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1. Your comment doesn't even provide a prime facie argument against some forms of government intervention. E.g., we could let the market determine prices but ma
by throwawaygh 5y ago
1. Your comment doesn't even provide a prime facie argument against some forms of government intervention. E.g., we could let the market determine prices but mandate that fab equipment suppliers go to the front of the line.
2. Price is probably a red herring anyways. I'm willing to bet that fab equipment suppliers are losing out not on price negotiations, but on volume negotiations. I.e., they might even be willing to pay more -- even much more -- than other users, but can't buy in massive quantities so don't go to the front of the line.
3. Is there any (legal) mechanism at the moment that prevents chip makers from increasing prices?
4. Fab equipment producers are small consumers of chips but have such a disproportionately high impact on the rate of future supply. In the midst of a global shortage, we could straight up socialize 0.00...01% of chips produced every year and hand them out for free to fab equipment manufacturers without even effecting the short-term price dynamics. I'm not actually advocating this, but the assertion that earmarking a small number of chips for a particular high-value use fundamentally skew the market in the short-term is probably false.
5. Even if markets can eventually work in this case -- and for the record I'm convinced that this is a perfect example of contract negotiators being extremely myopic -- market dynamics have non-O(1) time complexity and the chip shortage is wrecking havoc on the real economy.
My comment wasn't suggesting price controls or socializing chip fabrication. It was suggesting that we very temporarily give special treatment to a very small consumer of chips that has an outsized impact on production rate, in the midst of a global chip shortage.
- s1artibartfast 5y ago>It was suggesting that we very temporarily give special treatment to a very small consumer of chips that has an outsized impact on production rate, in the midst of a global chip shortage. Why would we do that if the fabs themselves don't think it is worth paying their equipment manufacturers enough to afford their own chips? Giving "special treatment" is a price control. It is forcing a transaction that otherwise wouldn't settle at that price.
- throwawaygh 5y ago> Why would we do that if the fabs themselves don't think it is worth paying their equipment manufacturers enough to afford their own chips? Because there is a global chip shortage that is making life substantially worse for the vast majority of Americans. And because markets are tools used by man, not the other way around.
- s1artibartfast 5y ago>Because there is a global chip shortage that is making life substantially worse for the vast majority of Americans. Is it really? I don't know anyone who has had substantial impacts. Some prices have gone up, but I don't see the urgency.
- throwawaygh 5y agohttps://www.fierceelectronics.com/electronics/out-chips-out-work-auto-workers-tell-their-stories https://www.fierceelectronics.com/electronics/out-chips-out-... > Some prices have gone up Specifically, prices on new and used cars that most Americans depend on -- for better or worse -- to do basically everything in their lives (including getting to work, getting to school, getting food, etc.)