47 ms·

Intel and the $1.5T chip industry meltdown

288 points by __Joker 4y ago

top_sigrid 4y ago
https://archive.ph/GpPCN https://archive.ph/GpPCN
senttoschool 4y ago
A few months ago, I posted that here that governments around the world should not interfere with the chip industry just because of the covid-induced shortages. The reason is that supply and demand will naturally sort things out and that any government handout to chip companies to increase capacity will be wasted because chip demand will swing the other way. The chip industry is now swinging the other way.
- gergoe 4y ago
  - Quindecillion 4y ago
    - Dawnyhf5t 4y ago
    - cxr 4y ago
      Please just downvote these comments (and then flag them if you can), rather than replying. If you aren't able to downvote or flag them, then please still abstain from responding. It will get killed eventually, but replying brings undue attention, thwarting the point of moderation.
- noja 4y ago
  I'm not sure that makes your prediction correct, you need to give a timeframe too. Without a timeframe, it's just waiting until you are right.
- yvdriess 4y ago
  The current slump seems purely caused by a demand drop. It will take years to see the capacity increase because of those government investments. By then, we will hopefully be out of this recession.
  - senttoschool 4y ago
    The chip manufacturing industry would have spent their own money building fabs based on demand projections. Government money (my tax money) does not need to interfere and give free money to them. This is my point.
    - yvdriess 4y ago
      I get your point, but it seems to ignore the geopolitics involved in something like the CHIPS act. Those government investments are not to save the poor struggling semi industry, it is a strategic move to limit overseas dependencies in a supply chain that is seen as critical for the MIC and the economy at large. You are right that those semi companies do not need the government investments to build fabs. However, those fabs materialize overseas, depending on overseas supply chains. The EU and US regions want to build out more of the supply chain domestically, for strategic reasons. Those governments could simply legislate to impose heavy restrictions, but that hurts the competitiveness of the companies involved. And so, they combine that stick with a carrot, which is the government investments. You can already see increased restrictions on the semi supply chain in China, timed right after the CHIPS act passed.
- Balero 4y ago
  I think it is fair for a government to promote such a key industry to diversify where it is based. Currently a crazy percentage of chips are made in one geographical location. A huge amount of the modern economy is reliant on having cheap and easy access to these chips. This isn't a supply/demand decision by governments, but a strategic risk decision. Having some domestic/local regional (think EU based) chip manufacturing is going to be like having steel or food production. A strategic decision.
- pzduniak 4y ago
  As far as I understand, the primary reason for these investments is not to address the shortages, but to decouple Western nations from their reliance on Taiwanese silicon. Most of the remaining shortages - which are still happening in many industries, eg. heat pump shortages in Europe are mostly blocked by chip supply - are caused by the production backlog of the older/cheaper/different technologies. So the goal is political. The economy can take a hit to achieve it.
  - tooltalk 4y ago
    Well, the foundry business is now a two-horse race between Samsung and TSMC. Intel, many believe won't make it. The US gov't knows it too -- that's why Trump arm-twisted TSMC to open new plants in Arizona. Samsung was making Apple's A's in Austin, Texas some time ago, but Apple ditched Samsung's US manufacturing in favor of their China/Taiwan-first offshore outsourcing strategy.
    - mschuster91 4y ago
      > Samsung was making Apple's A's in Austin, Texas some time ago, but Apple ditched Samsung's US manufacturing in favor of their China/Taiwan-first offshore outsourcing strategy. Apple runs an Asia-first strategy these days, they are divesting from China at top speed (whether that's due to sanction threats, the risk of operating in dictatorships, raising wages in China or a combination of that is up for debate). It doesn't make much sense for Apple economically and logistically to use US-made products as they have to be shipped across the ocean to the assembly plants.
      - phpisthebest 4y ago
        Apple should be investing in a North America first strategy and getting manufacturer for everything spun up here
      - tooltalk 4y ago
        >> ... they are divesting from China at top speed... I'm not entirely convinced that that's what Apple is doing. The Information reported[1] last year that Apple made ginormouse investments ($270+B) in China's domestic tech industry to train their workforce and foster China's tech manufacturing. That was 6-7 years ago. It was also revealed very recently that Apple was still trying mighty hard to source more materials and chip suppliers from China's domestic tech industry (eg, YMTC) in spite of the on-going US sanctions on MIC chips -- in this particular case with YMTC, Apple finally gave up only after the Biden admin expanded export control on YMTC last week[2]. I don't think Apple is deterred by Xi's dictatorship, China's geopolitical threats to Taiwan/the South Sea conflict with other SEA countries, or the Uigher (and other ethnic minoority groups) human rights concerns, despite their virtue signaling here in the US. Sure, I think the justification for Biden's foreign/trade policies is up for debates, but what is quite clear is that Apple hasn't really changed its China/Taiwan-first business practices. 1. https://www.theinformation.com/articles/facing-hostile-chinese-authorities-apple-ceo-signed-275-billion-deal-with-them https://www.theinformation.com/articles/facing-hostile-chine... 2. https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-freezes-plan-to-use-China-s-YMTC-chips-amid-political-pressure https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-f...
- jtorsella 4y ago
  I really don’t understand this. Chips are tangible goods, not services where, for example, a bunch of hospitality capacity went to waste during the pandemic. Any “extra” chips will go to use, and will only serve to reduce costs for firms and consumers purchasing them, expand the range of products it makes sense to put chips in and the speed and quality of chips companies can afford to build on. While market signals are the best way to determine these things in general, many of the reasons mentioned in the article - long spin-up times for production infrastructure, dependence on other countries with fraught geopolitical situations - are strong reasons to build reserve capacity, even setting aside the direct economic benefits.
  - mschuster91 4y ago
    > Chips are tangible goods Many chips are not fungible, at least not for large-volume orders that incorporate stuff like customer specific mask ROMs or optimizations, and certainly for built-to-order stuff like Apple's SoCs. That means that let's say Apple can't just go and take a bunch of NVIDIA's chips and slap them into their products, and I'd even take a bet and say that manufacturers of NVIDIA cards can't easily take up cancelled order capacity for the same NVIDIA chip from other manufacturers.
    - jtorsella 4y ago
      Yes, that’s a good point. But it seems to me like that’s a matter of degree, right? Like, even stipulating that the chips themselves are not fungible across products and companies, they are fungible across time for the same or similar products. The price of your 2023 fridge, for example, could be lower because of excess supply of chips for 2022 models, no? And am I right in thinking that even if the chips themselves are not fungible (and there is a genuine possibility that excess production of specific chips goes completely to waste), excess productive capacity is good in and of itself despite some amount of specialization?
      - svnt 4y ago
        No. Chips don’t really expire, and suppliers often have to wean their customers off them by raising the prices regularly once they’re done acquiring design wins. If the chips went on sale every year then companies would gamble on additional stock at discount, driving revenue down, and further disrupting the sales transitions into new IC designs.
- Proven 4y ago
- guidedlight 4y ago
  I saw this announcement being more guaranteeing US onshore chip fabs are being built as demand increase. The rise of TSMC has somewhat increased the national security risk as the market share has shifted away from Intel. We are seeing with the Ukraine War, a reliable domestic supply of semiconductors is now critical to national security. I expect Intel will continue to be helped along by the US government for some time.
- bfung 4y ago
  There’s gov intervention now, not due to shortage nor Covid related supply, but strategic moves that’s happening between US and China. With China having “seized” Hong Kong, and Russia invading Ukraine, flags went up signaling that the next major move in the future could be China invading Taiwan. And Taiwan is where the most advanced chips are made. In parallel news, playing with the open source AI models, it’s clear that GPUs are NEEDED in order to run these AI models. Ex: an Nvidia RTX3090 (low end of A100) can run Stable Diffusion in a couple minutes, while my 2013 MacBook Pro, cpu driven, takes ~4hrs to perform the same task. AI models applied to military uses is a game changer, as demonstrated by Ukraine equipped with US tech. Mitigating the risk of losing Taiwan, enabling production on US shore, and banning sales to China [1] would keep the economic and military advantage on the US side a bit longer than if things kept going the way they were. Chips might slump now, but GPUs are gonna be in hot demand, even w/o the blockchain use cases. As demonstrated by the open source AI models, we’re about to replace a lot of stock photos, news illustrations, logo services… and that’s just the beginning. [1] https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file https://www.bis.doc.gov/index.php/documents/about-bis/newsro...
  - hikingsimulator 4y ago
    You mention AI applications in Ukraine. Can you provide more information on that? Sounds like a rabbit hole.
  - chernofool 4y ago
    Are you certain that AI is used in any of the tech that the US is sending to Ukraine? It's mostly cold war era equipment, designed around the '90s or earlier. Modern AI also seems very failure-prone for military applications around populated areas.
    - rank0 4y ago
      What about the air defense systems? Those things surely need advanced compute. There’s also drones, communications systems, electronic warfare systems, jets etc…
- digianarchist 4y ago
  The Economist made the same point a few months ago.
habibur 4y ago
Wondering if that means Raspberry Pi will be available again. Still no sign of stability in supply.
- moffkalast 4y ago
  https://www.raspberrypi.com/news/production-and-supply-chain-update/ https://www.raspberrypi.com/news/production-and-supply-chain... That's from April, but in short there's a huge order backlog that they're still working through apparently, despite producing half a million units per month. With the lockdown gap in production and the Pi 4s getting increasingly integrated into various 3rd party products I suppose that's no surprise. It's quite apparent that there's little demand for the Pico, since it's always in stock.
