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I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market

I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.

connicpu 4y ago
Tariffs on products we don't have immediate domestic manufacturing capacity for will hurt the economy in the short term, which is not a great move during a period of rising inflation. It's a tough decision though, because it does feel like the better move for the long term.
- lettergram 4y ago
  The US still produces a lot of computer chips… Intel is still a very large player in chips and dominate in some areas. Even TI which has tons of fabs (not highest end) as well. I don’t really understand this.
  - wildzzz 4y ago
    Relatively few consumer electronics use Intel chips. Even in the devices that do use Intel chips, it's one Intel CPU versus dozens of others.
  - Buraksr 4y ago
    TI's fabs are mainly focused on analog, so the requirements are a bit different. IIRC we have 3 130-65nm layers for digital in our mixed signal designs which is roughly on par with a the process technology Intel used in 2005.
    - anfilt 4y ago
      The majority ICs used for products and such do not need bleeding edge node sizes.
      - Buraksr 4y ago
        True. That is part of the reason why only 3 of maybe 30-60 layers are that small. Analog gets some signal integrity benefits from larger transistors, and often we have fairly large fets for low rdson and high voltage tolerance.
- acchow 4y ago
  > Tariffs on products we don't have immediate domestic manufacturing capacity for will hurt the economy in the short term I suppose you could announce tariffs which will take place 5 years down the line? And ramp it up over time?
  - judge2020 4y ago
    Congress offloads imposing tariffs to the executive branch, so they'd need to take it back to do that. Otherwise, it's just a countdown for the industry to donate enough to the opposing political party's PACs to get them in office and repeal the looming tariffs. ie. the current bill only passed because both political parties are fine with giving companies government money.
  - deleted 4y ago
    [deleted]
- mminer237 4y ago
  I agree tariffs are the right long-term move. I think they just have to be implemented gradually. Just increase it by 4% per year for the next 10 years.
Cuuugi 4y ago
"What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form." Is the market really free with tariffs?
- wbsss4412 4y ago
  It definitely isn’t, but at this point “free market” has been watered down so heavily it gets used improperly all the time. It’s more of a political slogan than an actual policy.
  - LMYahooTFY 4y ago
    A "free market" isn't borderless. There's virtually no precedent for that.
    - haroldp 4y ago
      Commerce between the States?
- lettergram 4y ago
  Yes it is, there’s always been taxes. Free market typically refers to regulations, free commerce (means ability to buy and sell), etc. that doesn’t mean no taxes, particularly tariffs. The US federal government was initially only able to make revenue from tariffs. Basically you control the borders, but inside the borders there are no control (ie free market). Once you deal between nations, you cannot have a perfectly free market, else your enemies will eat you. Which imo is what happened the last 50 years.
  - Dracophoenix 4y ago
    A tariff is a regulation. Tariffs are the interstate commercial equivalent of Pigovian taxes. When the government puts its thumb on the scale of what should or shouldn't be sold with an extra cost attached, that is not a free market.
  - deleted 4y ago
deleted 4y ago
[deleted]
analognoise 4y ago
There is no such thing as "the free market" - it's this mythologized idea that people keep pushing, usually to damage workers so they can ship jobs offshore. If anything, the more something resembles a "free market", the worse it is - you don't think Intel wouldn't poison the water supply if it juiced the Q4 earnings? It's always more economical to just dump the toxic waste into the local river. If anything these subsidies even the playing field for people who don't think that's a good idea.
- Bloating 4y ago
  There are absolutely free markets, usually small, niche, some under ground. Just because you don't see it, doesn't mean it doesn't exist. The world, and its economies, are more complex then you, I or anyone on this board can comprehend
- lettergram 4y ago
  Lol the whole point of the US design was to allow the free market internally. Externally it was designed to be protectionist. I agree “free market” today is insane. Initially the federal governments only source of revenue was tariffs, so it would protect domestic production. This makes the US independent and wealthy. You can’t have an international “free market” system unless you don’t want to protect domestic production. Which imo is what the US did starting in the 70s until today.
  - krainboltgreene 4y ago
    > Lol the whole point of the US design was to allow the free market internally Dear reader, this was not true in any shape.
    - selimthegrim 4y ago
