By "SpaceX moment", I mean a startup entering an impossible market, where the barrier to entry is billions of dollars of research and manufacturing, a market dominated by industry giants from the 60s, and yet still coming out on top somehow.
The thing is, the SpaceX moment occurred because of a rare opportunity where the industry incumbents were insulated from any competition or need for innovation for ~30 years. Some domestic industries still operate in an environment somewhat like this (e.g. the steel industry), but still face modernized global competition (albeit whose effects are kept at bay via import tariffs reaching as high as 266%).
The semiconductor industry... while there are magnificent barriers to entry and not "enough" competition, they have absolutely not been wholly insulated from innovation or competition. And innovation in fabrication is driven at a very rapid pace! So there aren't huge outsized profits to be found like there was for SpaceX. And even SpaceX needed to invent what was almost an entirely new industry (Starlink) to become truly profitable.
And even trying to pull a "SpaceX" on domestic steel manufacturing would fall flat because you wouldn't capture the global market, and would still be dependent on some (potentially much lower) tariffs to compete against the very modernized factories in China, which are innovative/competitive/efficient, unlike our domestic industry.
SpaceX took advantage of a very rare situation where there truly was no competition or innovation anywhere on the planet for a very long period. I'm not aware of any other industries which are quite as far "behind" today as space launch systems were in 2010. But if anyone else is, please mention those industries here!
> I'm not aware of any other industries which are quite as far "behind" today as space launch systems were in 2010. But if anyone else is, please mention those industries here!
Digital payments may be in a similar situation. Visa's 2% fee may seem low but from a scale and competitive standpoint it is fairly absurd - they are making 80% gross margins on $30b of revenue to do what boils down to a few API calls and some fraud repayment. I doubt that they need to do much innovation to keep that moat either (in contrast to say Apple and their 30% cut of App Store revenues - they need to constantly stay ahead of Android and Windows).
Curious to hear your take on what other industries at least come close to the space dynamics in 2010.
Problem is, the world consuming these things mostly seems to want those parts, and can't ignore those other parts. Which seems to explain relatively low uptake.
Payments are pulled instead of pushed; the underlying credit card numbers lack even a semblance of security; there is all kinds of mis-design due to the way that restaurant tips work; it all started when credit card imprints/readers were all assumed to be offline; etc.
One of my earliest memories is my mum paying for groceries using her credit card in the 90/00s, where the machine used was completely mechanical/manual. It copied the card number (that was embossed on the plastic) by literally taking a carbon paper rubbing of the card. The system was designed to be offline, because back then there was no "online".
I also recall the occasional business writing down credit card details, in person, with a pen, on a form they had for the purpose.
Sadly, I still see this...
A "built for online first" payment paradigm would look different, but it would have an enormous chicken-egg or installed-base problem, unless you had something with government-level muscle enforcing it.
If the electronic retail payment industry hadn't already been captured by VISA and MasterCard, I could very well see something like this, a much cheaper and simpler system, being what everybody uses. There's countries (India?) where debit/credit card adoption was slow and now these simpler solutions have significant market share.
You could pay with cash or debit if you wanted to, but then you can't chargeback the business.
We just need a non-profit integrator to do it worldwide... Use credit card as a fallback if everything else fails.
The banks issuing Visa cards do fraud repayment. Visa gets paid for their network, and specifically their network of higher income spenders who want to play the rewards game. Also, note that Visa does not earn 2% of transaction totals. A signification portion of total card processing fees goes to the card issuing banks to pay for rewards and fraud repayment.
LOL @ anyone who believes that global financial processing is primarily a technical problem vs. the regulatory / bureacratic dystopia it actually is.
Here’s one of them: https://multibeamcorp.com/
I remember touring a little research fab, maybe around 2000, that could achieve feature sizes comparable to what TSMC can do today. But they were very, very, very slow.
(Fast-moving electrons are easy to make, easy to aim, and have teeny tiny wavelengths that entirely sidestep most the issues that people have with photons having obnoxiously large wavelengths. But electrons have all manner of downsides that explain why fabs spend many billions of dollars on optical lithography, one of which is that they repel each other, which makes shining a lot of them at a wafer at once quite problematic.)
