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Interesting if it is related to the possibility of manufacturing smart phones in Mexico [1]. In that sense if you were to take the output of an Austin based fa

Interesting if it is related to the possibility of manufacturing smart phones in Mexico [1]. In that sense if you were to take the output of an Austin based fab to supply a smart phone manufacturing supply chain in Mexico versus China, that would be a significant reduction in the length of a smart phone supply chain. [1] https://www.reuters.com/article/us-mexico-china-factories-exclusive/exclusive-foxconn-other-asian-firms-consider-mexico-factories-as-china-risks-grow-idUSKBN25K17X https://www.reuters.com/article/us-mexico-china-factories-ex...

Robotbeat 6y ago
Chips are super value dense so the cost to fly them to the other side of the world is teeny tiny. Heck, the weight is so low you could just about afford to put the fab on the Moon (for chip logistics costs), if there was any real advantage to it.
- Qwertious 6y ago
  Shipping costs from the moon to anywhere on earth is probably pretty minimal, since you could do it with a catapult and a shell+parachute so the goods survive re-entry. I doubt mass would make a big difference there so much as volume. Shipping costs from earth to the moon is $10 000/KG IIRC though, which, if we assume that a processor weighs 10 grams and costs $100 means the value of the stuff you're selling is $10 000/KG, i.e. you can't make a profit on them. But, suppose you ship 50% of the processor's materials up (with a convenient 100% efficiency of raw materials usage), and you mine the other 50% locally. Which, does the moon have silicon? Yes, it has plenty. https://en.wikipedia.org/wiki/Lunar_resources#Resources https://en.wikipedia.org/wiki/Lunar_resources#Resources I suspect lunar silicon would be more expensive to process than terran silicon, primarily due to the lacking skilled labour market in the area. It would likely need to be extensively automated, and likely re-invented from the ground up around the different atmosphere (which while not breathable, is possibly still not clean enough for a cleanroom), gravity, potential power sources (metallurgical coal is a no-go, mainly because there's no easy oxygen but also because coal is quite expensive there). While it's possible that some raw materials are cheaper on the moon than elsewhere (e.g. platinum from asteroids), I doubt this is the case due to the previously mentioned potential for cheap moon-to-earth shipping.
  - Robotbeat 6y ago
    From what I can tell, a high end chip goes for almost $1/mm^2, which given typical wafer thicknesses and density, is about $1/mg, or $1,000,000/kg.
  - mrDmrTmrJ 6y ago
    Great post. Though current stated costs to the moon are like $1.2M/kg via Astrobotic and that's a bit speculative as they haven't landed. Fingers crossed SpaceX gets Starship online and pulls that number down! If you're interested in reading about proposals to use the Moon for manufacturing, here's a fun blog post on potential use of lunar resources for manufacturing: https://denniswingo.wordpress.com/2018/08/20/lunar-metals-and-materials-research-the-keys-to-lunar-industrialization/ https://denniswingo.wordpress.com/2018/08/20/lunar-metals-an... Lots of interesting proposals and people to follow on Twitter too for both lunar and astroid ISRU (in situ resource utilization): https://twitter.com/drphiltill https://twitter.com/drphiltill https://twitter.com/george_sowers https://twitter.com/george_sowers https://twitter.com/joelsercel https://twitter.com/joelsercel https://twitter.com/wingod https://twitter.com/wingod
- somethoughts 6y ago
  I'm not a supply chain expert, but just envisioning that export controls have been and will be getting a lot more challenging going forward. Not to mention higher risk at stuff getting held up due to other logistical challenges (i.e. bad weather, etc.) while doing the full roundtrip to Asia and back. If there was chip production (CPU, memory, etc.) out of an Austin fab and LCD screen, battery and other material production in a special economic region in Mexico, seems like there could be a full 3-5 day reduction in the production. Apple sells about 43 million iPhones in the US per year. Shipping 43 million of anything (i.e chips) to Asia only for it to be shipped back (as a finished product) to the US seems counter-productive?
  - reportingsjr 6y ago
    Almost all ICs are packaged in Asia at this time anyhow. Main countries are phillipines, malaysia, and taiwan. In the scheme of things shipping around the world doesnt take all that much time. (Lead times for ICs are 20 weeks at the bare minimum)
    - Robotbeat 6y ago
      We really need to package ICs in America. It's all automated now, anyway, so the low labor costs (the original reason for sending packaging to Asia) is MUCH less important.
    - throwaway2037 6y ago
      Don't forget about the Intel assembly & packaging plant in Costa Rica! Ref: https://en.wikipedia.org/wiki/Costa_Rica#Economy https://en.wikipedia.org/wiki/Costa_Rica#Economy To quote Wiki: "An Intel microprocessor facility in Costa Rica that was, at one time, responsible for 20% of Costa Rican exports and 5% of the country's GDP." As I understand, for a long time, assembly and packaging was labour-intensive, so ICs were packaged in places with low labour costs. However, with the advances made in automation, I wonder if this still holds true. Maybe assembly and packaging will move back to high income countries in the next generation.

