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Tech giants join call for funding U.S. chip production
- xeromal 5y agoThis was kind of expected due to the shutdowns required by most countries during the chaos of COVID. Of course we need our infrastructure to be more robust, but no use crying over spilt milk.
- toomuchtodo 5y agoThere have been calls for some time to treat semiconductor manufacturing as in the interest of national security. The funding and policy isn't onerous to do so, and "never let a crisis go to waste." Something similar was already done for rare earths [1]. [1] https://www.google.com/search?q=rare+earth+us+national+security https://www.google.com/search?q=rare+earth+us+national+secur...
- xeromal 5y agoThat's not an incorrect way of thinking! If we need it to be effective for self-defense and existence, it probably needs to be protected as such.
- toomuchtodo 5y agoFor sure. It's clear that in many cases (from pandemic experience), resiliency and supply readiness should be prioritized above cost efficiency.
- Nasrudith 5y agoI would call it technically correct but useless only because of how ill defined and exploitable national security is as a notion to bypass all objections by turning everything into an existential threat. Everything is in some degree important to national security - entertainment is a matter of national security because bored soldiers are less vigilant.
- aksss 5y agoSomething similar was "thought of" for rare earths but I don't think anything practical has come of that yet. Opening new mines in the US is not a process I'd call quick. It's more in the "I'll believe it when I see it" column. You think getting a pipeline across the Midwest is difficult? Just try strip-mining in Alaska. But yeah, if the government is serious about securing supply chains, then it's not enough to have semiconductor manufacturing here, one also needs to be able to source the inputs closer to home (quartz, etc). And I'm not even sure it requires government to directly fund the manufacturing/mining - it would be enough if government took a "not-hostile" attitude towards the environmental and engineering approvals, and then incentivized domestic sourcing.
- livueta 5y agoI'd have thought the same as you, though I very recently heard some hopeful news on that front: https://www.marketplace.org/2021/04/30/the-u-s-is-trying-to-reclaim-its-rare-earth-mantle/ https://www.marketplace.org/2021/04/30/the-u-s-is-trying-to-... The relevant part is kind of buried but tl;dr: new mines do take a while (but are in the works). Luckily, there are old mines that can be productively restarted: > “Our mission as a company is to restore the full supply chain,” said James Litinsky, CEO of MP Materials, the new owner of the U.S.’s only rare-earth mine, located in Mountain Pass, in California’s Mojave Desert. > “We are probably further ahead than people realize.” > MP Materials restarted the mine in 2017; the previous owner, Molycorp had declared bankruptcy a few years prior. > “It was mismanaged for some time,” Litinsky said. Mountain Pass’ reserves are particularly rich in rare earths and now supply, in unpurified form, 15% of the rare earths consumed globally each year.
- protomyth 5y agoHow about you spend some of that cash hoard and do it yourself? I would rather the government start dealing with cyber attacks because that's going to affect the east coast something fierce if this crap keeps going. If the government gives money then it better talk to these companies about where their items are produced.
- kovacs 5y agoMy exact reaction as well. Or how about all that money used for stock buy backs over the last decade? Intel especially. It's been mismanaged and now it's putting its hand out for government money while having spent billions on stock buy backs. No more but of course it'll happen because the politics of it. Socialism for the rich and corporations, capitalism for the rest of us.
- quercusa 5y agoI can't imagine Andy Grove would have supported that.
- toast0 5y agoStock buy backs are just more tax efficient dividends for investors. If the company is suffering from mismanagement, dividends are good, because it returns capital to investors rather than letting managment destroy it. Intel has been building fab capacity pretty much always, it's just that their 10nm process doesn't work as intended, and they haven't really been able to fix it, so their development is stalled and their production numbers aren't great and they haven't been able to stop making processors at 14nm to do other things with those fabs. So far, I think we've been hearing of delays on their 7nm node as well, so no good news there. That said, if there's a market for a 14nm or more fab in the US, Intel has shown they can build that, but they'd probably prefer to spend their money getting 7nm to work than building an old tech fab; spending other people's money on a new 14nm (or whatever) fab in the US is still good for Intel though, so it's no wonder they'd put their hand out to do that.
- kovacs 5y ago
- endisneigh 5y agoIf the US government subsidizes them they should also make their services cheaper for US companies. Hah - one can hope. But really, is there a chance that could happen? I'm not sure if there's any precedent.
- lsllc 5y agoDupe from earlier today: https://news.ycombinator.com/item?id=27116601 https://news.ycombinator.com/item?id=27116601
- dang 5y agoOn HN, it only counts as a dupe if the previous submission got significant attention. This is in the FAQ: https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html. Lots of past explanation here too: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20reposts%20mitig&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
- lsllc 5y agoDidn't know that! I always search for links before submitting and many times I've seen a previous submission with little to no traction (and then subsequently not posted it to avoid dupes).
- dang 5y agoThanks for searching first! If it's a good article and hasn't had attention yet, we certainly hope you will post it - that's why we allow reposts, to give good articles multiple cracks at the bat.
- turbinerneiter 5y ago1. Set up off shore tax havens to not pay tax 2. Lobby government for subsidies 3. Laugh all the way to the off shore bank
- vmception 5y agoprotip: the funds are in on-shore banks under offshore business names. this isn't controversial, just something many don't understand as readily available and commonplace.
- xgulfie 5y agoProtip: Just because something is legal doesn't mean it's ethical or good
- vmception 5y agoI didn't make any statement on that and you are assuming that the lack of signaling means acceptance. I said onshore banks open accounts for many entity types that are not limited to just humans or just businesses from the 50 states. The prior poster assumed a bank in another country was necessary, which can be very difficult to open and maintain for a US citizen owner of an offshore company.
- deleted 5y ago[deleted]
- diegocg 5y ago> Some of the world’s biggest chip buyers, including Apple Inc, Microsoft Corp and Alphabet Inc’s Google, are joining top chip-makers such as Intel Corp > to create a new lobbying group to press for government chip manufacturing subsidies None of those companies need subsidies.
