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Investing in local chip fabs is long overdue. These are incredibly important for geopolitical stability and should be distributed world-wide. We've centralized

Investing in local chip fabs is long overdue. These are incredibly important for geopolitical stability and should be distributed world-wide. We've centralized too many fabs in too few places in the search for low cost.

throwaway4good 4y ago
Most of Intel's fabs are in the US.
jeffbee 4y ago
Why is the local fab specifically important? They're still going to fly the wafers to Malaysia or wherever for packaging, right? And the tools and chemicals will all be made elsewhere, won't they? It's not as simple as having a steady supply of apples from your local orchard.
- sva_ 4y ago
  I think sourcing those things would be a lot easier than building a fab, on a time scale.
- KptMarchewa 4y ago
  There's a lot of assumptions there. Why don't you assume that it's about having as much of the supply chain locally?
- mojzu 4y ago
  I'd imagine it won't replace the entire supply chain in one go (although I think quite a bit of semiconductor tooling is already manufactured in the EU), but I think it's a step on the path towards that. Which is probably a good thing considering how fragile it appears some of our hyper-efficient globalised supply chains can be
- ChemSpider 4y ago
  That part is solved: (1) German BASF is one of the manufactures for "semiconductor chemicals". (2) More important: Getting parts from Malaysia (etc) is no issue as I don't think they plan to attack any neighboring countries in the next decade. Also, they did not start a trade boycott against Lithuania just over the name of an trade office.
  - ratww 4y ago
    Exactly. Malaysia can still be a partner, however this is a big step that opens the door for replacing labor in distant countries with another EU neighbour. This is good for the entire EU.
  - coffeeblack 4y ago
    If there is a conflict with China, maritime routes will become much less reliable than they are now, after 75+ years of peace and 30+ years of a unipolar international system.
    - paganel 4y ago
      Plus, I suspect that in a The West vs China war a country like Malaysia will think twice before choosing a side, and I'm afraid they won't choose the West by default.
    - TedDoesntTalk 4y ago
      And the possibility port blockades.
- dkjaudyeqooe 4y ago
  Self sufficiency for products that are the lifeblood of your economy is attractive to governments. Any of the things you describe can easily be replicated locally, fabs much less so. Even more to the point is that it gives countries the chance to develop a high value competitive advantage that others cannot replicate. Places like the EU would argue that they have the human capital to compete globally but they don't have the industry because of historical factors.
- arlort 4y ago
  They're also creating a packaging center in Italy https://gamingnews.cyou/here-is-intels-plan-for-europe-a-packaging-factory-in-italy/ https://gamingnews.cyou/here-is-intels-plan-for-europe-a-pac... And an R&D center in France https://www.intel.com/content/www/us/en/newsroom/news/eu-news-2022-release.html https://www.intel.com/content/www/us/en/newsroom/news/eu-new...
- ezsmi 4y ago
  Assembly services are all over the place. Here's a large one in Escondido, CA which is commonly used. https://www.qptechnologies.com/about-us/company-info-bios/ https://www.qptechnologies.com/about-us/company-info-bios/
baybal2 4y ago
This will not do much with Taiwan being a single source for semiconductor manufacturing supplies. Much of critical blockers for chemicals, consumables, materials will still be in Taiwan just because the semi industry is that huge there. All 300mm fabs working outside of Taiwan are just few shipments of consumables away from stalling all the time. When Russia attacks Ukraine, the 3rd world is fucked. When China attacks Taiwan, the 1st world is fucked.
- lm28469 4y ago
  What makes Taiwan inherently better than somewhere else ? If it's just for historical and/or economical reason I don't see why Europe or the US couldn't build their own chemical plants. You have to start somewhere, it took us decades to delocalise everything to Asia, it'll take decades to build these industries locally.
  - baybal2 4y ago