      Compared to Articles of Confederation?
  - andrekandre 4y ago
    im not sure thats true, but putting that aside, why do you feel it cant scale across national borders?
bpodgursky 4y ago
Uh I mean yes Boeing is kind of a mess right now, but it's ridiculous to argue that having Boeing based in the US isn't an enormous strategic advantage. Can you imagine a world where US airlines had to depend on either Airbus or Sukhoi planes? Do you really think that would be better?
- lettergram 4y ago
  I don’t think subsidizing them has been a success. I think tariffs and awarding contracts to the best domestic manufacturers are the way forward. That’s why SpaceX took off, they won contracts. Boeing effectively lobbied to regulate others out of existence. Bought off who they could, then won grants and contracts because there was no one else.
  - bushbaba 4y ago
    Government spending could require multiple vendors. Encouraging at least a duopoly.
  - nyc_data_geek1 4y ago
    Maybe a combination of the approaches. I might actually be in favor of raising import costs if there were a guarantee of some sort that the resulting funds would be applied to jumpstarting domestic chipfab capabilities, specifically to overcoming the initial capital intensive investment required to get started.
  - 7thaccount 4y ago
    As they say "competition is for losers". They've all figured that out lol.
    - taneq 4y ago
      Sun Tzu would say you don’t take to the battlefield unless you have already won.
  - bumby 4y ago
    That’s why SpaceX took off, they won contracts. Can you elaborate? How was Boeing subsidized in this instance and SpaceX not? It's my understanding that it was closer to the other way around. Both Boeing and SpaceX won commercial crew contracts, but Boeing (at the time) had a stronger track record. It was a strategic move by NASA to not put all their eggs in one basket and it worked out well by subsidizing the early dark horse (SpaceX).
oofbey 4y ago
Undoubtedly this is a massive gift from taxpayers to Intel. Hard to see anything good in that. I also agree that subsidizing R&D isn't a reliable strategy to make us more competitive. Government incentivizes to find solutions works much better. BUT building high-end fabs is SO very capital intensive, that I think this actually could work out. This might actually be a case where the skids need to be greased a bit (to the tune of billions of dollars) to get them over the hump and back in the game.
- onepointsixC 4y ago
  What's the alternative? SK is subsidizing Samsung by more ($450 Bn)[1]. China is doing the same. [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
nyc_data_geek1 4y ago
Consider that semiconductor fab has a very high barrier to entry in that the cost and time required to bring it online. No company presently appears to be poised to build out significant domestic chipmaking capability as far as I know. I believe that this is where subsidization makes sense, because if we wait for the free market to catch up to the shortfall in supply created by raising import costs, it will ultimately take longer to get the manufacturing capacity online.
gscott 4y ago
> What works is a free market. If such a thing existed then you would be right.
- kube-system 4y ago
  Unfortunately, this is true. We have to subsidize the industry because other countries are subsidizing them. We can't compete on a level playing field because there isn't one.
Bayart 4y ago
Industries that heavy in frontloaded capital expenditures (like chip manufacturing) fare better with government support.
closedloop129 4y ago
How do you prevent companies from avoiding the import costs by building their data centers in Canada?
- sbf501 4y ago
  That's exactly what they do. That is why Intel has a Fab in Ireland.
clairity 4y ago
i'm with you that a tariff scheme is better than giving money to large corps, which always puts money in the pockets of the already rich rather than into creating customer surplus and driving innovation. there is a (mostly front-loaded) cost, but there is also a clear net benefit in the long run. the tariff scheme just needs to be graduated (both on and off) and based on industry milestones. if it isn't ramped down as soon as feasible, then it becomes a overly-depended-upon subsidy and a market distortion masking price signals instead. because we know there is a large and likely growing demand for semiconductors, it's not a very risky bet for us to be subsidizing it via trade restrictions for some finite amount of time.
CamperBob2 4y ago
What works is a free market. Raise import costs Well, which do you want? You can't have both.
- taneq 4y ago
  Internal free market mechanics with macro somewhat controlled by regulation. Sort of like a commercial Hunger Games.
thunkshift1 4y ago
There is no “free market” here.. other players in this field like samsung and tsmc are neck deep in govt funding. The question is are we ok handing over the top spot for such an important technology - most likely the most important technology right now- to foreign manufacturers?

