10 ms·

House Bill Funds CHIPS Act, Stresses R&D

123 points by Trouble_007 4y ago

WalterGR 4y ago
> Efforts aimed at reviving U.S. semiconductor manufacturing and strengthening technology supply chains advanced this week with the introduction of a catch-all bill that funds “surge production” of U.S.-made chips while investing in broad-based technology R&D. There's a ton of Superfund[0] sites in Silicon Valley[1]. What's the current situation re. semiconductor manufacturing and toxic waste? [0] https://en.wikipedia.org/wiki/Superfund https://en.wikipedia.org/wiki/Superfund [1] "The Superfund Sites of Silicon Valley" https://www.nytimes.com/2018/03/26/lens/the-superfund-sites-of-silicon-valley.html https://www.nytimes.com/2018/03/26/lens/the-superfund-sites-...
- lumost 4y ago
  Manufacturing is generally pretty messy. But green tech has come a long way in identifying effective alternatives to toxic chemicals, as well as effective management and disposal techniques for what is toxic. Odds are good that re-shored manufacturing will be cleaner than older plants built in regions with lower environmental regulation.
  - sremani 4y ago
    >> green tech has come a long way in identifying effective alternatives to toxic chemicals Enlighten us, how manufacturing 'silicone' has become less chemical intensive.
    - throwaway743 4y ago
      FTFY: Silicon
      - sremani 4y ago
        between spelling nazis and reflexive downvoters .. who are entitled their respective actions.. what I am looking for is, how is the whole Quartz to Wafers process has become green and what kind of reduction and/or elimination of toxic materials has been achieved. A good proper justification of the claim from the claimant or supporters of that argument is useful.
        acomjean 4y ago
        I don’t have exact details but I did work in an civil/environment consulting companies (we worked remediating the GE silicone waste site in Upstate NY .. ) which might be why people are senesitive to the spelling.[1] But generally those chemical engineers are pretty good at cleaning up the processes (it cheaper, also cheaper to ship manufacturing overseas…) The Resource Conservation and Recovery act https://en.m.wikipedia.org/wiki/Resource_Conservation_and_Recovery_Act https://en.m.wikipedia.org/wiki/Resource_Conservation_and_Re... And toxic substance control acts seemed to rules of note. https://en.m.wikipedia.org/wiki/Toxic_Substances_Control_Act_of_1976 https://en.m.wikipedia.org/wiki/Toxic_Substances_Control_Act... GE silicones [1]https://www.epa.gov/hwcorrectiveactionsites/hazardous-waste-cleanup-momentive-performance-materials-silicones-llc https://www.epa.gov/hwcorrectiveactionsites/hazardous-waste-...
        adrian_b 4y ago
        In this case the spelling nazis had rightfully pointed to the correct spelling, because the wrong spelling is not a problem of style or preferences, but it causes a confusion between two different chemical substances, with very different properties and applications. "silicon" is the chemical element number 14, and this name, which is used in the English-speaking countries, was coined by someone who believed that it is a good idea for it to rhyme with "carbon" (actually a bad idea in my opinion) "silicone" is the generic name for a class of plastics, i.e. the polymers with a poly-siloxane structure. This name was coined by someone who believed that it is a good idea for it to rhyme with "acetone", because he erroneously believed that these polymers have a structure similar to ketones.
        throwaway743 4y ago
    - karmicthreat 4y ago
      It's not less chemical intensive at all. Some aqueous processes have replaced more toxic ones. But dissolved copper and solvent waste makes up the majority of ever fabs waste stream. TSMC/Intel etc have made pretty big strides in zero landfill hazardous waste. It just gets recycled and used in other processes internally or by other companies. I don't know what the Chinese fabs do, so I have no idea if pump their waste out into the environment.
      - Kadin 4y ago
        > dissolved copper You would think that dissolved copper would have some recovery value, given the price of copper. I am reminded of the waste from silver halide photographic processing, which at one point was just dumped into rivers (an unfortunate amount went into the Great Lakes); when the price of silver increased, suddenly it became worthwhile to recover the silver rather than let it go down the literal drain.
  - iancmceachern 4y ago
