29 ms·

If the EU treats this as a strategic capability and not commercial, the spending is much less of a consideration. The advantage that the EU has is in fact ASML

If the EU treats this as a strategic capability and not commercial, the spending is much less of a consideration. The advantage that the EU has is in fact ASML. No company can make the 5nm litho systems today, and catching up with the decades of R&D they've invested is not feasible. They are the greatest achievement of science and technology on the planet. [0] The strategy that can work is for the EU to partner with TSMC to build a foundry in the EU that produces at the node they want to intercept (2 nm?). Then, make a business arrangement that puts European scientists and engineers into high-value roles. That would enable the EU to develop the technical skills and keep China from locking it up. [0] https://news.ycombinator.com/item?id=25361028 https://news.ycombinator.com/item?id=25361028

Nokinside 6y ago
Pretty much. All big players (US, EU, China) must maintain domestic strategically important industries (aerospace, energy, semiconductors, telecom, drugs/biotech ...) even with government subsidies. The goal of strategic investment is to stay as one of the major players in the industry. Being the leader is not necessary, but letting the deep core and knowledge in manufacturing to erode is strategic weakness.
- f6v 6y ago
  Exactly the opposite happened in Russia and other ex-soviet countries. The factories were sold and dismantled under the pretense of “transitioning to market economy”.
  - tasubotadas 6y ago
    They were non-competitive businesses producing outdated junk and in majority of cases there was no other way to survive apart of being sold for scrap. Some manufacturers that produced basic sellable goods survived (steel foundries, fertilizer makers)
    - lumost 6y ago
      Price signals following the soviet collapse were non functioning ( see the current oligarchs ). It’s hard to know how many of these factories could have adapted over a slightly longer time frame or with some slight investment restructuring. When the price of a corporation falls below their paper assets it tends to attract A certain kind of investor disinterested in long term value. I’d venture a good number of soviet parts suppliers saw their revenues dry up when their clients were dismantled, it wouldn’t have taken more than a few such links in the supply chain being dismantled to break the entire supply chain given the level of centralization.
    - chx 6y ago
      This is not true, several precision mechanics factories (or parts of factories) in Hungary were producing for Western export and yet they let them rot apart.
      - aries1980 6y ago
        Indeed. In my hometown - Gyula, Hungary - there was a precision mechanics factory, for phones, faxes, communication relays called Integra. It wasn't huge, employed a couple of hundreds people. In '89, Olivetti bought it for peanuts to close it down. This was quite a classic move during the "privatisation" in '89-90.
      - exebook 6y ago
        Same happened in Latvia where the largest soviet chip maker ALFA was dismatled under silly (but efficient) propaganda premises. It was top notch and had great contracts with US and Russia at the moment. Decades later the retired goverment officials confirmed they were "advised" and said "we did not understand what we were doing very much back then". Of course, they were ex-soviet middle level officials and anti soviet activists who suddenly found themselves in power and needed such advices. The true reason for those who wonder was the fact that ALFA was making electronics for MiG, Su, Tu and for missiles. I had family and friends working there btw.
    - eecc 6y ago
      No. There’s significant evidence that sudden overnight market manipulation (e.g. setting exchange parity to the eastern and western Deutsche Mark destroyed all eastern consumer goods industries, which were bought for symbolic sums and then deliberately shuttered.) it’s obvious that any such fundamentalist and radically liberalist policy would have tore through any economy, but the point was to smother Carthage, and sow salt on its ruins
  - stelonix 6y ago
    Most of the time with countries not directly aligned to the west, the preaching is for us to sell our strategic industries in name of liberalism and "economic openness", usually spreading lies and misinformation about the company's efficiency. When it's the other way around, it's protectionism and good old Keynesian economics: China can't buy that company, their 5g is evil etc. I know this first-hand because it has happened to my country each and every time an US backed president was elect. It's happening right now, they're attempting to sell our only semiconductor company. The Soviet Union was destroyed from within much the same way the 2010s arab springs/ukraine and more recently also tried with HK.