  - swores 4y ago
    > It's quite apparent that there's little demand for the Pico, since it's always in stock. Without additional context (which perhaps you have and used subconsciously) that's not evidence that there's less demand - just evidence that the ratio of demand to stock is lowest. It could be that it has 2x the demand but they prioritised it and produced 3x as much stock, or it could be that a specific component makes one product easier/less delayed than the other to make (in which case equal demand could still lead to only one being regularly in stock). If for example 100 people a year want to buy a product $A, and 10 a year want to buy product $B, and the company manufactures 200 $A's a year but only 5 $B's, then $B will be out of stock more despite being far less popular. Or course this partly relates to how well a company predicts future demand when deciding how much of each product to create. But in many cases (though I would guess not when it comes to The Raspberry Pi Foundation) marketing therefore also becomes a factor - in that companies may see value in either creating slightly less than they expect there to be demand for, or artificially limiting / lying about stock levels, in order to get people thinking "wow it's out of stock so it must be popular!"
    - moffkalast 4y ago
      Well it's either an overestimation in production or an underestimation in demand. Or likely both to some extent in this case. I bought a few of them a while back and have only recently managed to integrate one of them into a really basic project. They tried to make some kind of middle ground between an ESP and an Arduino, while providing an incredibly buggy MicroPython build and no Arudino IDE integration. Some of that's been corrected, but it still remains this all rounder thing that's never the best choice for the application.
machinekob 4y ago
tl:dr Global recession => lower chip demand for consumers China ban => lower demand from CCP nvidia RTX 4090 still out of stock in most places :| I'm pretty sure datacenter and military chip usage will grow in next few years even if recession hit consumer market even harder then past year then US chipmakers will get fat checks just 2be prepared for China retaliation (probably feels good to be Intel in chip war time).
- hulitu 4y ago
  > tl:dr Global recession => lower chip demand for consumers Global recession is to blame for everything. I'm waiting for some years for payable video card, nothing special, but i guess Global recession is to blame. /s
  - NavinF 4y ago
    You're waiting for a "payable video card" after prices crashed to an all time low? There are 3090s getting dumped for <$800 now. Is a 50% drop not enough for you?
    - ChoGGi 4y ago
      Nope :)
    - ThatMedicIsASpy 4y ago
      That's a 3090 with terrible power draw. Not a decent 200-300€ card
      - NavinF 4y ago
        The power limit is adjustable lol. It will perform a lot better than say a 3060 at the same power limit.
  - machinekob 4y ago
    Global recession for sure can be blamed for most thinks in EU right now, as we just have a lot less money to spend cause of energy prices, inflation and enormous number of refuges which make prices of basic goods even higher (In some places from 3 to even 10% [Poland] of all population living there are people from Ukraine). And Central Europe isn't prepare for that.
bsenftner 4y ago
With the Skyscraper tall wall of facts that article is composed, one would think such writing would have an index of references. But nope, what The Economists publishes sounds factual but is barely a nudge above laundry room gossip with a complete lack of references, lack of accountability for that wall of facts. It is truly amazing how manipulated our official discourse is on these critical issues. How to know what is opinion?
- Swenrekcah 4y ago
  Why do you say that? Almost every paragraph contains numerous references to either industry reports, sales numbers and market shares, various company projections past and present, relevant global events, laws passed or government statements, market performance and whatnot. They aren't enumerated and listed at the end sure, but they're there.
  - xattt 4y ago
    - bigbillheck 4y ago
      > Please don't post insinuations about astroturfing, shilling, bots, brigading, foreign agents and the like
    - striking 4y ago
      Having spoken to someone who simply felt a nationalistic fervor in their formative years, I can tell you some folks just do it for fun.
  - bsenftner 4y ago
    Try tracking them down, many are just dead ends, many are opinion presented as facts.
    - Swenrekcah 4y ago
      I assume that in order to make this claim you have indeed tracked them down and could then share your results in order to corroborate this?
Isinlor 4y ago
China already declared that it will use force in Taiwan if "possibilities for a peaceful reunification should be completely exhausted". From Chinese Anti-Secession Law: Article 8: In the event that the "Taiwan independence" secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that major incidents entailing Taiwan's secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China's sovereignty and territorial integrity. https://www.europarl.europa.eu/meetdocs/2004_2009/documents/fd/d-cn2005042601/d-cn2005042601en.pdf https://www.europarl.europa.eu/meetdocs/2004_2009/documents/... It is USA/EU strategic interest to avoid too deep dependency on Taiwan. We should support the status quo there as people of Taiwan are prosperous and peaceful nation. But we can't be caught off guard by China as EU was caught off guard by Russia.
- hardware2win 4y ago
  Seems like bluff
  - ambicapter 4y ago
    Sounds like normal foreign relations/diplomacy. It's all grey areas where politicians politick and diplomats maneuver to get what they want without anyone losing face.
    - ethbr0 4y ago
      But when politicians and diplomats make a miscalculation, soldiers die.
      - computerfriend 4y ago
        Not just soldiers.
- rzwitserloot 4y ago
  > can't be caught off guard by China as EU was caught off guard by Russia. There's always a bigger fish. The last time nations were obsessed with autarky, we got WW1, and soon after, WW2. Most countries (i.e. every country not suffering from a drastic case of the resource curse) have the nature that if they trade a lot with another country, either country would lose economic value if they invade the other, _even if_ that invasion goes off stellarly well with almost no losses: The populace doesn't like being subjugated and produces significantly less. In an inbalanced trade/dependency relationship, such as Saudi Arabia's oil vs. the rest of the world, or Russia's gas vs. europe, it's actually _both_ sides that are dependent on the other. It's the dutch curse all over again. Go back in time: * Europe wants more gas to grow its economy, and doesn't have enough on its own soil. * Russia has more than plenty and is willing to sell it. * We enter a period of years where europe companies and countries more and more build industry that isn't going to work out without the relatively cheap russian gas. As these industries continue to succeed and russia continues to be a reliable supplier, ever more industry takes the leap and becomes dependent on it. * This sounds like handing off quite the 'weapon' to your supplier, but, the problem is, that supplier is now just as dependent on this relationship as the consumer is: Russian economy falls apart without the trade of europe-produced goods (a lot of it by industries that run on russian gas), just as fast as europe falls apart without russian gas. Thus, if russia were to invade europe, russia's economic value falls off a cliff, and the same applies to a lesser extent to europe. The only reason europe could in theory invade russia (assumes a perfect invasion, no nukes, no significant resistance at all, just a dejected populace), is because russia's primary value is not particularly dependent on human capital. My theory about why this theory didn't work out and russia invades ukraine is a mix of: * Misunderstanding by Russia of world/Europe response to this invasion. * Too much power in one person, who, like most people surrounded by yay-sayers for 20 years, has lost grip on reality. * Most of all, a ticking clock: Europe has stated they want to wean themselves off of fossil fuel within a decade or so. And so they should, but it's a torpedo to the trade dependency relationship between europe and russia. That last one is the economic argument: Russia had to do something or their economy would fall apart if europe delivers on their plans to rapidly reduce their dependence on (russian-supplied) gas. Thus, autarky -> war. Because if you're doing economically better than your neighbouring country, you produce more weapons and more people, and just invade em, why not. We can trade the risk of what happened to europe, or what is likely to happen if china and the west become autarkic relative to each other (namely, that china invades taiwan) - with nukes and MAD. But that's got its own problems.
mensetmanusman 4y ago
Highly recommend the economist’s podcast on Xi called ‘The Prince’ Xi became a Leninist and is trying to be the next Mao. He is a true believer that his glory and the glory of China can only happen by taking back Taiwan. TSMC is a huge reason for this conflict. The current US policy is trying to slow China’s technological might for that next war.
- gonzo41 4y ago
  It's also setting up the conditions for the US and the West to leave Taiwan to fight it's own fight like Ukraine.
  - gtirloni 4y ago
    Ukraine is fighting its own fight but it's far from alone.
    - ethbr0 4y ago
      Voters in a democracy tend to react better to dollars-spent than bodybags-returned. So support via the former will always be the more tenable position for a democracy.
      - nly 4y ago
        The best way for the EU to 'fight' russia would be to not be dependent on it for energy. Russia can also do what it likes because of the constant nuclear threat. Russia has nukes that work, whereas the likes of the UK has a single nuclear sub that occasionally gets stuck on a sand banks. The Russians probably know where it is at all times.
        cpursley 4y ago
        Yup. It's actually the same answer how we should have fought middle eastern terrorism after 911. The answer was for the west to become energy independent from the middle east as fast and sustainability as possible.
bullen 4y ago
Everything can be predicted if you understand energy. Companies can't survive in a peak world without manufacturing crap. Sell more because your tools break. So now they are looking at how to do that under the premise of eternal growth: They will try to lock us down in the hardware = deprecate older hardware and force you to move to never software with TLS 1.3. That has never succeded because you can always hack everything = They will try to rent out the accounts. They allready started that process, but I'm not buying it. I have all the software I need under permanent license. Since processors now have peaked, everyone is buying all the computers they can, the really smart ones are buying low energy devices like Raspberry but 1151 Xeon is also sold out. Anything manufactured today will probably have hardware kill-switches or programmed obsolescence. For companies: "To not lock your customer down for eternity is suicide"... Edit: Loving the downvotes without comment...