    From my understanding the chemicals haven't changed, and can't really be changed. As far as i understand we will always need these crazy bad chemicals to make chips. What has, hopefully, changed is we aren't allowing companies to store it in leaking underground tanks, etc. All these superfund sites aren't a result if business as usual, in each case there is some major, systemic, intentional oversight and frankly corruption. Source - I've worked some in that industry designing automation for asml, applied, etc. Not in the semiconductor industry but a good example of the kind of thing that results in a super fund site is Rocky Flats in Colorado. There is a now famous news broadcast where the representative from the department of energy is saying "there is no fire" and a big fire can be clearly seen behind them. They were machining plutonium and uranium nuclear bomb triggers on lathes in special glove boxes with particle capture and ventilation systems that were supposed to scrub the air before venting it to atmosphere. These systems weren't properly maintained and they got clogged up with radioactive dust and caught fire. It was later found that they were dumping radioactive dust into the air, and had hundreds of barrels of radioactive waste in steel barrels that were rusted through leaking into the ground for decades. It's the only time one federal agency (the FBI) raided a facility of another federal agency (DOE).
    - deleted 4y ago
      [deleted]
    - nickff 4y ago
      There have been a huge number of changes to the chemicals used in photolithography over time, specifically the photoresists.
      - iancmceachern 4y ago
        Yeah but lots of the super terrible stuff is in the surface prep and etching chemicals. All those crazy acids and bases that eat through everything, are highly toxic, and deadly in tiny quantities. https://www.prevor.com/en/chemical-risks-in-semiconductors-industry/ https://www.prevor.com/en/chemical-risks-in-semiconductors-i...
  - aaronbrethorst 4y ago
    Meanwhile, the Supreme Court is about to gut the EPA's authority. Hope you're able to afford to move far away from plants that spew toxic chemicals! https://www.npr.org/2022/02/28/1082934438/supreme-court-to-hear-a-case-that-could-limit-the-epas-power-to-fight-climate-ch https://www.npr.org/2022/02/28/1082934438/supreme-court-to-h...
    - deleted 4y ago
      [deleted]
    - colechristensen 4y ago
      Eh, I’m relatively in favor of limiting government agencies effectively making law up all by themselves. That is not the correct fix for a dysfunctional legislature.
      - paulmd 4y ago
        If you think Congress is dysfunctional now, wait until you require congress to individually specify safety limits for each compound, etc. You'll have congresspeople grandstanding about how restricting X chemical is killing hardworking small businesses in their state, etc. Which the court knows damn well will be the outcome - that's the goal. Keep anything from being done.
        colechristensen 4y ago
        That kind of thinking leads to “the only way we’ll get anything done is with a dictator” and it’s not like that is an unprecedented outcome for a country. Fix what’s broken, don’t use authoritarianism as a patch for dysfunction.
        triceratops 4y ago
        I don't understand why it's "authoritarianism" for elected representatives to say "we want to protect X, within the following parameters, and we delegate the job of making specific rules to this agency". You can vote out the legislator if you disagree with the parameters they agreed upon, and you can vote out the executive branch that appointed the leaders of the agency. We already complain all the time that legislators don't understand the stuff they pass laws about. Delegation is not authoritarianism. You haven't actually said how you'd "fix what's broken". Do you have any specific ideas?
- rossdavidh 4y ago
  So, I haven't worked in semiconductors since the mid-noughties, so keep that in mind. However, essentially every company in semiconductors in the 60's and 70's ended up with a Superfund site in Silicon Valley (back when the "Silicon" referred to actual chip manufacturing, not software). Fabs built in the 80's and 90's were much different in regards to how toxic chemicals were handled, and I believe have continued to improve. Some of this improvement came naturally, as the requirement for cleaner and cleaner manufacturing environment for the wafers themselves (to keep particulate contamination from lowering yield) meant that the chemicals were kept in enclosed systems, thus easier to keep from leaking out. Some of this came about because, from what I was told by "old timers", in the 60's and 70's part of the problem was that fabs were not thought of as being very dangerous. This sounds incredible now, but the risks people thought of from manufacturing then were those present in steel mills, coal mines, auto factories, etc. Big heavy things and molten steel and roofs that can collapse on you; physically obvious risks. It took some time to realize that semiconductor fabs were just as dangerous; no doubt longer than it should have, but the realization did arrive in time. I left the semiconductor industry because it was outsourcing, not because of concerns for my safety; in new fabs, there was a great emphasis on safety and the environmental impact (which no doubt raised costs relative to some of the other places that manufacturing shifted to).