Robotbeat 6y ago

Chips are super value dense so the cost to fly them to the other side of the world is teeny tiny. Heck, the weight is so low you could just about afford to put the fab on the Moon (for chip logistics costs), if there was any real advantage to it.

Qwertious 6y ago
Shipping costs from the moon to anywhere on earth is probably pretty minimal, since you could do it with a catapult and a shell+parachute so the goods survive re-entry. I doubt mass would make a big difference there so much as volume. Shipping costs from earth to the moon is $10 000/KG IIRC though, which, if we assume that a processor weighs 10 grams and costs $100 means the value of the stuff you're selling is $10 000/KG, i.e. you can't make a profit on them. But, suppose you ship 50% of the processor's materials up (with a convenient 100% efficiency of raw materials usage), and you mine the other 50% locally. Which, does the moon have silicon? Yes, it has plenty. https://en.wikipedia.org/wiki/Lunar_resources#Resources https://en.wikipedia.org/wiki/Lunar_resources#Resources I suspect lunar silicon would be more expensive to process than terran silicon, primarily due to the lacking skilled labour market in the area. It would likely need to be extensively automated, and likely re-invented from the ground up around the different atmosphere (which while not breathable, is possibly still not clean enough for a cleanroom), gravity, potential power sources (metallurgical coal is a no-go, mainly because there's no easy oxygen but also because coal is quite expensive there). While it's possible that some raw materials are cheaper on the moon than elsewhere (e.g. platinum from asteroids), I doubt this is the case due to the previously mentioned potential for cheap moon-to-earth shipping.
- Robotbeat 6y ago
  From what I can tell, a high end chip goes for almost $1/mm^2, which given typical wafer thicknesses and density, is about $1/mg, or $1,000,000/kg.
- mrDmrTmrJ 6y ago
  Great post. Though current stated costs to the moon are like $1.2M/kg via Astrobotic and that's a bit speculative as they haven't landed. Fingers crossed SpaceX gets Starship online and pulls that number down! If you're interested in reading about proposals to use the Moon for manufacturing, here's a fun blog post on potential use of lunar resources for manufacturing: https://denniswingo.wordpress.com/2018/08/20/lunar-metals-and-materials-research-the-keys-to-lunar-industrialization/ https://denniswingo.wordpress.com/2018/08/20/lunar-metals-an... Lots of interesting proposals and people to follow on Twitter too for both lunar and astroid ISRU (in situ resource utilization): https://twitter.com/drphiltill https://twitter.com/drphiltill https://twitter.com/george_sowers https://twitter.com/george_sowers https://twitter.com/joelsercel https://twitter.com/joelsercel https://twitter.com/wingod https://twitter.com/wingod
somethoughts 6y ago
I'm not a supply chain expert, but just envisioning that export controls have been and will be getting a lot more challenging going forward. Not to mention higher risk at stuff getting held up due to other logistical challenges (i.e. bad weather, etc.) while doing the full roundtrip to Asia and back. If there was chip production (CPU, memory, etc.) out of an Austin fab and LCD screen, battery and other material production in a special economic region in Mexico, seems like there could be a full 3-5 day reduction in the production. Apple sells about 43 million iPhones in the US per year. Shipping 43 million of anything (i.e chips) to Asia only for it to be shipped back (as a finished product) to the US seems counter-productive?
- reportingsjr 6y ago
  Almost all ICs are packaged in Asia at this time anyhow. Main countries are phillipines, malaysia, and taiwan. In the scheme of things shipping around the world doesnt take all that much time. (Lead times for ICs are 20 weeks at the bare minimum)
  - Robotbeat 6y ago
    We really need to package ICs in America. It's all automated now, anyway, so the low labor costs (the original reason for sending packaging to Asia) is MUCH less important.
  - throwaway2037 6y ago
    Don't forget about the Intel assembly & packaging plant in Costa Rica! Ref: https://en.wikipedia.org/wiki/Costa_Rica#Economy https://en.wikipedia.org/wiki/Costa_Rica#Economy To quote Wiki: "An Intel microprocessor facility in Costa Rica that was, at one time, responsible for 20% of Costa Rican exports and 5% of the country's GDP." As I understand, for a long time, assembly and packaging was labour-intensive, so ICs were packaged in places with low labour costs. However, with the advances made in automation, I wonder if this still holds true. Maybe assembly and packaging will move back to high income countries in the next generation.