- amelius 5y agoI'm ok with subsidies if they open up their designs. Commoditize your complement. To some approximation and with few exceptions, hardware is everybody's complement.
- lumost 5y agowhy? even if they open the designs the CapEx requirements for modern chip making leaves it in the realm of megacaps and governments.
- monkeydust 5y agoSubsidise chips based on RISC V architecture?
- lkbm 5y agoIn terms of fairness to these companies, yeah. They're rich and it sucks to give them our tax dollars. But in terms of maintaining the competitiveness and security of the US, seems like they do. As a rule, I don't care if giving someone money is fair. I care about whether it causes a general increase in the welfare of our society. Even as a non-recipient of these subsidies, I might be better off if they existed if they reduce risk to the supply chain I'm downstream of as a consumer. If it's unfair to me but makes me better off, I'm not going to cry over the unfairness. (Maybe tariffs on imported chips are a better solution, but I suspect that's more politically fraught, and solutions that work are better than solutions that don't.)
- pixelatedindex 5y ago> As a rule, I don't care if giving someone money is fair. Sure > I care about whether it causes a general increase in the welfare of our society. But by what metric do you measure that? There has been a tech boom in the last couple of decades but the inequality divide has been growing day by day.
- century19 5y agoCouldn't this be a positive long term benefit of Corona? A push back against globalisation and more domestic production in each region of the world.
- XGeneral 5y ago> A push back against globalisation and more domestic production in each region of the world. There are many countries that have always wanted to be self reliant but the powers be can't allow it. Coz it's sets a bad example that countries can exist without certain giants. I don't think they are about to allow that
- Nasrudith 5y agoFor damned good reason. "Self reliant" countries tend to behave like complete assholes internationally even by the standards of Realpolitik. North Korea is one of the most Autarkous nations on earth. The "victimized by a conspiracy" anthromorphization is also deeply wrong. They cannot be oppressed - they do not have rights. Governments are fundamentally made of coercion. Without it they are an empty pile of words, a rules card for poker when the deck is being used for blackjack or building houses of cards. The coercion may be used to support rights like "not being murdered" but granting it rights to further human rights is like trying to increase a number by multiplying a negative number by a grearer than one positive number. To sum it up if you apply the "corporation as a sociopath" conception governments are basically so alien to be cthulu. Corporations are at least made of people essentially, at least until the first AI run no human owner corporation is founded.
- chrischen 5y agoGlobalization has benefits too, like preventing world war due to heavy interdependencies.
- paganel 5y agoThe same discourse was made before WW1, and we all know how that turned out. As far as I could tell the world was even more globalised back then, at least for the elites.
- mywittyname 5y ago> Intel Corp to create a new lobbying group to press for government chip manufacturing subsidies. Assholes. They don't need subsidies to produce chips competitively in America (since they already do) and Intel is one of the reasons the industry is so reliant on TSMC. I'd much rather see this money go to founding a domestic TSMC competitor than to Intel. Or even to TSMC to have them build plants in North America. Fabless design is here to stay, so it behooves the country (and world) to have enough designless fabricators to ensure sufficient manufacturing capacity.
- blt 5y agoYes, let's subsidize a domestic TSMC competitor and pay for it by increasing corporate tax rates / closing loopholes. This is not a snarky comment btw.
- jaggederest 5y agoIt's in the same order of magnitude as the interstate highway system, as long as the chips are sold fairly, I think it counts as infrastructure.
- fmakunbound 5y agoTSMC is a member of this Semiconductors in America Coalition lobbying group already, apparently https://www.chipsinamerica.org/about/ https://www.chipsinamerica.org/about/
- cde-v 5y agoHow ballsy for a bunch of corps that barely pay taxes to ask for government subsidies.
- tenebrisalietum 5y agoEveryone who works there should be already paying income taxes. Why the double taxation?
- pjc50 5y agoHow much tax did Bezos pay on his fortune? Not income tax but capital gains, and probably not as much as you'd expect.
- dahfizz 5y agoIf you want the Bezos's of the world to pay more tax, then lobby for that directly. Using the corporate tax as a proxy for "screw rich people" is distortionary and ineffective.
- etcet 5y agoDo corporations pay tax on their payroll? I'm not understanding what's being doubly taxed here.
- ajosh 5y agoActually, they do. You pay half of the payroll tax and the company pays the other half. This is payroll tax and not income tax, that is Social Security and Medicaid. This is why if you're self employed, there is a self employment tax. That said, I think that the parent is making a different point. I think the parent's point is that if the owners and employees of a company are paying taxes, then taxing the profit of a company taxes twice, once for the profit and then again for the income that comes from the dividend.
- deleted 5y ago[deleted]
- FpUser 5y agoApple and the likes need more chips to make more money and they have big coffers. Instead of public subsidizing those fat cats let them take care of that pesky money issue. They can afford it.
- cedilla 5y agoWealthiest entities on Earth lobbies government for handouts. I'm not even being snarky, this is just a lobby group trying to socialize costs to avoid spending their own money. Explicitly: “Government should refrain from intervening as industry works to correct the current supply-demand imbalance causing the shortage,”. The industry is not stripped for cash at all, so if the government is not expected to steer, why should it put up the people's money?
- yrgulation 5y agoThe worst part is that they might get such handouts. I don't understand how, given their mighty fortunes, they haven't achieved 99.9% automation to keep costs as low as in cheap labour countries. If anything I think the EU, US and UK should subsidise research in achieving near full automation. Sucks for low skilled labour but they’ve already been fucked when jobs were moved overseas.
- cedilla 5y agoIf I understand the situation correctly, the current president is already willing to enact such a law. The lobbying seems to be about pressuring congress into actually passing it. Fair enough, everyone is entitled to lobby for their interests. What I take umbrage with is that they want to turn subsidies into handouts. It's beyond ironic to call for subsidies but then label oversight as "intervening". Subsidies are interventions. Without a government plan and oversight they are just legalized corruption.