- striking 4y ago
  Fine, I'll bite. I downvoted you because TLS 1.3 isn't a conspiracy to make your old stuff break, and such an allegation is undeserving of a reply. You should be able to run an HTTP/S proxy supporting TLS 1.3 on any machine, issuing your own cert to machines that insist on unsupported HTTPS connection types, and route most of your traffic through it without issue. Raspberry Pis are out of stock because 1) companies that used them in production and got those production builds certified in some way get preference and 2) scalpers are taking the rest of the stock and doubling their money with it as it drops. Older Xeons (and similar hardware) aren't worth running unless you have access to really cheap electricity; upgrading your system is cheaper than paying for the electricity you'd be wasting otherwise, even if you're staying a gen or two behind by buying datacenter surplus from eBay et al. I understand your consternation, as some devices (e.g. cell phones) and some applications (e.g. SaaS apps) definitely appear to exhibit rent-seeking behavior. But that's no reason to declare literally everything a conspiracy, which just makes you appear to have some wires crossed.
  - bullen 4y ago
    TLS 1.3 is not more secure then TLS 1.2 Now Mojang and Rockstar (on azure) have disabled TLS 1.2 on their servers on purpose to lockout Windows 7. Windows 10 offers NOTHING of value compared to Windows 7.
mrjin 4y ago
Not sure how well/bad is AMD doing right now. Have been using Intel machines for over two decades now but not long ago I finally switched to AMD with my new PC and I regret haven't done so earlier. In the meantime, I'm also about to ditch Windows. I guess I'm not alone. Time to say goodbye to Wintel league.
- Comevius 4y ago
  That's more or less irrelevant, AMD is one of the many fabless companies like Qualcomm or MediaTek. Intel makes it's own chips, and now wants to make chips for other companies as well. They may end up making AMD processors one day.
  - akuma73 4y ago
    Isn’t that a huge conflict of interest? It’s hard to see how AMD would get capacity ahead of Intel CPUs.
    - simpsond 4y ago
      Agree. They will prioritize their chips on leading edge. Plenty of business for older processes though.
    - Comevius 4y ago
      Samsung makes a lot of money manufacturing displays and cameras for Apple. They are working on an under-display sensor too that's going to replace the notch in the future. Intel used to make a processor with AMD graphics and 4GB HBM2 (Core i7-8809G).
tannhaeuser 4y ago
Thanks (O/T: copy-pasting text into vim to even read TFA high times to flag ad-ridden, basically unreadable content, or not link to it in the first place)
- m_mueller 4y ago
  O/T T: try reader mode in firefox or safari sometime. works pretty well.
- agomez314 4y ago
  I'm able to read it just fine in Brave Browser
- tanseydavid 4y ago
  >> or not link to it in the first place Please, do not suggest this. You can decide for yourself whether or not you want to go to the extra effort to read the content. And then the rest of us can also decide for ourselves.
  - aliqot 4y ago
    Yes, please more of this thinking. With all of the choice we have now, personal agency is not valued at a time when it needs reinforcing the most. Take care, stranger.
  - lmm 4y ago
    Flagging is the right thing to do with articles that are too spammy, whether that's because of the content or the presentation.
- sundarurfriend 4y ago
  Adding https://remove-js.com/ https://remove-js.com/ before the URL i.e. https://remove-js.com/https://www.economist.com/business/2022/10/17/intel-and-the-15trn-chip-industry-meltdown https://remove-js.com/https://www.economist.com/business/202... is often an easy fix for news websites. The page actually looks beautiful with this, and the content is front and center.
- 4y ago
lvl102 4y ago
Intel messed up big time and I hate to see the US govt dump more money on incompetence. They are failing their way to success.
- A4ET8a8uTh0 4y ago
  I have some bitter taste about that myself. First they offshore[1] to anywhere, but US, but the moment US makes it geopolitically risky, US recompenses Intel by offering massive incentives to re-shore. It is maddening. The worst part is, making chips is actually hard so there is a good and valid reason to actually do it, but I just hate rewarding bad behavior ( from US taxpayer's perspective ). [1]https://www.latimes.com/archives/la-xpm-2004-apr-07-fi-intel7-story.html https://www.latimes.com/archives/la-xpm-2004-apr-07-fi-intel...
- totalZero 4y ago
  It would be stupendously bad judgment to permit the semiconductor fabrication industry to exist with no redundancy whatsoever. Tail risk is ever present and the tails seem to be getting fatter every day.
bouncycastle 4y ago
Related: There is a massive TSMC factory being built in Japan right now. Take a look at the pictures, I've never seen this many cranes at one location: https://www.nhk.jp/static/assets/images/newblogposting/ts/7P5MRK4ZKV/7P5MRK4ZKV-eyecatch_697317e9f77fa571256076ea98044823.png https://www.nhk.jp/static/assets/images/newblogposting/ts/7P... https://cdn-cw-english.cwg.tw/ckeditor/202205/ckeditor-628ae91d19304.png https://cdn-cw-english.cwg.tw/ckeditor/202205/ckeditor-628ae... It looks like a forest of cranes...
- adeptima 4y ago
  "The plant will produce 22-nanometer and 28-nanometer chips to address strong global demand for speciality chip technologies, they said" I'm curious why not the latest - 3nm, 5nm
  - detaro 4y ago
    There is no spare capacity to build highest-end process fabs, and there is huge demand for capacity in 22/28nm too.
    - sylware 4y ago
      "spare capacity" ? what do you mean ? Taiwan and South Korea are enough to supply the world demand? Well, it is still hard to get your hands on top-notch chips at a reasonable price whatever the news is saying...
      - kuschku 4y ago
        You need certain machines for EUV. There's only one manufacturer (ASML) for those, and they're at capacity. And even if they wanted to scale up, there's only one manufacturer (Zeiss) for the EUV mirrors required for those machines, and all their capacity for the next years is already bought as well.
        throwawaylinux 4y ago
valdiorn 4y ago
So, can someone explain to me why I can't get ANY chips for anything at all? Everything is out of stock that I use in my designs (Audio processing equipment). microprocessors, microcontrollers, ADCs, DACs, audio codecs, memory. Even bread and butter diodes were hard to source a few months ago. You name it, Mouser/Farnell/Digikey/the manufacturer doesn't have it. And if they do, it's priced at 500% MSRP. It may be "swinging the other way" but we're at the very depth of the curve right now, and lead times are frequently 12-18 months. I can't see any evidence that it's swinging back, personally, maybe someone else does (like the writer of this article).
- martincmartin 4y ago
  I mean it's literally in TFA: "In late September Micron, an Idaho-based maker of memory chips, reported a 20% year-on-year fall in quarterly sales. A week later amd, a Californian chip designer, slashed its sales estimate for the third quarter by 16%. Within days Bloomberg reported that Intel plans to lay off thousands of staff, following a string of poor results" But most of the article is about how they're building new fabs in America, right when sales to China are being restricted. So its about a future surge in supply and reduction in demand.
  - svnt 4y ago
    Parent is talking about distributor stock and you are talking about sales. If your comment was accurate it would seem like we should have had distributor stock coming online after the pandemic shortages as companies push to get their orders in the queue before capacity goes offline due to conflict. I’m curious with parent — my guess is just that the humans behind the companies got used to the profits and not sitting on inventory, which was always risky.
- nathas 4y ago
  Check out the post by Schiit Audio's CEO (I think CEO?): https://www.head-fi.org/threads/schiit-happened-the-story-of-the-worlds-most-improbable-start-up.701900/page-5951#post-16859594 https://www.head-fi.org/threads/schiit-happened-the-story-of... It looks like the audio sector was hit particularly hard by the war in Ukraine.
programmer_dude 4y ago
https://web.archive.org/web/20221018123239/https://www.economist.com/business/2022/10/17/intel-and-the-15trn-chip-industry-meltdown https://web.archive.org/web/20221018123239/https://www.econo...
sabujp 4y ago
semi stocks are at all time lows and PE levels. Don't let this doom and gloom piece prevent you from buying more
- alexk307 4y ago
  Agreed - so much long term upside paired with tons of short term uncertainity.
- ac29 4y ago
  Note that the typically given P/E ratio is a backwards looking number, not forwards. Intel trades at 5.5x PE for the last 12 months but 12.1x PE for the next 12 months (estimated, obviously). Intel specifically is also not at an "all time low" - they IPO'd in 1971 and have grown significantly since then. I agree there are some bargains to be had in semi stocks, but keep in mind things may very well get worse before they get better.
- bagacrap 4y ago
  If you didn't sell semi stocks at their peak last November, when will you sell them? And if you didn't buy till they were near their peak, did you really care about PE ratios?
  - liketochill 4y ago
    About the time I need to retire is when I will sell
tgtweak 4y ago
To be perfectly honest, this is still within a 1000km radius circle that encompasses Taiwan, South Korea and Japan. That covers the majority of next-generation fabs that aren't Intel. It's great to legally diversify these fabs, but it does very little to mitigate geopolitical issues that are brewing in and around the east china sea.
- nscalf 4y ago
  How does it do little to diversify these fabs? The current situation is that if China invades Taiwan, the entire Western world is compelled to engage militarily over Taiwan's high end chip fabs. It cannot be overstated how much we depend on that, if TSMC operates in other countries, we don't HAVE to engage in WW3.
  - LeifCarrotson 4y ago
    A fab in Ohio, Oregon, or Arizona 10,000 km from China is safe from threats like cruise missiles that the proposed fab 1000 km from China in Japan or South Korea would not be. It's not so much that cruise missiles used on civilian targets in South Korea or Japan would not be a reason to start WW3, more that it would be less tempting.
    - deleted 4y ago
      [deleted]
    - theptip 4y ago
      I'm confused by this take. Who is threatening Japan with cruise missiles? Certainly not China or Russia. North Korea, perhaps. The primary reason that we're concerned about semiconductor fab concentration in Taiwan is that China has consistently stated that it is going to invade Taiwan at some point (and that could be 2049 or in a few years for all we know). This is completely outside of any hypothetical scenarios of who lobs cruise missiles at who during WW3. You can make the point that relying on semiconductor manufacturing outside of your country/coalition is a bad idea for military self-sufficiency, and I would agree, but that's a much more diffuse risk than the very specific scenario that is driving the CHIPS act and concern about fab concentration in Taiwan.
deleted 4y ago
[deleted]
alexk307 4y ago
