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> Ann Kelleher, a 24-year Intel veteran, will lead development of 7-nanometer and 5-nanometer chip technology processes. Last week, the company had said the sma

> Ann Kelleher, a 24-year Intel veteran, will lead development of 7-nanometer and 5-nanometer chip technology processes. Last week, the company had said the smaller, faster 7-nanometer chipmaking technology was six months behind schedule and it would have to rely more on outside chipmakers to keep its products competitive. I hope Intel keeps its US-based fabs and continues to upgrade them. It would be a mistake to cede this capacity to outsourcing like so much of our other manufacturing capacity. Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.

criddell 6y ago
Another article I just read says Intel is talking to TSMC. I think they are trying to get out of manufacturing.
- segfaultbuserr 6y ago
  While I'm not a fan of Intel's monopolistic position on x86, but if Intel really gets rid of manufacturing, it's going to be another accelerator of consolidation in the semiconductor industry. I see it as a threat and I hope it will not happen. The timeline which Intel's in-house fabs survive, is a better timeline.
  - harpratap 6y ago
    Samsung has pledged to heavily invest in fabs and try to beat TSMC while SMIC is gaining historic momentum too. Looks like good competition in the upcoming decade to me.
  - scarface74 6y ago
    A monopoly is not defined as you’re the only one that can make your own products. Intel doesn’t have a “monopoly” in the processor space.
- DC-3 6y ago
  It is going to be a little bit geopolitically terrifying if Taiwan/TSMC monopolizes cutting edge chip fab.
  - Bud 6y ago
    TSMC is building a $12B factory in Arizona.
    - jorblumesea 6y ago
      It will never be the latest chips. TSMC will never let their cutting edge fab machines out of Taiwan. If they're on 3nm then Arizona will make 7nm or something.
      - ethbro 6y ago
        We'll see. Bargains come in many forms, and Taiwan certainly has things they want from the US.
        TheGrassyKnoll 6y ago
        Like what ? F16s ?
        wahern 6y ago
        Aircraft carriers and nuclear ICBMs. F-16s and missiles are merely to buy enough time for the U.S. to respond, which in a surprise attack with a minimal initial invasion force probably doesn't require as much sophisticated equipment as Taiwan has to preserve a viable defensive line for if and when the U.S. intervenes. If China (PRC) was smart, it'd have invaded Taiwan two years ago as Trump's resolve to backup commitments to Taiwan, or pretty much any military commitments to any ally, with force is basically nil. Nearing the election it's less clear as retaliation and a standoff crisis might better suit his reelection bid under present circumstances (e.g. COVID-19 sentiment). China missed its opportunity, but if Trump were to win re-election China would have much less to lose given their rejection of one country, two systems, the deterioration of trade ties, etc. In a lame duck Trump presidency invasion would have an even better cost+benefit profile for China.
- baybal2 6y ago
  Yes, I myself heard that Intel CEO been frequenting visits to Hsinchu last year. There is only one company out there worth visiting in person for a man of his calibre.
  - devmunchies 6y ago
    Can you elaborate? I just learned about https://en.m.wikipedia.org/wiki/Hsinchu_Science_Park https://en.m.wikipedia.org/wiki/Hsinchu_Science_Park Would this be to acquire, poach, invest, or relocate?
    - baybal2 6y ago
      The biggest company there is TSMC. The murmur been that Intel gave up on 10nm, and wanted to do a tapeout at TSMC's fab as a stopgap measure until they can make a new process from scratch.
- jhallenworld 6y ago
  Maybe for Altera FPGAs? I don't really understand the scale Intel needs and whether TSMC offers enough for their micros.
rehitman 6y ago
half of chip making is in manufacturing it. If they out source it, not much would be left.
- hardikgupta 6y ago
  This is clearly false. None of Nvidia, AMD, or Qualcomm manufacture their own chips. These companies are valuable despite not having in-house manufactures, perhaps because of it.
  - segfaultbuserr 6y ago
    > half of chip making is in manufacturing it. Correctness of this statement also depends on the type of chips. Not everything needs the latest and greatest process node (which is predominately a fabless industry) except for advanced microprocessors, SoCs, or storage. On the other hand, 65 nm is perfectly fine for 90% of chips in existence, even 0.18 microns is still often used. You don't need EUV for a good LED driver, a serial port, or a battery charger controller. If we talk in this context, indeed, companies like Texas Instruments, NXP, ONSemi, Analog Devices, Microchip, etc, usually make chips in-house.
- ksec 6y ago
  They dont have to outsource their Core Asset. If Intel ships 250M CPU annually there are also 250M Chipset going alongside with it. Those can go to TSMC or Samsung. ( Or in a turn of an event, Global Foundry )
jjcon 6y ago
> Interestingly, it seems the US is almost unique in our mass deindustrialization The US manufacturing share of real GDP has been pretty much unchanged since the 40s - ie it’s growth has kept up with the rest of the economy. https://www.stlouisfed.org/~/media/Blog/2017/April/BlogImage_ManuRealGDPShare_041117.jpg https://www.stlouisfed.org/~/media/Blog/2017/April/BlogImage...