- rebuilder 5y agoThis is just the PR spiel we're seeing. What they're really saying is the usual: Local cost is too high to be competitive, subsidize or lose jobs. It's a naked power play (or pragmatic statement of fact, depending on your viewpoint). They're just framing it in a way they think will fit the current, protectionist mood.
- deleted 5y ago[deleted]
- xiaolingxiao 5y agoWhat are the geopolitical consequence of a de-coupled chip supply chain? Recall TSMC is headquartered in Taiwan, which has been a point of contention in US-China relationship since the 1950s. Please discuss civilly.
- paxys 5y agoSame reason Foxconn is a proponent for manufacturing in America. If the shift is happening and you can't control it, may as well hedge by being part of it.
- csharptwdec19 5y agoInteresting to think about. On one hand, this could cause other countries to pay more attention to the situation, since -they- will still be dependent on TSMC and may not have the US doing all the posturing. But that's assuming we wound up truly 'de-coupled'. TSMC tends to be the leader in fab tech, and I am fairly certain any near term plans will involve providing incentive for TSMC to build more fabs in the US.
- 8note 5y agoI think the main question is how much of the US support for Taiwan comes from the chip supply chain, vs ensuring that china needs american permission to trade
- bob1029 5y agoIn game theoretic terms - If you feel like the only leverage you have over your opponent is about to be obviated by some other approach (i.e. domestic chip fabrication becomes dominant within the decade), then there could be some increase in tensions. My implication here being that China is aware that they are capable of making an unstoppable strike against all TSMC's leading edge fabrication capacity, and that this action would be far more harmful to the strategic positioning of the US than to any other nation on earth. The ability to execute this option is time-limited by the US wishing to grow domestic capacity. Whether this implication holds in reality is something I am very much open to suggestion on. I am fully aware that the US military's response to such an action is probably the leading reason it is not something we have seen occur already. I am also unsure if the impact of all 7nm node loss is substantially greater for the US vs any other country.
- pietromenna 5y agoIt is always nicer to do things with somebody else's money. Not with out own, right? Even if we have money to spend.
- robbrown451 5y agoTo all those saying that those companies can afford it themselves, remember that there are reasons they don't. The economics don't add up. Companies tend to do what is in their economic interest to do. Something like this can change the economics, which could be a good thing.
- bdhess 5y ago+1. I'd also guess that these companies getting together to start a joint venture is not really feasible, due to anti-monopoly laws.
- genericone 5y agoIt's only a monopoly if the government says you are using market position anti-competitively and/or against the common good. If the US government says that chip production capability is now a national focus, companies can expect government cooperation for a joint venture.
- dragonwriter 5y ago> It's only a monopoly if the government says you are using market position anti-competitively and/or against the common good. No, its a monopoly if you have market power. It’s only illegal if you are abusing market power.
- throwaway481048 5y agoCan you please elaborate? I struggle to discern the ultimate effect of private capital versus government funds in this situation. Ideally, a business’ problems are handled by itself, not via the federal government using taxpayer monies.
- bpodgursky 5y agoIf Google thought they could get a solid return on investing $50B rather than holding cash, they would do so. The fact they are holding it as cash is an indication they are not bullish on the fundamentals.
- Clubber 5y agoI wonder what the "strings attached" will be. Perhaps the back doors the FBI has always wanted? Sounds like a double fleecing of the taxpayer. We get to give them subsidies and they get to give law enforcement an easier vector to spy on us. What a deal!
- godelmachine 5y agoIf this truly comes to fruition, it would be a prime mover in displacing Chinese global hegemony and stave off its bullish nature. China maintains economic well being by donating the chip market and also the supply chains. The Quad has emerged to dislocate Chinese tyranny in the Indo-Pacific, and US chip takeover will be one of the last strokes in China’s downfall.
- dang 5y agoThis crosses into nationalistic flamewar. We don't want that on HN, regardless of $nation. It leads to predictable, nasty discussion that kills the curious conversation which this site is supposed to be for. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- qntty 5y agoThe demand to always be curious and never angry is itself a limitation on the natural unfolding of curiosity. Sometimes the most interesting questions can only be asked by people who are aware of their own anger and the mutual anger of others around them.
- dang 5y agoI might question that a bit, but it's an empirical question that one could talk about. I don't think we've ever asked people not to get angry, though - that would be not to be human. The request is to not allow it to drive one into internet comments in a predictable way. That's also a lot to ask, but at least it's doable. Can anger lead one to explore and learn things that wouldn't have happened without the anger? Sure it can, and comments coming from that place are more likely to be on topic here. But that's already a later stage of a pretty complex process. I'm talking about the split-second moment that we all experience when a flash of anger first arises, where we're reacting adversely to something we've heard before and are propelled to respond immediately with something we've said before. A lot of internet comments, including HN comments, are generated in that state, and they aren't distinguished by curiosity.
- deleted 5y ago[deleted]
- qntty 5y ago> Some of the world’s biggest chip buyers, including Apple Inc, Microsoft Corp and Alphabet Inc’s Google, are joining top chip-makers such as Intel Corp to create a new lobbying group to press for government chip manufacturing subsidies. > “Government should refrain from intervening as industry works to correct the current supply-demand imbalance causing the shortage,” the group said. What do they think "intervening" means?
- dageshi 5y agoI feel like in about 4 years time there's going to be a massive bust in chip prices from massive oversupply based on the plans for chip manufacture around the world?
- vmception 5y agoOkay, cool. We can get back on track then instead of randomly pointing fingers at resellers and miners.
- dageshi 5y agoYou have a point for sure I'm not going to complain if it actually makes graphics cards available.
- resonantjacket5 5y agoI agree, there's going to be a massive oversupply of chips. If the US, EU, China, and also the current chip producers all increase output that's way too many chips. I recently watched a youtube video predicting a semiconductor bust that https://www.youtube.com/watch?v=Z7QkIECEkVc https://www.youtube.com/watch?v=Z7QkIECEkVc, though I don't quite understand if the differing say <7nm versus mid range 14~28 nm chips will have differing oversupply in the future.
