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"European chip and auto companies, for their part, are mostly lined up against the idea. They would prefer subsidies for the older-generation chips that are hea

"European chip and auto companies, for their part, are mostly lined up against the idea. They would prefer subsidies for the older-generation chips that are heavily used by car manufacturers and are in short supply. Many of TSMC's most lucrative customers, such as Apple, are U.S.-based, while its European customer base is made up of mostly of automakers buying less-advanced chips." Oh boy... This is exactly why EU will always stay third behind USA, China... "We don't need e mobility, we have the best combustion engines!" Tesla owns VW now. "We don't need Apple like chips" This hurts. Apple and rest does many things differently and way better than EU. We should learn from them. Or do I miss something?

stdgy 5y ago
Not to mention it takes years to build these fabs. Do they think the automotive industry will use the same chips forever?
- whazor 5y ago
  These fabs are already there, it would mainly be increasing capacity.
- numpad0 5y ago
  Tesla Model S is a 2009 design if you think about it, though they did upgrade the touchscreen computer once in 2019
  - enchiridion 5y ago
    Eh, yes and no. New computer, new screen, new grill, new batteries, new engine, probably a bunch of other stuff I can't think of off the top.
whazor 5y ago
As far as I understand, both Tesla and VW use the same older automotive chips (in the thousands). The self driving and infotainment chips are of course newer but very few. They send messages to the older more reliable chips.
dougmwne 5y ago
That sounds like a pretty low information hot take. While it's probably true that car manufacturers are calling for more manufacturing of the chips they use right now to deal with the shortages, that's a 2021 and 2022 issue. I don't see any plausible reason why Europe would not see the value in having advanced chip fabs over the next 15 years. It's mostly likely that behind the scenes TSMC demanded more in subsidies than Europe was willing to give and that the Americans' pocket books are wide open at the moment. I think Europe is more likely to remain third due to bureaucracy, multilateralism and a regulatory and investment philosophy that favors European businesses and citizens over international businesses. The cost of being first is high anyway.
schmorptron 5y ago
Yep. This is sooo frustrating. Why does Europe, and Germany especially, just NOT grasp digitalization at all? I'm growing ever more angry that almost our politicians are 80 year old mega-boomers who are voted in by other boomers and couldn't care less about any interests other than their own. Young people and their climate & computors be damned.
- fxtentacle 5y ago
  I feel the same way. Talk to your local IHK = chamber of commerce. I did and mine will soon run an article series in all of northern Germany to educate business leaders about electronics, innovation and how that'll create jobs and lucrative patents. It was some work for me to collect statistics and experts to cite, but I expect it'll help my business too by increasing demand. I went with industrial cameras as the example product because they have a market yearning for innovation in factory robotics and optical AI.
  - mensetmanusman 5y ago
    Did you publish your research?
    - fxtentacle 5y ago
      They will publish it in their magazine, but they'll remove company identifiers
- croes 5y ago
  It's a little bit more complicated. TSMC wants subvention for building the fabs, but the chips that will be produced will be sold elsewhere. So the EU gains nothing from it but costs. The EU needs a european chip manufacturer and developer not a subsidiary of Intel or TSMC
  - christkv 5y ago
    Guess what by putting a factory doing the newest node you educate a whole new generation of engineers that can build and run those next fabs.
fxtentacle 5y ago
Other people have called this the greatest strength of Nintendo: build stuff with slightly older parts that are cheap and proven to work, so that you don't have to sell at a loss That aside, I'm in the process of designing an USB gadget and I find process shrinks quite pesky. Of course it'll reduce production costs for the manufacturer of the IC but it also reduces flanking times which causes more electromagnetic interference issues for me. So insisting on using large ICs built using old process nodes is a very valid decision if you work in an area where reliability trumps a $0.001 per piece cost saving. Like in cars, robots, or industrial machines. That said, I see it more and more that German companies outsource all of their production until they eventually have so little building skills left inside their building that innovation stops. It's kind of the same issues that drove Boing to recycle old designs, but in Europe it's happening with thousands of small companies, instead of one big one.
- ChuckNorris89 5y ago
  Except Nintendo's strength and main selling ponit was never their hardware, but their vast entertainment IP roster(Super Mario, etc.) which they go to great lengths to enforce its protection. So it's not a good comparison to products who's performance is dependent on being on the latest tech nodes.
  - fxtentacle 5y ago
    I'd say car performance is pretty independent of the performance of the embedded CPU
- mensetmanusman 5y ago
  This happened to Kodak. Unfortunately it is a truism that MBA led companies are incentivized for short term profits, which translates to selling future innovation by outsourcing now. They aren’t thinking about what the next generation will be doing (I.e. they will be contracting for the companies still innovating.)
croes 5y ago
Tesla owns VW? Telsa is overvalued and still doesn't make profit from car manufacturing. And it's USPs get fewer and fewer and especially full driving autonomous won't happen in the near future despite Musk's claims
- jeremiahhs 5y ago
  You've bought the CNBC fud. Tesla made 4x the profit from cars than bitcoin or credits. Valuation is based on the future, not on the past. Exponential growth matters - just look at the last ten years, then extrapolate a few years more. If you did not predict 500k Tesla cars delivered in 2020, back in 2015, then you can not credibily comment on current valuation ( which is based on the future).
