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The short answer is during a time of massive profits of semi companies, most cashed out. One (TSMC) has kept reinvesting gains into R&D for the last 20 years. L

The short answer is during a time of massive profits of semi companies, most cashed out. One (TSMC) has kept reinvesting gains into R&D for the last 20 years. Lithography via ASML is the cutting edge advance, but there are many other small details too. Both in the technology itself but also in the complexity of integrating that technology to work together in one process.

elzbardico 3y ago
I think that one of the greatest advantages that Korean, Chinese, and Taiwanese companies have is that most of them seem to be somewhat immune to Harvard Business School ideas, and Jack Welch was never worshipped as he was in the West. Keeping the bean counters under leash is good for building long-term value.
- sigbottle 3y ago
  What's the difference between HBS ideas and these Asian companies? I have no background in economics so idk. Like what advantages do both have? From this comment it reads like HBS has no merit at all but I'd imagine that's not the entire picture
  - Nokinside 3y ago
    Business school type leadership rarely works in high tech. Important decisions are technological decisions. It's easier to pick senior engineers from the industry and give them business education than vice versa. There is also special field called industrial engineering that trains people to manage and lead industrial processes.
    - heisenbit 3y ago
      Rarely work in growing healthy tech. But one or two generations later…
      - jpgvm 3y ago
        That is how they stop growing in the first place. Bean counters is how you get Intel instead of TSMC.
        fuzzfactor 3y ago
        When it comes to research, it always costs a substantial amount to accomplish anything at all. So the cost is always prominent, and the return is difficult to fully attribute. Forces at work that can lead to undue cuts. Engineering companies need to be run by engineering/businesspeople selected internally from a deep bench of capable candidates. As succession occurs technical leadership can better maintain continuity of what made the company competitive to begin with. For the bean counters it can be impossible to realize potential in many ways, not just research. Concrete costs will always be ripe for quantitative elimination without consideration of the crippling effect on upside outcome that can not be recovered in less than a few years (or generations) after overcompensating funding has been restored. Which could happen . . . right? No conincidence how many different kinds of hard technology are referred to in "generations" of advancement. Bean counters are supposed to be good at math but they're usually no engineers. When these start to come into leadership positions of an engineering company it can be a very bad sign. It could be worse. Some of the top financial operators are not even bean counters, or leadership material of any kind. More like social climbers who've moved up a corporate ladder without much distraction from any effort other than the social climbing itself. Even worse when the only reason they're financial is greed. Look what happened to Boeing when the engineering culture no longer extended all the way to the top. Still an engineering company, with some of the world's most outstanding engineers doing very advanced things very successfully. Just not as much as it once was. And not as much as it could be. Well acccounting companies should be run by accounting/businesspeople which does seem to work, and bean counters shine until generations later at a place like Arthur Andersen where it looks like they were replaced by social climbers at the top and oh, well.
  - Eisenstein 3y ago
