The American chip industry’s $1.5T meltdown
economist.com
economist.com
The fact that china could reduce 63% of the world's chip making capacity to rubble at a whim is a strategic threat to the global economy. This is one area where we could absolutely use some redundant supply, even at the cost of taxpayer dollars.
When it comes to food, energy, water and critical tech, it makes sense to control your supply, even if it comes at a premium.
I don't think there's a strong objection to farm subsidies on their own. The complaints mostly revolve around (a) the food that gets subsidized is food that makes us unhealthy, and (b) the politicians pushing farm subsidies are also against other forms of government assistance, and refuse to recognize the inconsistency in these attitudes.
And not even a major cost. 50bn sounds like a lot to a layperson (and makes for great clickbait). We spend 700bn on military every year.
It's more jobs, especially different jobs. It's fewer imports (possibly not more exports with this isolationist trend we're seeing globally). There's more trust in the supply chain.
Ths article/propaganda is very short-sighted, as per usual.
It's jobs that Americans can't do (or at least not in sufficient volume). These are high-skill jobs; you can't just grab some uneducated person and expect them to do the work necessary to keep a place like TSMC running.
That's why these chips are made in Taiwan, and not in places like Cambodia, El Salvador, or Rwanda. America also doesn't have the skill necessary to replace TSMC. What chipmaking capacity it has is already tied up with Intel (which doesn't make chips for most things outside of PCs and servers). America doesn't have an excess of engineers that could be trained for this work; they're already busy doing other stuff (usually software), and there's already a shortage of them anyway.
This isn't a problem you can just throw money at to solve. There simply aren't enough skilled workers available to do what the leaders want here.
Plus, money DOES allow you to hire outside consultants and teachers.
Decentralising the chip foundries is a necessary step, arguably one that should've been made long ago.
Hiring consultants and teachers (from where?) isn't going to help with the complete lack of engineers. It takes many, many years to build a workforce of engineers needed for what's being discussed here, and even then it's not guaranteed because it relies on getting young people to go to engineering school and get degrees in relevant specialties, and then work in industry for a while to gain relevant experience. This isn't something you can just throw some money at to acquire or develop.
Path dependence is a thing. It might be perfectly economical once you get there, it was just simpler to establish in Taiwan for whatever historical reasons.
Given how long it takes foundries to get up and running, this seems like something you can solve in parallel.
2022 October 18 (7 days ago)
285+ points, 679+ comments
The article is remarkably ignorant of history. Nightmarish is a absurd exaggeration. With the semiconductor industry, you must invest heavily during any downturn to properly reap the rewards during the inevitable good years. Rinse and repeat across decades.
> So far this year more than $1.5trn has been wiped from the combined market value of American-listed semiconductor companies
Which has only somewhat to do with the semiconductor industry and everything to do with the hyper overvaluation in nearly all asset classes thanks to the Fed's prior, prolonged, low rate program. Just ask the cloud stocks (smashed), or eg Microsoft (which all by itself is missing ~$720 billion off its market cap high). Tesla has been slashed in half, it's missing nearly $700 billion all by itself too. The examples of market cap destruction in the stock market are plentiful.
> In late September Micron, an Idaho-based maker of memory chips, reported a 20% year-on-year fall in quarterly sales.
Oh no, what ever will Micron do. It's a true nightmare. /s They have been around for 44 years and are doing quite well. Micron understands market swings, they have lived through many of them. So have AMD and Intel.
This article is one big click-bait, scaremongering nothingburger.
The only thing worth considering at this moment for the US semiconductor industry, is how much more should be invested than has already been allocated. The US Government should probably put tens of billions of dollars more into the pot for advancing semiconductor R&D, training labor, partnerships with universities, et al.
> It is enough to keep you awake in terror at night.
No.
You can be certain that this article is a particularly wonderful indicator of the exact opposite as to what is going to actually happen. ~6-10 years from now the US semiconductor industry will be stronger than ever and will still tower over China's badly flailing efforts at forcing a semi industry into existence.
In the long term, the chip ban will greatly reduce China's AI/HPC capabilities. And those technologies are critical for leading in most areas - science, r&d, robotics and manufacturing and others.
This would have the effect of letting the west, to become the economic leader again. I'm sure it's a good future for the Semi companies.
Toyota saw the shortage coming. Now we're seeing a glut that will take a decade to work itself out and result in another shortage.
Plenty of discussion over here 8 days ago: https://news.ycombinator.com/item?id=33244767
Mods will clean up things if it's closer to original posting date but a week out I dunno.
Okay, consumer processor chips are down from their work-from-home/bitcoin boom. But I was under the impression that these new factories were focusing on industrial inputs - microcontrollers and such.
The reporter here could still be mixing categories. Ford has thinky computer chips for their infotainment systems, but not enough dumb chips that control the heated seats.
Automotive EE. It’s nearly entirely this.
No one that sees how vehicles are made would ever follow the recipe if they were concerned about a chip shortage.
Driver seats, with 8 modules in them. That’s at least 8 micros, at least 8 switching power supplies, at least 8 bootloaders, applications, verifications, 8 different (ish) suppliers, etc. The reality is most of those are more than 8.
There is a movement going on right now that next gen goes back to larger computers like Tesla does. Which is how Tesla was able to say they were so nimble during shortage. They aren’t; they just had a lot less to do.
Current system is bad. But don’t worry, we’ll screw up the next one too!
So is it a fair simplification that a Tesla really just has everything running through a giant tablet as a cost cutting measure? Wouldn't that affect vehicle longevity? I have 10 year old tablets that can barely boot up any more, but 20 year old power windows that still work perfectly.
I was also hearing that one of the responses to this might be more base models with manual features (cranks, push buttons, etc). Any truth to that?
I don’t work for Tesla, but as I understand it their architecture is largely one (effectively a) PC per quadrant.
There are sub modules of course; but as I understand it they are kept pretty dumb relative to the larger controllers.
https://www.digikey.com/en/products/detail/stmicroelectronic...
Unless you are saying they are the scalpers.