- alexnewman 5y agoThis is a much better investment than more f22
- ksec 5y agoIs this for US companies only? I mean if all they want is Fabs in US surely the funding should be available for TSMC as well? Otherwise why should TSMC invest billions in US while having US government handing out money to American companies competing against TSMC with their own money?
- s_dev 5y ago>Otherwise why should TSMC invest billions in US I don't want to seem politically ignorant but isn't the entire existence of Taiwan is simply dependent on the US wanting it to exist. If the US didn't provide billions in defense -- TMSC would be a Chinese FAB pretty fast. I see your point but I'd imagine the extra layer of geopolitics is propping up this odd situation.
- colinmhayes 5y agoTSMC would blow their fabs up if China invaded. China might not mind though since some the us government has forced TSMC to not sell to some Chinese companies. Probably would be good for their semi industry.
- deleted 5y ago[deleted]
- dang 5y agoAll: this thread got a flash flood of angry-predictable-obvious comments. Please don't post those! They're really bad for this site. (Edit: if you want to see the comments I'm talking about, they're collapsed at the bottom of the page now. Before that, they were the page.) The issue with such points isn't that they're wrong, it's that they're not interesting. Nothing predictable and obvious is. We want interesting conversation here, and that comes from curiosity. If you're feeling agitation rather than curiosity, please wait until that polarity flips. The interesting things in a story like this are any diffs from what one would have expected. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=diffs%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so... It's a significant move, so there must be interesting diffs. But sometimes one has to hunt for those, or at least wait for them to occur to one. That sort of waiting is key to getting good HN discussion, which is reflective rather than reflexive. https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sort=byDate&type=comment&query=reflective%20reflex%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
- sremani 5y agoThis is what bringing back supply chain looks like. I am not against it. What is happening is not great, but you know the whole necessary evil thing.. this is it. This will start with Tech, but will extend to other domains.
- dylan604 5y agoWill extend, or already has extended? The gas pipeline shut down is currently showing this to be an issue for refined fuel. The hurricane that squatted on top of Houston a couple of years ago also shows that to be true as well. We also saw that in toilet paper as well.
- jvanderbot 5y agoWell, TSMC had 2020 revenue in the 30 giga-$ range. Even a few 3% sales tax on that revenue would pay for a 5 giga-$ investment in 5 years. (or a few F-35's / year) That's grossly optimistic numbers, given US labor costs, startup costs, etc, but it's also potentially a reasonable investment that would be sustained by domestic and international purchases (one would hope).
- fuzzer37 5y agoWhat is a giga-buck?
- jedberg 5y ago1 billion.
- jvanderbot 5y ago... dollars :)
- mjevans 5y agoEngineering notation, 10^12. Since 'billion' is an overloaded term with different values depending on historic and national context.
- fsn4dN69ey 5y agoTSMC (Taiwan Semiconductor Manufacturing Corporation) is a foreign company that operates entirely overseas - why would the US have authority to tax them? If anything I'd imagine they'd be against this proposal.
- _wldu 5y agoIBM use to manufacture PowerPC chips in New York and Vermont. They may still, but I'm not sure.
- bluedino 5y agoAFAIK the Vermont plant is owned by GlobalFoundries and is still operational.
- yarg 5y agoI think GlobalFoundries pretty much abandoned the idea of actually improving their tech (https://www.anandtech.com/show/13277/globalfoundries-stops-all-7nm-development https://www.anandtech.com/show/13277/globalfoundries-stops-a...). I'm not sure what's changed since then. It may work for GF, but it's not enough for national security interests - critical parts of the supply chain depend on a potentially hostile foreign power (and it's not just silicon). I'd say the US should invest in TSMC, and push to expand manufacturing capabilities to domesticate some production - but good luck convincing taxpayer's that that's a good idea.
- savant_penguin 5y ago"The iPhone maker said last month it will lose $3 billion to $4 billion in sales in the current quarter ending in June because of the chip shortage," The IPhone maker has $3 to $4 billion in incentives to fund its own factory
- justaguy88 5y agoThis is a great point, Apple has plenty of capital to fund it's own dedicated fabs (even if operated by TSMC)
- lostlogin 5y agoI wonder if it’s as simple as that? Presumably making their own fab would mean they had more chips, but then the chips need to get to their production line. Shipping is a significant problem at the moment.
- thamer 5y agoI was curious about the cost and looked it up, the estimates I found were in the $5-15 billion range. Not that it's out of reach or anything, but it's quite a bit more than $3-4B. For example, this TSMC fab planned in Arizona is estimated to cost $12 billion: https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-announcement-of-a-us-fab-is-big-news/ https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-anno...
- flatiron 5y agoBut you don’t build factories to fund quarterly profits. It should be normal risk mitigation if you are dealing at that scale to have a plan B. Even if it’s your own plant.
- Mountain_Skies 5y agoTrue but that also creates vertical integration, which is something that has caused many problems in the past. I'd like to see these huge companies solve their supply chain problems by splitting themselves up, in the process creating the companies they need to supply them, without owning them outright or restricting them from working with others in the market. Basically spin-offs that are designed to be spin-offs from the start. Since the current stockholders would have shares in existing company and the new entities, they're not being damaged in the process so they shouldn't be opposed unless maximizing vertical integration is their plan for continued wealth growth.
- seieste 5y ago> But economics works on incentives. > The economics don't line up. Suppose you're Google. You know what's cheaper than investing $100m in a new chip manufacturing company? Lobbying for the government to invest $100m in the chip manufacturing company. This is why "the economics don't line up", and "the incentives don't align". No shareholder would want you to do the financially irresponsible thing of investing in a risky, capital-intensive venture when governments can do that for you. As a result, companies have the incentive to invest in lobbying rather than actually fund the chip production themselves. Essentially the companies believe that chip production will result in $X/yr, but investing in it themselves would be $Y/yr, whereas they could just invest in lobbying for $Z/yr, where $Z << $Y.
- zitterbewegung 5y agoROI of investing the money vs Lobbying is ~ $100 to $1 [1] https://www.bloomberg.com/news/articles/2021-04-23/google-amazon-spent-millions-lobbying-amid-bipartisan-scrutiny?sref=wLyKPDtZ https://www.bloomberg.com/news/articles/2021-04-23/google-am...
