/accurate, or they might not. Someone is staking their own success or happiness based on if they think it’s true or not, and I can point you to many examples in the recent past where that was a severe evolutionary negative for many people.
Prisoners dilemma is a thought experiment/theoretical problem because in the real world, what people value, their own understanding of and perceived trustworthiness of others, and their own dispositions and habits means it might as well be talking about spherical cows.
If we get into a shooting war with China next year for instance, global warming is going to be pretty low on the problematic outcomes one could face. If a pile of coal (or billion barrels of oil) is what it takes for the US (or China, or any other nation) to survive, they will burn it without a moments hesitation.
We can all hand wring about if that hurts the global balance, and how it’s terrible, and game theory and all that - but if it’s a fight for dominance, survival, and resources it won’t matter. So far we’ve found enough common ground/everyone is getting rich enough helping each other out it hasn’t come to that. We can hope it never will.
Pretending that folks who are building tools, or capabilities, or working in the areas that would be necessary to survive if something like that happened seems willfully ignorant of the reality we’re in or incredibly naive, IMO.
Some folks make short sighted choices, lose a ton of money, screw people over (intentionally or not), etc. In my experience it’s usually due to environmental factors (regulation, market, competitive forces) strongly incentivizing it, or just plain not being able to predict the future.
That chaos and dumbness is not only inevitable, it happens everywhere. It’s fundamental to the human experience. It’s easy to be high and mighty, much harder to do it differently - and survive.
No, not really. Looking at the large scale, the Earth will burn up together with the Sun, and then we'll reach the death of the universe one way or the other.
Small scale, we have sustained businesses, economies, families, ecosystems. In those, prisoner's dilemma is real and testable.
I'm getting the impression that you're trying to draw some equivalency between all classes of harms, regardless of their magnitude. I do agree to a certain extent, but I can nary see an argument that would convince me that some options are just not singularly harmful.
As an example, me and my neighbour being paid to grow a field, at the cost of the field insects, versus me and my neighbour being paid to drive each other away and take over the land. One is clearly better than another if human well being is more important than that of insects.
If we fear the neighbour fighting us and we value survival, we must fight ourselves. That's the curse of the prisoner's dilemma, because giving up the fight yields a better outcome. I would call such a greedy "survival" approach naive and unfortunate.
If we value dominance above all, then fighting the neighbour is the better choice. I believe we have a word for such value systems: egoism.
It isn’t about dominance over all - it’s about survival and the complex intertwining of all the various strategies (good, bad, failing) being tried simultaneously with the hope that theirs wins. Sometimes it’s domination. Sometimes it’s teamwork. Sometimes it’s passivity.
As any individual player, you have to pick one - and sometimes it wins, sometimes it loses. Most strategies exist not because they are always ideal, but because having the selection is essential and necessary to long term survival in a fundamentally unpredictable environment. A species that only does one strategy at once is going to go extinct when the environment changes suddenly.
I’m definitely not equating all actions as equal, or saying everything has equal cost. I’m noting that nothing, including no action, has no cost, and that assuming a player in the game (you or someone else) will definitely lose or definitely win for a given survival criteria has a very low degree of predictive accuracy in the real world.
I gave the example of economies and ecosystems together with prisoner's dilemma to illustrate that we do indeed have a models that are accurate in predicting at least first order effects.
First order effects are not everything, of course, but it doesn't seem sensible to throw away our knowledge coming from game theory (or cybernetics? or plain life experience) and settle on not being able to predict which choices are net positive and which are net negative.
As with any estimation, there will be those that can't be evaluated with any certainty, but also clear winners and losers.