I think semiconductors is a difficult space for a SpaceX. SpaceX was relatively cheap - the company itself only raised 2 billion dollars, and according to Musk, the cost to develop Falcoln Heavy was "only" $500M. I think the "thesis" behind SpaceX is moreso that the technology to develop rockets had come down massively, but the market had gotten fat and lazy on government contracts. The market only seemed impossible because everyone just assumed so.
On the other hand ASML's EUV machine costs $300M and that's only a small part of what you need build your own Fab and barring some massive research breakthrough that isn't coming down any time soon.
As near as I can tell there was nothing particularly remarkable about TSMC in the 1980s or 1990s.
UMC was a Taiwan foundry that started even before TSMC and it eventually folded.
What are you even talking about...
Also what's so special about TSMC?
I mean they were doing quite well in the 90s and early 2000s before falling back behind Intel before they caught up and surpassed it this time.
Estimates are it would take $200 - $300 billion just to catch up with them and little to no profitability for a decade while burning $10s of billions every year.
I think the federal govt is the only entity that has that kind of money.
It is prudent, possibly even critical, to have foundries on US shores, and the US will have to pay for it.
SpaceX and Tesla benefited from being helmed by a crazy person (in their nascent stages), who pushed to break norms in the conventional thinking, either "rockets can't be reused/we must spend $10B on a test campaign[2] before any part leaves the ground" and "EVs aren't cool". I don't think if Musk could design a rocket engine from scratch is relevant, but the strategic design patterns of 1) reduce requirements, 2) remove unused things, 3) simplify/optimize, 4) accelerate cycle times, 5) automate. Those points aren't revolutionary, just a more expanded "go fast and break things."
The computers that came out of Silicon Valley in the late 70s-into the 80s were a disruption to the old stalwarts like IBM. Though for silicon maybe I'm just trapped in that pre-SpaceX thinking.
[1]: https://phys.org/news/2020-05-exceptional-euv-hot-tin-plasma...
[2]: https://www.planetary.org/space-policy/cost-of-sls-and-orion
another good example of this is how VLSI in particular disrupted the mini-computer/mainframe market and made CPU's cheap enough to put them into smaller and far cheaper machines. This really shook up the old guys who where used to being total system vendors. (IBM, DEC etc). Suddenly, you could get a computer for much cheaper compared to the decade prior, and by the early to mid nineties you had guys like sun eating their lunch completely.
IBM pivoted to being a services company and DEC just imploded.
That machine btw is called "free electron laser", and utilizes relativistic electrons to match their velocity to free-space photons instead of the slowed-down-by-metal-helix traveling-wave-tube-amplifiers that power most TV satellites. Those work at about 10 GHz or 30mm wavelength, much larger than the 13nm band used for EUV lithography.
FELs can have efficiencies in the double digit % if built with energy recovery, btw.
It could be simple as the free world not wanting manufacturing capability at home. It could be wanting only grain farms and money printers.
Also, manufacturing has a massive impact on the environment, this includes semiconductor manufacturing. It has politically been impopular for a while now.
This already happened and the startup was TSMC. Unfortunately for the U.S., it's in Taiwan.
SpaceX entered a market with hardly any competition (due to little demand) and is/was extremely reliant on government funding anyway.
Semiconductors are highly competitive and you can't rely on government agencies buying most of what you manufacture.
I'd argue Tesla might be much more closer to "startup entering an (somewhat)impossible market" considering how entrenched non Chinese car makers it was and how hard it was to survive in and especially start from scratch as a small company.
But surely it wouldn't be impossible, with enough capital and initiative, to start a US-side TSMC clone on US soil? Just like the Valley successes of the 70s and 80s prompted savvy Taiwanese investors to found TSMC. We might need to start copying back some of their playbook to chart our own course to success, as they did with ours, then exceeded it with their out strategy and ingenuity, currently.