- syrrim 5y agoUmmm if the government does the investing they get all the returns. If google does the investing they get the returns. If they are lobbying rather than investing, this suggests they think the ROI would be negative.
- Mountain_Skies 5y agoThat's not how government funding of sports stadiums work, why would fabs be any different?
- syrrim 5y ago>Usually, the local government owns the stadium, while the team and its ownership control the revenues. This arrangement leaves taxpayers on the hook for maintaining the stadium year after year, team or not. From here: https://www.johnlocke.org/policy-position/publicly-funded-stadiums/ https://www.johnlocke.org/policy-position/publicly-funded-st... The problem for sports stadiums seems to be a monopsony relationship. That wouldn't be true for a fab, which can sell to anyone. It seems like this relationship is desirable because a sports team can't benefit from all the profit they generate, for example at restaurants near the sports stadium, whereas the city can, by taxing those businesses. I suppose there might be an equivalent relationship with respect to a fab, but I'm not sure what it is.
- andrewclunn 5y agoWith the CCp constantly threatening to invade Taiwan, there's a decent supply chain and security justification for this.
- fmakunbound 5y agoWhy would firms like TSMC be members of this lobbying group? https://www.chipsinamerica.org/about/ https://www.chipsinamerica.org/about/
- Covzire 5y agoPossibly hedging their bets. If China invades and conquers Taiwan, presumably the heads of TSMC would be able to flee to America and keep a chunk of their investments.
- kube-system 5y agoTSMC is currently headquartered on land which is: * undergoing a drought and they're having to truck in water to sustain their operations. * claimed by a powerful country different than the one currently controlling it. Sounds like a lot of risk that they probably would otherwise not want.
- volkl48 5y agoTSMC is planning to spend $12bn in the next decade on the fab they're building in Arizona (which I believe has some level of US government subsidy). I am sure they would be quite happy to get further government $$$ for their operations. (TSMC also owns WaferTech and their US fab in Washington state).
- SXX 5y agoTMSC would be the one of companies building / operating fabs. You can argue it's against Taiwan interests, but again they gonna have more leverage if they own US fabs.
- Traster 5y agoThe problem with this governmental intervention is that you can't have it both ways. These companies want the governmetn to step in to hlp them with their problems, but let's take a look - are they going to contribute back once the government has intervened? What are they really proposing, a 20% revenue tax on consumer products that are sold with these new US sourced chips? No. Of course not. God forbid they actually pay taxes to fund the government services they're asking for.
- Covzire 5y agoJust to play devil's advocate, what would the world look like had there been massive investment 5-10 years ago? The benefits would probably have been a chip shortage that wasn't and we'd be free to complain about other things.
- instafail 5y agoIn this world, obviously, we would be complaining about the government subsidising unprofitable chip factories with billions of tax credits. Since we wouldn't have a chip supply crisis, we wouldn't know what its like to have one :D
- pjc50 5y agoUnless they put the fab in Texas and it went offline with all the other fabs in the power outages? Or went bankrupt, like the previous "let's onshore an important piece of high tech" plan, Solyndra? If it was started 5-10 years ago, would it have survived the change of administrations?
- antonzabirko 5y agoI would take a chip shortage over subsidizing them.
- paulddraper 5y ago> God forbid they actually pay taxes to fund the government services they're asking for. That unironically makes complete sense. If they were going to pay taxes to fund the subsidy, why have the subsidy in the first place? (My conclusion: don't subsidize, don't pick winners and losers.)
- markkat 5y agoThese industries squeezed the blood out of US suppliers to compete on cost. I don't think a correct solution is the government building capacity and supply chains. IMHO a more sustainable strategy is the government taxing the environmental and human rights externalities of off-shore production.
- elzbardico 5y agoYes, and this not only because of fiscal reasons, but because it is the ethical thing to do.
- Siira 5y agoIt's ethical how? By making rich Americans even richer, and removing one of the few ways developing countries can enter the global market?
- to11mtm 5y agoIf a developing country handled all environmental regulations, etc. there would -still- be a profit to be had, unless shipping winds up negating that profit. Logically speaking a less developed country will still have lower overall wages. While this means the countries may develop slower, they will likely/hopefully wind up with less concentrated wealth (hiring more workers instead of a few people pocketing all the profits.) I would hope that such taxes would be used towards environmental or humanitarian efforts, to be a proper 'offset' tax. Doing so will likely result in some short term shocks, but a more sustainable society overall. My hope is that when prices would go up in such a scenario, consumers would again care about how long something lasts in big enough numbers that we have a less disposable society.
- spfzero 5y agoWhich “developing” countries are running world class fabs these days? Taiwan and South Korea are definitely first-world countries, as much so as the US.
- Hypx_ 5y ago
- ohashi 5y agoIf the US tax payer gets a significant stake in the chip fab venture, I would be OK with this. We want to secure national security via chip manufacturing and you want billions of dollars? Give us some upside. I don't want to hear it creates jobs, it generates blah blah blah, a real equity stake and possibly repayment of the capital. Creating jobs should be a happy by-product of subsidizing an industry that is probably more well capitalized than any other in existence. According to (https://startupanz.com/5-tech-giants-hold-588b-cash-reserves-apple-records-highest-decline-6-8-yoy/ https://startupanz.com/5-tech-giants-hold-588b-cash-reserves...) Amazon, Apple, Google, and Microsoft had 526 billion dollars between the four of them in cash reserves. They have over half a TRILLION dollars in cash. If this were life or death, they could afford anything. But the calculus is offload risk onto the tax payer (despite being a shareholder directly in all those companies or indirectly via mutual funds/etfs), I don't want to be left holding the bag with no upside beyond the general sentiment of 'national security was secured' while private companies reap all the benefits.
- lostlogin 5y ago> Amazon, Apple, Google, and Microsoft had 526 billion dollars between the four of them in cash reserves. Presumably they would cooperate and do something about it if they saw the current situation as too risky?