- deleted 4y ago
  [deleted]
xiphias2 4y ago
,, Despite new U.S. fab initiatives announced by Intel, Samsung and Taiwan Semiconductor Manufacturing Co., each has said those investments require tax breaks and other incentives beyond what states have offered'' Tax breaks sound much more reasonable way to improve onshore manufacturing if that would be the real goal.
- deleted 4y ago
  [deleted]
- mikepurvis 4y ago
  I think the issue here is figuring out how to make sure the tax breaks and other stimulus/incentives are "let's put some temporary fuel on this fire until it becomes self-sustaining" vs how it's seemingly gone for most other industries (ag, resources, banking, etc) where it becomes a long-term dependency and every new shakedown is anchored in a combination of emotional arguments and sunk cost fallacy.
  - xiphias2 4y ago
    Chip technology looks like a critical long term dependency for all nations, and I don't think China will shy away from providing practically infinite incentives for it happening there.
    - Smoosh 4y ago
      So, you are expecting a race to the bottom, then?
      - Sirened 4y ago
        isn't that the whole point of globalization anyways? We wanted super cheap fabs, we got super cheap fabs. The problem is that the cheapest way to get something done may or may not be the most strategic move from a governance standpoint when you don't have a great relationship with the country who is responsible for all of your fabrication.
      - 4y ago
mjevans 4y ago
While more R&D is good, if their intent is to stabilize the production markets other changes are likely required. It must be at least moderately profitable to build and run _new_ fabs that produce the simple 'jelly bean' components that have been in dire shortage. Inventories, both of sellable common 'ingredients' and also of shelf stable commonly desirable outputs should probably be reflected differently on asset books. Cutting buffers to the bone should not be good accounting practice as that encourages vulnerability. Laws need to change how that accounting is performed.
- daniel-cussen 4y ago
  Just keep the MBAs with their Midas touch away from basic tech. Engineers are good enough at math to balance the books, it's not really harder than balancing a checkbook. I had better finances as a high school student than most Wall Streeters at the peak of their career. Got alpha they didn't, accounting for real is just mathematical horse sense.
  - bsder 4y ago
    One of the big problems in the US is accounting for inventory. If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. There are some other issues with inventory taxation like how fast you can depreciate it (ie. for tax purposes, chips are treated like mechnical inputs even though chips depreciate MUCH faster). This all strongly discourages holding inventory. And even engineers running companies will come to that conclusion.
    - Kadin 4y ago
      > If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. I admit to not being a CPA, but that... doesn't make a ton of sense to me. What sort of tax do you pay on inventory? My understanding is that it's not tax that's the issue, but the tying-up of capital in inventory that's generally being minimized. If interest rates are 3% and you have $1M in inventory, that's $30k per year in interest you're paying in order to hold that inventory, plus the physical costs of warehousing it. And the MBAs naturally look at cutting costs as the fastest and most direct route to improving profitability.
tmaly 4y ago
I wonder how much of this funding will go to producing chips that are in shortage verse just a blitz of money at all chips regardless of supply?
- Kadin 4y ago
  Given the lead time of building a fab and producing components, trying to incentivize the production of specific devices that happen to be in short supply right now is probably not a great plan. The market does a pretty good job of sending demand signals to producers, faster than the government can generally create and pass incentivizing legislation. But if you don't have the production capacity in the first place, encouraging that to be built out (which is a long-term process) does seem like something where government can meaningfully intervene.
madengr 4y ago
newaccount2021 4y ago
onepointsixC 4y ago
While it's good that the CHIPS act is being passed, it's far too modest of a bill considering how important semiconductors are to the US. Just compare it to the South Korean $450Bn bill[1]. In the 80's enormous foreign subsidization of commercial ship building by South Korea, Japan, and others, saw the near total loss of that key industry in America. Semiconductors must not be allowed to suffer a similar fate. [1]: https://www.bloomberg.com/news/articles/2021-05-13/korea-unveils-450-billion-push-to-seize-global-chipmaking-crown https://www.bloomberg.com/news/articles/2021-05-13/korea-unv... [1 Non paywalled]: https://archive.ph/9Gs8q https://archive.ph/9Gs8q
