3 ms·

Without weighing in on the geopolitics, I'm reminded of the quoted paper in https://twitter.com/JWMason1/status/1380253484130394114/photo/1 https://twitter.com/

Without weighing in on the geopolitics, I'm reminded of the quoted paper in https://twitter.com/JWMason1/status/1380253484130394114/photo/1 https://twitter.com/JWMason1/status/1380253484130394114/phot.... In other news, the modern economy suffers from a persistent aggregate demand problem, so a few supply shocks here and there, especially amongst advanced goods as opposed to raw materials (like 1970s oil), strike me as just fine; needed even. For example, this could be the thing that makes Intel's "let's stop just rent seeking and diversify" actual get off the ground, which would be great. Worrying about these supply shocks rather than celebrating them is just a sop to big big business.

dylan604 6y ago
Necessity is the mother of invention. Something you need isn't available? Figure out how to not need that thing.
magicsmoke 6y ago
There's also the problem that semiconductor manufacturing is a highly capital intensive and cyclical industry. If you spend billions to spin up a fab today along with everyone else and 5 years from now the whole world is producing a surplus of chips, now you're stuck paying back the loans for that fab in a very unprofitable environment. Semiconductor manufacturing may be one of those industries where the capital costs are so high and the necessary units sold to dilute that cost is so large that the world can only support a single fab company at the cutting edge without significant regional subsidies. Would also be interesting to compare with a similarly capital intensive industry like steel because there's also a shortage of steel and spike in steel prices right now.
- dirtyid 6y ago
  From report by SIA a couple weeks ago. >A hypothetical alternative with parallel, fully “self sufficient” local supply chains in each region to meet its current levels of semiconductor consumption would have required at least $1 trillion in incremental upfront investment, resulting in a 35% to 65% overall increase in semiconductor prices and ultimately higher costs of electronic devices for end users. https://www.semiconductors.org/wp-content/uploads/2021/04/SIA-BCG-Report_Strengthening-the-Global-Semiconductor-Supply-Chain_April-2021.pdf https://www.semiconductors.org/wp-content/uploads/2021/04/SI...

dylan604 6y ago

Necessity is the mother of invention. Something you need isn't available? Figure out how to not need that thing.

magicsmoke 6y ago

There's also the problem that semiconductor manufacturing is a highly capital intensive and cyclical industry. If you spend billions to spin up a fab today along with everyone else and 5 years from now the whole world is producing a surplus of chips, now you're stuck paying back the loans for that fab in a very unprofitable environment. Semiconductor manufacturing may be one of those industries where the capital costs are so high and the necessary units sold to dilute that cost is so large that the world can only support a single fab company at the cutting edge without significant regional subsidies. Would also be interesting to compare with a similarly capital intensive industry like steel because there's also a shortage of steel and spike in steel prices right now.

dirtyid 6y ago
From report by SIA a couple weeks ago. >A hypothetical alternative with parallel, fully “self sufficient” local supply chains in each region to meet its current levels of semiconductor consumption would have required at least $1 trillion in incremental upfront investment, resulting in a 35% to 65% overall increase in semiconductor prices and ultimately higher costs of electronic devices for end users. https://www.semiconductors.org/wp-content/uploads/2021/04/SIA-BCG-Report_Strengthening-the-Global-Semiconductor-Supply-Chain_April-2021.pdf https://www.semiconductors.org/wp-content/uploads/2021/04/SI...