    You have just asked why we can't "just move manufacturing out of China:" There are no individual chemical plants, there are huge chemical complexes owned by many companies with own well guarded know hows. There may be 2-4 suppliers in a row producing some intermediary product used in making of only 1 output. Just to make the semiconductor grade hyperpure propanol you need ultrapure catalysts, ultrapure sulphuric acid, ultrapure water, and ultrapure input hydrocarbon stock. Ah, forgot, you also needs an ultrapure tare manufacturer, because bottles you ship ultrapure materials are single use. You need decades just to replicate this. Now you need to move 100+ of such material chains. > If it's just for historical and/or economical reason Simple answer, yes! Taiwan has quietly swallowed near an entirety of the wider precision manufacturing industry. It been consistently swallowing very capital intensive industries producing exportable niche products one after another simply because nobody else been taking such hard, and risky ventures. Yes, their profitability is not high, but their "moat" is gigantic. Taiwan been an industrial titan for 20+ years, and the US only finds out about it now.
    - JoachimS 4y ago
      Excellent explanation.
curiousgal 4y ago
ASML is in the Netherlands though. Edit: Yes ASML is obviously not a chip fab but they supply the machines that actually fabricate the chips.
- joker99 4y ago
  Correct, but ASML is not a chip fab
  - amelius 4y ago
    I think the point was that high-tech shouldn't be concentrated in one location. What if ASML was in China?
    - rmah 4y ago
      Well, as far as I can tell, China is seems willing to sell just about anything to anyone as long as they can pay.
    - himlion 4y ago
      ASML is prohibited from shipping its newest machines to China by the Dutch government, because of heavy US pressure. I'm sure China would love ASML to be fully based there.
  - dkjaudyeqooe 4y ago
    No but it is the monopoly supplier of the single most important device for fabs. If ASML (and all their knowledge) disappeared off the face of the earth today progress in semiconductors would probably be set back a decade or two. The fact they are a single company in one country that the global industry depends on for progress in semis should be of concern.
    - eternauta3k 4y ago
      What company has the next-best litho machines after ASML?
cinntaile 4y ago
I don't think this is why fabs were centralized. I think this is because when you start to decrease node size, the fab costs go up astronomically so to keep the cost in check you need economies of scale and with the current manufacturing techniques you can achieve this by centralizing manufacturing.
- sephlietz 4y ago
  Didn't you and parent both say "to keep costs low"?
- bottled_poe 4y ago
  Seems to me that most software is horribly inefficient anyway. If push came to shove we might just consider making better software?
  - rat9988 4y ago
    Software engineers are expensive too.
  - sneak 4y ago
    The cutting edge of software that mostly uses these advanced process node sizes is not horribly inefficient. The new applications enabled by, for example, GPU-accelerated ML are not the same as running 400 chrome tabs on an M1. The hot paths in most important high-end computing are mostly quite efficient.
    - colinsane 4y ago
      > The hot paths in most important high-end computing are mostly quite efficient. it’s hard to determine the lower bound on a lot of these things. in scientific computing (e.g. physics sims) i still run across a lot of runtime branching that could easily be compiled out if we were using languages that had stronger type systems/templates. we use linear approximations for a lot of things, but it’s been shown that smarter interpolation can let you decrease your resolution without losing accuracy/stability. there’s an easy 2x or more perf gain every time you do that successfully. there’s also the boundary conditions: we always simulate more volume of space than we’re actually interested in so as to avoid certain types of distortion (reflections from the boundary of the simulation). over time we’ve learned tricks for reducing those reflections: we’ve applied a lot of general-purpose optimizations, but there’s evidence that we can go further if we encode more simulation-specific information at these boundaries. this whole area has just been slow, steady, compounded optimizations. i don’t work in ML, but i find it very unlikely that (a) optimizing neural networks is a completely solved problem or (b) that you all know how to train them using the fewest iterations. you make sweeping statements that just aren't obvious to me.
ISL 4y ago
It is very important for national stability. A highly-interconnected global economy is arguably better at securing international stability.
- hh3k0 4y ago
  - bakuninsbart 4y ago
    There's no contradiction in interconnected economies being both better for global stability and more volatile to global instability. On a populist level, these kinds of questions are always presented as either-or, when in reality it is a pretty delicate balancing act. No, we shouldn't be completely reliant on potentially adversarial states for our basic well-being, but intertwined economies change the cost-benefit-analysis of a lot of adversarial geopolitical actions, and that has led to a lot less war in the world.