    Business schools teach efficiency. Efficient as in 'put in a dollar, what gets you the most back in the shortest time period?' It is oriented to appeasing stockholders (investors), who want to see earnings grow. If your company is losing money, cut cost centers and maximize revenue to up the profits for the quarter so that the stock doesn't go down. This usually means cutting jobs, defunding research, and making things cheaper. Another way to accomplish this is to sell off specialized parts of the company for a quick cash infusion. Another big thing is the need to quantify -- you need to be able to put the numbers on a chart and if you can't then it is worthless. R&D cannot be quantified like that so it, along with things like IT and information security are seen as cost sinks ready to be slashed. All of these add up to have terrible effects on companies that rely on research and having a workforce of highly trained professionals who are entrenched in your institutional knowledge. For example, you can't just fire a materials science engineer who is a specialist in silicon crystal seeding to save money one quarter and then hire another one when needed.
    - NeverFade 3y ago
      > It is oriented to appeasing stockholders (investors), who want to see earnings grow. This strategy appeases short-term shareholders, at the cost of significantly penalizing long-term holders. It's not a simple case of "appeasing shareholders".
      - Eisenstein 3y ago
        Maybe I should have said 'stock traders'?
        NeverFade 3y ago
        My point is that shareholder capitalism doesn't necessarily lead to the short-term focus you describe. Shareholders can in fact be the group with the longest-term focus of all. They can still be there and care about the company long after the current C-suite are all gone.
        3y ago
- User23 3y ago
  I suspect this is due to those bad ideas mainly being spread in English.
  - diceduckmonk 3y ago
    That theory fails to account for Japan's failed semiconductor industry.
    - jpgvm 3y ago
      Japan got destroyed by the Plaza Accord. Also their industry still survived despite the massive bubble popping etc. Instead of making fabs they build most of the important tooling and chemicals in semi-conductor manufacturing. Namely the photo resists and the specialised tooling for inspecting and repairing masks, including the insane EUV masks.
- bjourne 3y ago
  That theory fails to account for Japan's failed semiconductor industry.
  - tacostakohashi 3y ago
    No it doesn't, because Japanese companies aren't Korean, Chinese, or Taiwanese.
    - bjourne 3y ago
      So? What's the evidence for Japanese companies being more susceptible to "Harvard Business School ideas" than Korean, Chinese, or Taiwanese companies?
      - pigeons 3y ago
        After surrendering to the United States, Japanese companies were taught Harvard Business School ideas as part of a reconstruction effort. While that is a very tiny piece of what is referred to as Japan's Economic Miracle, it is enough to explain the difference in exposure and susceptibility to Harvard Business School ideas compared to Korea, China, and Taiwan.
- cosmodisk 3y ago
  Samsung, as a conglomerate with all the affiliates makes up 20% or so of Korea's economy. The entire state is motivated to keep it going,so a financial analysis of some 20 year old in wall Street don't have such a huge impact. TSMC is the same, it's a strategic company in taiwan,so again the entire country ensures it's not going anywhere. In the west, GE and similar companies are important, but not that important,so idiots like Jack Welch get more mileage than they'd get in Asia.
imhoguy 3y ago
The fun fact is that Intel had the biggest stake in ASML (15%) vs TSMC (5%) vs Samsung (3%), but they indeed cashed out. It was join investment. https://semiwiki.com/semiconductor-services/semiconductor-advisors/302806-asml-is-the-key-to-intels-resurrection-just-like-asml-helped-tsmc-beat-intel/ https://semiwiki.com/semiconductor-services/semiconductor-ad...

