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Comment by HPsquared | Hacker News Reader

Semiconductor fabs involve a lot of hazardous chemicals, process changes and high energy consumption. Exactly the kind of thing European regulations tend to deter or slow down. Which is somewhat fine if there is nowhere else to build it, but if other places are easier, well...

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What is so energy consuming around fabs? The light source? I always thought of these as high-precision, not-too-high-volume processes and would have expected energy requirements to be lower than e.g. a car factory (or similar to e.g. a mall) and completely negligible on a national grid scale or compared to something like a smelter or lignite mine.

Edit: AI claims HVAC and air filtering/handling can be 40-50% of energy usage. Plus a megawatt per EUV scanner (ok, the latter matches what I would have guessed, but compared to the 16 MW of a single large bucket wheel excavator or estimates I've seen for large shopping malls, that's not that insane either).

Check out asianometry on YouTube for deep dives into many parts of semiconductor manufacturing, including the lithography processes ASML uses.

TSMC's Arizona fab needs 200MW of electricity.

But even more importantly, they need 2 separate completely independent substation feeds, since a 15 second interruption can cause 0.1B Euro of losses.

Finally, and here is where Europe really really suffers, generally you need these things to be planned, approved and built within a year.

Why would the turnaround time need to be so small?

Why suffer worse bureaucracy than you absolutely have to? As long as there are no trade barriers companies will go where circumstances are the most favorable. What's the argument in favor of settling in Europe?

The decision loop needs to be faster than the market shifts. Otherwise, you are fighting yesterday's war.

A great example of this is trying to compete with the New Space companies.

> Finally, and here is where Europe really really suffers, generally you need these things to be planned, approved and built within a year.

I think that is not even possible in China, let alone in the USA.

Not the OP and 1 year is too much. But eu is still much slower than Arizona. See https://www.datacenterdynamics.com/en/news/intels-german-fab...

And what's so special about 200 MW? Many factories in Europe use these amounts and they run their own power plants. The only edge here is that the US has cheaper fossil fuels, which it amounts to.

> Finally, and here is where Europe really really suffers, generally you need these things to be planned, approved and built within a year.

Like the offshore wind farms in the US? I think Europe and China are building these things much faster. ;)

There are plenty of locations with redundant power supply, and even building a new power line from another substation would generally not be too expensive given the short distances (unless NIMBYs block it, which they do).

They have hundreds of machines that use microwaves, turbo molecular pumps like cvd, ion implantation, plasma etching, idk what else? I'd say it's just the sheer density of equipment within. An average fab has 2000 tools aka machines for wafers alone

Large shopping malls would fail the air purity requirements for semiconductor manufacturing.

EUV lithography and etching rooms require ISO class 1 clean rooms. Those can have a maximum of 10 particles of size 0.1 microns per cubic meter.

While a shopping mall can get away with 2 - 4 air changes per hour, an ISO class 1 clean room requires 400-600 an hour, or about 10 a minute. Airflow needs to also be controlled: vertical and laminar. Every human entering the cleanroom needs to undergo an air shower with speeds of 60-90 mph to shear off loose skin flakes, hair and lint. This area needs to maintain constant positive air pressure to repel outside dust as humans move in and out.

In the EUV lithography systems, temperature control is measured in milliKelvins (0.001 C). If a wafer stage has a temperature variation of 0.05 C, the silicon expands by a few nanometers and the multimillion dollar batch is toast. Meanwhile in the same room, the EUV machine is generating extreme ultraviolet light using a plasma light source that gets to above 200,000 C. That's 40x hotter than the surface of the sun.

> I always thought of these as high-precision, not-too-high-volume processes

EUV rooms are churning out about 150 wafers an hour, 24/7. That sounds like not too high of a volume, but each wafer is about 500 cpus. So 75,000 cpus an hour.

I doubt I could even work in a fab having psoriasis.

It is mandatory to wear a bunny suit, mask and goggles in every fab I've been inside of.

They have special security guards who make sure you do the procedure correctly.

seems like doing this in a vacuum would be more economical

Laymens guess what problems it could introduce:

Vacuum does not dissipate heat well (extra engineering in that department)

Vacuum is never 100% vacuum. If you have some dust in the air, it will mostly flow to the direction of the airflow, but in vacuum dust particles will do random walk thing and settle on surfaces.