    - baja_blast 4y ago
      The USSR and United States had zero trade and never went to war. And since the fall of the USSR the number of conflicts has not gone down. Ukraine and Russia were very interconnected, but that did not prevent the invasion.
      - selimthegrim 4y ago
        Uh, we sold them grain, and they sold oil, and let’s leave aside the NEP period…
      - nradov 4y ago
        The United States sold huge amounts of grain to the USSR. Did this prevent a war, or make a war more likely? Who knows? https://coldwarheartland.ku.edu/documents/foes-or-friends https://coldwarheartland.ku.edu/documents/foes-or-friends
      - 4y ago
_trackno5 4y ago
Will it make much of a difference, though? Sure they can fabricate the chips, but a lot of the raw material needed will come from places like China.
- myself248 4y ago
  Right now, the raw material will come from China because that's where the resources are developed. But once a fab is in place, it makes sense to push more to develop local resources, or at least among more diverse allies. It doesn't make sense to do that now, because you'd just be shipping local resources to a foreign fab, so that's still a bottleneck. But I think having a local fab is the tipping-point.
  - deleted 4y ago
    [deleted]
- sounds 4y ago
  It's a move back down the supply chain. Fine, they haven't completely verticalized the entire supply chain. It's still a strategic move.
- cromka 4y ago
- deleted 4y ago
  [deleted]
- baja_blast 4y ago
  copper, silicon, gold, aluminum are sourced from many countries so they wouldn't need any raw materials from any particular country. Also the machines used to make the Fabs are sourced right next door in the Netherlands
- audunw 4y ago
  Which raw material specifically? Norway is the fifth largest exporter of Quartz. Turkey is third. I think there's enough Quartz in Europe for silicon. For silicon wafer manufacturing there's Okmetic Oy in Finland and Siltronic AG in Germany.
explaingarlic 4y ago
Doesn't feel to me like microchips are in such short supply that any more would significantly contribute to the economy. Am I just unaware of the crisis going on all around me?
- IfOnlyYouKnew 4y ago
  That wasn't the parent's argument. But, incredibly enough, there really is a shortage in microchips that has lead, among other problems, to shutdown of whole production lines for cars. It doesn't necessarily matter to have local fabs: at least in the current situation, the worldwide chip production is still a mostly free market with products being sold to the highest bidder independent of location (as long as it's not Russia). But the confidence of this state continuing is certainly lower than it was a few years ago.
phkahler 4y ago
>> Investing in local chip fabs is long overdue. Nah, this is a bargain. Rather than chasing the technology for 50 years, they just waited until it's already mature (2nm may be the end of the road?) and spend a few billion after all the development has happened elsewhere. BTW Germany is already home to some fairly advanced non-EUV fabs with Global Foundries.
- dorgo 4y ago
  > (2nm may be the end of the road?) from https://en.wikipedia.org/wiki/Bremermann%27s_limit https://en.wikipedia.org/wiki/Bremermann%27s_limit : >However, it has been shown that access to quantum memory in principle allows computational algorithms that require arbitrarily small amount of energy/time per one elementary computation step.[6][7] Not the end of the road.
toss1 4y ago
Yup May have had something to do with these tweets [1] from Emily Haber @GermanAmbUSA German Ambassador to USA: >> "The current geopolitical situation and its impact on supply chains has triggered a discussion about “technological sovereignty” in the US and Europe. For us, it means being able to help shape future technologies in line with our values. We see the USA as natural partners in this." >> "It's one reason our Minister for Education and Research is visiting Washington. Welcome, Minister @starkwatzinger . Your visit will deepen our cooperation as we face intense global challenges! 2/2" https://twitter.com/GermanAmbUSA/status/1534236635562491905 https://twitter.com/GermanAmbUSA/status/1534236635562491905
bradgessler 4y ago
Not just fabs, but other staples like baby formula.
stevenjgarner 4y ago
Is the increase in cost known or predictable in decentralizing fabs? The argument for geopolitical stability is strong but at what cost?
LdSGSgvupDV 4y ago
Yep. Accelerate the global warming for inefficient waste on local fab and pollute the environment globally. For the national security, we could sacrifice all countries including ourself. Hillarius.