- remarkEon 4y ago
  The loss of commercial ship building in the US is something I want to learn more about. Did it happen simply because other countries subsidized their own industries and the US couldn’t compete? Would love a long form history of that industry going back a few centuries.
  - samstave 4y ago
    Im sure environmental aspects play a role - the shipyards in asia are unbelievably huge. Plus the chinese shipyards build literal battleships/aircraft-carriers and cruise ships and cargo ships sitting right next to eachother - and its said they steal/share technologies from the various contracts/products. https://www.dailymail.co.uk/news/article-6520357/Satellite-images-reveal-major-Chinese-military-shipyard-expanded-rapidly.html https://www.dailymail.co.uk/news/article-6520357/Satellite-i... --- And there is this: China builds mock-US ships in what seems to be for battle scenario training ops.. https://www.politico.com/news/2021/11/08/satellite-china-us-warships-520271 https://www.politico.com/news/2021/11/08/satellite-china-us-...
  - donthellbanme 4y ago
- scottcodie 4y ago
  US consumers got a lot of cheap chips from their subsidy. US businesses had to close because they couldn't compete but US consumers still won in the end. I wondering if the US government will have to subsidize this industry in perpetuity if the subsidized fabs can't become competitive.
01100011 4y ago
Thanks to the Triffin Dilemma (https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma) the US is fighting an uphill battle to repatriate key industries.
scottcodie 4y ago
Glad to see the US subsidizing chips for the entire world market. It's about time we pay our fair share to give back to the subsidizes that asian countries have been putting in.
throwaway4good 4y ago
I know that it is the way us politics work but it is pretty wild skimming through the text and seeing just how many things are cobbled together. Eg: Sec. 30219G. Requirements relating to vaccine branding. Directs the President to ensure that every vaccine donated, procured, or financed by the U.S. Government is clearly branded with the U.S. flag.
- thatguy0900 4y ago
  I dont understand how the government actually follows all these rules (to the extent that they do). Imagine if your job requirements and duties was spread out in single paragraphs in thousands of hundred page long documents
  - daemoens 4y ago
    It's also on page 1011 of a 2912 page document. How would you ever know that something in there applied to your company?
1-6 4y ago
R&D usually gets siphoned to other countries at the expense of American taxpayers. I think we need to place safeguards in place before we start ramping up spending.
jtaft 4y ago
Cool! Can smaller businesses gain access to these funds ?
- raziel2701 4y ago
  That's what I wonder too, if a big chunk of this money goes to intel then a bunch of smaller boutique fabs that are integral for some of the other stated areas like quantum computing will be impacted. How is the money going to trickle down through the sector?
atlasunshrugged 4y ago
Just a note for those interested in the current state of things, this bill is currently in conference between the House and Senate to marry the bills to one another as the initial versions in each was significantly different. Likely in the coming weeks we'll see an announcement of a new final bill from the conferees (think leadership of each party and the influential congresspeople) and then the new bill will be voted on quicklyish barring some unexpected political event that takes precedent. But they will need to do it soon as there are not that many days left on the legislative calendar. For those interested in staying up to date, I recommend Punchbowl news highly, they had a newsletter a few weeks ago with a good amount of info. https://punchbowl.news/archive/4-25-22-punchbowl-news-am/ https://punchbowl.news/archive/4-25-22-punchbowl-news-am/
- Cipater 4y ago
  Is it correct to state that it is not the members of Congress themselves writing these bills but the stakeholders (industry)?
  - atlasunshrugged 4y ago
    I think that's an oversimplification. Do stakeholders have lots of input? I'm sure, after all, I also wouldn't build a product without asking potential end users what they really wanted. But with something this high profile (and with an actual chance of passing, unlike most bills in Congress), I'd guess that Congresspeople are actually personally invested in their priorities that are in the bill (maybe those are partially written by industry, maybe not).