elzbardico 3y ago

I think that one of the greatest advantages that Korean, Chinese, and Taiwanese companies have is that most of them seem to be somewhat immune to Harvard Business School ideas, and Jack Welch was never worshipped as he was in the West. Keeping the bean counters under leash is good for building long-term value.

sigbottle 3y ago
What's the difference between HBS ideas and these Asian companies? I have no background in economics so idk. Like what advantages do both have? From this comment it reads like HBS has no merit at all but I'd imagine that's not the entire picture
- Nokinside 3y ago
  Business school type leadership rarely works in high tech. Important decisions are technological decisions. It's easier to pick senior engineers from the industry and give them business education than vice versa. There is also special field called industrial engineering that trains people to manage and lead industrial processes.
  - heisenbit 3y ago
    Rarely work in growing healthy tech. But one or two generations later…
    - jpgvm 3y ago
      That is how they stop growing in the first place. Bean counters is how you get Intel instead of TSMC.
      - fuzzfactor 3y ago
        When it comes to research, it always costs a substantial amount to accomplish anything at all. So the cost is always prominent, and the return is difficult to fully attribute. Forces at work that can lead to undue cuts. Engineering companies need to be run by engineering/businesspeople selected internally from a deep bench of capable candidates. As succession occurs technical leadership can better maintain continuity of what made the company competitive to begin with. For the bean counters it can be impossible to realize potential in many ways, not just research. Concrete costs will always be ripe for quantitative elimination without consideration of the crippling effect on upside outcome that can not be recovered in less than a few years (or generations) after overcompensating funding has been restored. Which could happen . . . right? No conincidence how many different kinds of hard technology are referred to in "generations" of advancement. Bean counters are supposed to be good at math but they're usually no engineers. When these start to come into leadership positions of an engineering company it can be a very bad sign. It could be worse. Some of the top financial operators are not even bean counters, or leadership material of any kind. More like social climbers who've moved up a corporate ladder without much distraction from any effort other than the social climbing itself. Even worse when the only reason they're financial is greed. Look what happened to Boeing when the engineering culture no longer extended all the way to the top. Still an engineering company, with some of the world's most outstanding engineers doing very advanced things very successfully. Just not as much as it once was. And not as much as it could be. Well acccounting companies should be run by accounting/businesspeople which does seem to work, and bean counters shine until generations later at a place like Arthur Andersen where it looks like they were replaced by social climbers at the top and oh, well.
- Eisenstein 3y ago
  Business schools teach efficiency. Efficient as in 'put in a dollar, what gets you the most back in the shortest time period?' It is oriented to appeasing stockholders (investors), who want to see earnings grow. If your company is losing money, cut cost centers and maximize revenue to up the profits for the quarter so that the stock doesn't go down. This usually means cutting jobs, defunding research, and making things cheaper. Another way to accomplish this is to sell off specialized parts of the company for a quick cash infusion. Another big thing is the need to quantify -- you need to be able to put the numbers on a chart and if you can't then it is worthless. R&D cannot be quantified like that so it, along with things like IT and information security are seen as cost sinks ready to be slashed. All of these add up to have terrible effects on companies that rely on research and having a workforce of highly trained professionals who are entrenched in your institutional knowledge. For example, you can't just fire a materials science engineer who is a specialist in silicon crystal seeding to save money one quarter and then hire another one when needed.
  - NeverFade 3y ago
    > It is oriented to appeasing stockholders (investors), who want to see earnings grow. This strategy appeases short-term shareholders, at the cost of significantly penalizing long-term holders. It's not a simple case of "appeasing shareholders".
    - Eisenstein 3y ago
      Maybe I should have said 'stock traders'?
      - NeverFade 3y ago
        My point is that shareholder capitalism doesn't necessarily lead to the short-term focus you describe. Shareholders can in fact be the group with the longest-term focus of all. They can still be there and care about the company long after the current C-suite are all gone.
        3y ago
User23 3y ago
I suspect this is due to those bad ideas mainly being spread in English.
- diceduckmonk 3y ago
  That theory fails to account for Japan's failed semiconductor industry.
  - jpgvm 3y ago
    Japan got destroyed by the Plaza Accord. Also their industry still survived despite the massive bubble popping etc. Instead of making fabs they build most of the important tooling and chemicals in semi-conductor manufacturing. Namely the photo resists and the specialised tooling for inspecting and repairing masks, including the insane EUV masks.
bjourne 3y ago
That theory fails to account for Japan's failed semiconductor industry.
- tacostakohashi 3y ago
  No it doesn't, because Japanese companies aren't Korean, Chinese, or Taiwanese.
  - bjourne 3y ago
    So? What's the evidence for Japanese companies being more susceptible to "Harvard Business School ideas" than Korean, Chinese, or Taiwanese companies?
    - pigeons 3y ago
      After surrendering to the United States, Japanese companies were taught Harvard Business School ideas as part of a reconstruction effort. While that is a very tiny piece of what is referred to as Japan's Economic Miracle, it is enough to explain the difference in exposure and susceptibility to Harvard Business School ideas compared to Korea, China, and Taiwan.
cosmodisk 3y ago
Samsung, as a conglomerate with all the affiliates makes up 20% or so of Korea's economy. The entire state is motivated to keep it going,so a financial analysis of some 20 year old in wall Street don't have such a huge impact. TSMC is the same, it's a strategic company in taiwan,so again the entire country ensures it's not going anywhere. In the west, GE and similar companies are important, but not that important,so idiots like Jack Welch get more mileage than they'd get in Asia.

imhoguy 3y ago

The fun fact is that Intel had the biggest stake in ASML (15%) vs TSMC (5%) vs Samsung (3%), but they indeed cashed out. It was join investment. https://semiwiki.com/semiconductor-services/semiconductor-advisors/302806-asml-is-the-key-to-intels-resurrection-just-like-asml-helped-tsmc-beat-intel/ https://semiwiki.com/semiconductor-services/semiconductor-ad...