Plus the fact that then you need the everything to be structurally strong to be able to support 1atm of pressure differential, keep the vacuum sealed, and keep material degassing under control, so you end up with some heavy duty, expensive stuff. Pretty sure a lot of steps in the chip fab are done under very very high vaccums tho!

In general it's easier to control the air you're blowing into a room than what you're extracting, so I'd expect it would be more economical to keep the fabrication rooms under high pressure than low pressure. Also, in case of a leak, air and contaminants will flow out of the room instead of into it.

I worked a lot with and built up ultra-high vacuum systems during my PhD. At least for that level of vacuum, you introduce a lot of headache.

You can't use normal plastic or any kind of lubricant anymore because it starts degasing inside the vacuum, pump down after opening to air is a multi-day process that involves heating everything up to 150°C to get rid of the water that will settle on basically every surface when you pull the vacuum, every electricity feedthrough is a potential point of failure, transfering objects between different stages is a huge hassle etc. pp.

I'm sure there's still lots of UHV and HV systems in a chip fab, but there's no way that's easier on a full factory scale than clean room operation.

I don't think he meant UHV, just vacuum good enough that dust particles are not suspended.

Heat dissipation would be the obvious problem.

Exactly this. The process is super complex and expensive. The result, a cpu, is sold for a few dollars. To be profitable, the scale / volume has to be absolutely massive!

> high energy consumption

Just to address this separately: there is effectively energy rationing in several European countries, where the government intervenes to prioritize who should receive energy first (e.g., the Netherlands and Denmark).

Most fabs build their own separate power grid.

And Japan, South Korea, and Taiwan are also energy poor states that have been able to maintain capacity.

The energy excuse is true for some manufacturing processes like automotive in CEE which were pants that were built in the 1990s to 2000s and leveraged Russian ONG, but is a red herring for a lot of other manufacturing processes in Europe.

European states have a coordination problem as Draghi pointed out 2 years ago.

TSMC alone uses 1/8th of Taiwan's electricity (and rising). They make it work.

https://spectrum.ieee.org/taiwan-semiconductor

https://www.datacenterdynamics.com/en/news/tsmc-could-accoun...

Also, if you start now you would not compete with TSMC in the coming 20-30 years, so the energy requirements won't be that high off the bat

A consequence of a totally self-imposed handicap.

I get the feeling you're suggesting it's due to government regulation or 'socialist' policies.

But no, this failure is due a mixture or privatisation and politicians looking no further than the next election, leading to structural underinvestment.

Oh, and the energy transition going faster than even the most forward looking scenarios anticipated.

Going faster... until now. It's screetching to a halt. And they want us to get off gas in a few years while also being unable to handle the electrical load. I'm gonna buy a gas boiler thank you very much.

AFAIK the problem in NL is due to chronic underinvestment in the grid infrastructure since the big privatisation wave. Combined with the heavy subsidy of industry causing the issues.

Solvable but we need to be much smarter and redirect the fossil subsidies to reducing risk for grid-scale batteries and adding more grid capacity.

I wonder. Had any privatisation in NL any net benefits for the population? Not talking shareholder revenues.

Of course not. The whole concept just doesn't make sense.

In most areas it made things worse. One could argue that the only exception are ISPs/cellular operators. But for public transport, healthcare, energy, etc. I can't say it was an improvement.

But yeah, we have one party that is most often in government that just loves privatisation, taxing workers more and the rich less, etc. and engages in a lot of short-term thinking. Apropos short-term thinking, one of them was a prime minister for 14 years and cut defense spending and did not even consider increasing spending when Russia invaded Crimea. And now he is the secretary general of NATO. Talking about failing upwards. Though he is probably primarily chosen for being able to communicate with Trump.

Rutte can't even speak English properly. My 7-year-old speaks better English than he does (kind of by accident, but that's another story).

There's a possibility that the postal and telecoms systems did but I can't give you a counter. For everything else it has not been particularly effective; but a lot depends on what is privatised and how it's actually ran.

Water. Energy. Public transport (which is partially privatised). Healthcare has been a disaster.

Same thing for the UK but the results there were much much worse, especially the water (Brexit made it 10x worse). It was driven by the actions of the Unions in the 1970s (where they were taking the mickey) but of course went way way way too far. What was needed was to tweak the system such that the unions couldn't blackmail the Labour governments. Not to break it all up and sell it off for pennies on the dollar.