It seems silly to measure short term success in an industry known for "notoriously cyclical" booms and busts. The size of the investment needed to create these manufacturing plants in the US, coupled with the complexity and time it takes to build them, combines perfectly for articles like this. I can't think of a reason that on-shoring chip fabs would be a bad thing for the US - other than the vague threat of China retaliating. Cutting off foreign dependencies in high-tech industries would surely be beneficial in the long term.
swamp40 4y ago
> American chip bosses now fear that China could retaliate They will certainly retaliate. The question is how. Most think they will react similarly, banning cutting edge electronics exports that could have military use. But I suspect they will go after our weak spots. Prescription drugs, solar, lithium. I'm sure there are more.
- simonsarris 4y ago
  yeah. They might even flood the country with fentanyl.
iancmceachern 4y ago
It's the people, the talent, the knowledge that drives any industry like this. The US government, US, we, gave Intel and some other companies a huge sum of money to stay awesome. Then they announce huge layoffs to get rid of a lot of thr talent, people, heart of their business. So, wouldn't we have been better off as a society of we had just offered thT CHIPs money as a startup find and asked a bunch or people from Intel to leave and build new semi companies using this fund? In the end the meteic for success of the CHIPs program in the short term should be number of people working in semi in the US. How did we dedicate money and resources to this thing of national importance and end up with fewer experts working on it? Money is the root of all evil, power corrupts us all.
- ac29 4y ago
  > Then they announce huge layoffs to get rid of a lot of thr talent, people, heart of their business. Intel has not announced layoffs. There is a rumor layoffs will be announced at the next quarterly earnings release.
- CoastalCoder 4y ago
  Targeted layoffs might be the best thing long-term. From my limited perspective of having recently worked at Intel, they had a lot of dead weight. There was a lot of talent, but it was also diluted by a lot of management and bureaucracy. I honestly don't know if layoffs are an effective solution to this, but IMHO they could definitely benefit from lower headcount and greater urgency.
  - AdrianB1 4y ago
    A friend that also worked at Intel until a couple of years ago confirmed what you say.
  - iancmceachern 4y ago
    Thanks for this. I see that perspective and from my experience in larger tech corps it jibes. I'm still trying to reconcile it with the CHIPs thing. Intel on one hand is admittedly bloated and inefficient, and so is choosing to reduce its headcount and therefore bandwidth to do work. So what is the CHIPs money going to. Typically when you invest in something like this you are buying people's time to do the work and also materials and supplies to build the stuff like factories, etc. So if we are lowering headcount it's not going to labor. I suspect as you say it's more about changing worker types, like getting rid of skillsets they don't need so they can hire those they do like people to build semi plants here. So, in my mind, the only way it adds up is if Intel goes on a big hiring spree soon. Otherwise, where did the money go? We can buy equipment to build plants but who builds them?
chatterhead 4y ago
1) We need chip manufacturing to be nationalized in the USA - if it's that important to national security we don't need to leave it in the hands of private industry. 2) Taiwan is not China. We are going to break the rest of China up because Xi decided to consolidate power instead of steward the distributed power he inherited. 3) The USA isn't in trouble at all; we will expand our industries, inflate our currency and strengthen it so demand globally grows as Russia, EU and China falter. 4) China took HK almost 3 decades early so why should anyone believe their word on territorial respect.
- _trackno5 4y ago
  > 1) We need chip manufacturing to be nationalized in the USA - if it's that important to national security we don't need to leave it in the hands of private industry I generally agree with you that countries should have control over strategic industries (e.g., oil), but I'm not sure if nationalisation is the way to go. I feel like that serves more to scare off investors than anything else. The way the US is going about it feels more correct to me: give fiscal and financial incentives for these strategic resources to be built and managed inside the country, while also removing incentives for too many exports
  - chatterhead 4y ago
    If you believe oil should be then so should all energy; including the entirely government created "alternative energy" industry. Investors will be scared of the US nationalizing specific strategic industries but not the changing political winds of foreign nations? I don't think so.
    - _trackno5 4y ago
      I don't understand your comment. You seem to believe because I stated something it means that I'm denying something else. If clean energy sources are strategic, yeah the US should do the work to protect its ability to utilise it regardless of it being oil, solar, wind, nuclear. Doesn't mean the state needs to own those ventures, just that they should put in the effort to fund investment and growth in strategic areas.
nonrandomstring 4y ago
We've reached or are approaching "peak tech". The other day we were discussing Pablo Azar, "Computer Saturation and the Productivity Slowdown" (Federal Reserve Bank of New York Liberty Street Economics, October 6, 2022) [1] Simply reinventing systems and deliberately obsoleting stuff to create fake demand is over. The metaverse isn't hoing to happen. People are fatigued with tech. We're entering a different era in which we need to make better, more humane and effective technology, not just more and more and more of it. [1] https://libertystreeteconomics.newyorkfed.org/2022/10/computer-saturation-and-the-productivity-slowdown/ https://libertystreeteconomics.newyorkfed.org/2022/10/comput... EDIT: less trashy link
- vkou 4y ago
  We may need this, but the stakeholders holding the purse strings don't. And they are the ones who will decide what gets built. It's how we end up with shit like grocery self-checkout machines and robots answering customer support calls. Nobody likes being yelled at by a robot who doesn't understand the situation, except the decision-makers buying the machines. This isn't peak tech, not by a longshot. This is just Intel's competitors eating it's lunch.
  - bee_rider 4y ago
    Grocery self-checkout machines are great. There's even a system now where you can bring a little scanner with you and scan as you pick them out, that way you can bag them directly in your cart, saving the time of the final scan and the bagging (it was great during the peak of the pandemic, skip the cashier and waiting in the high-population line area). Robots answering support calls are annoying, but self-service websites are pretty good for 99% of things.
    - pcai 4y ago
      the scan as you shop technology is actually being phased out in many chains because the theft rates are unsustainable some wholesale clubs apparently counter this by randomly auditing every cart as you leave, but that seems to leave the whole thing only marginally more efficient than traditional checkout
achenet 4y ago
https://archive.ph/ICWl6 https://archive.ph/ICWl6
mFixman 4y ago
I know nothing about the chip-making process, and news about fabs and the chip industry confuse and scare me. Can anybody link me to a guide with the basics of these topics, like what exactly is a chip (is it a microcontroller? a part of a larger system?), or why the few giant fabs can't be replaced by a lot of smaller and cheaper ones?
- deleted 4y ago
  [deleted]
- muricula 4y ago
  There are two parts to making chips: architecture (design) and process (how it's manufactured). Intel does both but eg Apple only does design and outsources manufacturing to other companies. There are lots of different chips ranging from slow, energy efficient, and cheap microcontrollers, to fast, energy hungry, and expensive high performance computing clusters. Intel makes the fast ones, and had the fastest chips from the late 1990s to the mid 2010s. Since then, a Taiwanese company has had the fastest chips which go into iPhones, Nvidia graphics cards, and AMD cpus. Building a fab (manufacturing plant) to make the fastest chips which require features shorter than 7nm (billionths of a meter!) requires billions of dollars in up front investment. It's mass scale manufacturing at some of the lowest levels anything has ever been created at. The US gov't is afraid that company which makes the fastest chips in Taiwan (which is not recognized as an independent country, but is effectively self governing, but China claims is theirs, it's complicated yes), could be under Chinese control some day. The Military Industrial Complex don't want the US tech sector or US defense tech to be beholden to China, and US companies (Intel) want government funding to build expensive factories. Thus the CHIPS act.
- passion__desire 4y ago
  Asianometry[1] is a good channel for breaking down the chip industry news and process. He also has a newsletter[2]. [1] https://www.youtube.com/c/Asianometry/videos https://www.youtube.com/c/Asianometry/videos [2] https://asianometry.substack.com/ https://asianometry.substack.com/
Melatonic 4y ago
Seems like a dumb article - their whole argument is that we should NOT be building fabs in the US because demand has recently fallen and we MIGHT end up with too much supply? Seems like a good thing to be honest. More supply means cheaper prices and even if demand is a bit lower there is no way it is going to keep going down. We have CPU's in damn near everything these days. The drop is probably mainly because of crypto mining falling of a cliff.
- fnordpiglet 4y ago
  Seems like a good thing as a consumer. As a producer it’s what you try to avoid. They’re not charities
  - CydeWeys 4y ago
    It's reasons like this why the DPA and other mechanisms exist. Having sufficient fab capacity in case global supply lines experience disruption is a strategic reserve of high national security importance.
    - fnordpiglet 4y ago
      That’s true. But then supply, demand, and price are irrelevant. The challenge is making optimal decisions about investment. Markets tend to be brutal to producers who aren’t efficient, and that leads to a Darwinian process favoring the momentarily optimal producers. Production by fiat leads to weird outcomes. DPA mandated and funded fab facilities will probably in the future be wildly out of date with private producers ensuring we can only produce antiquated processes or using extraordinarily inefficient processes. I’m no libertarian market wacko, and I think it’s important to have decentralized production and as a planet we probably jumped the shark with centralizing Asia as the production hub for manufacturing and fabrication. But I’m dubious DPA etc are sufficient measures. My point though was low prices and softening demand is NOT helpful as the prior poster asserted. It hurts the effort because the lack of margin and scale means only fiat production is possible, with poor long term outcomes.
- godelski 4y ago
varelse 4y ago
lakomen 4y ago
Paywalled
jarym 4y ago
> Toshiya Hari of Goldman Sachs, a bank, Never thought I'd see an Economist article explaining that GS are a bank hahaha