123 points by Trouble_007 4y ago

> Efforts aimed at reviving U.S. semiconductor manufacturing and strengthening technology supply chains advanced this week with the introduction of a catch-all bill that funds “surge production” of U.S.-made chips while investing in broad-based technology R&D. There's a ton of Superfund[0] sites in Silicon Valley[1]. What's the current situation re. semiconductor manufacturing and toxic waste? [0] https://en.wikipedia.org/wiki/Superfund https://en.wikipedia.org/wiki/Superfund [1] "The Superfund Sites of Silicon Valley" https://www.nytimes.com/2018/03/26/lens/the-superfund-sites-of-silicon-valley.html https://www.nytimes.com/2018/03/26/lens/the-superfund-sites-...

lumost 4y ago
Manufacturing is generally pretty messy. But green tech has come a long way in identifying effective alternatives to toxic chemicals, as well as effective management and disposal techniques for what is toxic. Odds are good that re-shored manufacturing will be cleaner than older plants built in regions with lower environmental regulation.
- sremani 4y ago
  >> green tech has come a long way in identifying effective alternatives to toxic chemicals Enlighten us, how manufacturing 'silicone' has become less chemical intensive.
  - throwaway743 4y ago
    FTFY: Silicon
    - sremani 4y ago
      between spelling nazis and reflexive downvoters .. who are entitled their respective actions.. what I am looking for is, how is the whole Quartz to Wafers process has become green and what kind of reduction and/or elimination of toxic materials has been achieved. A good proper justification of the claim from the claimant or supporters of that argument is useful.
      - acomjean 4y ago
        I don’t have exact details but I did work in an civil/environment consulting companies (we worked remediating the GE silicone waste site in Upstate NY .. ) which might be why people are senesitive to the spelling.[1] But generally those chemical engineers are pretty good at cleaning up the processes (it cheaper, also cheaper to ship manufacturing overseas…) The Resource Conservation and Recovery act https://en.m.wikipedia.org/wiki/Resource_Conservation_and_Recovery_Act https://en.m.wikipedia.org/wiki/Resource_Conservation_and_Re... And toxic substance control acts seemed to rules of note. https://en.m.wikipedia.org/wiki/Toxic_Substances_Control_Act_of_1976 https://en.m.wikipedia.org/wiki/Toxic_Substances_Control_Act... GE silicones [1]https://www.epa.gov/hwcorrectiveactionsites/hazardous-waste-cleanup-momentive-performance-materials-silicones-llc https://www.epa.gov/hwcorrectiveactionsites/hazardous-waste-...
      - adrian_b 4y ago
        In this case the spelling nazis had rightfully pointed to the correct spelling, because the wrong spelling is not a problem of style or preferences, but it causes a confusion between two different chemical substances, with very different properties and applications. "silicon" is the chemical element number 14, and this name, which is used in the English-speaking countries, was coined by someone who believed that it is a good idea for it to rhyme with "carbon" (actually a bad idea in my opinion) "silicone" is the generic name for a class of plastics, i.e. the polymers with a poly-siloxane structure. This name was coined by someone who believed that it is a good idea for it to rhyme with "acetone", because he erroneously believed that these polymers have a structure similar to ketones.
        throwaway743 4y ago
  - karmicthreat 4y ago
    It's not less chemical intensive at all. Some aqueous processes have replaced more toxic ones. But dissolved copper and solvent waste makes up the majority of ever fabs waste stream. TSMC/Intel etc have made pretty big strides in zero landfill hazardous waste. It just gets recycled and used in other processes internally or by other companies. I don't know what the Chinese fabs do, so I have no idea if pump their waste out into the environment.
    - Kadin 4y ago
      > dissolved copper You would think that dissolved copper would have some recovery value, given the price of copper. I am reminded of the waste from silver halide photographic processing, which at one point was just dumped into rivers (an unfortunate amount went into the Great Lakes); when the price of silver increased, suddenly it became worthwhile to recover the silver rather than let it go down the literal drain.
- iancmceachern 4y ago