- chrisjarvis 6y ago
  this image contradicts everything I've maybe ever heard about "American manufacturing"'s decline. Not saying the image is wrong, it's just impressive how much one segment of industry has been politicized.
  - jjcon 6y ago
    I imagine a lot of it is due to automation - there are in fact less assembly line jobs than there were in the 40s but economically the sector has continued to grow.
    - varjag 6y ago
      Automation in the industry is a big lie, the degree of it since post-WW2 days (when most of modern mass production methods were perfected) is greatly overstated. It is mostly due to outsourcing the labor-intensive parts to cheaper labor markets. The hypothetical robots are people working elsewhere.
  - jedberg 6y ago
    It's important to note that the number of manufacturing jobs has fallen significantly. Manufacturing has gotten way more efficient since the 40s, so a lot fewer people are necessary. That's why it's so politicized. Manufacturing is about 12% of GDP. That 12% used to go to a lot of people. Now it goes to the few people who own all the factories and the robots inside them.
    - baybal2 6y ago
nabla9 6y ago
> it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. This is very common misconception. The US has not deindustrialized other sectors have grown faster. US is the second largest country by industrial output. Third largest if you count EU as comparable unit. Industrial era is over in all advanced economies. We live in post-industrial societies.
- ghostcluster 6y ago
  It's not in China, Germany, Japan, or South Korea. They still have a huge manufcaturing presence. Samsung builds its products in South Korea. Everything has to get manufactured somewhere and, in my view, the US has made a mistake by outsourcing this capacity more than other countries. As I said elsewhere in the thread, chip manufacturing is a special category as well, and Intel has the only US-based fabrication that is competitive with the state of the art. It should be as important to protect that capacity as other industrial sectors, like Boeing.
  - deleted 6y ago
    [deleted]
  - Ericson2314 6y ago
    I recently read this review https://phenomenalworld.org/reviews/trade-wars https://phenomenalworld.org/reviews/trade-wars book sounds quite good as a sober explanation without the blinders of neoliberalism or industrial romanticism.
    - Ericson2314 6y ago
      https://phenomenalworld.org/interviews/trade-wars-are-class-wars https://phenomenalworld.org/interviews/trade-wars-are-class-... interview is nice too.
  - renewiltord 6y ago
    Yeah, China is a manufacturing powerhouse. But the world system has moved beyond that. The US can't compete on price. Germany and Japan have stagnant economies. South Korea and the US grow at similar rates but the US has a massive base to grow on. America's economy grows at 2.9% every year. The largest in the world and it's still growing at this rate. I take this trade every single time. It's why Americans are so wealthy in general.
vkou 6y ago
> I hope Intel keeps its US-based fabs and continues to upgrade them. It would be a mistake to cede this capacity to outsourcing like so much of our other manufacturing capacity. Intel is a publicly traded internationally-owned corporation, with no obligations to the long-term welfare of the United States. If you'd like a chip manufacturer to make decisions based on what is good for the US, I would recommend bribing it, nationalizing it, or starting a government-backed competitor. Any of those would be more effective at accomplishing this than hope and prayers. The free market itself is not necessarilly going to deliver the results you wish for, just because you wish for them.
- chottocharaii 6y ago
  Gee save us the free market lecture friend. What he said doesn’t exclude any of the options you’ve brought up. Also I note you’ve raised carrot strategies when stick strategies exist also.
- stass 6y ago
  You are correct about having no obligations, but as a company that is based in US and employs a large US-based workforce it benefits a lot from US itself being successful.
  - shi314 6y ago
    In Today's World, Countries should be grateful to a company when they employ people. There is no lack of highly skilled workforce in entire world. US with it's abysmal education system should be grateful to intel that it attracts semi conductor industry talents from all over the world which maintains US's hegemony in the world. If intel doesn't employ them, they would start companies like TSMC in their countries, hell if US didn't discriminate against Asians in 1980s maybe TSMC wouldn't even exist in the first place. Benefits that US provides to companies is way less than benefits companies provide to US.
hammock 6y ago
>Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. Related to the dollar being global reserve currency, which encourages a trade deficit. The US has a deficit equal to the next 15 biggest deficits combined. On the other hand, Germany, Japan and South Korea are top 5 trade surpluses.
jake_morrison 6y ago
