3 ms·
High-end chip manufacturing is effectively a natural monopoly. You need huge initial investments, after which cost of production is too small to make creation o
by fuoqi 6y ago
High-end chip manufacturing is effectively a natural monopoly. You need huge initial investments, after which cost of production is too small to make creation of competing fabs a good investment idea (unless politics get involved). TSMC was the first company who found the right business model for this space and it was done when the global economy was relatively open, so it was in the right place and time to achieve a global monopoly.
> It would seem that European countries have great education and economy and yet we cannot see any innovation in this space?
Some of the important hardware for chip manufacturing is developed and produced in Europe.
- pm90 6y ago> (unless politics get involved) I don't understand why the US Government can tolerate losing the edge in this area to other nations. Maybe its because TSMC is based in Taiwan, which is an American Ally? It seems like one would want to retain these skills even if they may not be profitable. Are there military contractors dedicated to manufacturing microchips?
- einpoklum 6y ago> I don't understand why the US Government can tolerate losing the edge in this area to other nations Because the US is a Capitalist state. It serves first and foremost the interests of large corporations and capital holders operating in the US. As (some of) those have become less interested in nationalism and are multi-national - including a few that are not US-based to begin with - the incentive for maintaining "national edge"s wanes.
- magicsmoke 6y agoMilitary equipment is built using older technology nodes because of how long military projects take to complete and military equipment having to be certified as radiation hardened. There are still plenty of US fabs working at above 50nm that can provide semiconductors sufficient for military equipment and the latest technology nodes are largely used for commercial products. While the US government has done plenty work on military strategy and keeping the military supplied it hasn't had an economic strategy since winning the cold war other than keep its hands off and hope for the best.
- Cyph0n 6y agoI believe that the NSA and DoD have their own fabs, but as the sibling comment noted, they operate at larger nodes.
- nl 6y agoTraditionally leadership in fab capabilities has been seen as a critical US Strategic advantage.
- wmf 6y agoIntel, a US company, was #1 and GlobalFoundries was arguably #2 until three years ago. It will probably take the government 5-10 years to do anything about this situation.