- jedberg 5y agoThey are doing something -- forming a lobby group to get the government to pay for it. That's much cheaper than actually paying for it themselves.
- TakuYam 5y agoIt also gets the actual foundry a pretty sharp knife to cut through the pesky red tape/law when they do start looking for prospective sites.
- azinman2 5y agoGovernment subsidies protecting industries rarely pay off in a peaceful world to the entire country. I personally get nothing out of Chevron getting tax breaks. However, if those incentives meant supply was harder to disrupt, and in a war time the country has better access to fuel, then it does seem like a worthwhile trade off. In this case, the risk is that China literally takes over (one way or another) the vast majority of supply of semiconductors to specifically harm western companies (or countries in a war setting). In that scenario, are you still worried about unequal kick backs or are you happy that the nation has access to the chips it needs for industry and defense?
- elevation 5y agoEven if this consortium constructs a North American fab, a single natural disaster near that fab could wreak the same follow-on effects in the headlines today; the underlying problem isn't only that we've outsourced our critical manufacturing, but also that we keep so little buffer that any disruption could cause today's headlines. The MBAs running US manufacturers need to scrap their JIT strategies, build some warehouses, and start keeping a store of the essentials. If a tangible good is essential to your business continuity on a 6 or 12 month horizon, then your business should not outsource the maintenance of this lifeline, regardless of whether your supplier is domestic.
- leesalminen 5y ago> The MBAs running US manufacturers need to scrap their JIT strategies, build some warehouses, and start keeping a store of the essentials. Just the other day here on HN I read an account from a founder who did just that- in early 2008. He ended up having a warehouse full of raw materials and no cash to make payroll. That's one way a business dies. So, this talking point sounds good, those damn MBAs and their JITs!, but carries its own set of risks. It's important for each business to balance those risks and arrive at their own decision. It's not as cut-and-dry as one would necessarily think.
- sbeller 5y agocash it the most important thing that should not be done JIT. ;-)
- DebtDeflation 5y agoA few months into the pandemic. a Texas manufacturer of N95 masks offered to ramp up capacity and start cranking out millions of N95 masks so long as hospitals and the government were willing to sign a multiyear contract to continue to buy masks from him at pre-pandemic prices after the pandemic ended. No one took him up on his offer. He said without a long term contract there would eventually be a supply glut and all of the buyers would just go right back to the offshore suppliers who would undercut him by a few cents per mask. At the time, I thought he was crazy, but it looks like he was exactly right.
- tedivm 5y agoInvestments and funding can come in a variety of packages, some better or worse than others. Even something as simple as the government providing or backing loans can go a long way. The Energy Department's loan program has helped speed up investment in solar and has turned a profit- making it easier for production to move to the US doesn't always mean "giving" money away. I guess my point here is that the devil is in the details, and an organization as large as the US Government has a lot of different options for incentivizing or assisting in starting up new industries. https://www.csmonitor.com/Business/In-Gear/2016/1017/Solyndra-who-The-Energy-Department-s-loan-program-is-now-profitable https://www.csmonitor.com/Business/In-Gear/2016/1017/Solyndr...
- throwaway4good 5y agoLooks like the military industrial complex is about to be expanded with the semiconductor industry.
- Minor49er 5y agoAbout to be? They have been involved for the last 30 years. The most public of these was their backdooring of the Clipper chip in the mid-90s https://www.cryptomuseum.com/crypto/usa/clipper.htm https://www.cryptomuseum.com/crypto/usa/clipper.htm
- throwaway4good 5y agoThe EU and US each spending billions to subsidize semiconductor fabs on their soil. Let's pray the Chinese don't figure out EUVL and crack the bottom of the market.
- elzbardico 5y agoWell, couldn't they stop the buybacks for a little while and invest their bazillion dollars of cash themselves?
- andutu 5y agoPeople mention how building new fabs in the U.S would be a worthwhile yet extremely costly and risky investment that require a monumental undertaking that could only be done through massive tech firms and the U.S government. What I don't see mentioned too often is promoting chip design. Compared to building a fab, making a startup that simply designs chips should be straightforward but through my initial research into it, that's not the case. Tech cos like Google and Amazon have already begun endeavors into in-house fabless chip design through ex.: TPU and Graviton, but hardware startups seem to be few and far between (there are a few like SciFive and Cerebras, but it's not like they are exactly ubiquitous). In part it has to due with the huge complexity of modern day chips and the fact that if any new startup wants to be competitive it requires hiring talent with deep and niche industry experience. I think what's more of an issue is accessibility for newcomers into the space. From what I've read, the top 3 EDA companies control the vast majority of their market and license their tools for hundreds of thousands of dollars. These tools aren't accessible to the majority of students and most likely fledgling startups. I know these tools are extremely complex, but it always stuck me as odd how IDEs like VS Code and the ones made by JetBrains are free or are priced so that the vast majority of developers (whether as individuals or as companies)can afford it, while the top of the line EDA tools are only accessible by established players. I know there is an open source effort to change this, but there's a long way to catch up. Maybe things will change. AMD started out reverse engineering Intel chips and now are beating Intel in most metrics. Hopefully hardware becomes more hyped over time just as machine learning and software startups have.
- sbeller 5y ago> but hardware startups seem to be few and far back then I used to watch all the videos of https://millcomputing.com/docs/belt/ https://millcomputing.com/docs/belt/ as that seemed promising, but they seem to be stuck in the hardware production and writing a compiler for that architecture.
- madengr 5y agoThe EDA vendors are pretty good about university licenses. They want the students to use their tools when they graduate. EDA tools require a ton of multidisciplinary knowledge. A computer scientist can write a compiler. An EDA tool requires that along with EE, physics, and mathematicians.