This deindustrialization was driven by Wall Street. The important metric is return on invested capital. Manufacturing companies use a lot of capital for their factories. Shut down the factory and outsource to China, and you have the same sales with a lot less capital, so the stock goes up. Great success. Maybe repeat by having your suppliers do more and more of the engineering. At a certain point, you are just a brand, with no actual engineering capability. You can't compete with the people who actually know how to make the things. Then you die. See Hewlett Packard. The US taxing companies on global income at high rates also has an effect. Say you have 50% of your sales outside the US. You pay taxes in the country where you sell the product. Then you have profits overseas. If you bring that cash back to the US, you pay the difference between the corporate rate in country X and the US, which can be a lot, say 15%. Might as well take that money and use it to pay for manufacturing at e.g. Foxconn. So it's 15% better to invest in manufacturing capacity outside the US. The poor health care system in the US drives up costs as well, twice what it is in other industrialized countries for worse outcome. Same for cost of housing because zoning laws won't allow building. Google was allowed to build offices in Mountain View but not residential property for the employees to live in. So everyone has to commute from somewhere else, and cost of rent is driven by how much misery you can handle. Failures in government policy make US workers much more expensive without creating any more value or improving the quality of life for the employees.
- kiba 6y ago
  Reminds me of the old joke about the ideal company is having one person to turn on a factory and then place a logo on it, while engineering and everything else is outsourced.
  - TeMPOraL 6y ago
    It's like celebrities launching lines of cosmetics products - all they do is contribute a picture of their face, and then they rake in the money.
    - sharken 6y ago
      Sadly a very effective strategy until you develop critical thinking, some struggle their entire life to achieve it.
quotemstr 6y ago
Yes. Intel's failure demonstrates that the US no longer knows how to make chips as good as those of our geopolitical rivals. We're kept safe in large part by our technological edge. If we start falling behind in technology, it's not just a bad decade for Intel, but a hole in national security.
- Symmetry 6y ago
  Taiwan and South Korea are hardly our geopolitical rivals.
  - quotemstr 6y ago
    Oh, come on. We both know that in a war, our main geopolitical rival would conquer both on turn 1.
    - Symmetry 6y ago
      We really don't. Naval invasions are hard, particularly when the US is the world's dominant sea power. Theoretically China could invade South Korea through North Korea but North Korea wouldn't like that and they have nukes. But conquest of them is what happens when WWIII cooks off - we were talking about geopolitical rivalry.
      - quotemstr 6y ago
        Even if China can't invade Taiwan right away, China can set up a naval and air blockade. And if they can't do that, they can destroy the very delicate fabs using short-range conventional missiles. China is a high-tech peer adversary, not a bunch of desert guys in pickup trucks. As a matter of national security, we need a secure (and E2E-trusted!) supply chain for advanced technology.
whazor 6y ago
But running a fab is a huge cost and liability while all the competition is outsourcing to TSMC. Because the process is so difficult, I think it makes sense to only have fabs that work for multiple companies. I do think US chip companies (Intel, AMD, Nvidia) and government should get together and start a fab by themselves.
- beaunative 6y ago
  The reason market challengers outsource to TSMC is because they don't have enough revenue to support their own fab line, with Intel taking majority of the revenue. The precise reason Intel kept their own fab is because it's the makret leader that wants to keep their competitive edge, that is under the assumption their own fab is more advance, and for their use only. However, now that TSMC as a fab somehow got more advanced. It meant Intel's in-house fab has failed in that mission. That doesn't mean Intel's challenger's gonna hand their production to Intel's fab. Intel obviously won't just turn over their technology for their competitors to use either. It's quite impossible and unconventional to do.
qserasera 6y ago
We really, really, really NEED US based fabs. >US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. yup, I wouldn't necessarily include SK in that list but I'm very displeased at our deindustrialization process. Most/all of it does not make sense outside a tenuous abstract global finance system. We are losing knowledge and control every time and every day factories are allowed to leave the country.
beaunative 6y ago
There is of little significance advocating a company to do that. Unless it's regulated and legislated. Any company who willingly gave up such advantange in cost would be a fool and lost its market due to such policies unless that company has other unique advantange to keep their market position. People like to talk about how they love "locally-sourced products" until they realized they had to pay double or triple.
oblio 6y ago
> Interestingly, it seems the US is almost unique in our mass deindustrialization. The UK, Belgium did the same. The whole Communist Bloc also did it (for different reasons).
- dgellow 6y ago
  France too.
burntoutfire 6y ago