  - pmlnr 5y ago
    Valuation is based on who farted at wall street.
  - legulere 5y ago
    If you extrapolate, VW will overtake Tesla soon in electric cars. The reality is more that untapped markets follow S curves. The electric car market will not be bigger than what the total car market has been but replace it. Electric cars are not there yet, but the market valuation is already far beyond that.
  - croes 5y ago
    Tesla made 438 millions profit, 100 million are from bitcoin. If we ignore the profit from carbon credits (they made more from credits than from bitcoin) they made 4x100 millions profit from cars by your math. So combined they made more profit than they did. What comes next? Are they building the perpetual motion machine?
speedgoose 5y ago
Tesla are good electric cars, the best in their categories, but Europe has no problem to produce good electric cars that are the best in their categories too. The VW group is doing particularly well these days, with the ID4 or the Taycan for example.
- brabel 5y ago
  I was on the market for a new car this year in Europe and was happily surprised that every European brand now, not just VW, is offering a fully electrical model, at least, and several traditional models are offered as plugin-hybrids as well. Audi has the e-tron[1] already, and plans to have every model it sells come with a fully electric version before 2030[2]. BMW has been selling the i3 fully electric model since 2013, now has several other electric cars[3] (including the iX, the first one it designed from scratch to be an electric car, and the ix3, an electric version of the popular X3) and most of its models come as plugin hybrid (I ended up buying an X1 plugin-hybrid, the electric models are still really expensive compared to hybrid, which are themselves really expensive compared to the old combustion engine models - but worth it because you save loads of money if the electric range is enough for your daily trips, like for me, and due to government bonuses and much lower taxation!). Mercedez seems to have started a bit late, but now it's keeping up with BMW and also offers many plugin-hybrid models as well as the new EQ line[4] which is fully electric (I drove the EQC and it's amazing - the luxury of Mercedez with the modernity of a Tesla - but just a little too pricey for me). Other brands are following the same pattern. For example, Seat has a new sub-brand called Cupra[5] which offers a more affordable fully electrical, but still pretty awesome, model called Formentor which seems to be getting pretty popular in my country. Volvo now offers the XC40 with a pure electric engine[6] or plugin-hybrid... and it has a subsidiary to challenge Tesla called Polestar[7] which makes highly performant electrical vehicles similar to Teslas. Finally, Renault Zoe[8] is a fully electrical, small vehicle that is pretty popular in Europe (where small cars are more convenient to use in cities). [1] https://www.audi.com/en/experience-audi/models-and-technology/production-models/e-tron.html https://www.audi.com/en/experience-audi/models-and-technolog... [2] http://www.mobiletechdaily.com/audi-plans-to-electrify-every-model-by-2030-heres-how/ http://www.mobiletechdaily.com/audi-plans-to-electrify-every... [3] https://www.bmw.com/en-au/discover/electromobility/electric-cars.html https://www.bmw.com/en-au/discover/electromobility/electric-... [4] https://www.mercedes-benz.com/en/eq/ https://www.mercedes-benz.com/en/eq/ [5] https://www.cupraofficial.com/ https://www.cupraofficial.com/ [6] https://www.volvocars.com/intl/why-volvo/human-innovation/electrification/pure-electric https://www.volvocars.com/intl/why-volvo/human-innovation/el... [7] https://en.wikipedia.org/wiki/Polestar https://en.wikipedia.org/wiki/Polestar [8] https://en.wikipedia.org/wiki/Renault_Zoe https://en.wikipedia.org/wiki/Renault_Zoe
bserge 5y ago
They do have a point, subsidies for something the EU doesn't really use are sort of wasted taxpayer money. But I think a leading edge chip fab in the EU would be strategically important.
- pas 5y ago
  The EU wants a homegrown solution - as usual, they are providing frontloaded loans for this from the NextGenEU ~700B EUR fund. https://digital-strategy.ec.europa.eu/en/news/member-states-join-forces-european-initiative-processors-and-semiconductor-technologies https://digital-strategy.ec.europa.eu/en/news/member-states-...
Dah00n 5y ago
>Tesla owns VW now. One is a company that make less money selling cars than trading bitcoins and emission certificates. The other is selling more cars than anyone else. It's less than 500.000 cars a year versus 2.8 million cars with just one brand from the VW group (out of 12). Edit: According to VW's news site "Volkswagen delivered around 5.3 million vehicles in 2020". That does not include vans or trucks. Tesla likely won't survive as a car company when other car makers stop needing their emissions certificates. Tesla would be deep in the red today if it didn't live off other income than cars. Look at their official numbers if in doubt. In 2025 Tesla will likely be an investment firm selling some cars.
- imtringued 5y ago
  >The other is selling more cars than anyone else. It's less than 500.000 cars a year versus 2.8 million cars with just one brand from the VW group (out of 12). Plus 231600 EVs sold in 2020 across all brands. It's no longer a battle between an EV company vs an ICE company. It's a battle between an EV company vs an ICE+EV company where the EV portion alone is half the size of the first EV company. https://www.motorauthority.com/news/1130931_vw-group-sold-almost-half-as-many-evs-as-tesla-in-2020-and-it-s-just-getting-warmed-up https://www.motorauthority.com/news/1130931_vw-group-sold-al...
smulc 5y ago
See https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si... - Intel has a 14nm in the EU (Ireland) and has planned a 7nm fab also - so "the EU" also plays in this space. A TSMC fab also would be good too of course but things aren't that bad.
pas 5y ago
You missed that TSMC buys their next gen EUV lithograph machines from the EU (from ASML in the Netherlands). What the EU needs is specialization (comparative advantage), not becoming a TSMC assembly outpost.
imtringued 5y ago
>"We don't need e mobility, we have the best combustion engines!" Tesla owns VW now. VW is one of the biggest EV manufacturers. Maybe you should pick a different example.