- brokencode 5y agoI think the government just needs to change incentives so that companies stop offshoring everything. Tariffs are much maligned for increasing costs for consumers, but that seems like the most efficient way for getting companies to make stuff here. Instead of corporate welfare like these rich companies clearly want, why don’t we take the tariff money and use that to fund regular welfare, such as some of the programs Biden is suggesting. Or maybe we could just take all the tariff money and divide it equally amongst all citizens? That should offset the tariff for the average person, while still allowing us to get companies to figure out the problem for themselves. That approach can be extended to taxes on pollution as well. Capitalism does work, and we need to recognize that, but it has to be guided and regulated appropriately, or it gets really greedy really fast.
- kingsuper20 5y agoWe can call the effort 'Sematech'.
- einpoklum 5y agoUS corporations have recently been given a corporate revenue tax cut, from 35% to 21% (and beyond this they apparently enjoy a bunch of loopholes bringing their taxes much further down). Surely that is more than enough for them to be able to bankroll chip fabrication in the US - individually or together. Isn't this simply an attempt at "double-dipping"? "Please subsidize us! The humongous corporate income tax deduction you gave us is not nearly enough!"
- vkou 5y agoThis sounds great, as long as all the organizations putting money in get commensurate equity in return. If not, that's going to be a hard pass from me.
- axiosgunnar 5y ago@dang, > All: this thread got a flash flood of angry-predictable-obvious comments. Please don't post those! They're really bad for this site. The issue with such points isn't that they're wrong, it's that they're not interesting. Nothing predictable and obvious is. We want interesting conversation here, and that comes from curiosity. If you're feeling agitation rather than curiosity, please wait until that polarity flips. > The interesting things in a story like this are any diffs from what one would have expected. >https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so... > It's a significant move, so there must be interesting diffs. But sometimes one has to hunt for those, or at least wait for them to occur to one. That sort of waiting is key to getting good HN discussion, which is reflective rather than reflexive. > https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor... What "flash flood of angry-predictable-obvious comments" are you talking about? What would an "obvious" reaction to this news be? I understand if the news was something along the lines "startup incubator for black girls goes live" or something, where you have a divide roughly amongst the line of "let's help the underpriviledged" and "we should see beyond race and gender". But this news? Could you at least point me to some examples?
- qntty 5y agoThe ideology of the tech elite is to see themselves as cool, detached, rational observers of the world. So when people feel regular human emotions in response to things, they need some way to deride them for it.
- dang 5y agoThat's a misunderstanding. We're just trying to have an internet forum that doesn't suck in predictable ways. People come to HN for relief from that, in the hope of finding something that's a little more interesting. If they come here and see people yelling the same angry, recycled points over and over again, that's obviously not interesting. It isn't because of emotion per se, and the idea that the people operating this site have any sort of anti-emotional ideology is far off base! I don't identify with that any more than I imagine you do.
- dhduusheff 5y agoCouldn't disagree more. We throw tons of money at people who contribute nothing, I've no problem seeing that much money allocated to something worthwhile even if the profits aren't public. The value is the security and the supply chain, it's still more then what we get for helping dregs.
- fighterpilot 5y agoThen stop giving money to dregs. Yet more government excess is not the solution, even if this case of spending is slightly less bad than most of the others.
- dhduusheff 5y agoI would if the money wasn't taken forcefully through my taxes. It's hardly excess for one of the most important assets a country can have right now and it beats the hell out of seeing the money go to yet another useless social welfare program for fuckups.
- fighterpilot 5y agoBoth of those things are wasteful and harmful government excesses. Handouts just take the cake between the two
- dang 5y agoPlease don't use HN for ideological battle and please don't create accounts to break the site guidelines. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html We detached this subthread from https://news.ycombinator.com/item?id=27122390 https://news.ycombinator.com/item?id=27122390.
- bobcostas55 5y agoWhen the 3060s are flying off the shelves at $1000+ and AMD raised their prices by 50% over the previous generation, why the fuck is there any need for government funding? It's an obscenely profitable business.
- jriley 5y agoThis coalition seems to want both research and physical infrastructure across many process nodes. Fabs are expensive, so I hope Assembly-Test-Mark-Pack gets a look too. Not sure what happens to research IP sourced from domestic investment, or how this doesn’t overlap existing defense supply chain efforts. From their letter: “Manufacturing incentives funded by Congress should focus on filling key gaps in our domestic semiconductor ecosystem and cover the full range of semiconductor technologies and process nodes – from legacy to leading-edge – relied on by industry, the military, and critical infrastructure.” So... give us your semiconductor ecosystem gap analysis, SIAC :) Source: Former semiconductor analyst / planner when domestic fabs went out of style.
- coliveira 5y agoIt is funny that the US intelligentsia complains about China as being dominated by government, but there is nothing really big done in the US without huge costs for American tax payers, frequently without any retribution. This is clearly the next step: the US corporations created the "big enemy" China by exporting jobs there during the last 40 years, now they want the same taxpayers to pay for rebuilding the US industrial base that they destroyed, because they're afraid of the competition. It is really a con business.
- smithza 5y agoA cynical take... considering how short-sighted public corps are with quarterly shareholder valuations, this is an unintended side-effect at best. At worst, it could be that your comment "the US corporations created the 'big enemy' China" was intentional.
- coliveira 5y agoIntentional or not it doesn't matter. If you do something wrong and lose money, they won't save you if you declare that it was all unintentional. But big companies have bad policies (sometimes criminal) and use this excuse all the time.
- ErikVandeWater 5y ago> US corporations created the "big enemy" China by exporting jobs there during the last 40 years I've noticed that for the most part every time a corporation export jobs it's the corporation's fault. Whenever a corporation brings jobs to the US the politicians get credit for good policy.
- djenendik 5y agoAh yes, blame the faceless free market or the bumbling gmen.
- rsj_hn 5y agoIt is better to blame culture and values. From the cultural left, if you believe that nationalism is immoral and everyone is a global citizen with nation-states being obsolete and even illegetimate ideas, you can't expect someone to have a sense of loyalty to his fellow citizens and not outsource. After all, why deny good jobs to the poor in other countries who benefit from them? Isn't it bigoted for a company to want to keep jobs in America? So that's why the left is strangely silent on these trade deficits, and attacks anyone who raises concerns about them as "nativist". On the economic right, if you believe that profit maximizing behavior leads to pareto-maximizing outcomes, why would you interfere with a company that decides to boost profits by outsourcing? It is the cultural right, economic left that remains shaking their heads at what are obviously foolish, self-destructive policies, but they are generally locked out of power in this country, and so the national firesale continues.