    - deleted 6y ago
      [deleted]
    - samat 6y ago
      There is a popular myth that 'there was a mighty USSR and some enemies ruined it'. The Soviet Union collapsed because of massively broken economy. That's just basic science. They exported oil and imported grain. Russia imported GRAIN for gods sake. Then oil prices collapsed. Next? They did nothing and just ate through the resources until they were no more. And then 'evil liberals/evil west destroying the great country' happened, when finally USSR had no money to pay for the social obligations and for massive military. This are the undisputed facts, supported by a vast trove of internal documents from the late USSR and first years of the Russian Federations. A monograph by Egor Gaidar [1] is an excellent source referencing tons of the original documents. Sorry for Russian, not sure this is available in English anywhere. I get that it's easier to think that source of our problems is some evil mastermind and conspiracy. But think of the Occam's razor — this is explained much easier by sheer incompetency and stupidity and no checks and balances to mitigate them. 1. https://ru.wikipedia.org/wiki/Гибель_империи_(монография) https://ru.wikipedia.org/wiki/Гибель_империи_(монография)
      - f6v 6y ago
        The truth is in between. Was USSR full of internal problems? Yes. Did USA and allies want USSR destroyed and actively work on? Also yes. Saying that Cold War and the arms race had absolutely no role in USSR collapse is either a blatant lie or incompetence.
  - akrymski 6y ago
    Assets were sold to friends and family, with massive kickbacks and for a fraction of their market value. This can't happen in EU today.
- GregarianChild 6y ago
  aerospace, energy, semiconductors, telecom, drugs/biotech The EU lost leadership in all of them! (And some others!)
  - Nokinside 6y ago
    What did I just wrote about leadership and it's importance?
    - lumost 6y ago
      The parent is alluding to the notion that govt investment made for sluggish state owned industries which aim to be second and suck the life out of any domestic competition. There are a variety of ways to cultivate a domestic industry, govt committees directly investing doesn’t seem like the leading candidate can. Trade barriers and state sponsored industrial partnerships.
    - GregarianChild 6y ago
      One might wonder if the EU has leadership capacity to be able to maintain domestic strategically important industries. Generalising from 40 years of EU history, I have little confidence. The top US and East Asian processor and semiconductor companies all are extremely successful in the marketplace, in addition to consuming government subsidies. Fostering a competitive market has not been the EU's forte. Indeed the EU narrates this funding as a need to address a "market failure" [1]. I feel that this is one-dimensional, bur entirely predictable from the structure of EU decision making. Just today, at midnight, the EU lost ARM and DeepMind as domestic industries. [1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014XC0620(01) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52...
      - justicezyx 6y ago
        I know nVidia bought Arm, but what is about DeepMind being lost as domestic industry? It raises to prominence after becoming a Google wholly owned subdiary. I have repeated multiple times in other comments that DeepMind's success is at least built on top of Google's tech and capital. Interesringly, Google's tech infrastructure were blueprinted by a lot of pioneers and two of the most well known are Urs Hozle and Luiz André Barroso both are of Eu descentdent. There is no evidence that whatever DeepMind did can be done with another EU partner. Or even anyone who is not Google, largely thanks to Larry and Sergey's personal tastes and experience. I doubt Msft or Amazon have the right culture for DeepMind. The whole alphabet thing was engineered to allow independency. So that, among other things, a more pure research org can work without the ever encroaching of the profit driven hands inside Google. Mind you, DeepMind absolutely put itself above Google, or at least firmly distance itself from Google, GCP once proposed to use DeepMind brand in marketing materials, and was sharply rejected citing "conflicting brand images".
coolgod 6y ago
> No company can make the 5nm litho systems today, and catching up with the decades of R&D they've invested is not feasible. They are the greatest achievement of science and technology on the planet. [0] Those are some huge claims, which could have previously been said for many currently outdated technologies.
