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These 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 chai

These 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 ago
Yes, and this not only because of fiscal reasons, but because it is the ethical thing to do.
- Siira 5y ago
  It'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 ago
    If 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 ago
    Which “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
This type of government/corporate collaboration is similar to how other traditional industries like autos, oil & gas, steel, etc., usually operate. That's because the capital cost of building factories and supply chains exceed the private sector's ability to tolerate the risk of such investments. And a big reason why the risk is so high is because the business is both unpredictable and low margin. This has never been an issue in the semiconductor industry until now. Demand was always increasing and margins have been high enough to allow them to self-fund. If semiconductor companies now need subsidies to expand then we are probably past the "exponential growth" era of semiconductors. Technological gains will be much slower and much more consistent with traditional industries rather one that what we're use to.
tpmx 5y ago
1. I suspect that you don't realize that Taiwan is a (to many) surprisingly first-world place. "environmental and human rights externalities" is not a very large issue in this context. It's not like mainland China/PRC. 2. I think both e.g. US and EU should have their own chip-manufacturing infrastructure. We need more robustness at a global scale in this area. 3. Taiwan needs (and deserves) US/EU support. TSMC has turned into a geopolitical play - it seems like Taiwan feels like they need it to avoid a PRC invasion.
- Dah00n 5y ago
  Taiwan needs support yes, but the US isn't helping. Poking China by sending warships to patrol its borders makes us the bad guys. If China did what we do we would have WW3 instantly.
  - christkv 5y ago
    The us is navigating international waters that China is trying to claim as theirs in fact they claim territorial waters from all their neighbors international treaties be damned. Thus they are in conflict with everyone around them.
  - spfzero 5y ago
    It almost sounds like you are saying that if China sailed ships in international waters it would start a war. They do that all the time, and have been doing so for decades. Did I miss a world war?
    - systemvoltage 5y ago
      Before there is an inevitable response “But, China doesn’t patrol 100km off the coast of US” - yes, also China has no allies with defense treaties near US, ie Mexico and Canada. In fact, China has just one ally - North Korea.

elzbardico 5y ago

Yes, and this not only because of fiscal reasons, but because it is the ethical thing to do.

Siira 5y ago
It'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 ago
  If 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 ago
  Which “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

This type of government/corporate collaboration is similar to how other traditional industries like autos, oil & gas, steel, etc., usually operate. That's because the capital cost of building factories and supply chains exceed the private sector's ability to tolerate the risk of such investments. And a big reason why the risk is so high is because the business is both unpredictable and low margin. This has never been an issue in the semiconductor industry until now. Demand was always increasing and margins have been high enough to allow them to self-fund. If semiconductor companies now need subsidies to expand then we are probably past the "exponential growth" era of semiconductors. Technological gains will be much slower and much more consistent with traditional industries rather one that what we're use to.

tpmx 5y ago

1. I suspect that you don't realize that Taiwan is a (to many) surprisingly first-world place. "environmental and human rights externalities" is not a very large issue in this context. It's not like mainland China/PRC. 2. I think both e.g. US and EU should have their own chip-manufacturing infrastructure. We need more robustness at a global scale in this area. 3. Taiwan needs (and deserves) US/EU support. TSMC has turned into a geopolitical play - it seems like Taiwan feels like they need it to avoid a PRC invasion.

Dah00n 5y ago
Taiwan needs support yes, but the US isn't helping. Poking China by sending warships to patrol its borders makes us the bad guys. If China did what we do we would have WW3 instantly.
- christkv 5y ago
  The us is navigating international waters that China is trying to claim as theirs in fact they claim territorial waters from all their neighbors international treaties be damned. Thus they are in conflict with everyone around them.
- spfzero 5y ago
  It almost sounds like you are saying that if China sailed ships in international waters it would start a war. They do that all the time, and have been doing so for decades. Did I miss a world war?
  - systemvoltage 5y ago
    Before there is an inevitable response “But, China doesn’t patrol 100km off the coast of US” - yes, also China has no allies with defense treaties near US, ie Mexico and Canada. In fact, China has just one ally - North Korea.