288 points by __Joker 4y ago

https://archive.ph/GpPCN https://archive.ph/GpPCN

A few months ago, I posted that here that governments around the world should not interfere with the chip industry just because of the covid-induced shortages. The reason is that supply and demand will naturally sort things out and that any government handout to chip companies to increase capacity will be wasted because chip demand will swing the other way. The chip industry is now swinging the other way.

gergoe 4y ago
- Quindecillion 4y ago
  - Dawnyhf5t 4y ago
  - cxr 4y ago
    Please just downvote these comments (and then flag them if you can), rather than replying. If you aren't able to downvote or flag them, then please still abstain from responding. It will get killed eventually, but replying brings undue attention, thwarting the point of moderation.
noja 4y ago
I'm not sure that makes your prediction correct, you need to give a timeframe too. Without a timeframe, it's just waiting until you are right.
yvdriess 4y ago
The current slump seems purely caused by a demand drop. It will take years to see the capacity increase because of those government investments. By then, we will hopefully be out of this recession.
- senttoschool 4y ago
  The chip manufacturing industry would have spent their own money building fabs based on demand projections. Government money (my tax money) does not need to interfere and give free money to them. This is my point.
  - yvdriess 4y ago
    I get your point, but it seems to ignore the geopolitics involved in something like the CHIPS act. Those government investments are not to save the poor struggling semi industry, it is a strategic move to limit overseas dependencies in a supply chain that is seen as critical for the MIC and the economy at large. You are right that those semi companies do not need the government investments to build fabs. However, those fabs materialize overseas, depending on overseas supply chains. The EU and US regions want to build out more of the supply chain domestically, for strategic reasons. Those governments could simply legislate to impose heavy restrictions, but that hurts the competitiveness of the companies involved. And so, they combine that stick with a carrot, which is the government investments. You can already see increased restrictions on the semi supply chain in China, timed right after the CHIPS act passed.
Balero 4y ago
I think it is fair for a government to promote such a key industry to diversify where it is based. Currently a crazy percentage of chips are made in one geographical location. A huge amount of the modern economy is reliant on having cheap and easy access to these chips. This isn't a supply/demand decision by governments, but a strategic risk decision. Having some domestic/local regional (think EU based) chip manufacturing is going to be like having steel or food production. A strategic decision.
pzduniak 4y ago
As far as I understand, the primary reason for these investments is not to address the shortages, but to decouple Western nations from their reliance on Taiwanese silicon. Most of the remaining shortages - which are still happening in many industries, eg. heat pump shortages in Europe are mostly blocked by chip supply - are caused by the production backlog of the older/cheaper/different technologies. So the goal is political. The economy can take a hit to achieve it.
- tooltalk 4y ago
  Well, the foundry business is now a two-horse race between Samsung and TSMC. Intel, many believe won't make it. The US gov't knows it too -- that's why Trump arm-twisted TSMC to open new plants in Arizona. Samsung was making Apple's A's in Austin, Texas some time ago, but Apple ditched Samsung's US manufacturing in favor of their China/Taiwan-first offshore outsourcing strategy.
  - mschuster91 4y ago
    > Samsung was making Apple's A's in Austin, Texas some time ago, but Apple ditched Samsung's US manufacturing in favor of their China/Taiwan-first offshore outsourcing strategy. Apple runs an Asia-first strategy these days, they are divesting from China at top speed (whether that's due to sanction threats, the risk of operating in dictatorships, raising wages in China or a combination of that is up for debate). It doesn't make much sense for Apple economically and logistically to use US-made products as they have to be shipped across the ocean to the assembly plants.
    - phpisthebest 4y ago
      Apple should be investing in a North America first strategy and getting manufacturer for everything spun up here
    - tooltalk 4y ago
      >> ... they are divesting from China at top speed... I'm not entirely convinced that that's what Apple is doing. The Information reported[1] last year that Apple made ginormouse investments ($270+B) in China's domestic tech industry to train their workforce and foster China's tech manufacturing. That was 6-7 years ago. It was also revealed very recently that Apple was still trying mighty hard to source more materials and chip suppliers from China's domestic tech industry (eg, YMTC) in spite of the on-going US sanctions on MIC chips -- in this particular case with YMTC, Apple finally gave up only after the Biden admin expanded export control on YMTC last week[2]. I don't think Apple is deterred by Xi's dictatorship, China's geopolitical threats to Taiwan/the South Sea conflict with other SEA countries, or the Uigher (and other ethnic minoority groups) human rights concerns, despite their virtue signaling here in the US. Sure, I think the justification for Biden's foreign/trade policies is up for debates, but what is quite clear is that Apple hasn't really changed its China/Taiwan-first business practices. 1. https://www.theinformation.com/articles/facing-hostile-chinese-authorities-apple-ceo-signed-275-billion-deal-with-them https://www.theinformation.com/articles/facing-hostile-chine... 2. https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-freezes-plan-to-use-China-s-YMTC-chips-amid-political-pressure https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-f...
jtorsella 4y ago
I really don’t understand this. Chips are tangible goods, not services where, for example, a bunch of hospitality capacity went to waste during the pandemic. Any “extra” chips will go to use, and will only serve to reduce costs for firms and consumers purchasing them, expand the range of products it makes sense to put chips in and the speed and quality of chips companies can afford to build on. While market signals are the best way to determine these things in general, many of the reasons mentioned in the article - long spin-up times for production infrastructure, dependence on other countries with fraught geopolitical situations - are strong reasons to build reserve capacity, even setting aside the direct economic benefits.
- mschuster91 4y ago
  > Chips are tangible goods Many chips are not fungible, at least not for large-volume orders that incorporate stuff like customer specific mask ROMs or optimizations, and certainly for built-to-order stuff like Apple's SoCs. That means that let's say Apple can't just go and take a bunch of NVIDIA's chips and slap them into their products, and I'd even take a bet and say that manufacturers of NVIDIA cards can't easily take up cancelled order capacity for the same NVIDIA chip from other manufacturers.
  - jtorsella 4y ago
    Yes, that’s a good point. But it seems to me like that’s a matter of degree, right? Like, even stipulating that the chips themselves are not fungible across products and companies, they are fungible across time for the same or similar products. The price of your 2023 fridge, for example, could be lower because of excess supply of chips for 2022 models, no? And am I right in thinking that even if the chips themselves are not fungible (and there is a genuine possibility that excess production of specific chips goes completely to waste), excess productive capacity is good in and of itself despite some amount of specialization?
    - svnt 4y ago
      No. Chips don’t really expire, and suppliers often have to wean their customers off them by raising the prices regularly once they’re done acquiring design wins. If the chips went on sale every year then companies would gamble on additional stock at discount, driving revenue down, and further disrupting the sales transitions into new IC designs.
Proven 4y ago
guidedlight 4y ago
I saw this announcement being more guaranteeing US onshore chip fabs are being built as demand increase. The rise of TSMC has somewhat increased the national security risk as the market share has shifted away from Intel. We are seeing with the Ukraine War, a reliable domestic supply of semiconductors is now critical to national security. I expect Intel will continue to be helped along by the US government for some time.
bfung 4y ago
There’s gov intervention now, not due to shortage nor Covid related supply, but strategic moves that’s happening between US and China. With China having “seized” Hong Kong, and Russia invading Ukraine, flags went up signaling that the next major move in the future could be China invading Taiwan. And Taiwan is where the most advanced chips are made. In parallel news, playing with the open source AI models, it’s clear that GPUs are NEEDED in order to run these AI models. Ex: an Nvidia RTX3090 (low end of A100) can run Stable Diffusion in a couple minutes, while my 2013 MacBook Pro, cpu driven, takes ~4hrs to perform the same task. AI models applied to military uses is a game changer, as demonstrated by Ukraine equipped with US tech. Mitigating the risk of losing Taiwan, enabling production on US shore, and banning sales to China [1] would keep the economic and military advantage on the US side a bit longer than if things kept going the way they were. Chips might slump now, but GPUs are gonna be in hot demand, even w/o the blockchain use cases. As demonstrated by the open source AI models, we’re about to replace a lot of stock photos, news illustrations, logo services… and that’s just the beginning. [1] https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file https://www.bis.doc.gov/index.php/documents/about-bis/newsro...
- hikingsimulator 4y ago
  You mention AI applications in Ukraine. Can you provide more information on that? Sounds like a rabbit hole.
- chernofool 4y ago
  Are you certain that AI is used in any of the tech that the US is sending to Ukraine? It's mostly cold war era equipment, designed around the '90s or earlier. Modern AI also seems very failure-prone for military applications around populated areas.
  - rank0 4y ago
    What about the air defense systems? Those things surely need advanced compute. There’s also drones, communications systems, electronic warfare systems, jets etc…
digianarchist 4y ago
The Economist made the same point a few months ago.

habibur 4y ago

Wondering if that means Raspberry Pi will be available again. Still no sign of stability in supply.