> it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. Entire Central Europe (Poland, Slovakia, Hungary etc.) is filled with German manufacturing plants. The Germans have done plenty of deindustrialization themselves.
- barry-cotter 6y ago
  47% of German GDP is manufacturing. Hardly deindustrialisation. https://markets.businessinsider.com/news/stocks/german-economy-3-reasons-economy-is-flopping-headed-for-recession-2019-8-1028484056#:~:text=In%20fact%2C%2047%25%20of%20Germany%27s%20GDP%20is%20made,an%20economy%20that%27s%20four%20times%20as%20much%20 https://markets.businessinsider.com/news/stocks/german-econo...
  - burntoutfire 6y ago
    I wonder how is that counted - i.e. can for example Mercedes contribute a lot towards the part of GDP counted as production even if most of its cars are produced outside Germany. Or, is that counted as engineering and branding.
numlock86 6y ago
> make a lot of short term profit (cut expenses) > invest into long term stability Well, you have to choose one.
gmtx725 6y ago
> Interestingly, it seems the US is almost unique in our mass deindustrialization The UK has vast swathes of poverty in the deindustrialised north of England and other areas. Former mining and heavy industry towns that even today almost 40 years on from deindustrialisation are dominated by insecure, unskilled work and unemployment
noir_lord 6y ago
Not that unique. UK did it as well, we let Arm be sold to foreign investors - I wonder if the French or German government would have allowed that sale.
- gspr 6y ago
  Arm is hardly a company that manufactures anything. An impressive tech company for sure, but I don't understand how the foreign takeover of a company that licenses processor designs is an example of loss of British manufacturing.
knubie 6y ago
> Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. Those countries also have much higher trade barriers. The US is almost unique in how few trade trade restrictions they (used to) have.
- Barrin92 6y ago
  >Those countries also have much higher trade barriers. This isn't true. Here's a comparison of the EU, several individual European countries, Japan and the US[1], and there isn't much difference tariffs or trade barriers. Global trade-barriers have been reduced to virtually nothing among developed economies, the US isn't unique at all. This is a stale old meme that seems to be popular in the US because it frames the US as a sort of victim of global trade which is a popular political narrative but not evidence backed. The real difference is in the overfinancialised, laissez-faire capitalism of the anglosphere (the UK suffers from the same issue of deindustrialisation, Australia as well), comopared to the industrial policy and state/big business dominated capitalism of Japan, Germany, France and so on. [1]https://blogs.lse.ac.uk/brexit/2017/10/24/the-eu-isnt-protectionist-its-one-of-the-most-open-economies-in-the-world/ https://blogs.lse.ac.uk/brexit/2017/10/24/the-eu-isnt-protec...
curiousllama 6y ago
The US hasn't deindustrialized at all. Industrial production has increased pretty consistently as far back as I can find data. What has increased in pace, though, is capacity per person, so manufacturing _jobs_ have decreased. It's less of a geopolitical issue and more of a domestic employment issue. https://fred.stlouisfed.org/series/INDPRO https://fred.stlouisfed.org/series/INDPRO https://fred.stlouisfed.org/series/CAPB50001SQ https://fred.stlouisfed.org/series/CAPB50001SQ
- jjoonathan 6y ago
  Ironically, those numbers were cooked up by counting Intel as manufacturing and over-weighting its success with a hedonic multiplier: https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
  - curiousllama 6y ago
    Idk what a hedonic multiplier is, but my understanding of that article is that production numbers measure the real $ value of output, not the actual quantity, making the production index misleading (e.g., if the US manufactured totally stopped except to make 1 computer chip costing $100 trillion, then manufacturing would seem to shoot up, even as it actually collapsed.) If that's correct, then it's interesting: we're making few, valuable items now, rather than many, cheap items. It follows that automation isn't a drive towards cheaper production, but more a drive towards higher quality goods that simply require machines to make. But it all takes me back to my point: from a geopolitical perspective, being good at highly-differentiated, tech-intensive, difficult-to-execute manufacturing is a great position. It's just a disaster from an employment perspective, because to get there, we traded away all our labor-intensive manufacturing.
    - jjoonathan 6y ago
      Hedonic multiplier is the idea that a CPU that's twice as good should count for twice the GDP even if it doesn't actually sell for that. It's a strategy for overweighting our strengths in those manufacturing indices by confusing the relationship between money and value. Intel was the lynchpin of this lie. We are in a thread about Intel becoming non-competitive at highly-differentiated, tech-intensive, difficult-to-execute manufacturing. No, that is not a great geopolitical position to be in.
chkaloon 6y ago
Just spent 3 months in Hillsboro, Oregon, and Intel construction work there is full speed ahead it seems. Of course that could change pretty quickly, but right now it sure looks like they intend to keep fabs going in the US.