Even worse: the right-wing politicians blocked all preemptive grid investments, as it would lead to "needlessly high" grid transport fees.

We can’t let industry be built, because the power infrastructure is so shabby, because the state can’t afford to improve it, because the economy is in tatters, because there is no industry, because we can’t let industry be built

Life cycle of the fab is 3-5 years, an opimistic estimate of slow down in europe due to all the paper work is 2-3 years, so then you would rather not build the plant.

How? I thought there was still tons of demand for every node that has launched in the last 15+ years.

Yes, and many applications don't need / work on the latest node.

The problem is that constructing a cutting-edge fab is stupidly expensive, and you can only pay for it by selling chips at quite a premium - and nobody is paying a premium for 5-year-old CPUs.

So that brand-new fab has to pay for itself within the first 3-5 years, or it'll simply never pay for itself. But indeed, once it has paid off its initial construction costs it'll happily keep running for another 10+ years, churning out pure profit.

An additional problem here is that the costs have been rapidly increasing as the nodes have gotten more advanced. The tech for something like, say, the 40nm node is now mature enough that building new fabs isn't too expensive, so there's a decent market for building new ancient fabs for cheap mass production. But with EUV everything has gotten so complicated that there's no reasonable way to make it cheaper as it matures, and scale-wise you're well into the diminishing returns for everything which isn't logic. It is very much doubtful whether building brand-new 7nm-and-smaller fabs for mass production will ever make economic sense.

CPUs and GPUs a node or two old aren't really cheap compared to the cutting edge, though. If the fab's selling price has dropped a ton, are Intel and Amd and nVidia all making an extra big profit on the older models they're still selling?

yes, hugely so.

There is a whole niche in semiconductor called abatement which usually involves burning fluorine based gases used for etching, in order to make them less hazardous before releasing them into the environment. They use natural gas for combustion. The chemicals are not liquids anymore just gases because they are easier to control and manipulate with plasma via e.g. dry etching, CVD, ion implant

I mean Ireland has some of the most strenuous regulations in this regard, with dozens of data centres blocked over planning and environmental impact assessments. Despite this Intel still put €30 billion in turning a 360-acre former stud farm in Kildare into a semiconductor wafer fabrication facility, powered entirely by green energy, and acting a key location for production of Intel’s 14nm process technology. They currently pull 1,677,197 MWh/year from our grid.

More to the point, from 2019 they built €17 billion new fab development which doubled the manufacturing capacity available in Ireland and enabled the production of Intel 4, the company’s most advanced process technology.

For better or worse, Ireland’s extremely lax tax rules resulted in a ton of multinational corporate cash ‘stuck’ there with companies having the option of spending there roughly tax free or repatriating back to the US at some rate higher than that. It also really helps sell the ‘of course an Irish subsidiary owns all of our IP’ tax claims if there is actual spending there, hence you got all the pharma investment and the capital projects from others like Intel and Apple.

"Trapped capital" is not why Intel has doubled down on Ireland.

It's because whenever Intel asks for anything, the Taoiseach, IDA, and Invest Ireland will move mountains to do it.

Ireland is extremely business friendly because their leadership actually listens to industry.

While I agree completely with you regarding how we handle FDI, the role of Enterprise Ireland, and that our ability to act as an educated, stable and culturally compatible western european base for US industry is not to be understated, the Intel situation in particular has its own special nuance.

This is where the 'Inside Tennis' knowledge of the Irish Tech industry from someone working within it comes in handy. Enter the 21st Century Luddite, Thomas Reid, from stage left.

Thomas is an eccentric, independent bachelor farmer whose family has owned a 72-acre farm next to Intel's Leixlip manufacturing campus for generations.

Ireland’s State Industrial Development Agency (IDA) attempted to use a Compulsory Purchase Order (CPO) to buy Reid's land so that Intel could proceed with a multi-billion euro expansion of its microchip production plant. The land was valued at €5 million. During the negotiations that followed, the farmer was reportedly offered in the region of €10 million. He turned it down. Reid had no interest in being a millionaire. Instead, he continued to live on-site without a telephone or modern amenities while taking on Intel and the state alone.