throwaway4good 4y ago

Most of Intel's fabs are in the US.

jeffbee 4y ago

Why is the local fab specifically important? They're still going to fly the wafers to Malaysia or wherever for packaging, right? And the tools and chemicals will all be made elsewhere, won't they? It's not as simple as having a steady supply of apples from your local orchard.

sva_ 4y ago
I think sourcing those things would be a lot easier than building a fab, on a time scale.
KptMarchewa 4y ago
There's a lot of assumptions there. Why don't you assume that it's about having as much of the supply chain locally?
mojzu 4y ago
I'd imagine it won't replace the entire supply chain in one go (although I think quite a bit of semiconductor tooling is already manufactured in the EU), but I think it's a step on the path towards that. Which is probably a good thing considering how fragile it appears some of our hyper-efficient globalised supply chains can be
ChemSpider 4y ago
That part is solved: (1) German BASF is one of the manufactures for "semiconductor chemicals". (2) More important: Getting parts from Malaysia (etc) is no issue as I don't think they plan to attack any neighboring countries in the next decade. Also, they did not start a trade boycott against Lithuania just over the name of an trade office.
- ratww 4y ago
  Exactly. Malaysia can still be a partner, however this is a big step that opens the door for replacing labor in distant countries with another EU neighbour. This is good for the entire EU.
- coffeeblack 4y ago
  If there is a conflict with China, maritime routes will become much less reliable than they are now, after 75+ years of peace and 30+ years of a unipolar international system.
  - paganel 4y ago
    Plus, I suspect that in a The West vs China war a country like Malaysia will think twice before choosing a side, and I'm afraid they won't choose the West by default.
  - TedDoesntTalk 4y ago
    And the possibility port blockades.
dkjaudyeqooe 4y ago
Self sufficiency for products that are the lifeblood of your economy is attractive to governments. Any of the things you describe can easily be replicated locally, fabs much less so. Even more to the point is that it gives countries the chance to develop a high value competitive advantage that others cannot replicate. Places like the EU would argue that they have the human capital to compete globally but they don't have the industry because of historical factors.
arlort 4y ago
They're also creating a packaging center in Italy https://gamingnews.cyou/here-is-intels-plan-for-europe-a-packaging-factory-in-italy/ https://gamingnews.cyou/here-is-intels-plan-for-europe-a-pac... And an R&D center in France https://www.intel.com/content/www/us/en/newsroom/news/eu-news-2022-release.html https://www.intel.com/content/www/us/en/newsroom/news/eu-new...
ezsmi 4y ago
Assembly services are all over the place. Here's a large one in Escondido, CA which is commonly used. https://www.qptechnologies.com/about-us/company-info-bios/ https://www.qptechnologies.com/about-us/company-info-bios/

baybal2 4y ago

This will not do much with Taiwan being a single source for semiconductor manufacturing supplies. Much of critical blockers for chemicals, consumables, materials will still be in Taiwan just because the semi industry is that huge there. All 300mm fabs working outside of Taiwan are just few shipments of consumables away from stalling all the time. When Russia attacks Ukraine, the 3rd world is fucked. When China attacks Taiwan, the 1st world is fucked.

lm28469 4y ago
What makes Taiwan inherently better than somewhere else ? If it's just for historical and/or economical reason I don't see why Europe or the US couldn't build their own chemical plants. You have to start somewhere, it took us decades to delocalise everything to Asia, it'll take decades to build these industries locally.
- baybal2 4y ago
  You have just asked why we can't "just move manufacturing out of China:" There are no individual chemical plants, there are huge chemical complexes owned by many companies with own well guarded know hows. There may be 2-4 suppliers in a row producing some intermediary product used in making of only 1 output. Just to make the semiconductor grade hyperpure propanol you need ultrapure catalysts, ultrapure sulphuric acid, ultrapure water, and ultrapure input hydrocarbon stock. Ah, forgot, you also needs an ultrapure tare manufacturer, because bottles you ship ultrapure materials are single use. You need decades just to replicate this. Now you need to move 100+ of such material chains. > If it's just for historical and/or economical reason Simple answer, yes! Taiwan has quietly swallowed near an entirety of the wider precision manufacturing industry. It been consistently swallowing very capital intensive industries producing exportable niche products one after another simply because nobody else been taking such hard, and risky ventures. Yes, their profitability is not high, but their "moat" is gigantic. Taiwan been an industrial titan for 20+ years, and the US only finds out about it now.
  - JoachimS 4y ago
    Excellent explanation.

