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Comment by pm90 | Hacker News Reader

WaPo article, which has more details about the bill and less details about what different “personalities” are saying: https://www.washingtonpost.com/politics/2022/07/27/senate-ch....

Overall, it looks great. We absolutely need to fund more semiconductor manufacturing. Losing that ability to China/Taiwan was just a terrible strategic mistake.

The US hasn’t lost this battle (over semiconductors) just yet. While current manufacturing is indeed dominated by East Asian countries, the vast majority of research still happens in US universities. This legislation allocates more funding for that research, fantastic.

Theres some political gamesmanship over some silly stock options of congresspeople… my response is, who gives a single shit. The country needs this bill.

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main problem is that we are rewarding companies for being disloyal and offshoring in the first place, now they win again with free money after raking in profits for decades. We should have some funding for smaller companies and R&D but also massive tariffs to force companies to bring manufacturing back

That would slow an already injured economy.

There are basically only 3 close-to-cutting edge foundries left - Intel (American), Samsung (South Korean) and TSMC (Taiwanese), and TSMC is in the lead by quite a bit. We're getting extremely close to the end-game of moore's law, so the lifetime of a <7nm fab is likely to be long, and there are likely to only ever be a handful built because they are absurdly expensive (20+ Billion dollars), particularly if you can't keep them fully utilized. There are no 'smaller companies' with cutting edge fabs, and these aren't really American companies who outsourced and are no bringing them back - Intel has always had a large manufacturing presence in the US, and a large part of this is trying to get foreign companies to 'offshore' fabs to the US rather than continuing to concentrate in south korea / taiwan.

This is true for large digital integrated circuits.

There's also analog fabs, MEMS fabs, LED/photo/laser fabs.

Places like Analog still have smaller fabs like that. Those fabs also seem likely to create technological progress into the future, and so the US should be funding those too.

Unless I'm mistaken, Micron and Texas Instruments have their own foundries as well.

They do but they have explicitly given up the game of competing to be the first to the next fastest smallest digital logic (i.e. cutting edge nodes).

Micron is still pushing DRAM and NAND tech but it's more for cost cutting since they are strictly commodities. The work it takes to be a pure-play fab like TSMC is pretty different - lots of working with fabless vendors to bring up their chips. Even Intel isn't any good at this (yet). It's a collaborative process.

> Micron and Texas Instruments have their own foundries as well.

At their tech level there's probably hundreds of companies with fabs[1]. GP was explicitly talking about cutting edge fabs.

[1] https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...

TSMC straight out competed the 1st movers in the chip space. They’re not dominant because American companies moved their own factories to Taiwan. It was homegrown and they really nailed it.

TSMC were almost single-handedly bankrolled by Apple. Had Samsung not tried to establish themselves as a competitor to Apple in basically every product offering, they would be in first place.

Well, TSMC delivered on what Apple needed and Samsung spread themselves too thins. That's how it goes sometimes.

> main problem is that we are rewarding companies for being disloyal and offshoring in the first place, now they win again with free money after raking in profits for decades. We should have some funding for smaller companies and R&D but also massive tariffs to force companies to bring manufacturing back

I'm no corporate apologist but the current mess is the result of a government policy designed to encourage globalization. An American company that builds stuff here will always be at a competitive disadvantage versus a foreign company that builds stuff using dramatically cheaper labor.

So I don't think it's really correct to think of these subsidies as "rewards" - it's done strategically to keep American manufacturing alive.

I would suggest that the real alternative is not to fund the smaller companies, but to simply nationalize Intel.

>>While current manufacturing is indeed dominated by East Asian countries, the vast majority of research still happens in US universities. This legislation allocates more funding for that research…>>

I suspect there’s more to it than this, but to the extent there’s not, this doesn’t make much sense. If the monetization of our research ends up in China’s control, how does it help to fund more research. Apparently research is not the problem, manufacturing is.

Location of manufacturing doesn't determine location of monetization.

Ok, we'll change to that from https://www.foxnews.com/politics/senate-passes-china-semicon.... Thanks!

Can we not frame this as a battle or even a war? The US lost this capability a long time ago due to labor costs and natural resource consumption.

From the labor cost and natural resource consumption a operation of this size can easily fail. We need more partners in this not just a handout.

This action should have little to no input on any globalized leverage system.

For this to be successful we need more partners

>We need more partners in this not just a handout.