criddell 6y ago

Another article I just read says Intel is talking to TSMC. I think they are trying to get out of manufacturing.

segfaultbuserr 6y ago
While I'm not a fan of Intel's monopolistic position on x86, but if Intel really gets rid of manufacturing, it's going to be another accelerator of consolidation in the semiconductor industry. I see it as a threat and I hope it will not happen. The timeline which Intel's in-house fabs survive, is a better timeline.
- harpratap 6y ago
  Samsung has pledged to heavily invest in fabs and try to beat TSMC while SMIC is gaining historic momentum too. Looks like good competition in the upcoming decade to me.
- scarface74 6y ago
  A monopoly is not defined as you’re the only one that can make your own products. Intel doesn’t have a “monopoly” in the processor space.
DC-3 6y ago
It is going to be a little bit geopolitically terrifying if Taiwan/TSMC monopolizes cutting edge chip fab.
- Bud 6y ago
  TSMC is building a $12B factory in Arizona.
  - jorblumesea 6y ago
    It will never be the latest chips. TSMC will never let their cutting edge fab machines out of Taiwan. If they're on 3nm then Arizona will make 7nm or something.
    - ethbro 6y ago
      We'll see. Bargains come in many forms, and Taiwan certainly has things they want from the US.
      - TheGrassyKnoll 6y ago
        Like what ? F16s ?
        wahern 6y ago
        Aircraft carriers and nuclear ICBMs. F-16s and missiles are merely to buy enough time for the U.S. to respond, which in a surprise attack with a minimal initial invasion force probably doesn't require as much sophisticated equipment as Taiwan has to preserve a viable defensive line for if and when the U.S. intervenes. If China (PRC) was smart, it'd have invaded Taiwan two years ago as Trump's resolve to backup commitments to Taiwan, or pretty much any military commitments to any ally, with force is basically nil. Nearing the election it's less clear as retaliation and a standoff crisis might better suit his reelection bid under present circumstances (e.g. COVID-19 sentiment). China missed its opportunity, but if Trump were to win re-election China would have much less to lose given their rejection of one country, two systems, the deterioration of trade ties, etc. In a lame duck Trump presidency invasion would have an even better cost+benefit profile for China.
baybal2 6y ago
Yes, I myself heard that Intel CEO been frequenting visits to Hsinchu last year. There is only one company out there worth visiting in person for a man of his calibre.
- devmunchies 6y ago
  Can you elaborate? I just learned about https://en.m.wikipedia.org/wiki/Hsinchu_Science_Park https://en.m.wikipedia.org/wiki/Hsinchu_Science_Park Would this be to acquire, poach, invest, or relocate?
  - baybal2 6y ago
    The biggest company there is TSMC. The murmur been that Intel gave up on 10nm, and wanted to do a tapeout at TSMC's fab as a stopgap measure until they can make a new process from scratch.
jhallenworld 6y ago
Maybe for Altera FPGAs? I don't really understand the scale Intel needs and whether TSMC offers enough for their micros.

rehitman 6y ago

half of chip making is in manufacturing it. If they out source it, not much would be left.

hardikgupta 6y ago
This is clearly false. None of Nvidia, AMD, or Qualcomm manufacture their own chips. These companies are valuable despite not having in-house manufactures, perhaps because of it.
- segfaultbuserr 6y ago
  > half of chip making is in manufacturing it. Correctness of this statement also depends on the type of chips. Not everything needs the latest and greatest process node (which is predominately a fabless industry) except for advanced microprocessors, SoCs, or storage. On the other hand, 65 nm is perfectly fine for 90% of chips in existence, even 0.18 microns is still often used. You don't need EUV for a good LED driver, a serial port, or a battery charger controller. If we talk in this context, indeed, companies like Texas Instruments, NXP, ONSemi, Analog Devices, Microchip, etc, usually make chips in-house.
ksec 6y ago
They dont have to outsource their Core Asset. If Intel ships 250M CPU annually there are also 250M Chipset going alongside with it. Those can go to TSMC or Samsung. ( Or in a turn of an event, Global Foundry )

jjcon 6y ago

> Interestingly, it seems the US is almost unique in our mass deindustrialization The US manufacturing share of real GDP has been pretty much unchanged since the 40s - ie it’s growth has kept up with the rest of the economy. https://www.stlouisfed.org/~/media/Blog/2017/April/BlogImage_ManuRealGDPShare_041117.jpg https://www.stlouisfed.org/~/media/Blog/2017/April/BlogImage...

