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Comment by gosub100 | Hacker News Reader

they would buy cars, lattes and pay tax on non-subsidized jobs, too. Why should the latte shop owner have to pay tax to run their business, while the chip mfg doesn't? it just creates two classes of people.

> America as a nation has decided we need to produce semiconductors here for economic and national security purposes

a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment?

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> a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment?

Because it was dumb, changing away from a path when you see it is a dead end is a good thing to do.

Also I’m not sure “we” (to the extent that there even is an “we” here, there are always winners and losers with these sorts of policies so I bet the whole country didn’t agree) ever intended to move high-tech manufacturing away from the US. I think we want to outsource the bad jobs and keep the good ones. Of course it is a game everybody is playing, we’re shifting our strategy to hopefully more effectively keep the high-tech stuff.

why is building a washer that keeps peoples clothing clean a 'bad job' and building tech components a 'good job'?

Because computer chips are cool and washing machines are boring.

Everyone involved with floating the dollar and running a deficit understood that it would pump the asset sector and dump the export sector. There were fights about it. Keynes got himself ejected from elite circles by lobbying a bit too hard for his pet alternative.

If you want a more visible and recent datapoint, look to the perennial fights in the UN over the opposite, where a country that promised not to devalue their currency devalued their currency. Note that these discussions generally start from a point where everyone understands why it might be desirable to devalue one's currency, pumping exports & the real economy while dumping assets. This is macroeconomics 101 stuff.

The surprising thing is not that high tech manufacturing left, it's that for a while it was actually able to compete with a money printer for access to talent and resources.

>I’m not sure “we” ever intended to move high-tech manufacturing away from the US.

Until the recent turnaround, it was understood the west was moving to a service industry. Someone Else(tm) (read: China) would manufacture everything (the "dirty", "cheap" work) and we would provide the service (the "clean", "expensive" work).

Of course, an economy can't be valuable if it can't actually make anything. As it stands, the US can't even make chopsticks by itself let alone microprocessors.

I actually have significant doubt CHIPS will be successful in bringing back microprocessor manufacturing, and more broadly bringing back manufacturing in general to the west at all, but we have to start somewhere if we don't want to be beholden.

I’m not sure what you mean by “can’t even make chopsticks by itself,” which is to say, obviously that is an exaggeration but on the other hand, lots of products do touch multiple countries…

Anyway, US manufacturing output still seems to be second in the world, around 1/2 that of China with 1/4 the population. Microprocessors are already made in the US, Intel (despite their struggles) is still making plenty of chips here.

I’m not really sure what the plan is with Global Foundries, in the sense that they presumably won’t keep up with TSMC or even Intel… but maybe 7nm will be the next or next-next generation automotive chip node or something.

Intel designs their chips here, but Intel makes their chips in Israel, Vietnam, Malaysia, Costa Rica, etc.

This is what the west was trying to do before: Providing services like microprocessor design for the manufacturing industries overseas.

But of course, simply drawing stuff on paper for others to peruse doesn't actually produce value. It's the act of making something that produces value, and we finally realized that grave error.

Not to mention the people doing the manufacturing work will inevitably accrue the know-how to also just do the designing themselves too, and then we in the service industry really are worthless fools.

>I’m not sure what you mean by “can’t even make chopsticks by itself,”

I mean that quite literally. I know Georgia (the state, to be clear) has (or had) a robust disposable chopstick manufacturing industry, but nearly every disposable chopstick I see sold or given out are Made In China these days.

If we can't (or won't) even figure out the means to making some wooden sticks, we definitely aren't manufacturing microprocessors.

> Intel designs their chips here, but Intel makes their chips in Israel, Vietnam, Malaysia, Costa Rica, etc.

> But of course, simply drawing stuff on paper for others to peruse doesn't actually produce value.

Intel actually manufactures quite a bit in the US. The bulk of their fabs are here, and they ensure they can produce the wafers with good yields in the US. Once they've got the process down, the other fabs kick in. And even then, I believe a fair amount of the mass production is still in the US. It's the packaging that is mostly offshored.

So no, not just designing on paper.

If that's true Intel needs to advertise that better, especially in today's geopolitical climate.

I'm aware they have fabs (mostly R&D) in Oregon and have manufacturing fabs planned in Arizona, New Mexico, and I recall Ohio, but I've mostly heard praise of their Israel fabs and all the CPUs I've ever bought from them have said some variation of "Made in Costa Rica/Malaysia/Vietnam".

To be fair my latest purchase, a 14700K, says "Manufactured in US with global content." which is a slight improvement, but that could just as well mean "We shipped chips in from Israel and soldered a heat spreader on it." and it still ultimately says "Final assembly in VN." (Vietnam) right under it.

Made in USA this is not (yet?).

That is false. All the advanced Intel fabs are located in the U.S. And in fact, the design has actually been done in Israel in previous generations.[0] Much of the equipment needed to run advanced fabs are made in the US as well.

[0] eg. https://en.wikipedia.org/wiki/Intel_8088

Intel has production fabs in the US.

https://www.intel.com/content/www/us/en/support/articles/000...

>> I’m not sure what you mean by “can’t even make chopsticks by itself,”

> I mean that quite literally. I know Georgia (the state, to be clear) has (or had) a robust disposable chopstick manufacturing industry, but nearly every disposable chopstick I see sold or given out are Made In China these days.

But these are different things. “Can’t make chopsticks by itself” is clearly not true, I could just go make a pair of chopsticks if I wanted. You can find expensive hand-made chopsticks from the US. The US might not have a huge production of disposable chopsticks, but making really simple things at scale is a place where we don’t have a competitive advantage, and I wouldn’t be surprised if we have a relatively low demand for chopsticks, so this doesn’t seem surprising or indicative of anything in particular.

The game the manufactures are playing is to get extra good conditions for them by pressing the government that they would produce abroad. Local manufacturing in any reasonable volume is not coming back. Highly automated - yes, maybe, if there are dotations/tax cuts/high import tariffs. Highly automated means 1.5k people working on a giant fab and rest are robots.

> they would buy cars, lattes and pay tax on non-subsidized jobs, too

The point here was that your assumption of the economic effects of the subsidies didn’t include other meaningful factors.

Why continue to ignore the answer given in favor of purely economic arguments? We need chips built at home so we’re making it happen, it isn’t complicated.

"we" is doing a lot of work there. a multiple-trillion-dollar company could do the investing (since their products depend on this silicon) instead of the American taxpayer. But lets blur the lines with the word "we".

All of their competitors are subsidized by their governments and chips are as important as energy or agricultural today. It’s not realistic for us to expect a free market to compete with non free ones

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