The battle culminated in a landmark legal fight that went all the way to the Supreme Court of Ireland, where Reid ultimately won a historic victory against corporate overreach and protected his property rights

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

https://www.reddit.com/r/ireland/comments/3s4bg1/how_a_farme...

https://www.irishtimes.com/business/commercial-property/inte...

https://www.rte.ie/culture/2020/1102/1003311-the-lonely-batt...

They certainly tried!

Overreach? Annoying one guy and making him rich in exchange for such a huge buildout isn't overreach in my book. When I think of the overreach of eminent domain the examples have a lot more people and a lot less free millions of dollars.

> Enter the 21st Century Luddite, Thomas Reid, from stage left.

How does any of this make him a Luddite?

Luddites weren’t anti-technology. They were highly skilled workers that actually wanted to be involved with it.

They wanted technology to serve them not make their conditions worse as they worked with it.

This guy just doesn’t to sell his farm. That’s not the same at all.

Rather the US lax rules regarding their own enforcement.

The Double Irish (& Dutch Sandwich) where Companies routed profits through two Irish-registered subsidiaries, attributing intellectual property royalties to a management seat in a tax haven like Bermuda, is closed since 2015.

Subsequent sequential mismatch structures (the "Single Malt" tool) that replaced the Double Irish for certain firms using non-EU residency loops were also banned. Finally there's a 12.5% charge on unrealized capital gains when a company moves its assets or tax residency out of Ireland.

The headline tax rate and the effective tax rate are also very different things. France's effective corporate tax rate was actually lower than Irelands - but France is an absolutely brutal place to do business in for employers and they've comparatively no english-language tech FDI to speak of.

France corporate taxes are not that bad, but the corporate paid social charges are massive (40-45% of employees gross salary)

I pay similar in the USA and get literally nothing in “social” or otherwise return. I’d trade with french anytime

Just to be clear, the employer first pays ~40-45% of the original salary, then the employee pays ~32-38% of the original salary.

i.e. a 100,000 EUR annual salary, the employer pays ~40,000 EUR to the government, then the employee gets their wage slips with additional deductions of ~38,000 EUR.

= total of ~78,000 EUR tax on a 100,000 EUR salary.

I don't think anything like that level of taxation exists in the US?

The tax loading in the US on the equivalent of a 100,000 EUR salary is much lower than this.

At 100,000 USD (a bit lower than EUR) the combined tax load on income for both employee and employer is typically ~30-35% depending on locale. In the US, $100k is pretty close to the median household income.

If you have extremely high incomes (e.g. 1,000,000+ USD) the gap closes a bit but even in the highest tax locales the marginal tax loading maxes out at ~60% of top-line income.

US Federal tax rates are some of the most progressive in the world. Only ~20% of households are net taxpayers after transfer payments and subsidies. Ironically, this is why it is so difficult to significantly increase income tax revenue in the US. It would require the middle-class majority to vote to raise their own taxes.

I understand your frustration, but it's not literally nothing - just less than it should be. The US still has Medicaid/Medicare, public schools, welfare services, emergency services, etc (even if you don't use them yourself you benefit from a reduction in the number of desparate people around you if they were cut back even further than they already have).

If you are completely broke and go/are brought to a hospital in the US with an immediate life threatening medical issue, they will still try to save your life.

it is literally almost nothing :)

I am too young for M&M, public schools are the worst and I pay ridiculous amount of money for private education. welfare services? depending on where you live (I live in urban area) welfare services would make sure I am just as homeless as if I didn’t get any welfare service…

and yes, the ER will take me to save my life but that about as low of a bar as one could come up with.

Which jurisdiction? I highly doubt your effective tax rate is anywhere close to that. Especially considering the myriad deductions and exemptions one should be able to take with a high income (401k, Roth IRA, HSA, 529, etc).

>construction kicked off in 2019 on a €17 billion new fab development which will double

I think what the OP wanted to highlight is right here: in China or Taiwan etc. this would not have taken 7 years.