chrisjarvis 6y ago
this image contradicts everything I've maybe ever heard about "American manufacturing"'s decline. Not saying the image is wrong, it's just impressive how much one segment of industry has been politicized.
- jjcon 6y ago
  I imagine a lot of it is due to automation - there are in fact less assembly line jobs than there were in the 40s but economically the sector has continued to grow.
  - varjag 6y ago
    Automation in the industry is a big lie, the degree of it since post-WW2 days (when most of modern mass production methods were perfected) is greatly overstated. It is mostly due to outsourcing the labor-intensive parts to cheaper labor markets. The hypothetical robots are people working elsewhere.
- jedberg 6y ago
  It's important to note that the number of manufacturing jobs has fallen significantly. Manufacturing has gotten way more efficient since the 40s, so a lot fewer people are necessary. That's why it's so politicized. Manufacturing is about 12% of GDP. That 12% used to go to a lot of people. Now it goes to the few people who own all the factories and the robots inside them.
  - baybal2 6y ago

nabla9 6y ago

> it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. This is very common misconception. The US has not deindustrialized other sectors have grown faster. US is the second largest country by industrial output. Third largest if you count EU as comparable unit. Industrial era is over in all advanced economies. We live in post-industrial societies.

ghostcluster 6y ago
It's not in China, Germany, Japan, or South Korea. They still have a huge manufcaturing presence. Samsung builds its products in South Korea. Everything has to get manufactured somewhere and, in my view, the US has made a mistake by outsourcing this capacity more than other countries. As I said elsewhere in the thread, chip manufacturing is a special category as well, and Intel has the only US-based fabrication that is competitive with the state of the art. It should be as important to protect that capacity as other industrial sectors, like Boeing.
- deleted 6y ago
  [deleted]
- Ericson2314 6y ago
  I recently read this review https://phenomenalworld.org/reviews/trade-wars https://phenomenalworld.org/reviews/trade-wars book sounds quite good as a sober explanation without the blinders of neoliberalism or industrial romanticism.
  - Ericson2314 6y ago
    https://phenomenalworld.org/interviews/trade-wars-are-class-wars https://phenomenalworld.org/interviews/trade-wars-are-class-... interview is nice too.
- renewiltord 6y ago
  Yeah, China is a manufacturing powerhouse. But the world system has moved beyond that. The US can't compete on price. Germany and Japan have stagnant economies. South Korea and the US grow at similar rates but the US has a massive base to grow on. America's economy grows at 2.9% every year. The largest in the world and it's still growing at this rate. I take this trade every single time. It's why Americans are so wealthy in general.

vkou 6y ago

> I hope Intel keeps its US-based fabs and continues to upgrade them. It would be a mistake to cede this capacity to outsourcing like so much of our other manufacturing capacity. Intel is a publicly traded internationally-owned corporation, with no obligations to the long-term welfare of the United States. If you'd like a chip manufacturer to make decisions based on what is good for the US, I would recommend bribing it, nationalizing it, or starting a government-backed competitor. Any of those would be more effective at accomplishing this than hope and prayers. The free market itself is not necessarilly going to deliver the results you wish for, just because you wish for them.

chottocharaii 6y ago
Gee save us the free market lecture friend. What he said doesn’t exclude any of the options you’ve brought up. Also I note you’ve raised carrot strategies when stick strategies exist also.
stass 6y ago
You are correct about having no obligations, but as a company that is based in US and employs a large US-based workforce it benefits a lot from US itself being successful.
- shi314 6y ago
  In Today's World, Countries should be grateful to a company when they employ people. There is no lack of highly skilled workforce in entire world. US with it's abysmal education system should be grateful to intel that it attracts semi conductor industry talents from all over the world which maintains US's hegemony in the world. If intel doesn't employ them, they would start companies like TSMC in their countries, hell if US didn't discriminate against Asians in 1980s maybe TSMC wouldn't even exist in the first place. Benefits that US provides to companies is way less than benefits companies provide to US.

hammock 6y ago

>Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. Related to the dollar being global reserve currency, which encourages a trade deficit. The US has a deficit equal to the next 15 biggest deficits combined. On the other hand, Germany, Japan and South Korea are top 5 trade surpluses.

