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I don't get where the logical disconnect is happening. Or maybe it's just an industry trend that isn't explicitly addressed. Comments here say that silicon en

I don't get where the logical disconnect is happening. Or maybe it's just an industry trend that isn't explicitly addressed. Comments here say that silicon engineering is one of the most difficult things that you need very specific education for. Yet salaries are flat and/or not very impressive for that education level, in this industry. That says to me that there's a surplus of people interested in such jobs, or the current job market shrank compared to what used to be required to innovate and operate all these fabs. And if there is a surplus of labor, it's cheap for anyone, not just China, to siphon off willing talent. Or am I missing something?

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youeseh 6y ago
If you look at the number of chip companies in business starting 30-40 years ago to today, you'll notice that the trend has been one of consolidation.
- godelski 6y ago
  Honestly that would mean there's ample room for competition considering what's happening especially with Intel, Nvidia, and AMD. Though I imagine the barrier to entry is high.
  - jojobas 6y ago
    >I imagine the barrier to entry is high. Understatement of the last 29 minutes. Invest a few billion with immense risks? Shut up and take the money I wish I had.
    - godelski 6y ago
      I could imagine a collaboration effort from companies like Google, Intel, Nvidia, and Amazon that would reduce the risk to each individual company and result with big benefits. There's been a lot of talk lately about TSMC not being able to produce enough chips for demand. Sounds like the time to take the risk is better than previously. (I'd also argue that there are benefits to having a fab lab closer to these companies headquarters)
      - jojobas 6y ago
        No money in the world would get you near TSMC in less than 10 years. Source: China throwing all the money in the world, stealing some IP and still not catching up in 20 years.
        godelski 6y ago
        Playing catch-up is a lot easier than innovation. I'm not sure I buy the claim that another company couldn't catch up. The reason being because if you took all the employees from TSMC and put them in another company (and you weren't worried about IP claims) what would be different? We've seen several companies make up a lot of ground in a short period of time (AMD as an example). But also, 10 years isn't that long.
        coreblocks 6y ago
        Actually the major problem for most fabs (Intel/GloFo/Samsung/etc) is not that they can't make 7nm chips, it's they can't make it cheap enough (in high enough yields) to compete with TSMC. However in this case, China can subsidize SMIC to produce at a loss until they eventually catch up compared to the open market.
        godelski 6y ago
        > subsidize [] to produce at a loss until they eventually catch up compared to the open market. Isn't this effectively the Silicon Valley model? Corner the market, control, set price.
  - codeisawesome 6y ago
    I think the answer to OP is in the combination then? High barriers to entry means there are fewer competitors for talent - leading to stagnating wages. It might all change with news like the above shaking things up..
gridlockd 6y ago
The expensive part isn't getting the labor, it's building and operating the facilities - and then the profit margins aren't even that great. The existing chip manufacturers are sufficient to supply global demand, creating more competition there is pointless from an economic perspective. It only makes sense from a national security perspective.
- magicsmoke 6y ago
  And from the perspective of the labor, what good are your highly specialized skills on a million dollar machine if you don't have a million dollar machine? Your only choice is to work for the few companies that own one and take whatever pay they offer you to try and make up for the decade+ of lost income from grad school.
rmrfstar 6y ago
I have this theory, supported by anecdote alone. In the US there is a "scam premium". The scammier a business, the higher the multiple. Fabbing is decidedly unscammy. So according to the theory of scam premiums, everything associated with fabbing should trade at a discount.
- supernova87a 6y ago
  Well, maybe another way to put it is that it's a business where the costs and value are absolutely clear. And it's a pure physics/technology catchup business. So margins get competed very thin. Versus what you call "scammy" industries, where people attach emotional value, social value, network effects, irrational likes/dislikes -- there's a lot of margin that can be milked out of stuff like that.
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Gustomaximus 6y ago
Very specialised work with a low volume of competitors seems a great way to stagnate wages.
fakeslimshady 6y ago
It’s probably been undervalued for a long time. Not just fabs , hardware comp used to on par or higher than SW many years ago. Now it’s fallen behind on average. But eventually shock (eg trade embargo) will cause a correction
tanilama 6y ago
Your salary is however conditioned on market and how hard your job is
- deleted 6y ago
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deleted 6y ago