- 11thEarlOfMar 6y ago
  This truism is known to ASML as well, and they are ramping R&D spending to maintain or expand their lead. [0] Just as an example, the dimension of the features their tool prints are smaller than the wavelength of light that is actually doing the printing. [0] https://www.statista.com/statistics/1100162/randd-costs-of-asml/ https://www.statista.com/statistics/1100162/randd-costs-of-a...
- xadhominemx 6y ago
  No one else is even trying
sigstoat 6y ago
> The strategy that can work is for the EU to partner with TSMC to build a foundry in the EU that produces at the node they want to intercept (2 nm?). that's hardly in Taiwan's geopolitical interest. perhaps if the EU made some serious political concessions to Taiwan.
- ku-man 6y ago
  When it comes to geopolitics the EU has the impetuous of Vanuatu.
- aaronblohowiak 6y ago
  Underrated comment! If eu has a viable alternative to tsmc, incentive to protect Taiwan diminishes greatly. Then again, Why would the eu care to fight China? EU does not seem interested in using its power to further democracy elsewhere (or even within Europe.... )
dmix 6y ago
Man, I wish I too shared such optimism in EU or other massive multi government bureaucratic organizations to pull something off like this in 2021. But sorry I simply don’t. From my experience with gov trying to do tech investment it’s going to go into the pockets of late career overpaid ‘executives’ with ‘industry experience’ and tons of (also overpaid and underqualified) contractors doing the same thing. Not the brilliant engineers you imagine are going to run it. I mean I hope it goes to the engineers and smart dudes (who doesn’t want another successful semi competitor and 2nm?) and not the ones who know how to play the political game the best but I’m highly highly skeptical. We’ll see in a few years I guess. And I say that fully understanding ASML and the value they currently provide. But let’s hope who ever doles this out understands it as well as (maybe) half the people in this thread. But even ignoring that giant elephant in the room, it adds the critical question why should ASML care to give special treatment to this one project? They are already killing it globally. Just because they operate in EU and this offers shit loads of money to potentially fleece?
- 11thEarlOfMar 6y ago
  I don't think this requires anything special from ASML. They'd sell systems to the TSMC/EU partnership. The key is that the process engineers in the fab would learn how to develop processes for the leading edge geometries. To some extent, ASML engineers would know this, too. However, the secret recipes (literally) of chip production are so closely guarded that even the equipment companies for the tools they run on are not permitted to see them. I completely agree that consortium-based organizations are less able to respond and react to changes or issues. That's why it needs to be treated as a strategic (defense) matter rather than a government/industry partnership, a-la Sematech in the US.
- supernova87a 6y ago
  I think I share your concern -- it's a question of "is a top down order to develop some technology (with required investment to 'force' it to happen) the best way to achieve that?" What often ends up happening is that because it's so "strategically important" and so much money has been directed towards it, you are obligated to have expensive ("experienced") people hired based on past reputation -- which may not be applicable to new technology, roadmaps get laid out which everyone has to say they're meeting successfully, and then at the end you find out somehow that it didn't produce what you wanted. Versus, a more bottoms-up approach where you hopefully create the conditions that incentivize or make possible some technologies and technologists to succeed -- without knowing fully who exactly or what exactly. I'm sure that both have some inefficiencies, but the 1st method is sure to pay the people who have already been successful. But then again, maybe for a relatively incremental advance in some technology, there are fewer unknowns and method #1 works ok.
aeyes 6y ago
We have been trying to help Infineon get onto its own feet for years and years, it just isn't happening. The investment it would take for competing with TSMC would require massive government support with very few benefits. Specialized chips with higher margins but older tech make more sense than mass production with the most advanced process. Same with solar or battery tech, we have the tech and the people but economically it isn't feasible to have production in the EU.

