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When prices "skyrocket", it becomes profitable to use a lot more expensive means to produce (eg: using nuclear energy to grow rice indoors), this will quickly i

When prices "skyrocket", it becomes profitable to use a lot more expensive means to produce (eg: using nuclear energy to grow rice indoors), this will quickly increase supply. For microchips, it's likely the prices have not increased enough to kickstart this increase in supply.

JoachimS 5y ago
The prices may be there, but that does not mean supply is able to pick up. There are non-monetary barriers to entry the market. Knowledge, access to tools and materials, permits from gov agencies, source of water, power etc. And the time scale to establish new capacity from scratch is many years to a decade or more. Look at the capacity build up in China. It has taken decades, and that is with all the power of the nation, and in some cases loose on regulations regarding IP rights.
raxxorrax 5y ago
Considering what extremely performant and reliable chips you get for under $0.10, it is no wonder that few economies can deliver here. It simply isn't worth it to manufacture these chips without selling billions of units. Not to mention the development, even the small chips today are extremely advanced from a technical perspective. Opening a lemonade stand is a far more solid business plan. Since owning know how is somehow not worth anything despite heavy handed patent laws, I think the business case is just bad. China seems to work against this with specifically funding establishment of fabs.
ajsnigrutin 5y ago
> (eg: using nuclear energy to grow rice indoors) You gave a right example, to prove the current problem... the prices are high now... go build a nuclear energy heater to grow rice, I'll wait. The prices for chips are high now, the process of building a production facility is very very expensive, and takes a lot of time, and the people building them (and quite a few are being built right now), are still unsure if the high prices will hold, to make it worthwhile.

JoachimS 5y ago

The prices may be there, but that does not mean supply is able to pick up. There are non-monetary barriers to entry the market. Knowledge, access to tools and materials, permits from gov agencies, source of water, power etc. And the time scale to establish new capacity from scratch is many years to a decade or more. Look at the capacity build up in China. It has taken decades, and that is with all the power of the nation, and in some cases loose on regulations regarding IP rights.

raxxorrax 5y ago

Considering what extremely performant and reliable chips you get for under $0.10, it is no wonder that few economies can deliver here. It simply isn't worth it to manufacture these chips without selling billions of units. Not to mention the development, even the small chips today are extremely advanced from a technical perspective. Opening a lemonade stand is a far more solid business plan. Since owning know how is somehow not worth anything despite heavy handed patent laws, I think the business case is just bad. China seems to work against this with specifically funding establishment of fabs.

ajsnigrutin 5y ago

> (eg: using nuclear energy to grow rice indoors) You gave a right example, to prove the current problem... the prices are high now... go build a nuclear energy heater to grow rice, I'll wait. The prices for chips are high now, the process of building a production facility is very very expensive, and takes a lot of time, and the people building them (and quite a few are being built right now), are still unsure if the high prices will hold, to make it worthwhile.