5 ms·

I know SV wasn't in the running, but I can't imagine the Bay Area or California even addressing the permits by 2023... On another note, does anyone know if the

I know SV wasn't in the running, but I can't imagine the Bay Area or California even addressing the permits by 2023... On another note, does anyone know if the supply chain/parts/materials/machinery can be sourced from outside of Chinese suppliers?

totalZero 6y ago
> does anyone know if the supply chain/parts/materials/machinery can be sourced from outside of Chinese suppliers? I don't believe there's a single part of the semiconductor supply chain that is exclusively available from China.
- reaperducer 6y ago
  I don't believe there's a single part of the semiconductor supply chain that is exclusively available from China. I agree with you. But the parent comment reminds me of when Apple started making computers in Austin and HN was full of people saying, "No, you can't build computers in America because America doesn't have any screws, and can't possibly figure out how to make its own!" Time and money solve all problems. Even supply chains.
  - adventured 6y ago
    The nice thing about China at its present stage of development is that everything made in China will perpetually get more expensive to make there and that will provide an ongoing advantage gain to every other location around the world that has until recently been at a steep cost disadvantage to China. Five to seven years ago it was already nearing cost-even to begin making things in the US again vs keeping that manufacturing in China, that will continue to tilt in the favor of the US by the year.
    - baybal2 6y ago
      I doubt If it was only cost... Cost of manufacturing labour is already lower in most of US territorially than in China, and is dramatically lower in other poorer countries. The saying is that only $2 of iPhone is manual labour.
      - someperson 6y ago
        Samsung smartphones shows that assembly in China is no longer required: no Samsung smartphone is made in China anymore. They're mostly made in Vietnam and now India (with some small scale manufacturing in a bunch of protectionist countries like Brazil for domestic demand but not for export) The age of China being the factory of the world is ending. And that was before Trump's trade war.
        baybal2 6y ago
        You need to know difference in between assembly, and manufacturing. Just screwing parts, and subassemblies coming from China is assembly. Manufacturing implies integration not on just parts, and subassemblies level, and having much bigger part of the supply chain under one roof.
        totalZero 6y ago
        Samsung still has some ODM devices assembled in China. https://www.reuters.com/article/us-samsung-elec-china-focus/made-in-china-samsung-farms-out-more-phones-to-fend-off-rivals-idUSKBN1XR0TJ https://www.reuters.com/article/us-samsung-elec-china-focus/...
        someperson 6y ago
        Thanks for the correction. A few years ago I did read that they had low-volume ODM devices made in China for the Chinese domestic market. 80% of Samsung's smartphones being made outside China is still great though.
      - Qwertious 6y ago
        >The saying is that only $2 of iPhone is manual labour. $2 under which wage? Like, is it $2 at $1/hr or $2 at $20/hr? If the latter, it's negligible. If the former, it's an extra $39 which is apparently huge in the context of manufacturing.
  - tobylane 6y ago
    I heard recently that that Apple factory’s output was limited by the number of screws their local supplier could make per week. Can this be called a solved problem? They just stopped depending on the US supplier. https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html https://www.nytimes.com/2019/01/28/technology/iphones-apple-...
quasirandom 6y ago
I've been meaning to do a deep dive on semiconductor supply chains for a while now. I'd start by aggregating annual reports for the companies named in [1], identify their major categories of capex, gather information about their suppliers, and recurse. [1] https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/technology-media-telecommunications/cn-tmt-rise-of-the-big-4-en-082820.pdf https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/...
- mdocherty 6y ago
  I am doing the same. I started at the SMH etf and have been working downwards. It's interesting stuff!
- AareyBaba 6y ago
  Don't miss Ajinomoto - the company that makes msg (monosodium glutamate). They also make ABF (Ajinomoto Build-up Film) that is used in circuit fabrication and is currently in short supply. https://www.ajinomoto.com/innovation/action/buildupfilm https://www.ajinomoto.com/innovation/action/buildupfilm
adrianmonk 6y ago
Probably one advantage of the proposed Austin site is that it's only a 10-minute drive from the Austin location of Applied Materials (https://www.appliedmaterials.com/ https://www.appliedmaterials.com/), a really large manufacturer of equipment for fabs.
- DavidPeiffer 6y ago
  I wonder if a large fab is a "if you build it, they will come" type situation? When I worked at Micron in Boise, the surrounding area had many fab suppliers.
  - AnimalMuppet 6y ago
    Hmm. And that makes me wonder if the city might be right to give all those tax breaks to the foundry. They get to charge full tax on all the businesses that come there as suppliers to the foundry.
11thEarlOfMar 6y ago
China cannot fabricate semiconductors exclusively on Chinese machinery. In fact, there is very little viable Chinese-made equipment at state of the art technology. They must source machinery primarily from the US [AMAT, LRCX, KLAC], Japan [TEL, Screen] and Europe [ASML].
cma 6y ago
Maybe earthquake risk (though they are still in earthquake prone areas elsewhere)? https://semiengineering.com/recent-earthquakes-highlight-risk-to-semiconductor-manufacturing-sites https://semiengineering.com/recent-earthquakes-highlight-ris...
RhodoGSA 6y ago
I worked at Tesla on the CapEx Team, so not chip fabrication but we definitely bought similar things since it is still industrial automation. We mainly sourced from the country we were building in with an emphasis on vertical integration. We even designed our own chips and have them fabbed in the COO. People seem to act like only China makes things. America still makes things, it's just sometimes they are more expensive when you aren't looking at the project holistically. For Tesla it was simple. Lower lead times means lower safety stock, better quality and usually US suppliers are willing to push payment terms out. So it was a better deal for Tesla. However, some companies use different metrics for their 'deals' and those companies tend to source from China.