  From my understanding the chemicals haven't changed, and can't really be changed. As far as i understand we will always need these crazy bad chemicals to make chips. What has, hopefully, changed is we aren't allowing companies to store it in leaking underground tanks, etc. All these superfund sites aren't a result if business as usual, in each case there is some major, systemic, intentional oversight and frankly corruption. Source - I've worked some in that industry designing automation for asml, applied, etc. Not in the semiconductor industry but a good example of the kind of thing that results in a super fund site is Rocky Flats in Colorado. There is a now famous news broadcast where the representative from the department of energy is saying "there is no fire" and a big fire can be clearly seen behind them. They were machining plutonium and uranium nuclear bomb triggers on lathes in special glove boxes with particle capture and ventilation systems that were supposed to scrub the air before venting it to atmosphere. These systems weren't properly maintained and they got clogged up with radioactive dust and caught fire. It was later found that they were dumping radioactive dust into the air, and had hundreds of barrels of radioactive waste in steel barrels that were rusted through leaking into the ground for decades. It's the only time one federal agency (the FBI) raided a facility of another federal agency (DOE).
  - deleted 4y ago
    [deleted]
  - nickff 4y ago
    There have been a huge number of changes to the chemicals used in photolithography over time, specifically the photoresists.
    - iancmceachern 4y ago
      Yeah but lots of the super terrible stuff is in the surface prep and etching chemicals. All those crazy acids and bases that eat through everything, are highly toxic, and deadly in tiny quantities. https://www.prevor.com/en/chemical-risks-in-semiconductors-industry/ https://www.prevor.com/en/chemical-risks-in-semiconductors-i...
- aaronbrethorst 4y ago
  Meanwhile, the Supreme Court is about to gut the EPA's authority. Hope you're able to afford to move far away from plants that spew toxic chemicals! https://www.npr.org/2022/02/28/1082934438/supreme-court-to-hear-a-case-that-could-limit-the-epas-power-to-fight-climate-ch https://www.npr.org/2022/02/28/1082934438/supreme-court-to-h...
  - deleted 4y ago
    [deleted]
  - colechristensen 4y ago
    Eh, I’m relatively in favor of limiting government agencies effectively making law up all by themselves. That is not the correct fix for a dysfunctional legislature.
    - paulmd 4y ago
      If you think Congress is dysfunctional now, wait until you require congress to individually specify safety limits for each compound, etc. You'll have congresspeople grandstanding about how restricting X chemical is killing hardworking small businesses in their state, etc. Which the court knows damn well will be the outcome - that's the goal. Keep anything from being done.
      - colechristensen 4y ago
        That kind of thinking leads to “the only way we’ll get anything done is with a dictator” and it’s not like that is an unprecedented outcome for a country. Fix what’s broken, don’t use authoritarianism as a patch for dysfunction.
        triceratops 4y ago
        I don't understand why it's "authoritarianism" for elected representatives to say "we want to protect X, within the following parameters, and we delegate the job of making specific rules to this agency". You can vote out the legislator if you disagree with the parameters they agreed upon, and you can vote out the executive branch that appointed the leaders of the agency. We already complain all the time that legislators don't understand the stuff they pass laws about. Delegation is not authoritarianism. You haven't actually said how you'd "fix what's broken". Do you have any specific ideas?
rossdavidh 4y ago
So, I haven't worked in semiconductors since the mid-noughties, so keep that in mind. However, essentially every company in semiconductors in the 60's and 70's ended up with a Superfund site in Silicon Valley (back when the "Silicon" referred to actual chip manufacturing, not software). Fabs built in the 80's and 90's were much different in regards to how toxic chemicals were handled, and I believe have continued to improve. Some of this improvement came naturally, as the requirement for cleaner and cleaner manufacturing environment for the wafers themselves (to keep particulate contamination from lowering yield) meant that the chemicals were kept in enclosed systems, thus easier to keep from leaking out. Some of this came about because, from what I was told by "old timers", in the 60's and 70's part of the problem was that fabs were not thought of as being very dangerous. This sounds incredible now, but the risks people thought of from manufacturing then were those present in steel mills, coal mines, auto factories, etc. Big heavy things and molten steel and roofs that can collapse on you; physically obvious risks. It took some time to realize that semiconductor fabs were just as dangerous; no doubt longer than it should have, but the realization did arrive in time. I left the semiconductor industry because it was outsourcing, not because of concerns for my safety; in new fabs, there was a great emphasis on safety and the environmental impact (which no doubt raised costs relative to some of the other places that manufacturing shifted to).
deleted 4y ago
[deleted]