connicpu 4y ago

Tariffs on products we don't have immediate domestic manufacturing capacity for will hurt the economy in the short term, which is not a great move during a period of rising inflation. It's a tough decision though, because it does feel like the better move for the long term.

lettergram 4y ago
The US still produces a lot of computer chips… Intel is still a very large player in chips and dominate in some areas. Even TI which has tons of fabs (not highest end) as well. I don’t really understand this.
- wildzzz 4y ago
  Relatively few consumer electronics use Intel chips. Even in the devices that do use Intel chips, it's one Intel CPU versus dozens of others.
- Buraksr 4y ago
  TI's fabs are mainly focused on analog, so the requirements are a bit different. IIRC we have 3 130-65nm layers for digital in our mixed signal designs which is roughly on par with a the process technology Intel used in 2005.
  - anfilt 4y ago
    The majority ICs used for products and such do not need bleeding edge node sizes.
    - Buraksr 4y ago
      True. That is part of the reason why only 3 of maybe 30-60 layers are that small. Analog gets some signal integrity benefits from larger transistors, and often we have fairly large fets for low rdson and high voltage tolerance.
acchow 4y ago
> Tariffs on products we don't have immediate domestic manufacturing capacity for will hurt the economy in the short term I suppose you could announce tariffs which will take place 5 years down the line? And ramp it up over time?
- judge2020 4y ago
  Congress offloads imposing tariffs to the executive branch, so they'd need to take it back to do that. Otherwise, it's just a countdown for the industry to donate enough to the opposing political party's PACs to get them in office and repeal the looming tariffs. ie. the current bill only passed because both political parties are fine with giving companies government money.
- deleted 4y ago
  [deleted]
mminer237 4y ago
I agree tariffs are the right long-term move. I think they just have to be implemented gradually. Just increase it by 4% per year for the next 10 years.

Cuuugi 4y ago

"What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form." Is the market really free with tariffs?

wbsss4412 4y ago
It definitely isn’t, but at this point “free market” has been watered down so heavily it gets used improperly all the time. It’s more of a political slogan than an actual policy.
- LMYahooTFY 4y ago
  A "free market" isn't borderless. There's virtually no precedent for that.
  - haroldp 4y ago
    Commerce between the States?
lettergram 4y ago
Yes it is, there’s always been taxes. Free market typically refers to regulations, free commerce (means ability to buy and sell), etc. that doesn’t mean no taxes, particularly tariffs. The US federal government was initially only able to make revenue from tariffs. Basically you control the borders, but inside the borders there are no control (ie free market). Once you deal between nations, you cannot have a perfectly free market, else your enemies will eat you. Which imo is what happened the last 50 years.
- Dracophoenix 4y ago
  A tariff is a regulation. Tariffs are the interstate commercial equivalent of Pigovian taxes. When the government puts its thumb on the scale of what should or shouldn't be sold with an extra cost attached, that is not a free market.
- deleted 4y ago

deleted 4y ago

[deleted]

analognoise 4y ago

There is no such thing as "the free market" - it's this mythologized idea that people keep pushing, usually to damage workers so they can ship jobs offshore. If anything, the more something resembles a "free market", the worse it is - you don't think Intel wouldn't poison the water supply if it juiced the Q4 earnings? It's always more economical to just dump the toxic waste into the local river. If anything these subsidies even the playing field for people who don't think that's a good idea.

Bloating 4y ago
There are absolutely free markets, usually small, niche, some under ground. Just because you don't see it, doesn't mean it doesn't exist. The world, and its economies, are more complex then you, I or anyone on this board can comprehend
lettergram 4y ago
Lol the whole point of the US design was to allow the free market internally. Externally it was designed to be protectionist. I agree “free market” today is insane. Initially the federal governments only source of revenue was tariffs, so it would protect domestic production. This makes the US independent and wealthy. You can’t have an international “free market” system unless you don’t want to protect domestic production. Which imo is what the US did starting in the 70s until today.
- krainboltgreene 4y ago
  > Lol the whole point of the US design was to allow the free market internally Dear reader, this was not true in any shape.
  - selimthegrim 4y ago
    Compared to Articles of Confederation?
- andrekandre 4y ago
  im not sure thats true, but putting that aside, why do you feel it cant scale across national borders?