moffkalast 4y ago
https://www.raspberrypi.com/news/production-and-supply-chain-update/ https://www.raspberrypi.com/news/production-and-supply-chain... That's from April, but in short there's a huge order backlog that they're still working through apparently, despite producing half a million units per month. With the lockdown gap in production and the Pi 4s getting increasingly integrated into various 3rd party products I suppose that's no surprise. It's quite apparent that there's little demand for the Pico, since it's always in stock.
- swores 4y ago
  > It's quite apparent that there's little demand for the Pico, since it's always in stock. Without additional context (which perhaps you have and used subconsciously) that's not evidence that there's less demand - just evidence that the ratio of demand to stock is lowest. It could be that it has 2x the demand but they prioritised it and produced 3x as much stock, or it could be that a specific component makes one product easier/less delayed than the other to make (in which case equal demand could still lead to only one being regularly in stock). If for example 100 people a year want to buy a product $A, and 10 a year want to buy product $B, and the company manufactures 200 $A's a year but only 5 $B's, then $B will be out of stock more despite being far less popular. Or course this partly relates to how well a company predicts future demand when deciding how much of each product to create. But in many cases (though I would guess not when it comes to The Raspberry Pi Foundation) marketing therefore also becomes a factor - in that companies may see value in either creating slightly less than they expect there to be demand for, or artificially limiting / lying about stock levels, in order to get people thinking "wow it's out of stock so it must be popular!"
  - moffkalast 4y ago
    Well it's either an overestimation in production or an underestimation in demand. Or likely both to some extent in this case. I bought a few of them a while back and have only recently managed to integrate one of them into a really basic project. They tried to make some kind of middle ground between an ESP and an Arduino, while providing an incredibly buggy MicroPython build and no Arudino IDE integration. Some of that's been corrected, but it still remains this all rounder thing that's never the best choice for the application.

machinekob 4y ago

tl:dr Global recession => lower chip demand for consumers China ban => lower demand from CCP nvidia RTX 4090 still out of stock in most places :| I'm pretty sure datacenter and military chip usage will grow in next few years even if recession hit consumer market even harder then past year then US chipmakers will get fat checks just 2be prepared for China retaliation (probably feels good to be Intel in chip war time).

hulitu 4y ago
> tl:dr Global recession => lower chip demand for consumers Global recession is to blame for everything. I'm waiting for some years for payable video card, nothing special, but i guess Global recession is to blame. /s
- NavinF 4y ago
  You're waiting for a "payable video card" after prices crashed to an all time low? There are 3090s getting dumped for <$800 now. Is a 50% drop not enough for you?
  - ChoGGi 4y ago
    Nope :)
  - ThatMedicIsASpy 4y ago
    That's a 3090 with terrible power draw. Not a decent 200-300€ card
    - NavinF 4y ago
      The power limit is adjustable lol. It will perform a lot better than say a 3060 at the same power limit.
- machinekob 4y ago
  Global recession for sure can be blamed for most thinks in EU right now, as we just have a lot less money to spend cause of energy prices, inflation and enormous number of refuges which make prices of basic goods even higher (In some places from 3 to even 10% [Poland] of all population living there are people from Ukraine). And Central Europe isn't prepare for that.

bsenftner 4y ago

With the Skyscraper tall wall of facts that article is composed, one would think such writing would have an index of references. But nope, what The Economists publishes sounds factual but is barely a nudge above laundry room gossip with a complete lack of references, lack of accountability for that wall of facts. It is truly amazing how manipulated our official discourse is on these critical issues. How to know what is opinion?

Swenrekcah 4y ago
Why do you say that? Almost every paragraph contains numerous references to either industry reports, sales numbers and market shares, various company projections past and present, relevant global events, laws passed or government statements, market performance and whatnot. They aren't enumerated and listed at the end sure, but they're there.
- xattt 4y ago
  - bigbillheck 4y ago
    > Please don't post insinuations about astroturfing, shilling, bots, brigading, foreign agents and the like
  - striking 4y ago
    Having spoken to someone who simply felt a nationalistic fervor in their formative years, I can tell you some folks just do it for fun.
- bsenftner 4y ago
  Try tracking them down, many are just dead ends, many are opinion presented as facts.
  - Swenrekcah 4y ago
    I assume that in order to make this claim you have indeed tracked them down and could then share your results in order to corroborate this?

Isinlor 4y ago

China already declared that it will use force in Taiwan if "possibilities for a peaceful reunification should be completely exhausted". From Chinese Anti-Secession Law: Article 8: In the event that the "Taiwan independence" secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that major incidents entailing Taiwan's secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China's sovereignty and territorial integrity. https://www.europarl.europa.eu/meetdocs/2004_2009/documents/fd/d-cn2005042601/d-cn2005042601en.pdf https://www.europarl.europa.eu/meetdocs/2004_2009/documents/... It is USA/EU strategic interest to avoid too deep dependency on Taiwan. We should support the status quo there as people of Taiwan are prosperous and peaceful nation. But we can't be caught off guard by China as EU was caught off guard by Russia.

hardware2win 4y ago
Seems like bluff
- ambicapter 4y ago
  Sounds like normal foreign relations/diplomacy. It's all grey areas where politicians politick and diplomats maneuver to get what they want without anyone losing face.
  - ethbr0 4y ago
    But when politicians and diplomats make a miscalculation, soldiers die.
    - computerfriend 4y ago
      Not just soldiers.
rzwitserloot 4y ago
> can't be caught off guard by China as EU was caught off guard by Russia. There's always a bigger fish. The last time nations were obsessed with autarky, we got WW1, and soon after, WW2. Most countries (i.e. every country not suffering from a drastic case of the resource curse) have the nature that if they trade a lot with another country, either country would lose economic value if they invade the other, _even if_ that invasion goes off stellarly well with almost no losses: The populace doesn't like being subjugated and produces significantly less. In an inbalanced trade/dependency relationship, such as Saudi Arabia's oil vs. the rest of the world, or Russia's gas vs. europe, it's actually _both_ sides that are dependent on the other. It's the dutch curse all over again. Go back in time: * Europe wants more gas to grow its economy, and doesn't have enough on its own soil. * Russia has more than plenty and is willing to sell it. * We enter a period of years where europe companies and countries more and more build industry that isn't going to work out without the relatively cheap russian gas. As these industries continue to succeed and russia continues to be a reliable supplier, ever more industry takes the leap and becomes dependent on it. * This sounds like handing off quite the 'weapon' to your supplier, but, the problem is, that supplier is now just as dependent on this relationship as the consumer is: Russian economy falls apart without the trade of europe-produced goods (a lot of it by industries that run on russian gas), just as fast as europe falls apart without russian gas. Thus, if russia were to invade europe, russia's economic value falls off a cliff, and the same applies to a lesser extent to europe. The only reason europe could in theory invade russia (assumes a perfect invasion, no nukes, no significant resistance at all, just a dejected populace), is because russia's primary value is not particularly dependent on human capital. My theory about why this theory didn't work out and russia invades ukraine is a mix of: * Misunderstanding by Russia of world/Europe response to this invasion. * Too much power in one person, who, like most people surrounded by yay-sayers for 20 years, has lost grip on reality. * Most of all, a ticking clock: Europe has stated they want to wean themselves off of fossil fuel within a decade or so. And so they should, but it's a torpedo to the trade dependency relationship between europe and russia. That last one is the economic argument: Russia had to do something or their economy would fall apart if europe delivers on their plans to rapidly reduce their dependence on (russian-supplied) gas. Thus, autarky -> war. Because if you're doing economically better than your neighbouring country, you produce more weapons and more people, and just invade em, why not. We can trade the risk of what happened to europe, or what is likely to happen if china and the west become autarkic relative to each other (namely, that china invades taiwan) - with nukes and MAD. But that's got its own problems.

mensetmanusman 4y ago

Highly recommend the economist’s podcast on Xi called ‘The Prince’ Xi became a Leninist and is trying to be the next Mao. He is a true believer that his glory and the glory of China can only happen by taking back Taiwan. TSMC is a huge reason for this conflict. The current US policy is trying to slow China’s technological might for that next war.

gonzo41 4y ago
It's also setting up the conditions for the US and the West to leave Taiwan to fight it's own fight like Ukraine.
- gtirloni 4y ago
  Ukraine is fighting its own fight but it's far from alone.
  - ethbr0 4y ago
    Voters in a democracy tend to react better to dollars-spent than bodybags-returned. So support via the former will always be the more tenable position for a democracy.
    - nly 4y ago
      The best way for the EU to 'fight' russia would be to not be dependent on it for energy. Russia can also do what it likes because of the constant nuclear threat. Russia has nukes that work, whereas the likes of the UK has a single nuclear sub that occasionally gets stuck on a sand banks. The Russians probably know where it is at all times.
      - cpursley 4y ago
        Yup. It's actually the same answer how we should have fought middle eastern terrorism after 911. The answer was for the west to become energy independent from the middle east as fast and sustainability as possible.

bullen 4y ago

Everything can be predicted if you understand energy. Companies can't survive in a peak world without manufacturing crap. Sell more because your tools break. So now they are looking at how to do that under the premise of eternal growth: They will try to lock us down in the hardware = deprecate older hardware and force you to move to never software with TLS 1.3. That has never succeded because you can always hack everything = They will try to rent out the accounts. They allready started that process, but I'm not buying it. I have all the software I need under permanent license. Since processors now have peaked, everyone is buying all the computers they can, the really smart ones are buying low energy devices like Raspberry but 1151 Xeon is also sold out. Anything manufactured today will probably have hardware kill-switches or programmed obsolescence. For companies: "To not lock your customer down for eternity is suicide"... Edit: Loving the downvotes without comment...

striking 4y ago
Fine, I'll bite. I downvoted you because TLS 1.3 isn't a conspiracy to make your old stuff break, and such an allegation is undeserving of a reply. You should be able to run an HTTP/S proxy supporting TLS 1.3 on any machine, issuing your own cert to machines that insist on unsupported HTTPS connection types, and route most of your traffic through it without issue. Raspberry Pis are out of stock because 1) companies that used them in production and got those production builds certified in some way get preference and 2) scalpers are taking the rest of the stock and doubling their money with it as it drops. Older Xeons (and similar hardware) aren't worth running unless you have access to really cheap electricity; upgrading your system is cheaper than paying for the electricity you'd be wasting otherwise, even if you're staying a gen or two behind by buying datacenter surplus from eBay et al. I understand your consternation, as some devices (e.g. cell phones) and some applications (e.g. SaaS apps) definitely appear to exhibit rent-seeking behavior. But that's no reason to declare literally everything a conspiracy, which just makes you appear to have some wires crossed.
- bullen 4y ago
  TLS 1.3 is not more secure then TLS 1.2 Now Mojang and Rockstar (on azure) have disabled TLS 1.2 on their servers on purpose to lockout Windows 7. Windows 10 offers NOTHING of value compared to Windows 7.

mrjin 4y ago

Not sure how well/bad is AMD doing right now. Have been using Intel machines for over two decades now but not long ago I finally switched to AMD with my new PC and I regret haven't done so earlier. In the meantime, I'm also about to ditch Windows. I guess I'm not alone. Time to say goodbye to Wintel league.