xiphias2 4y ago

,, Despite new U.S. fab initiatives announced by Intel, Samsung and Taiwan Semiconductor Manufacturing Co., each has said those investments require tax breaks and other incentives beyond what states have offered'' Tax breaks sound much more reasonable way to improve onshore manufacturing if that would be the real goal.

deleted 4y ago
[deleted]
mikepurvis 4y ago
I think the issue here is figuring out how to make sure the tax breaks and other stimulus/incentives are "let's put some temporary fuel on this fire until it becomes self-sustaining" vs how it's seemingly gone for most other industries (ag, resources, banking, etc) where it becomes a long-term dependency and every new shakedown is anchored in a combination of emotional arguments and sunk cost fallacy.
- xiphias2 4y ago
  Chip technology looks like a critical long term dependency for all nations, and I don't think China will shy away from providing practically infinite incentives for it happening there.
  - Smoosh 4y ago
    So, you are expecting a race to the bottom, then?
    - Sirened 4y ago
      isn't that the whole point of globalization anyways? We wanted super cheap fabs, we got super cheap fabs. The problem is that the cheapest way to get something done may or may not be the most strategic move from a governance standpoint when you don't have a great relationship with the country who is responsible for all of your fabrication.
    - 4y ago

mjevans 4y ago

While more R&D is good, if their intent is to stabilize the production markets other changes are likely required. It must be at least moderately profitable to build and run _new_ fabs that produce the simple 'jelly bean' components that have been in dire shortage. Inventories, both of sellable common 'ingredients' and also of shelf stable commonly desirable outputs should probably be reflected differently on asset books. Cutting buffers to the bone should not be good accounting practice as that encourages vulnerability. Laws need to change how that accounting is performed.

daniel-cussen 4y ago
Just keep the MBAs with their Midas touch away from basic tech. Engineers are good enough at math to balance the books, it's not really harder than balancing a checkbook. I had better finances as a high school student than most Wall Streeters at the peak of their career. Got alpha they didn't, accounting for real is just mathematical horse sense.
- bsder 4y ago
  One of the big problems in the US is accounting for inventory. If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. There are some other issues with inventory taxation like how fast you can depreciate it (ie. for tax purposes, chips are treated like mechnical inputs even though chips depreciate MUCH faster). This all strongly discourages holding inventory. And even engineers running companies will come to that conclusion.
  - Kadin 4y ago
    > If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. I admit to not being a CPA, but that... doesn't make a ton of sense to me. What sort of tax do you pay on inventory? My understanding is that it's not tax that's the issue, but the tying-up of capital in inventory that's generally being minimized. If interest rates are 3% and you have $1M in inventory, that's $30k per year in interest you're paying in order to hold that inventory, plus the physical costs of warehousing it. And the MBAs naturally look at cutting costs as the fastest and most direct route to improving profitability.

tmaly 4y ago

I wonder how much of this funding will go to producing chips that are in shortage verse just a blitz of money at all chips regardless of supply?

Kadin 4y ago
Given the lead time of building a fab and producing components, trying to incentivize the production of specific devices that happen to be in short supply right now is probably not a great plan. The market does a pretty good job of sending demand signals to producers, faster than the government can generally create and pass incentivizing legislation. But if you don't have the production capacity in the first place, encouraging that to be built out (which is a long-term process) does seem like something where government can meaningfully intervene.