curiousgal 4y ago

ASML is in the Netherlands though. Edit: Yes ASML is obviously not a chip fab but they supply the machines that actually fabricate the chips.

joker99 4y ago
Correct, but ASML is not a chip fab
- amelius 4y ago
  I think the point was that high-tech shouldn't be concentrated in one location. What if ASML was in China?
  - rmah 4y ago
    Well, as far as I can tell, China is seems willing to sell just about anything to anyone as long as they can pay.
  - himlion 4y ago
    ASML is prohibited from shipping its newest machines to China by the Dutch government, because of heavy US pressure. I'm sure China would love ASML to be fully based there.
- dkjaudyeqooe 4y ago
  No but it is the monopoly supplier of the single most important device for fabs. If ASML (and all their knowledge) disappeared off the face of the earth today progress in semiconductors would probably be set back a decade or two. The fact they are a single company in one country that the global industry depends on for progress in semis should be of concern.
  - eternauta3k 4y ago
    What company has the next-best litho machines after ASML?

cinntaile 4y ago

I don't think this is why fabs were centralized. I think this is because when you start to decrease node size, the fab costs go up astronomically so to keep the cost in check you need economies of scale and with the current manufacturing techniques you can achieve this by centralizing manufacturing.

sephlietz 4y ago
Didn't you and parent both say "to keep costs low"?
bottled_poe 4y ago
Seems to me that most software is horribly inefficient anyway. If push came to shove we might just consider making better software?
- rat9988 4y ago
  Software engineers are expensive too.
- sneak 4y ago
  The cutting edge of software that mostly uses these advanced process node sizes is not horribly inefficient. The new applications enabled by, for example, GPU-accelerated ML are not the same as running 400 chrome tabs on an M1. The hot paths in most important high-end computing are mostly quite efficient.
  - colinsane 4y ago
    > The hot paths in most important high-end computing are mostly quite efficient. it’s hard to determine the lower bound on a lot of these things. in scientific computing (e.g. physics sims) i still run across a lot of runtime branching that could easily be compiled out if we were using languages that had stronger type systems/templates. we use linear approximations for a lot of things, but it’s been shown that smarter interpolation can let you decrease your resolution without losing accuracy/stability. there’s an easy 2x or more perf gain every time you do that successfully. there’s also the boundary conditions: we always simulate more volume of space than we’re actually interested in so as to avoid certain types of distortion (reflections from the boundary of the simulation). over time we’ve learned tricks for reducing those reflections: we’ve applied a lot of general-purpose optimizations, but there’s evidence that we can go further if we encode more simulation-specific information at these boundaries. this whole area has just been slow, steady, compounded optimizations. i don’t work in ML, but i find it very unlikely that (a) optimizing neural networks is a completely solved problem or (b) that you all know how to train them using the fewest iterations. you make sweeping statements that just aren't obvious to me.

