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Comment by delichon | Hacker News Reader

> The last company to vertically integrate a car from raw material to finished product at this scale was Ford. Today BYD’s system runs all the way from the lithium mine to the port.

Both BYD and Tesla claim to produce around 75% of their components. Ford is at around 25%.

Tesla is indeed smaller in scale (cars/year):

  BYD 4.6M
  Ford 4.4M
  Tesla 1.6M

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I assumed this was referring to the early days of the Ford assembly line

Yes, Ford claimed up to 90% in the 1930s when they were producing up to 1.4M cars and trucks per year. (Down to less than 400K in the worst of the depression.)

I suppose it makes sense, back then you wouldn't think there would be an existing supply chain of companies like Mopar just waiting for a car manufacturer to spin up and start buying their stuff

The original Ford plant to raw ore, coal & limestone as inputs. There weren't any Mopar's, but Ford didn't have to build their own steel plants...

The original Model T plant (the Piquette Avenue plant in Detroit proper) was not vertically integrated, and in fact most of the "running gear" (all the complicated stuff, basically everything but the coachwork) was purchased as parts from the Dodge brothers (who owned a plant at what is now Detroit/Hammtramck Assembly -- formerly Dodge Main and then GM Poletown -- a GM plant making EVs like the Sierra and Hummer EVs) and merely assembled by Ford employees (albeit in an admittedly revolutionary assembly line process that changed capitalism forever).

The Highland Park plant was Ford's play to cut the Dodge Brothers out of the process by machining most of his own parts. The peak of vertical integration would be the River Rouge plant which, as you say, machined all its own parts from iron and steel made on-site from raw ore (but never made the Model T).

They would go so far as to license components for in-source production from suppliers who couldn't meet the needed volume.

Still lower than farmers and their horses. :)

So BYD for cars and Samsung for phones and consumer electronics more generally (from fab upwards).

In fact, I believe Samsung is the only company on the planet that can design & build a state of the art smartphone from scratch - silicon/fabrication, SoC, battery, baseband, camera sensor, memory, and display.

What other high tech vertically integrated producers exist in this group?

While I could have sworn RIM put out their own modems (which Qualcomm used to make life difficult for them, especially as the world transitioned from 3G to 4G), and did their own hardware and software, I can't currently find a source

Qualcomm makes life difficult for anyone who has to deal with them.

And now it appears Microsoft and Nvidia are gonna make life difficult for them in the computer market.

They are "more" vertical, but they too have vital suppliers that they could not do without. The semiconductor supply chain is deep. Everybody knows ASML, but there are countless others that produce raw wafers, etching machines, special chemicals and so forth.

IBM

IBM no longer has fabs (spun off as Globalfoundries and later sold), and no longer manufactures PCs (sold to Lenovo?), but it does make mainframes I guess?

I am still amazed that IBM is pushing their POWER processors forwards for things like their System Z Mainframes. From what I have heard they are still really fast with I/O and general shifting of data but I'm not sure how much better than is than the alternatives.

Wouldn't be surprised if that finally gets sunset in the next few years.

POWER still exists? That's kind of neat. I had a POWER 1 rs6k way back. Almost wish I'd had room to keep it just as a sort of museum piece. The processor was several chips on one or two large PCBs IIRC.

https://en.wikipedia.org/wiki/POWER1 IRC.

I know, they are up to the POWER 11 spec now. It is the definition of a brilliant architecture that was simply out run by others (x86) that could push their mediocre setups far better than they could.

I thought GlobalFoundries was AMD's fab division spun off.

Precisely. IBM paid them to take their fabs away (yes, they paid them, not the opposite, they were so obsolete that it was basically a waste disposal operation)

was there some regulation preventing them from just shutting the plants down and selling off the real estate and equipment? severance payments too high?

IIRC they had an agreement that Globalfoundries were to take the fabs and further develop them to shrink to better nodes. I think it was less than a "take this crap off of us" and more of a "we still need fabs, so here's some money and please continue running them for a while". GloFo then utterly failed at competing with TSMC, Samsung and Intel which was quite a problem for IBM. In general if you have a certain design you can't immediately port it to a different fab, you need to engineer it around the constraints of the fab node and process

Yes, more specifically IBM -> AMD -> spin off.

They are mainly in services now, no?

In 2021, the majority of IBM's "Global Technology Services" was spun-off as an independent company named Kyndryl.

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