Nokinside 6y ago

Pretty much. All big players (US, EU, China) must maintain domestic strategically important industries (aerospace, energy, semiconductors, telecom, drugs/biotech ...) even with government subsidies. The goal of strategic investment is to stay as one of the major players in the industry. Being the leader is not necessary, but letting the deep core and knowledge in manufacturing to erode is strategic weakness.

f6v 6y ago
Exactly the opposite happened in Russia and other ex-soviet countries. The factories were sold and dismantled under the pretense of “transitioning to market economy”.
- tasubotadas 6y ago
  They were non-competitive businesses producing outdated junk and in majority of cases there was no other way to survive apart of being sold for scrap. Some manufacturers that produced basic sellable goods survived (steel foundries, fertilizer makers)
  - lumost 6y ago
    Price signals following the soviet collapse were non functioning ( see the current oligarchs ). It’s hard to know how many of these factories could have adapted over a slightly longer time frame or with some slight investment restructuring. When the price of a corporation falls below their paper assets it tends to attract A certain kind of investor disinterested in long term value. I’d venture a good number of soviet parts suppliers saw their revenues dry up when their clients were dismantled, it wouldn’t have taken more than a few such links in the supply chain being dismantled to break the entire supply chain given the level of centralization.
  - chx 6y ago
    This is not true, several precision mechanics factories (or parts of factories) in Hungary were producing for Western export and yet they let them rot apart.
    - aries1980 6y ago
      Indeed. In my hometown - Gyula, Hungary - there was a precision mechanics factory, for phones, faxes, communication relays called Integra. It wasn't huge, employed a couple of hundreds people. In '89, Olivetti bought it for peanuts to close it down. This was quite a classic move during the "privatisation" in '89-90.
    - exebook 6y ago
      Same happened in Latvia where the largest soviet chip maker ALFA was dismatled under silly (but efficient) propaganda premises. It was top notch and had great contracts with US and Russia at the moment. Decades later the retired goverment officials confirmed they were "advised" and said "we did not understand what we were doing very much back then". Of course, they were ex-soviet middle level officials and anti soviet activists who suddenly found themselves in power and needed such advices. The true reason for those who wonder was the fact that ALFA was making electronics for MiG, Su, Tu and for missiles. I had family and friends working there btw.
  - eecc 6y ago
    No. There’s significant evidence that sudden overnight market manipulation (e.g. setting exchange parity to the eastern and western Deutsche Mark destroyed all eastern consumer goods industries, which were bought for symbolic sums and then deliberately shuttered.) it’s obvious that any such fundamentalist and radically liberalist policy would have tore through any economy, but the point was to smother Carthage, and sow salt on its ruins
- stelonix 6y ago
  Most of the time with countries not directly aligned to the west, the preaching is for us to sell our strategic industries in name of liberalism and "economic openness", usually spreading lies and misinformation about the company's efficiency. When it's the other way around, it's protectionism and good old Keynesian economics: China can't buy that company, their 5g is evil etc. I know this first-hand because it has happened to my country each and every time an US backed president was elect. It's happening right now, they're attempting to sell our only semiconductor company. The Soviet Union was destroyed from within much the same way the 2010s arab springs/ukraine and more recently also tried with HK.
  - deleted 6y ago
    [deleted]
  - samat 6y ago
    There is a popular myth that 'there was a mighty USSR and some enemies ruined it'. The Soviet Union collapsed because of massively broken economy. That's just basic science. They exported oil and imported grain. Russia imported GRAIN for gods sake. Then oil prices collapsed. Next? They did nothing and just ate through the resources until they were no more. And then 'evil liberals/evil west destroying the great country' happened, when finally USSR had no money to pay for the social obligations and for massive military. This are the undisputed facts, supported by a vast trove of internal documents from the late USSR and first years of the Russian Federations. A monograph by Egor Gaidar [1] is an excellent source referencing tons of the original documents. Sorry for Russian, not sure this is available in English anywhere. I get that it's easier to think that source of our problems is some evil mastermind and conspiracy. But think of the Occam's razor — this is explained much easier by sheer incompetency and stupidity and no checks and balances to mitigate them. 1. https://ru.wikipedia.org/wiki/Гибель_империи_(монография) https://ru.wikipedia.org/wiki/Гибель_империи_(монография)
    - f6v 6y ago
      The truth is in between. Was USSR full of internal problems? Yes. Did USA and allies want USSR destroyed and actively work on? Also yes. Saying that Cold War and the arms race had absolutely no role in USSR collapse is either a blatant lie or incompetence.
- akrymski 6y ago
  Assets were sold to friends and family, with massive kickbacks and for a fraction of their market value. This can't happen in EU today.
GregarianChild 6y ago
aerospace, energy, semiconductors, telecom, drugs/biotech The EU lost leadership in all of them! (And some others!)
- Nokinside 6y ago
  What did I just wrote about leadership and it's importance?
  - lumost 6y ago
    The parent is alluding to the notion that govt investment made for sluggish state owned industries which aim to be second and suck the life out of any domestic competition. There are a variety of ways to cultivate a domestic industry, govt committees directly investing doesn’t seem like the leading candidate can. Trade barriers and state sponsored industrial partnerships.
  - GregarianChild 6y ago
    One might wonder if the EU has leadership capacity to be able to maintain domestic strategically important industries. Generalising from 40 years of EU history, I have little confidence. The top US and East Asian processor and semiconductor companies all are extremely successful in the marketplace, in addition to consuming government subsidies. Fostering a competitive market has not been the EU's forte. Indeed the EU narrates this funding as a need to address a "market failure" [1]. I feel that this is one-dimensional, bur entirely predictable from the structure of EU decision making. Just today, at midnight, the EU lost ARM and DeepMind as domestic industries. [1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014XC0620(01) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52...
    - justicezyx 6y ago
      I know nVidia bought Arm, but what is about DeepMind being lost as domestic industry? It raises to prominence after becoming a Google wholly owned subdiary. I have repeated multiple times in other comments that DeepMind's success is at least built on top of Google's tech and capital. Interesringly, Google's tech infrastructure were blueprinted by a lot of pioneers and two of the most well known are Urs Hozle and Luiz André Barroso both are of Eu descentdent. There is no evidence that whatever DeepMind did can be done with another EU partner. Or even anyone who is not Google, largely thanks to Larry and Sergey's personal tastes and experience. I doubt Msft or Amazon have the right culture for DeepMind. The whole alphabet thing was engineered to allow independency. So that, among other things, a more pure research org can work without the ever encroaching of the profit driven hands inside Google. Mind you, DeepMind absolutely put itself above Google, or at least firmly distance itself from Google, GCP once proposed to use DeepMind brand in marketing materials, and was sharply rejected citing "conflicting brand images".