Comevius 4y ago
That's more or less irrelevant, AMD is one of the many fabless companies like Qualcomm or MediaTek. Intel makes it's own chips, and now wants to make chips for other companies as well. They may end up making AMD processors one day.
- akuma73 4y ago
  Isn’t that a huge conflict of interest? It’s hard to see how AMD would get capacity ahead of Intel CPUs.
  - simpsond 4y ago
    Agree. They will prioritize their chips on leading edge. Plenty of business for older processes though.
  - Comevius 4y ago
    Samsung makes a lot of money manufacturing displays and cameras for Apple. They are working on an under-display sensor too that's going to replace the notch in the future. Intel used to make a processor with AMD graphics and 4GB HBM2 (Core i7-8809G).

tannhaeuser 4y ago

Thanks (O/T: copy-pasting text into vim to even read TFA high times to flag ad-ridden, basically unreadable content, or not link to it in the first place)

m_mueller 4y ago
O/T T: try reader mode in firefox or safari sometime. works pretty well.
agomez314 4y ago
I'm able to read it just fine in Brave Browser
tanseydavid 4y ago
>> or not link to it in the first place Please, do not suggest this. You can decide for yourself whether or not you want to go to the extra effort to read the content. And then the rest of us can also decide for ourselves.
- aliqot 4y ago
  Yes, please more of this thinking. With all of the choice we have now, personal agency is not valued at a time when it needs reinforcing the most. Take care, stranger.
- lmm 4y ago
  Flagging is the right thing to do with articles that are too spammy, whether that's because of the content or the presentation.
sundarurfriend 4y ago
Adding https://remove-js.com/ https://remove-js.com/ before the URL i.e. https://remove-js.com/https://www.economist.com/business/2022/10/17/intel-and-the-15trn-chip-industry-meltdown https://remove-js.com/https://www.economist.com/business/202... is often an easy fix for news websites. The page actually looks beautiful with this, and the content is front and center.
4y ago

lvl102 4y ago

Intel messed up big time and I hate to see the US govt dump more money on incompetence. They are failing their way to success.

A4ET8a8uTh0 4y ago
I have some bitter taste about that myself. First they offshore[1] to anywhere, but US, but the moment US makes it geopolitically risky, US recompenses Intel by offering massive incentives to re-shore. It is maddening. The worst part is, making chips is actually hard so there is a good and valid reason to actually do it, but I just hate rewarding bad behavior ( from US taxpayer's perspective ). [1]https://www.latimes.com/archives/la-xpm-2004-apr-07-fi-intel7-story.html https://www.latimes.com/archives/la-xpm-2004-apr-07-fi-intel...
totalZero 4y ago
It would be stupendously bad judgment to permit the semiconductor fabrication industry to exist with no redundancy whatsoever. Tail risk is ever present and the tails seem to be getting fatter every day.

bouncycastle 4y ago

Related: There is a massive TSMC factory being built in Japan right now. Take a look at the pictures, I've never seen this many cranes at one location: https://www.nhk.jp/static/assets/images/newblogposting/ts/7P5MRK4ZKV/7P5MRK4ZKV-eyecatch_697317e9f77fa571256076ea98044823.png https://www.nhk.jp/static/assets/images/newblogposting/ts/7P... https://cdn-cw-english.cwg.tw/ckeditor/202205/ckeditor-628ae91d19304.png https://cdn-cw-english.cwg.tw/ckeditor/202205/ckeditor-628ae... It looks like a forest of cranes...

adeptima 4y ago
"The plant will produce 22-nanometer and 28-nanometer chips to address strong global demand for speciality chip technologies, they said" I'm curious why not the latest - 3nm, 5nm
- detaro 4y ago
  There is no spare capacity to build highest-end process fabs, and there is huge demand for capacity in 22/28nm too.
  - sylware 4y ago
    "spare capacity" ? what do you mean ? Taiwan and South Korea are enough to supply the world demand? Well, it is still hard to get your hands on top-notch chips at a reasonable price whatever the news is saying...
    - kuschku 4y ago
      You need certain machines for EUV. There's only one manufacturer (ASML) for those, and they're at capacity. And even if they wanted to scale up, there's only one manufacturer (Zeiss) for the EUV mirrors required for those machines, and all their capacity for the next years is already bought as well.
      - throwawaylinux 4y ago

valdiorn 4y ago

So, can someone explain to me why I can't get ANY chips for anything at all? Everything is out of stock that I use in my designs (Audio processing equipment). microprocessors, microcontrollers, ADCs, DACs, audio codecs, memory. Even bread and butter diodes were hard to source a few months ago. You name it, Mouser/Farnell/Digikey/the manufacturer doesn't have it. And if they do, it's priced at 500% MSRP. It may be "swinging the other way" but we're at the very depth of the curve right now, and lead times are frequently 12-18 months. I can't see any evidence that it's swinging back, personally, maybe someone else does (like the writer of this article).

martincmartin 4y ago
I mean it's literally in TFA: "In late September Micron, an Idaho-based maker of memory chips, reported a 20% year-on-year fall in quarterly sales. A week later amd, a Californian chip designer, slashed its sales estimate for the third quarter by 16%. Within days Bloomberg reported that Intel plans to lay off thousands of staff, following a string of poor results" But most of the article is about how they're building new fabs in America, right when sales to China are being restricted. So its about a future surge in supply and reduction in demand.
- svnt 4y ago
  Parent is talking about distributor stock and you are talking about sales. If your comment was accurate it would seem like we should have had distributor stock coming online after the pandemic shortages as companies push to get their orders in the queue before capacity goes offline due to conflict. I’m curious with parent — my guess is just that the humans behind the companies got used to the profits and not sitting on inventory, which was always risky.
nathas 4y ago
Check out the post by Schiit Audio's CEO (I think CEO?): https://www.head-fi.org/threads/schiit-happened-the-story-of-the-worlds-most-improbable-start-up.701900/page-5951#post-16859594 https://www.head-fi.org/threads/schiit-happened-the-story-of... It looks like the audio sector was hit particularly hard by the war in Ukraine.

programmer_dude 4y ago

https://web.archive.org/web/20221018123239/https://www.economist.com/business/2022/10/17/intel-and-the-15trn-chip-industry-meltdown https://web.archive.org/web/20221018123239/https://www.econo...

sabujp 4y ago

semi stocks are at all time lows and PE levels. Don't let this doom and gloom piece prevent you from buying more

alexk307 4y ago
Agreed - so much long term upside paired with tons of short term uncertainity.
ac29 4y ago
Note that the typically given P/E ratio is a backwards looking number, not forwards. Intel trades at 5.5x PE for the last 12 months but 12.1x PE for the next 12 months (estimated, obviously). Intel specifically is also not at an "all time low" - they IPO'd in 1971 and have grown significantly since then. I agree there are some bargains to be had in semi stocks, but keep in mind things may very well get worse before they get better.
bagacrap 4y ago
If you didn't sell semi stocks at their peak last November, when will you sell them? And if you didn't buy till they were near their peak, did you really care about PE ratios?
- liketochill 4y ago
  About the time I need to retire is when I will sell

tgtweak 4y ago

To be perfectly honest, this is still within a 1000km radius circle that encompasses Taiwan, South Korea and Japan. That covers the majority of next-generation fabs that aren't Intel. It's great to legally diversify these fabs, but it does very little to mitigate geopolitical issues that are brewing in and around the east china sea.

nscalf 4y ago
How does it do little to diversify these fabs? The current situation is that if China invades Taiwan, the entire Western world is compelled to engage militarily over Taiwan's high end chip fabs. It cannot be overstated how much we depend on that, if TSMC operates in other countries, we don't HAVE to engage in WW3.
- LeifCarrotson 4y ago
  A fab in Ohio, Oregon, or Arizona 10,000 km from China is safe from threats like cruise missiles that the proposed fab 1000 km from China in Japan or South Korea would not be. It's not so much that cruise missiles used on civilian targets in South Korea or Japan would not be a reason to start WW3, more that it would be less tempting.
  - deleted 4y ago
    [deleted]
  - theptip 4y ago
    I'm confused by this take. Who is threatening Japan with cruise missiles? Certainly not China or Russia. North Korea, perhaps. The primary reason that we're concerned about semiconductor fab concentration in Taiwan is that China has consistently stated that it is going to invade Taiwan at some point (and that could be 2049 or in a few years for all we know). This is completely outside of any hypothetical scenarios of who lobs cruise missiles at who during WW3. You can make the point that relying on semiconductor manufacturing outside of your country/coalition is a bad idea for military self-sufficiency, and I would agree, but that's a much more diffuse risk than the very specific scenario that is driving the CHIPS act and concern about fab concentration in Taiwan.