I mixed up a tense or two there. It was done in 4 years, even accounting for Covid. The timeline looks like this

2019: Kick-off

2020: Construction in Ireland basically halted due to Lockdown for 18 months

Q3'2023: Fab 34 begins running a ‘First Full Loop’ of silicon

Q4'2023: Fab 34 completed. Doubles the manufacturing capacity available in Ireland, enabling the production of Intel 4 and Intel 3, some of the company’s most advanced process technologies, and the first to incorporate EUV lithography

2024: Intel sold 49% stake to Apollo GM for $11.2bn

2026: Intel buys back stake for $14.2bn

Q2'2026: Intel announce a further $5.7bn investment to upgrade existing capacity for server chips, slated for completion by late 2027

That's just low taxes pushing against everything else in the Irish regulation.

Everyone loves a good race to the bottom with the environment

Japan, South Korea, Taiwan, and the US all share comparable living standards to Western European states yet are able to maintain and expand semiconductor manufacturing.

The issue is with policymaking - coordination between the EU, national, and local governments is weak so high capex projects become risky.

Edit: can't reply

> Your first 3 countries are also incredibly poor comparisons for living standards as they have horrendous work/life balance.

Their hours worked are comparable to most Western European states as well now [0]. Germany is unique in Europe based on hours worked, and is why German industry is pushing to bring back the 40 hour work week.

[0] - https://www.oecd.org/en/data/indicators/hours-worked.html

> comparable living standards

So vague as to be utterly meaningless.

And slow moving regulation literally incentivises high capex long-horizon investment.

HDI is a good metric for gauging living standards [0]

And slow moving execution and creation of relevant legislation is a hindrance for capex in high risk projects like those in the semiconductor segment.

The Draghi report was published 2 years ago, and remains largely unimplemented.

[0] - https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...

> HDI is a good metric for gauging living standards

A country with living standards at Bill Gates levels with perfect good health until 200 where everyone is illiterate has a lower HDI than South Sudan. Even if we fix it by setting the minimum education value at 0.1 billionaires with perfect health land would have a HDI lower than 180 countries. HDI has a 90%+ correlation with GDP. It’s not a worthwhile measure.

>And slow moving regulation literally incentivises high capex long-horizon investment.

What?

No one wants to invest a lot of money into something that might be illegal tomorrow. (Do you?)

I don't think it's that vague. I've lived in both Europe and the US, in several places, and both have a wide range. What I will say is that I don't think Europe is better off for the times that it has thrown up roadblocks.

Also, slow moving, stable regulation can be better than arbitrary flippancy, but that doesn't mean it directly incentivizes investment, it just means the investment already incentivized by demand can proceed with more confidence that it won't have the rug pulled out from under it, assuming the regulations didn't discourage a tentative proposal in the first place.

So now we're suddenly talking about living standards and not environmental regulation?

Your first 3 countries are also incredibly poor comparisons for living standards as they have horrendous work/life balance.

We have a politician putting up very obviously hand drawn (because we need to be fucking certain that AI didn't do it right?) posters for an anti-datacenter meeting. I'm pretty sure that if you were to talk to the actual humans in our society they'd talk about housing, employment, public transport. Not datacenters. If datacenters even feature in their real world outcomes it's 3rd hand, but the usual lefty crowd will turn up to any vaguely lefty protests with their bizarre mix of rainbow flags and keffiyehs.

If something needs to be done, then these rules are a bit pointless if corporation can just do it in another country. It means the EU simply assists in poisoning poorer countries. If they were serious, then they would have banned chips made using those processes altogether. If they cannot do that, then that regulation is pointless virtue signalling.

This is some ridiculous speculation, we do plenty of such critical manufacturing in EU. Regulations is not why we don't make highly-integrated chips here.

Why then?

A probably non negligible weight is that decadence is bearish.

Those alive invest in long term planning, those with a dead drive get conservative in their action.

Again, the sniper seems to prove the point. Decadence and non effort are strictly related.

Just one more innovation and humanity will heal. Just one more!

No, humanity needs to actively (actively) rediscover human Values, to correct the proportion in the run towards technological growth vs Human growth - condition that has been noted for centuries and it substantially amounts to giving power to monkeys.

This does not counter that an idle, decadent mentality will have curbed growth everywhere.

Lately specifically because of Intel having financial issues, they already started building their fabs in Dresden and Wrocław when they cancelled last minute.

This was strategically planned with EU as part of bringing back production locally, similar to CHIPS Act in the US.

So you are fully dependent on US companies anyway.

That's a different problem than discussed here.

And it's not like US has companies doing own manufacturing outside of Intel. CHIPS specifically wanted to address that.

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