This rings hollow when all of America's major partners are pumping massive subsidies to their domestic companies to win. Case and point SK is subsidizing their Fabs to the tune of $450 Bn.[1]

[1]: https://www.bloomberg.com/news/articles/2021-05-13/korea-unv... [1 Non paywalled]: https://archive.ph/9Gs8q

I did not mean to strike a hollow note. I do not see such vision being applied outside of lets increase competition and spend locally.

How much further will their their money go locally than ours? I want us to spend our money on the next generation but what economic window are we planning to occupy?

Can someone else corroborate that is something the US lost because of labor costs? We are constantly told it's R&D and infrastructure costs. How much of that is labor costs?

It almost feels like labor costs is a good story to salve the ego when the US was simply beat on tech and tech investment.

"Lost this capability"?

https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...

90 plants in the US, of which 5 have been built or under construction within the last 5 years. That's the same number of new fabs as Taiwan, China and Japan.

It is true that Taiwan has the technical lead at the moment, but that's a very recent development, yet everyone's talking as though the US hasn't built a chip since the 90s. Most of the strategically most important chips for military and industrial applications aren't at the cutting edge anyway.

It's an important strategic sector, sure, but none of these subsidies will actually address the most advanced tech segment and most of it will disappear as political pork. I mean it's your money, I'm a Brit, but to me this all just seems like absurd posturing.

> Losing that ability to China/Taiwan was just a terrible strategic mistake.

More like losing that ability to Taiwan's TSMC and South Korea's Samsung. China's SMIC is very far behind and has insignificant market share. Additionally, it's rather insulting to non-communists when you mishmash together China and Taiwan.

yes, although the subsidies supply to anyone who builds fabs in the US, including TSMC.

Indeed, the point is to create jobs in the US and to, in the long run, lower the risk of a complete takeover of TSMC in case China invades Taiwan.

Taiwan is right across the border from China. At any point, they can invade and take over.

Right across a strait*

An amphibious assault against a prepared enemy is never easy or straightforward. China doesn't yet have the necessary logistics ships to be able to supply a beachhead so Taiwan should be "safe" for at least a few years.

>China's SMIC is very far behind

I think you misread the thrust of this comment. Commenter was likely alluding not to R&D, but an amphibious invasion, as to how it would end up being China. Obviously I don't know how much of that infrastructure would persist to be carried off after that invasion, but it would reasonably be considered 'lost' to the US.

This is always framed in terms of USA vs. China/Taiwan but what about Europe?

AFAIK (I might know wrong) the consensus among macroeconomists is that "social market economies" like European ones are better suited (compared to "liberal market economies" like the USA) to investing in large scale manufacturing (see e.g. Varieties of Capitalism [0]—though it is a bit controversial).

Though I do wonder if chip manufacturing might just be too large for the EU to handle. Many people in Europe keeps saying that e.g. Ericsson could start a fab but I'd be curious to see if a bill like this would succeed in the EU.

[0] https://en.wikipedia.org/wiki/Varieties_of_Capitalism

The EU passed their own Chips Act earlier this year. It was a point of contention since Intel's CEO has kept threatening to expand in Europe instead of the US if the US CHIPS act isn't passed.

Otherwise known as extortion.

Europe has ASML

The EU has a few fabs which aren't focusing on the cutting edge but older, industrial grade chips like Infineon, STMicroelectronics, Bosch.

And there's new legislation encouraging investment in the cutting edge stuff.

Manchin objected to reversing the cancellation of state and local tax deductions was my understanding. The piece is not clear on this.

>> We absolutely need to fund more semiconductor manufacturing. Losing that ability to China/Taiwan was just a terrible strategic mistake.

The correct solution to that is tariffs. That would hurt us short term and should have been done long ago before it would have been a problem. This will add to the debt pile, so it will be with us for a long time.

Who do you think pays the cost of tariffs?

People who buy the products. Not the entire population.

The debt pile won't notice an extra $50 billion. To make a meaningful dent in it, spending on entitlements needs to get cut or taxes on the middle class need to dramatically increase. Neither of those things are going to happen.

Yes. Entitlements like this one are what needs to be eliminated. Sweet handouts to corporations so they can pump up their stock price by buying back shares is basically what this will accomplish.

I wonder how many tech companies are about to pivot to chips in order to take advantage of some of this free money from taxpayers.

> and less details about what different “personalities” are saying

What are these? Can you quote them?

Pompeo could qualify I suppose? Though he was Secretary of State, which seems to be more than a "personality".

The rest of the "details" are about the opinions of congressmen, not "personalities".

I’m only interested in the hard facts - the provisions in the bill, and not in horseshit PR statements from politicians.

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