stdgy 5y ago

Not to mention it takes years to build these fabs. Do they think the automotive industry will use the same chips forever?

whazor 5y ago
These fabs are already there, it would mainly be increasing capacity.
numpad0 5y ago
Tesla Model S is a 2009 design if you think about it, though they did upgrade the touchscreen computer once in 2019
- enchiridion 5y ago
  Eh, yes and no. New computer, new screen, new grill, new batteries, new engine, probably a bunch of other stuff I can't think of off the top.

whazor 5y ago

As far as I understand, both Tesla and VW use the same older automotive chips (in the thousands). The self driving and infotainment chips are of course newer but very few. They send messages to the older more reliable chips.

dougmwne 5y ago

That sounds like a pretty low information hot take. While it's probably true that car manufacturers are calling for more manufacturing of the chips they use right now to deal with the shortages, that's a 2021 and 2022 issue. I don't see any plausible reason why Europe would not see the value in having advanced chip fabs over the next 15 years. It's mostly likely that behind the scenes TSMC demanded more in subsidies than Europe was willing to give and that the Americans' pocket books are wide open at the moment. I think Europe is more likely to remain third due to bureaucracy, multilateralism and a regulatory and investment philosophy that favors European businesses and citizens over international businesses. The cost of being first is high anyway.

schmorptron 5y ago

Yep. This is sooo frustrating. Why does Europe, and Germany especially, just NOT grasp digitalization at all? I'm growing ever more angry that almost our politicians are 80 year old mega-boomers who are voted in by other boomers and couldn't care less about any interests other than their own. Young people and their climate & computors be damned.