madengr 4y ago

newaccount2021 4y ago

onepointsixC 4y ago

While it's good that the CHIPS act is being passed, it's far too modest of a bill considering how important semiconductors are to the US. Just compare it to the South Korean $450Bn bill[1]. In the 80's enormous foreign subsidization of commercial ship building by South Korea, Japan, and others, saw the near total loss of that key industry in America. Semiconductors must not be allowed to suffer a similar fate. [1]: https://www.bloomberg.com/news/articles/2021-05-13/korea-unveils-450-billion-push-to-seize-global-chipmaking-crown https://www.bloomberg.com/news/articles/2021-05-13/korea-unv... [1 Non paywalled]: https://archive.ph/9Gs8q https://archive.ph/9Gs8q

remarkEon 4y ago
The loss of commercial ship building in the US is something I want to learn more about. Did it happen simply because other countries subsidized their own industries and the US couldn’t compete? Would love a long form history of that industry going back a few centuries.
- samstave 4y ago
  Im sure environmental aspects play a role - the shipyards in asia are unbelievably huge. Plus the chinese shipyards build literal battleships/aircraft-carriers and cruise ships and cargo ships sitting right next to eachother - and its said they steal/share technologies from the various contracts/products. https://www.dailymail.co.uk/news/article-6520357/Satellite-images-reveal-major-Chinese-military-shipyard-expanded-rapidly.html https://www.dailymail.co.uk/news/article-6520357/Satellite-i... --- And there is this: China builds mock-US ships in what seems to be for battle scenario training ops.. https://www.politico.com/news/2021/11/08/satellite-china-us-warships-520271 https://www.politico.com/news/2021/11/08/satellite-china-us-...
- donthellbanme 4y ago
scottcodie 4y ago
US consumers got a lot of cheap chips from their subsidy. US businesses had to close because they couldn't compete but US consumers still won in the end. I wondering if the US government will have to subsidize this industry in perpetuity if the subsidized fabs can't become competitive.

01100011 4y ago

Thanks to the Triffin Dilemma (https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma) the US is fighting an uphill battle to repatriate key industries.

scottcodie 4y ago

Glad to see the US subsidizing chips for the entire world market. It's about time we pay our fair share to give back to the subsidizes that asian countries have been putting in.

throwaway4good 4y ago

I know that it is the way us politics work but it is pretty wild skimming through the text and seeing just how many things are cobbled together. Eg: Sec. 30219G. Requirements relating to vaccine branding. Directs the President to ensure that every vaccine donated, procured, or financed by the U.S. Government is clearly branded with the U.S. flag.

thatguy0900 4y ago
I dont understand how the government actually follows all these rules (to the extent that they do). Imagine if your job requirements and duties was spread out in single paragraphs in thousands of hundred page long documents
- daemoens 4y ago
  It's also on page 1011 of a 2912 page document. How would you ever know that something in there applied to your company?

1-6 4y ago

R&D usually gets siphoned to other countries at the expense of American taxpayers. I think we need to place safeguards in place before we start ramping up spending.

jtaft 4y ago

Cool! Can smaller businesses gain access to these funds ?

raziel2701 4y ago
That's what I wonder too, if a big chunk of this money goes to intel then a bunch of smaller boutique fabs that are integral for some of the other stated areas like quantum computing will be impacted. How is the money going to trickle down through the sector?

atlasunshrugged 4y ago

Just a note for those interested in the current state of things, this bill is currently in conference between the House and Senate to marry the bills to one another as the initial versions in each was significantly different. Likely in the coming weeks we'll see an announcement of a new final bill from the conferees (think leadership of each party and the influential congresspeople) and then the new bill will be voted on quicklyish barring some unexpected political event that takes precedent. But they will need to do it soon as there are not that many days left on the legislative calendar. For those interested in staying up to date, I recommend Punchbowl news highly, they had a newsletter a few weeks ago with a good amount of info. https://punchbowl.news/archive/4-25-22-punchbowl-news-am/ https://punchbowl.news/archive/4-25-22-punchbowl-news-am/

Cipater 4y ago
Is it correct to state that it is not the members of Congress themselves writing these bills but the stakeholders (industry)?
- atlasunshrugged 4y ago
  I think that's an oversimplification. Do stakeholders have lots of input? I'm sure, after all, I also wouldn't build a product without asking potential end users what they really wanted. But with something this high profile (and with an actual chance of passing, unlike most bills in Congress), I'd guess that Congresspeople are actually personally invested in their priorities that are in the bill (maybe those are partially written by industry, maybe not).