jake_morrison 6y ago

This deindustrialization was driven by Wall Street. The important metric is return on invested capital. Manufacturing companies use a lot of capital for their factories. Shut down the factory and outsource to China, and you have the same sales with a lot less capital, so the stock goes up. Great success. Maybe repeat by having your suppliers do more and more of the engineering. At a certain point, you are just a brand, with no actual engineering capability. You can't compete with the people who actually know how to make the things. Then you die. See Hewlett Packard. The US taxing companies on global income at high rates also has an effect. Say you have 50% of your sales outside the US. You pay taxes in the country where you sell the product. Then you have profits overseas. If you bring that cash back to the US, you pay the difference between the corporate rate in country X and the US, which can be a lot, say 15%. Might as well take that money and use it to pay for manufacturing at e.g. Foxconn. So it's 15% better to invest in manufacturing capacity outside the US. The poor health care system in the US drives up costs as well, twice what it is in other industrialized countries for worse outcome. Same for cost of housing because zoning laws won't allow building. Google was allowed to build offices in Mountain View but not residential property for the employees to live in. So everyone has to commute from somewhere else, and cost of rent is driven by how much misery you can handle. Failures in government policy make US workers much more expensive without creating any more value or improving the quality of life for the employees.

kiba 6y ago
Reminds me of the old joke about the ideal company is having one person to turn on a factory and then place a logo on it, while engineering and everything else is outsourced.
- TeMPOraL 6y ago
  It's like celebrities launching lines of cosmetics products - all they do is contribute a picture of their face, and then they rake in the money.
  - sharken 6y ago
    Sadly a very effective strategy until you develop critical thinking, some struggle their entire life to achieve it.

quotemstr 6y ago

Yes. Intel's failure demonstrates that the US no longer knows how to make chips as good as those of our geopolitical rivals. We're kept safe in large part by our technological edge. If we start falling behind in technology, it's not just a bad decade for Intel, but a hole in national security.

Symmetry 6y ago
Taiwan and South Korea are hardly our geopolitical rivals.
- quotemstr 6y ago
  Oh, come on. We both know that in a war, our main geopolitical rival would conquer both on turn 1.
  - Symmetry 6y ago
    We really don't. Naval invasions are hard, particularly when the US is the world's dominant sea power. Theoretically China could invade South Korea through North Korea but North Korea wouldn't like that and they have nukes. But conquest of them is what happens when WWIII cooks off - we were talking about geopolitical rivalry.
    - quotemstr 6y ago
      Even if China can't invade Taiwan right away, China can set up a naval and air blockade. And if they can't do that, they can destroy the very delicate fabs using short-range conventional missiles. China is a high-tech peer adversary, not a bunch of desert guys in pickup trucks. As a matter of national security, we need a secure (and E2E-trusted!) supply chain for advanced technology.

whazor 6y ago

But running a fab is a huge cost and liability while all the competition is outsourcing to TSMC. Because the process is so difficult, I think it makes sense to only have fabs that work for multiple companies. I do think US chip companies (Intel, AMD, Nvidia) and government should get together and start a fab by themselves.

beaunative 6y ago
The reason market challengers outsource to TSMC is because they don't have enough revenue to support their own fab line, with Intel taking majority of the revenue. The precise reason Intel kept their own fab is because it's the makret leader that wants to keep their competitive edge, that is under the assumption their own fab is more advance, and for their use only. However, now that TSMC as a fab somehow got more advanced. It meant Intel's in-house fab has failed in that mission. That doesn't mean Intel's challenger's gonna hand their production to Intel's fab. Intel obviously won't just turn over their technology for their competitors to use either. It's quite impossible and unconventional to do.

qserasera 6y ago

We really, really, really NEED US based fabs. >US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. yup, I wouldn't necessarily include SK in that list but I'm very displeased at our deindustrialization process. Most/all of it does not make sense outside a tenuous abstract global finance system. We are losing knowledge and control every time and every day factories are allowed to leave the country.

beaunative 6y ago

There is of little significance advocating a company to do that. Unless it's regulated and legislated. Any company who willingly gave up such advantange in cost would be a fool and lost its market due to such policies unless that company has other unique advantange to keep their market position. People like to talk about how they love "locally-sourced products" until they realized they had to pay double or triple.

oblio 6y ago

> Interestingly, it seems the US is almost unique in our mass deindustrialization. The UK, Belgium did the same. The whole Communist Bloc also did it (for different reasons).

dgellow 6y ago
France too.

burntoutfire 6y ago

> it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. Entire Central Europe (Poland, Slovakia, Hungary etc.) is filled with German manufacturing plants. The Germans have done plenty of deindustrialization themselves.