coolgod 6y ago

> No company can make the 5nm litho systems today, and catching up with the decades of R&D they've invested is not feasible. They are the greatest achievement of science and technology on the planet. [0] Those are some huge claims, which could have previously been said for many currently outdated technologies.

11thEarlOfMar 6y ago
This truism is known to ASML as well, and they are ramping R&D spending to maintain or expand their lead. [0] Just as an example, the dimension of the features their tool prints are smaller than the wavelength of light that is actually doing the printing. [0] https://www.statista.com/statistics/1100162/randd-costs-of-asml/ https://www.statista.com/statistics/1100162/randd-costs-of-a...
xadhominemx 6y ago
No one else is even trying

sigstoat 6y ago

> The strategy that can work is for the EU to partner with TSMC to build a foundry in the EU that produces at the node they want to intercept (2 nm?). that's hardly in Taiwan's geopolitical interest. perhaps if the EU made some serious political concessions to Taiwan.

ku-man 6y ago
When it comes to geopolitics the EU has the impetuous of Vanuatu.
aaronblohowiak 6y ago
Underrated comment! If eu has a viable alternative to tsmc, incentive to protect Taiwan diminishes greatly. Then again, Why would the eu care to fight China? EU does not seem interested in using its power to further democracy elsewhere (or even within Europe.... )

dmix 6y ago

Man, I wish I too shared such optimism in EU or other massive multi government bureaucratic organizations to pull something off like this in 2021. But sorry I simply don’t. From my experience with gov trying to do tech investment it’s going to go into the pockets of late career overpaid ‘executives’ with ‘industry experience’ and tons of (also overpaid and underqualified) contractors doing the same thing. Not the brilliant engineers you imagine are going to run it. I mean I hope it goes to the engineers and smart dudes (who doesn’t want another successful semi competitor and 2nm?) and not the ones who know how to play the political game the best but I’m highly highly skeptical. We’ll see in a few years I guess. And I say that fully understanding ASML and the value they currently provide. But let’s hope who ever doles this out understands it as well as (maybe) half the people in this thread. But even ignoring that giant elephant in the room, it adds the critical question why should ASML care to give special treatment to this one project? They are already killing it globally. Just because they operate in EU and this offers shit loads of money to potentially fleece?

11thEarlOfMar 6y ago
I don't think this requires anything special from ASML. They'd sell systems to the TSMC/EU partnership. The key is that the process engineers in the fab would learn how to develop processes for the leading edge geometries. To some extent, ASML engineers would know this, too. However, the secret recipes (literally) of chip production are so closely guarded that even the equipment companies for the tools they run on are not permitted to see them. I completely agree that consortium-based organizations are less able to respond and react to changes or issues. That's why it needs to be treated as a strategic (defense) matter rather than a government/industry partnership, a-la Sematech in the US.
supernova87a 6y ago
I think I share your concern -- it's a question of "is a top down order to develop some technology (with required investment to 'force' it to happen) the best way to achieve that?" What often ends up happening is that because it's so "strategically important" and so much money has been directed towards it, you are obligated to have expensive ("experienced") people hired based on past reputation -- which may not be applicable to new technology, roadmaps get laid out which everyone has to say they're meeting successfully, and then at the end you find out somehow that it didn't produce what you wanted. Versus, a more bottoms-up approach where you hopefully create the conditions that incentivize or make possible some technologies and technologists to succeed -- without knowing fully who exactly or what exactly. I'm sure that both have some inefficiencies, but the 1st method is sure to pay the people who have already been successful. But then again, maybe for a relatively incremental advance in some technology, there are fewer unknowns and method #1 works ok.

aeyes 6y ago

We have been trying to help Infineon get onto its own feet for years and years, it just isn't happening. The investment it would take for competing with TSMC would require massive government support with very few benefits. Specialized chips with higher margins but older tech make more sense than mass production with the most advanced process. Same with solar or battery tech, we have the tech and the people but economically it isn't feasible to have production in the EU.