- jimmont 5y agoThe Fed could possibly buy TSM and provide loan and grants to TSMC to accelerate their plant in Phoenix. I don't know how much that would impact the projected 2024 start of operations. https://www.bizjournals.com/phoenix/news/2021/03/02/taiwan-semiconductor-phoenix-plant-35-billion.html https://www.bizjournals.com/phoenix/news/2021/03/02/taiwan-s... This is an especially good position for Taiwan right now. Also worth noting the concerns around available labor to staff the operation https://www.bizjournals.com/phoenix/news/2021/03/02/taiwan-semiconductor-phoenix-plant-35-billion.html https://www.bizjournals.com/phoenix/news/2021/03/02/taiwan-s... as much of the US lacks effective infrastructure.
- fvv 5y ago50b would be better spent founding Taiwan entering un and it's emancipation ,and going explicitly to defend them along with Eu instead of wasting money for Intel buybacks, 50b in that industry is nothing, America and free world need Taiwan independence ( and i'm saying that not because Taiwanese ,i'm European but Europe is weak in those geopolitics play and need us for sure) Globalization is inevitable , resistance is futile, in 300y we will have the world finally united and democrat with some due exception
- mjevans 5y agoIt would be nice for them to be in the UN. Can we still build some stuff in the continental Americas? Yes please to all solutions for producing modern stuff.
- fvv 5y agoSure but probably tsmc and Samsung are the company that can build them in usa, good relations , interdependence , continuous innovation is necessary from USA in the long run , national safety (for us) will be better served with Taiwan in UN and asking Samsung and tsmc to distribute fabs to avoid risks like china , drought, earthquake, .. this distributiin already start to happen
- mjevans 5y agoI was replying to the parent, who wants them in the United Nations, as a recognized country on the world stage. I would also like competition among fabrication providers, and each fabrication provider to have a factory on the same continent I live on, even if it isn't in the same country (which does happen to be the US).
- hindsightbias 5y agoBeen 34 years since Sematech and all that 80's industry bailout. Just switch out Japan for China. https://en.wikipedia.org/wiki/SEMATECH https://en.wikipedia.org/wiki/SEMATECH
- toss1 5y agoI'm all for having both govt and private structures to support on-shore manufacturing. The outsourcing of the USA's manufacturing core is a strategic blunder of historic scale. While we thought we were exploiting cheap Chinese labor, the CCP was actually thinking in 5-, 100- and 500-year plans to exploit our quarterly-profits myopia. and we fell for it. But here, I find it particularly ironic that these companies want all the protection of govt regs like Section 230, insulating them from responsibility of content they host and platform, but now want the govt to step in, far too late, and fix the shortage that is harming them. They are all "libertarian" scolds about govt interference, until they could use some. Since they collectively have something on the scale of more money than the USG, and they think the USG is a waste of time, they should implement such a consortium themselves. I say that not merely out of annoyance at the hypocrisy, but I really think that such a consortium of FAANG, Intel MS, Tesla, Micron, and others could much more rapidly and effectively setup such an innovative chip fab co-op or some other structure, and could really kick ass in global manufacturing. If they really believe their patter, they should just do it. The best time was 10 years ago, the second best time is now.
- yumraj 5y agoDoes anyone know if AMD is just not mentioned or is not even part of this group? If not, why not? Do they think they are better suited under their current arrangement with TSMC and perhaps Global Founderies?
- Rafuino 5y agoI found the lobby group and AMD's logo is there... They're probably not mentioned just because they're a blip on the radar compared to what AWS, GCP, and Azure buy from Intel still. https://www.chipsinamerica.org/about/ https://www.chipsinamerica.org/about/
- varispeed 5y agoWhy not look at why companies prefer to build fabs in dictatorships, authoritarian regimes or other unstable places instead of just throwing tax payer money at it? To me it looks like they take high taxes from everyone and use that money to pay companies to stay in the country? Doesn't that sound like neo-communism?
- deleted 5y ago[deleted]
- cryptonector 5y agoAnd U.S. chip tech leadership then ends.
- simonblack 5y agoThe problem with outsourcing semiconductor munufacture (as well as other things)and then trying to re-introduce local manufacture again means that the US is in roughly the same place as China is. Both the US and China are starting from scratch in building up new indigenous semiconductor fabs. The US doesn't have the spare trillions to throw at the problem, whereas China does. Forcing China to build their own fabs by banning sales of US chips has been the US shooting itself in the foot. The new US semiconductor manufacturers will be out-competed and and outsold by the new Chinese semiconductor manufacturers. US semiconductor manufacturing will go the same way as US paper production, US tools production, US textile production, US contsruction-materials production, US auto production, US shipbuilding production, ....., (You get the idea).
- mensetmanusman 5y agoI think this is fine, as long as the companies are paying taxes. It would be really frustrating to have to listen to companies that refuse to pay taxes ask for tax money.
- happyjack 5y agoShould USA chip production happen? Probably. But it won't happen without gov't subsidies. US labor is wayy more than some slave in a Foxconn factory trying to commit suicide by jumping off the building (hence the nets). I'm not saying I agree with subsidies, or think the USA should foot the bill, but the honest to god truth is that shareholders and board members WILL not approve of US companies paying for all this. No one wants to see their stock price drop. How do you remedy this? Create a "National Security" issue and have Uncle Sam fund it. The military has the same playbook https://www.youtube.com/watch?v=VSJjlaggbK0 https://www.youtube.com/watch?v=VSJjlaggbK0 .
- LdSGSgvupDV 5y agoIt would only help with 10nm+. I don't think throwing the money into the industry could solve the shortage of 10nm-. The real problem is lack of top 20% engineers in this industry. The salary for hardware engineer is uncompetitive with software engineer in US.