barry-cotter 6y ago
47% of German GDP is manufacturing. Hardly deindustrialisation. https://markets.businessinsider.com/news/stocks/german-economy-3-reasons-economy-is-flopping-headed-for-recession-2019-8-1028484056#:~:text=In%20fact%2C%2047%25%20of%20Germany%27s%20GDP%20is%20made,an%20economy%20that%27s%20four%20times%20as%20much%20 https://markets.businessinsider.com/news/stocks/german-econo...
- burntoutfire 6y ago
  I wonder how is that counted - i.e. can for example Mercedes contribute a lot towards the part of GDP counted as production even if most of its cars are produced outside Germany. Or, is that counted as engineering and branding.

numlock86 6y ago

> make a lot of short term profit (cut expenses) > invest into long term stability Well, you have to choose one.

gmtx725 6y ago

> Interestingly, it seems the US is almost unique in our mass deindustrialization The UK has vast swathes of poverty in the deindustrialised north of England and other areas. Former mining and heavy industry towns that even today almost 40 years on from deindustrialisation are dominated by insecure, unskilled work and unemployment

noir_lord 6y ago

Not that unique. UK did it as well, we let Arm be sold to foreign investors - I wonder if the French or German government would have allowed that sale.

gspr 6y ago
Arm is hardly a company that manufactures anything. An impressive tech company for sure, but I don't understand how the foreign takeover of a company that licenses processor designs is an example of loss of British manufacturing.

knubie 6y ago

> Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this. Those countries also have much higher trade barriers. The US is almost unique in how few trade trade restrictions they (used to) have.

Barrin92 6y ago
>Those countries also have much higher trade barriers. This isn't true. Here's a comparison of the EU, several individual European countries, Japan and the US[1], and there isn't much difference tariffs or trade barriers. Global trade-barriers have been reduced to virtually nothing among developed economies, the US isn't unique at all. This is a stale old meme that seems to be popular in the US because it frames the US as a sort of victim of global trade which is a popular political narrative but not evidence backed. The real difference is in the overfinancialised, laissez-faire capitalism of the anglosphere (the UK suffers from the same issue of deindustrialisation, Australia as well), comopared to the industrial policy and state/big business dominated capitalism of Japan, Germany, France and so on. [1]https://blogs.lse.ac.uk/brexit/2017/10/24/the-eu-isnt-protectionist-its-one-of-the-most-open-economies-in-the-world/ https://blogs.lse.ac.uk/brexit/2017/10/24/the-eu-isnt-protec...

curiousllama 6y ago

The US hasn't deindustrialized at all. Industrial production has increased pretty consistently as far back as I can find data. What has increased in pace, though, is capacity per person, so manufacturing _jobs_ have decreased. It's less of a geopolitical issue and more of a domestic employment issue. https://fred.stlouisfed.org/series/INDPRO https://fred.stlouisfed.org/series/INDPRO https://fred.stlouisfed.org/series/CAPB50001SQ https://fred.stlouisfed.org/series/CAPB50001SQ

jjoonathan 6y ago
Ironically, those numbers were cooked up by counting Intel as manufacturing and over-weighting its success with a hedonic multiplier: https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
- curiousllama 6y ago
  Idk what a hedonic multiplier is, but my understanding of that article is that production numbers measure the real $ value of output, not the actual quantity, making the production index misleading (e.g., if the US manufactured totally stopped except to make 1 computer chip costing $100 trillion, then manufacturing would seem to shoot up, even as it actually collapsed.) If that's correct, then it's interesting: we're making few, valuable items now, rather than many, cheap items. It follows that automation isn't a drive towards cheaper production, but more a drive towards higher quality goods that simply require machines to make. But it all takes me back to my point: from a geopolitical perspective, being good at highly-differentiated, tech-intensive, difficult-to-execute manufacturing is a great position. It's just a disaster from an employment perspective, because to get there, we traded away all our labor-intensive manufacturing.
  - jjoonathan 6y ago
    Hedonic multiplier is the idea that a CPU that's twice as good should count for twice the GDP even if it doesn't actually sell for that. It's a strategy for overweighting our strengths in those manufacturing indices by confusing the relationship between money and value. Intel was the lynchpin of this lie. We are in a thread about Intel becoming non-competitive at highly-differentiated, tech-intensive, difficult-to-execute manufacturing. No, that is not a great geopolitical position to be in.

chkaloon 6y ago

Just spent 3 months in Hillsboro, Oregon, and Intel construction work there is full speed ahead it seems. Of course that could change pretty quickly, but right now it sure looks like they intend to keep fabs going in the US.