ISL 4y ago

It is very important for national stability. A highly-interconnected global economy is arguably better at securing international stability.

hh3k0 4y ago
- bakuninsbart 4y ago
  There's no contradiction in interconnected economies being both better for global stability and more volatile to global instability. On a populist level, these kinds of questions are always presented as either-or, when in reality it is a pretty delicate balancing act. No, we shouldn't be completely reliant on potentially adversarial states for our basic well-being, but intertwined economies change the cost-benefit-analysis of a lot of adversarial geopolitical actions, and that has led to a lot less war in the world.
  - baja_blast 4y ago
    The USSR and United States had zero trade and never went to war. And since the fall of the USSR the number of conflicts has not gone down. Ukraine and Russia were very interconnected, but that did not prevent the invasion.
    - selimthegrim 4y ago
      Uh, we sold them grain, and they sold oil, and let’s leave aside the NEP period…
    - nradov 4y ago
      The United States sold huge amounts of grain to the USSR. Did this prevent a war, or make a war more likely? Who knows? https://coldwarheartland.ku.edu/documents/foes-or-friends https://coldwarheartland.ku.edu/documents/foes-or-friends
    - 4y ago

_trackno5 4y ago

Will it make much of a difference, though? Sure they can fabricate the chips, but a lot of the raw material needed will come from places like China.

myself248 4y ago
Right now, the raw material will come from China because that's where the resources are developed. But once a fab is in place, it makes sense to push more to develop local resources, or at least among more diverse allies. It doesn't make sense to do that now, because you'd just be shipping local resources to a foreign fab, so that's still a bottleneck. But I think having a local fab is the tipping-point.
- deleted 4y ago
  [deleted]
sounds 4y ago
It's a move back down the supply chain. Fine, they haven't completely verticalized the entire supply chain. It's still a strategic move.
cromka 4y ago
deleted 4y ago
[deleted]
baja_blast 4y ago
copper, silicon, gold, aluminum are sourced from many countries so they wouldn't need any raw materials from any particular country. Also the machines used to make the Fabs are sourced right next door in the Netherlands
audunw 4y ago
Which raw material specifically? Norway is the fifth largest exporter of Quartz. Turkey is third. I think there's enough Quartz in Europe for silicon. For silicon wafer manufacturing there's Okmetic Oy in Finland and Siltronic AG in Germany.

explaingarlic 4y ago

Doesn't feel to me like microchips are in such short supply that any more would significantly contribute to the economy. Am I just unaware of the crisis going on all around me?

IfOnlyYouKnew 4y ago
That wasn't the parent's argument. But, incredibly enough, there really is a shortage in microchips that has lead, among other problems, to shutdown of whole production lines for cars. It doesn't necessarily matter to have local fabs: at least in the current situation, the worldwide chip production is still a mostly free market with products being sold to the highest bidder independent of location (as long as it's not Russia). But the confidence of this state continuing is certainly lower than it was a few years ago.

phkahler 4y ago

>> Investing in local chip fabs is long overdue. Nah, this is a bargain. Rather than chasing the technology for 50 years, they just waited until it's already mature (2nm may be the end of the road?) and spend a few billion after all the development has happened elsewhere. BTW Germany is already home to some fairly advanced non-EUV fabs with Global Foundries.

dorgo 4y ago
> (2nm may be the end of the road?) from https://en.wikipedia.org/wiki/Bremermann%27s_limit https://en.wikipedia.org/wiki/Bremermann%27s_limit : >However, it has been shown that access to quantum memory in principle allows computational algorithms that require arbitrarily small amount of energy/time per one elementary computation step.[6][7] Not the end of the road.

toss1 4y ago

Yup May have had something to do with these tweets [1] from Emily Haber @GermanAmbUSA German Ambassador to USA: >> "The current geopolitical situation and its impact on supply chains has triggered a discussion about “technological sovereignty” in the US and Europe. For us, it means being able to help shape future technologies in line with our values. We see the USA as natural partners in this." >> "It's one reason our Minister for Education and Research is visiting Washington. Welcome, Minister @starkwatzinger . Your visit will deepen our cooperation as we face intense global challenges! 2/2" https://twitter.com/GermanAmbUSA/status/1534236635562491905 https://twitter.com/GermanAmbUSA/status/1534236635562491905

bradgessler 4y ago

Not just fabs, but other staples like baby formula.

stevenjgarner 4y ago

Is the increase in cost known or predictable in decentralizing fabs? The argument for geopolitical stability is strong but at what cost?

LdSGSgvupDV 4y ago

Yep. Accelerate the global warming for inefficient waste on local fab and pollute the environment globally. For the national security, we could sacrifice all countries including ourself. Hillarius.