fxtentacle 5y ago
I feel the same way. Talk to your local IHK = chamber of commerce. I did and mine will soon run an article series in all of northern Germany to educate business leaders about electronics, innovation and how that'll create jobs and lucrative patents. It was some work for me to collect statistics and experts to cite, but I expect it'll help my business too by increasing demand. I went with industrial cameras as the example product because they have a market yearning for innovation in factory robotics and optical AI.
- mensetmanusman 5y ago
  Did you publish your research?
  - fxtentacle 5y ago
    They will publish it in their magazine, but they'll remove company identifiers
croes 5y ago
It's a little bit more complicated. TSMC wants subvention for building the fabs, but the chips that will be produced will be sold elsewhere. So the EU gains nothing from it but costs. The EU needs a european chip manufacturer and developer not a subsidiary of Intel or TSMC
- christkv 5y ago
  Guess what by putting a factory doing the newest node you educate a whole new generation of engineers that can build and run those next fabs.

fxtentacle 5y ago

Other people have called this the greatest strength of Nintendo: build stuff with slightly older parts that are cheap and proven to work, so that you don't have to sell at a loss That aside, I'm in the process of designing an USB gadget and I find process shrinks quite pesky. Of course it'll reduce production costs for the manufacturer of the IC but it also reduces flanking times which causes more electromagnetic interference issues for me. So insisting on using large ICs built using old process nodes is a very valid decision if you work in an area where reliability trumps a $0.001 per piece cost saving. Like in cars, robots, or industrial machines. That said, I see it more and more that German companies outsource all of their production until they eventually have so little building skills left inside their building that innovation stops. It's kind of the same issues that drove Boing to recycle old designs, but in Europe it's happening with thousands of small companies, instead of one big one.

ChuckNorris89 5y ago
Except Nintendo's strength and main selling ponit was never their hardware, but their vast entertainment IP roster(Super Mario, etc.) which they go to great lengths to enforce its protection. So it's not a good comparison to products who's performance is dependent on being on the latest tech nodes.
- fxtentacle 5y ago
  I'd say car performance is pretty independent of the performance of the embedded CPU
mensetmanusman 5y ago
This happened to Kodak. Unfortunately it is a truism that MBA led companies are incentivized for short term profits, which translates to selling future innovation by outsourcing now. They aren’t thinking about what the next generation will be doing (I.e. they will be contracting for the companies still innovating.)

croes 5y ago

Tesla owns VW? Telsa is overvalued and still doesn't make profit from car manufacturing. And it's USPs get fewer and fewer and especially full driving autonomous won't happen in the near future despite Musk's claims

jeremiahhs 5y ago
You've bought the CNBC fud. Tesla made 4x the profit from cars than bitcoin or credits. Valuation is based on the future, not on the past. Exponential growth matters - just look at the last ten years, then extrapolate a few years more. If you did not predict 500k Tesla cars delivered in 2020, back in 2015, then you can not credibily comment on current valuation ( which is based on the future).
- pmlnr 5y ago
  Valuation is based on who farted at wall street.
- legulere 5y ago
  If you extrapolate, VW will overtake Tesla soon in electric cars. The reality is more that untapped markets follow S curves. The electric car market will not be bigger than what the total car market has been but replace it. Electric cars are not there yet, but the market valuation is already far beyond that.
- croes 5y ago
  Tesla made 438 millions profit, 100 million are from bitcoin. If we ignore the profit from carbon credits (they made more from credits than from bitcoin) they made 4x100 millions profit from cars by your math. So combined they made more profit than they did. What comes next? Are they building the perpetual motion machine?

speedgoose 5y ago

Tesla are good electric cars, the best in their categories, but Europe has no problem to produce good electric cars that are the best in their categories too. The VW group is doing particularly well these days, with the ID4 or the Taycan for example.