bpodgursky 4y ago

Uh I mean yes Boeing is kind of a mess right now, but it's ridiculous to argue that having Boeing based in the US isn't an enormous strategic advantage. Can you imagine a world where US airlines had to depend on either Airbus or Sukhoi planes? Do you really think that would be better?

lettergram 4y ago
I don’t think subsidizing them has been a success. I think tariffs and awarding contracts to the best domestic manufacturers are the way forward. That’s why SpaceX took off, they won contracts. Boeing effectively lobbied to regulate others out of existence. Bought off who they could, then won grants and contracts because there was no one else.
- bushbaba 4y ago
  Government spending could require multiple vendors. Encouraging at least a duopoly.
- nyc_data_geek1 4y ago
  Maybe a combination of the approaches. I might actually be in favor of raising import costs if there were a guarantee of some sort that the resulting funds would be applied to jumpstarting domestic chipfab capabilities, specifically to overcoming the initial capital intensive investment required to get started.
- 7thaccount 4y ago
  As they say "competition is for losers". They've all figured that out lol.
  - taneq 4y ago
    Sun Tzu would say you don’t take to the battlefield unless you have already won.
- bumby 4y ago
  That’s why SpaceX took off, they won contracts. Can you elaborate? How was Boeing subsidized in this instance and SpaceX not? It's my understanding that it was closer to the other way around. Both Boeing and SpaceX won commercial crew contracts, but Boeing (at the time) had a stronger track record. It was a strategic move by NASA to not put all their eggs in one basket and it worked out well by subsidizing the early dark horse (SpaceX).

oofbey 4y ago

Undoubtedly this is a massive gift from taxpayers to Intel. Hard to see anything good in that. I also agree that subsidizing R&D isn't a reliable strategy to make us more competitive. Government incentivizes to find solutions works much better. BUT building high-end fabs is SO very capital intensive, that I think this actually could work out. This might actually be a case where the skids need to be greased a bit (to the tune of billions of dollars) to get them over the hump and back in the game.

onepointsixC 4y ago
What's the alternative? SK is subsidizing Samsung by more ($450 Bn)[1]. China is doing the same. [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

nyc_data_geek1 4y ago

Consider that semiconductor fab has a very high barrier to entry in that the cost and time required to bring it online. No company presently appears to be poised to build out significant domestic chipmaking capability as far as I know. I believe that this is where subsidization makes sense, because if we wait for the free market to catch up to the shortfall in supply created by raising import costs, it will ultimately take longer to get the manufacturing capacity online.

gscott 4y ago

> What works is a free market. If such a thing existed then you would be right.

kube-system 4y ago
Unfortunately, this is true. We have to subsidize the industry because other countries are subsidizing them. We can't compete on a level playing field because there isn't one.

Bayart 4y ago

Industries that heavy in frontloaded capital expenditures (like chip manufacturing) fare better with government support.

closedloop129 4y ago

How do you prevent companies from avoiding the import costs by building their data centers in Canada?

sbf501 4y ago
That's exactly what they do. That is why Intel has a Fab in Ireland.

clairity 4y ago

i'm with you that a tariff scheme is better than giving money to large corps, which always puts money in the pockets of the already rich rather than into creating customer surplus and driving innovation. there is a (mostly front-loaded) cost, but there is also a clear net benefit in the long run. the tariff scheme just needs to be graduated (both on and off) and based on industry milestones. if it isn't ramped down as soon as feasible, then it becomes a overly-depended-upon subsidy and a market distortion masking price signals instead. because we know there is a large and likely growing demand for semiconductors, it's not a very risky bet for us to be subsidizing it via trade restrictions for some finite amount of time.

CamperBob2 4y ago

What works is a free market. Raise import costs Well, which do you want? You can't have both.

taneq 4y ago
Internal free market mechanics with macro somewhat controlled by regulation. Sort of like a commercial Hunger Games.

thunkshift1 4y ago

There is no “free market” here.. other players in this field like samsung and tsmc are neck deep in govt funding. The question is are we ok handing over the top spot for such an important technology - most likely the most important technology right now- to foreign manufacturers?