totalZero 6y ago

> does anyone know if the supply chain/parts/materials/machinery can be sourced from outside of Chinese suppliers? I don't believe there's a single part of the semiconductor supply chain that is exclusively available from China.

reaperducer 6y ago
I don't believe there's a single part of the semiconductor supply chain that is exclusively available from China. I agree with you. But the parent comment reminds me of when Apple started making computers in Austin and HN was full of people saying, "No, you can't build computers in America because America doesn't have any screws, and can't possibly figure out how to make its own!" Time and money solve all problems. Even supply chains.
- adventured 6y ago
  The nice thing about China at its present stage of development is that everything made in China will perpetually get more expensive to make there and that will provide an ongoing advantage gain to every other location around the world that has until recently been at a steep cost disadvantage to China. Five to seven years ago it was already nearing cost-even to begin making things in the US again vs keeping that manufacturing in China, that will continue to tilt in the favor of the US by the year.
  - baybal2 6y ago
    I doubt If it was only cost... Cost of manufacturing labour is already lower in most of US territorially than in China, and is dramatically lower in other poorer countries. The saying is that only $2 of iPhone is manual labour.
    - someperson 6y ago
      Samsung smartphones shows that assembly in China is no longer required: no Samsung smartphone is made in China anymore. They're mostly made in Vietnam and now India (with some small scale manufacturing in a bunch of protectionist countries like Brazil for domestic demand but not for export) The age of China being the factory of the world is ending. And that was before Trump's trade war.
      - baybal2 6y ago
        You need to know difference in between assembly, and manufacturing. Just screwing parts, and subassemblies coming from China is assembly. Manufacturing implies integration not on just parts, and subassemblies level, and having much bigger part of the supply chain under one roof.
      - totalZero 6y ago
        Samsung still has some ODM devices assembled in China. https://www.reuters.com/article/us-samsung-elec-china-focus/made-in-china-samsung-farms-out-more-phones-to-fend-off-rivals-idUSKBN1XR0TJ https://www.reuters.com/article/us-samsung-elec-china-focus/...
        someperson 6y ago
        Thanks for the correction. A few years ago I did read that they had low-volume ODM devices made in China for the Chinese domestic market. 80% of Samsung's smartphones being made outside China is still great though.
    - Qwertious 6y ago
      >The saying is that only $2 of iPhone is manual labour. $2 under which wage? Like, is it $2 at $1/hr or $2 at $20/hr? If the latter, it's negligible. If the former, it's an extra $39 which is apparently huge in the context of manufacturing.
- tobylane 6y ago
  I heard recently that that Apple factory’s output was limited by the number of screws their local supplier could make per week. Can this be called a solved problem? They just stopped depending on the US supplier. https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html https://www.nytimes.com/2019/01/28/technology/iphones-apple-...

quasirandom 6y ago

I've been meaning to do a deep dive on semiconductor supply chains for a while now. I'd start by aggregating annual reports for the companies named in [1], identify their major categories of capex, gather information about their suppliers, and recurse. [1] https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/technology-media-telecommunications/cn-tmt-rise-of-the-big-4-en-082820.pdf https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/...

mdocherty 6y ago
I am doing the same. I started at the SMH etf and have been working downwards. It's interesting stuff!
AareyBaba 6y ago
Don't miss Ajinomoto - the company that makes msg (monosodium glutamate). They also make ABF (Ajinomoto Build-up Film) that is used in circuit fabrication and is currently in short supply. https://www.ajinomoto.com/innovation/action/buildupfilm https://www.ajinomoto.com/innovation/action/buildupfilm

adrianmonk 6y ago

Probably one advantage of the proposed Austin site is that it's only a 10-minute drive from the Austin location of Applied Materials (https://www.appliedmaterials.com/ https://www.appliedmaterials.com/), a really large manufacturer of equipment for fabs.

DavidPeiffer 6y ago
I wonder if a large fab is a "if you build it, they will come" type situation? When I worked at Micron in Boise, the surrounding area had many fab suppliers.
- AnimalMuppet 6y ago
  Hmm. And that makes me wonder if the city might be right to give all those tax breaks to the foundry. They get to charge full tax on all the businesses that come there as suppliers to the foundry.

11thEarlOfMar 6y ago

China cannot fabricate semiconductors exclusively on Chinese machinery. In fact, there is very little viable Chinese-made equipment at state of the art technology. They must source machinery primarily from the US [AMAT, LRCX, KLAC], Japan [TEL, Screen] and Europe [ASML].

cma 6y ago

Maybe earthquake risk (though they are still in earthquake prone areas elsewhere)? https://semiengineering.com/recent-earthquakes-highlight-risk-to-semiconductor-manufacturing-sites https://semiengineering.com/recent-earthquakes-highlight-ris...

RhodoGSA 6y ago

I worked at Tesla on the CapEx Team, so not chip fabrication but we definitely bought similar things since it is still industrial automation. We mainly sourced from the country we were building in with an emphasis on vertical integration. We even designed our own chips and have them fabbed in the COO. People seem to act like only China makes things. America still makes things, it's just sometimes they are more expensive when you aren't looking at the project holistically. For Tesla it was simple. Lower lead times means lower safety stock, better quality and usually US suppliers are willing to push payment terms out. So it was a better deal for Tesla. However, some companies use different metrics for their 'deals' and those companies tend to source from China.