deleted 4y ago

[deleted]

alexk307 4y ago

It seems silly to measure short term success in an industry known for "notoriously cyclical" booms and busts. The size of the investment needed to create these manufacturing plants in the US, coupled with the complexity and time it takes to build them, combines perfectly for articles like this. I can't think of a reason that on-shoring chip fabs would be a bad thing for the US - other than the vague threat of China retaliating. Cutting off foreign dependencies in high-tech industries would surely be beneficial in the long term.

swamp40 4y ago

> American chip bosses now fear that China could retaliate They will certainly retaliate. The question is how. Most think they will react similarly, banning cutting edge electronics exports that could have military use. But I suspect they will go after our weak spots. Prescription drugs, solar, lithium. I'm sure there are more.

simonsarris 4y ago
yeah. They might even flood the country with fentanyl.

iancmceachern 4y ago

It's the people, the talent, the knowledge that drives any industry like this. The US government, US, we, gave Intel and some other companies a huge sum of money to stay awesome. Then they announce huge layoffs to get rid of a lot of thr talent, people, heart of their business. So, wouldn't we have been better off as a society of we had just offered thT CHIPs money as a startup find and asked a bunch or people from Intel to leave and build new semi companies using this fund? In the end the meteic for success of the CHIPs program in the short term should be number of people working in semi in the US. How did we dedicate money and resources to this thing of national importance and end up with fewer experts working on it? Money is the root of all evil, power corrupts us all.

ac29 4y ago
> Then they announce huge layoffs to get rid of a lot of thr talent, people, heart of their business. Intel has not announced layoffs. There is a rumor layoffs will be announced at the next quarterly earnings release.
CoastalCoder 4y ago
Targeted layoffs might be the best thing long-term. From my limited perspective of having recently worked at Intel, they had a lot of dead weight. There was a lot of talent, but it was also diluted by a lot of management and bureaucracy. I honestly don't know if layoffs are an effective solution to this, but IMHO they could definitely benefit from lower headcount and greater urgency.
- AdrianB1 4y ago
  A friend that also worked at Intel until a couple of years ago confirmed what you say.
- iancmceachern 4y ago
  Thanks for this. I see that perspective and from my experience in larger tech corps it jibes. I'm still trying to reconcile it with the CHIPs thing. Intel on one hand is admittedly bloated and inefficient, and so is choosing to reduce its headcount and therefore bandwidth to do work. So what is the CHIPs money going to. Typically when you invest in something like this you are buying people's time to do the work and also materials and supplies to build the stuff like factories, etc. So if we are lowering headcount it's not going to labor. I suspect as you say it's more about changing worker types, like getting rid of skillsets they don't need so they can hire those they do like people to build semi plants here. So, in my mind, the only way it adds up is if Intel goes on a big hiring spree soon. Otherwise, where did the money go? We can buy equipment to build plants but who builds them?

chatterhead 4y ago

1) We need chip manufacturing to be nationalized in the USA - if it's that important to national security we don't need to leave it in the hands of private industry. 2) Taiwan is not China. We are going to break the rest of China up because Xi decided to consolidate power instead of steward the distributed power he inherited. 3) The USA isn't in trouble at all; we will expand our industries, inflate our currency and strengthen it so demand globally grows as Russia, EU and China falter. 4) China took HK almost 3 decades early so why should anyone believe their word on territorial respect.

_trackno5 4y ago
> 1) We need chip manufacturing to be nationalized in the USA - if it's that important to national security we don't need to leave it in the hands of private industry I generally agree with you that countries should have control over strategic industries (e.g., oil), but I'm not sure if nationalisation is the way to go. I feel like that serves more to scare off investors than anything else. The way the US is going about it feels more correct to me: give fiscal and financial incentives for these strategic resources to be built and managed inside the country, while also removing incentives for too many exports
- chatterhead 4y ago
  If you believe oil should be then so should all energy; including the entirely government created "alternative energy" industry. Investors will be scared of the US nationalizing specific strategic industries but not the changing political winds of foreign nations? I don't think so.
  - _trackno5 4y ago
    I don't understand your comment. You seem to believe because I stated something it means that I'm denying something else. If clean energy sources are strategic, yeah the US should do the work to protect its ability to utilise it regardless of it being oil, solar, wind, nuclear. Doesn't mean the state needs to own those ventures, just that they should put in the effort to fund investment and growth in strategic areas.

nonrandomstring 4y ago

We've reached or are approaching "peak tech". The other day we were discussing Pablo Azar, "Computer Saturation and the Productivity Slowdown" (Federal Reserve Bank of New York Liberty Street Economics, October 6, 2022) [1] Simply reinventing systems and deliberately obsoleting stuff to create fake demand is over. The metaverse isn't hoing to happen. People are fatigued with tech. We're entering a different era in which we need to make better, more humane and effective technology, not just more and more and more of it. [1] https://libertystreeteconomics.newyorkfed.org/2022/10/computer-saturation-and-the-productivity-slowdown/ https://libertystreeteconomics.newyorkfed.org/2022/10/comput... EDIT: less trashy link

vkou 4y ago
We may need this, but the stakeholders holding the purse strings don't. And they are the ones who will decide what gets built. It's how we end up with shit like grocery self-checkout machines and robots answering customer support calls. Nobody likes being yelled at by a robot who doesn't understand the situation, except the decision-makers buying the machines. This isn't peak tech, not by a longshot. This is just Intel's competitors eating it's lunch.
- bee_rider 4y ago
  Grocery self-checkout machines are great. There's even a system now where you can bring a little scanner with you and scan as you pick them out, that way you can bag them directly in your cart, saving the time of the final scan and the bagging (it was great during the peak of the pandemic, skip the cashier and waiting in the high-population line area). Robots answering support calls are annoying, but self-service websites are pretty good for 99% of things.
  - pcai 4y ago
    the scan as you shop technology is actually being phased out in many chains because the theft rates are unsustainable some wholesale clubs apparently counter this by randomly auditing every cart as you leave, but that seems to leave the whole thing only marginally more efficient than traditional checkout

achenet 4y ago

https://archive.ph/ICWl6 https://archive.ph/ICWl6

mFixman 4y ago

I know nothing about the chip-making process, and news about fabs and the chip industry confuse and scare me. Can anybody link me to a guide with the basics of these topics, like what exactly is a chip (is it a microcontroller? a part of a larger system?), or why the few giant fabs can't be replaced by a lot of smaller and cheaper ones?

deleted 4y ago
[deleted]
muricula 4y ago
There are two parts to making chips: architecture (design) and process (how it's manufactured). Intel does both but eg Apple only does design and outsources manufacturing to other companies. There are lots of different chips ranging from slow, energy efficient, and cheap microcontrollers, to fast, energy hungry, and expensive high performance computing clusters. Intel makes the fast ones, and had the fastest chips from the late 1990s to the mid 2010s. Since then, a Taiwanese company has had the fastest chips which go into iPhones, Nvidia graphics cards, and AMD cpus. Building a fab (manufacturing plant) to make the fastest chips which require features shorter than 7nm (billionths of a meter!) requires billions of dollars in up front investment. It's mass scale manufacturing at some of the lowest levels anything has ever been created at. The US gov't is afraid that company which makes the fastest chips in Taiwan (which is not recognized as an independent country, but is effectively self governing, but China claims is theirs, it's complicated yes), could be under Chinese control some day. The Military Industrial Complex don't want the US tech sector or US defense tech to be beholden to China, and US companies (Intel) want government funding to build expensive factories. Thus the CHIPS act.
passion__desire 4y ago
Asianometry[1] is a good channel for breaking down the chip industry news and process. He also has a newsletter[2]. [1] https://www.youtube.com/c/Asianometry/videos https://www.youtube.com/c/Asianometry/videos [2] https://asianometry.substack.com/ https://asianometry.substack.com/

Melatonic 4y ago

Seems like a dumb article - their whole argument is that we should NOT be building fabs in the US because demand has recently fallen and we MIGHT end up with too much supply? Seems like a good thing to be honest. More supply means cheaper prices and even if demand is a bit lower there is no way it is going to keep going down. We have CPU's in damn near everything these days. The drop is probably mainly because of crypto mining falling of a cliff.

fnordpiglet 4y ago
Seems like a good thing as a consumer. As a producer it’s what you try to avoid. They’re not charities
- CydeWeys 4y ago
  It's reasons like this why the DPA and other mechanisms exist. Having sufficient fab capacity in case global supply lines experience disruption is a strategic reserve of high national security importance.
  - fnordpiglet 4y ago
    That’s true. But then supply, demand, and price are irrelevant. The challenge is making optimal decisions about investment. Markets tend to be brutal to producers who aren’t efficient, and that leads to a Darwinian process favoring the momentarily optimal producers. Production by fiat leads to weird outcomes. DPA mandated and funded fab facilities will probably in the future be wildly out of date with private producers ensuring we can only produce antiquated processes or using extraordinarily inefficient processes. I’m no libertarian market wacko, and I think it’s important to have decentralized production and as a planet we probably jumped the shark with centralizing Asia as the production hub for manufacturing and fabrication. But I’m dubious DPA etc are sufficient measures. My point though was low prices and softening demand is NOT helpful as the prior poster asserted. It hurts the effort because the lack of margin and scale means only fiat production is possible, with poor long term outcomes.
godelski 4y ago

varelse 4y ago

lakomen 4y ago

Paywalled

jarym 4y ago

> Toshiya Hari of Goldman Sachs, a bank, Never thought I'd see an Economist article explaining that GS are a bank hahaha