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youeseh 6y ago

If you look at the number of chip companies in business starting 30-40 years ago to today, you'll notice that the trend has been one of consolidation.

godelski 6y ago
Honestly that would mean there's ample room for competition considering what's happening especially with Intel, Nvidia, and AMD. Though I imagine the barrier to entry is high.
- jojobas 6y ago
  >I imagine the barrier to entry is high. Understatement of the last 29 minutes. Invest a few billion with immense risks? Shut up and take the money I wish I had.
  - godelski 6y ago
    I could imagine a collaboration effort from companies like Google, Intel, Nvidia, and Amazon that would reduce the risk to each individual company and result with big benefits. There's been a lot of talk lately about TSMC not being able to produce enough chips for demand. Sounds like the time to take the risk is better than previously. (I'd also argue that there are benefits to having a fab lab closer to these companies headquarters)
    - jojobas 6y ago
      No money in the world would get you near TSMC in less than 10 years. Source: China throwing all the money in the world, stealing some IP and still not catching up in 20 years.
      - godelski 6y ago
        Playing catch-up is a lot easier than innovation. I'm not sure I buy the claim that another company couldn't catch up. The reason being because if you took all the employees from TSMC and put them in another company (and you weren't worried about IP claims) what would be different? We've seen several companies make up a lot of ground in a short period of time (AMD as an example). But also, 10 years isn't that long.
      - coreblocks 6y ago
        Actually the major problem for most fabs (Intel/GloFo/Samsung/etc) is not that they can't make 7nm chips, it's they can't make it cheap enough (in high enough yields) to compete with TSMC. However in this case, China can subsidize SMIC to produce at a loss until they eventually catch up compared to the open market.
        godelski 6y ago
        > subsidize [] to produce at a loss until they eventually catch up compared to the open market. Isn't this effectively the Silicon Valley model? Corner the market, control, set price.
- codeisawesome 6y ago
  I think the answer to OP is in the combination then? High barriers to entry means there are fewer competitors for talent - leading to stagnating wages. It might all change with news like the above shaking things up..

gridlockd 6y ago

The expensive part isn't getting the labor, it's building and operating the facilities - and then the profit margins aren't even that great. The existing chip manufacturers are sufficient to supply global demand, creating more competition there is pointless from an economic perspective. It only makes sense from a national security perspective.

magicsmoke 6y ago
And from the perspective of the labor, what good are your highly specialized skills on a million dollar machine if you don't have a million dollar machine? Your only choice is to work for the few companies that own one and take whatever pay they offer you to try and make up for the decade+ of lost income from grad school.

rmrfstar 6y ago

I have this theory, supported by anecdote alone. In the US there is a "scam premium". The scammier a business, the higher the multiple. Fabbing is decidedly unscammy. So according to the theory of scam premiums, everything associated with fabbing should trade at a discount.

supernova87a 6y ago
Well, maybe another way to put it is that it's a business where the costs and value are absolutely clear. And it's a pure physics/technology catchup business. So margins get competed very thin. Versus what you call "scammy" industries, where people attach emotional value, social value, network effects, irrational likes/dislikes -- there's a lot of margin that can be milked out of stuff like that.
- deleted 6y ago
  [deleted]
deleted 6y ago
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Gustomaximus 6y ago

Very specialised work with a low volume of competitors seems a great way to stagnate wages.

fakeslimshady 6y ago

It’s probably been undervalued for a long time. Not just fabs , hardware comp used to on par or higher than SW many years ago. Now it’s fallen behind on average. But eventually shock (eg trade embargo) will cause a correction

tanilama 6y ago

Your salary is however conditioned on market and how hard your job is

deleted 6y ago
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