brabel 5y ago
I was on the market for a new car this year in Europe and was happily surprised that every European brand now, not just VW, is offering a fully electrical model, at least, and several traditional models are offered as plugin-hybrids as well. Audi has the e-tron[1] already, and plans to have every model it sells come with a fully electric version before 2030[2]. BMW has been selling the i3 fully electric model since 2013, now has several other electric cars[3] (including the iX, the first one it designed from scratch to be an electric car, and the ix3, an electric version of the popular X3) and most of its models come as plugin hybrid (I ended up buying an X1 plugin-hybrid, the electric models are still really expensive compared to hybrid, which are themselves really expensive compared to the old combustion engine models - but worth it because you save loads of money if the electric range is enough for your daily trips, like for me, and due to government bonuses and much lower taxation!). Mercedez seems to have started a bit late, but now it's keeping up with BMW and also offers many plugin-hybrid models as well as the new EQ line[4] which is fully electric (I drove the EQC and it's amazing - the luxury of Mercedez with the modernity of a Tesla - but just a little too pricey for me). Other brands are following the same pattern. For example, Seat has a new sub-brand called Cupra[5] which offers a more affordable fully electrical, but still pretty awesome, model called Formentor which seems to be getting pretty popular in my country. Volvo now offers the XC40 with a pure electric engine[6] or plugin-hybrid... and it has a subsidiary to challenge Tesla called Polestar[7] which makes highly performant electrical vehicles similar to Teslas. Finally, Renault Zoe[8] is a fully electrical, small vehicle that is pretty popular in Europe (where small cars are more convenient to use in cities). [1] https://www.audi.com/en/experience-audi/models-and-technology/production-models/e-tron.html https://www.audi.com/en/experience-audi/models-and-technolog... [2] http://www.mobiletechdaily.com/audi-plans-to-electrify-every-model-by-2030-heres-how/ http://www.mobiletechdaily.com/audi-plans-to-electrify-every... [3] https://www.bmw.com/en-au/discover/electromobility/electric-cars.html https://www.bmw.com/en-au/discover/electromobility/electric-... [4] https://www.mercedes-benz.com/en/eq/ https://www.mercedes-benz.com/en/eq/ [5] https://www.cupraofficial.com/ https://www.cupraofficial.com/ [6] https://www.volvocars.com/intl/why-volvo/human-innovation/electrification/pure-electric https://www.volvocars.com/intl/why-volvo/human-innovation/el... [7] https://en.wikipedia.org/wiki/Polestar https://en.wikipedia.org/wiki/Polestar [8] https://en.wikipedia.org/wiki/Renault_Zoe https://en.wikipedia.org/wiki/Renault_Zoe

bserge 5y ago

They do have a point, subsidies for something the EU doesn't really use are sort of wasted taxpayer money. But I think a leading edge chip fab in the EU would be strategically important.

pas 5y ago
The EU wants a homegrown solution - as usual, they are providing frontloaded loans for this from the NextGenEU ~700B EUR fund. https://digital-strategy.ec.europa.eu/en/news/member-states-join-forces-european-initiative-processors-and-semiconductor-technologies https://digital-strategy.ec.europa.eu/en/news/member-states-...

Dah00n 5y ago

>Tesla owns VW now. One is a company that make less money selling cars than trading bitcoins and emission certificates. The other is selling more cars than anyone else. It's less than 500.000 cars a year versus 2.8 million cars with just one brand from the VW group (out of 12). Edit: According to VW's news site "Volkswagen delivered around 5.3 million vehicles in 2020". That does not include vans or trucks. Tesla likely won't survive as a car company when other car makers stop needing their emissions certificates. Tesla would be deep in the red today if it didn't live off other income than cars. Look at their official numbers if in doubt. In 2025 Tesla will likely be an investment firm selling some cars.

imtringued 5y ago
>The other is selling more cars than anyone else. It's less than 500.000 cars a year versus 2.8 million cars with just one brand from the VW group (out of 12). Plus 231600 EVs sold in 2020 across all brands. It's no longer a battle between an EV company vs an ICE company. It's a battle between an EV company vs an ICE+EV company where the EV portion alone is half the size of the first EV company. https://www.motorauthority.com/news/1130931_vw-group-sold-almost-half-as-many-evs-as-tesla-in-2020-and-it-s-just-getting-warmed-up https://www.motorauthority.com/news/1130931_vw-group-sold-al...

smulc 5y ago

See https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si... - Intel has a 14nm in the EU (Ireland) and has planned a 7nm fab also - so "the EU" also plays in this space. A TSMC fab also would be good too of course but things aren't that bad.

pas 5y ago

You missed that TSMC buys their next gen EUV lithograph machines from the EU (from ASML in the Netherlands). What the EU needs is specialization (comparative advantage), not becoming a TSMC assembly outpost.

imtringued 5y ago

>"We don't need e mobility, we have the best combustion engines!" Tesla owns VW now. VW is one of the biggest EV manufacturers. Maybe you should pick a different example.