3 ms·

Because they do not fix the underlying causes; and also they create perverse incentives. Most companies are in the business of extracting money and will see thi

by csomar 3y ago

Because they do not fix the underlying causes; and also they create perverse incentives. Most companies are in the business of extracting money and will see this as such: an opportunity to extract money and the product is bureaucracy checkboxes. It would make more sense, in this personal view, to restrict sales to domestic production only and make sure the field is even for competitors to out-compete one another. This guarantee the dependency aspect at least (as you already restricted yourself!). Another solution: Move the manufacturing to a near-shore and friendly country (ie: Mexico or Puerto Rico) and keep the design part in the US. But of course, that wouldn’t be as politically popular and wouldn’t create the extraction opportunity (which lots of companies will want to benefit from).

edgyquant 3y ago
If a certain former president is reelected he will likely continue to push for the type of tariffs that will incentivize domestic production over foreign imports. If that happens the chips act will have put us on the footing required for that ramp up to begin.
jacobsimon 3y ago
This is a compelling perspective. But putting sales or import restrictions in place right now would be damaging in the short term both for the manufacturing partners and the US. They’ve already put some export restrictions in place (ie preventing nvidia from selling their most powerful chips to china). In terms of nearshoring - that’s a good idea too but I think the workforce training would be even more difficult than it has been in the US and it would be less popular politically as you said. (Side note: PR is part of the US - maybe you meant Costa Rica)
- coredog64 3y ago
  Intel does (or used to do) wafer packaging in Costa Rica. On paper, CR is an attractive near shore location: Good amount of English speakers, time zone parity with the US, and not difficult to travel to.
KoftaBob 3y ago
> Move the manufacturing to a near-shore and friendly country (ie: Mexico or Puerto Rico) Puerto Rico isn't a foreign country, it's a territory of the United States. Regardless of that, semiconductor fabrication is one of, if not THE most complex form of manufacturing. It's not enough to simply build a fab in Mexico, the supply chain of materials and highly skilled labor that runs these fabs needs to exist there too. That's not to say that it can't exist somewhere like Mexico, but currently it doesn't and it would take longer to build up. So while moving it to Mexico would remove the geopolitical risk problem, putting it there instead of the US would only give the advantage of cheaper labor but at the cost of taking much much longer to ramp up.
- coredog64 3y ago
  Not everything needs to be fabbed at 7 or 3 nm. Malaysia does well as a place where industrial nations can put mature manufacturing processes and get high quality outputs.
dragontamer 3y ago
> to restrict sales to domestic production only You think people will stop buying NVidia GPUs, AMD GPUs, PS5, XBox, Nintendo Switch, iPhone, Pixels, Samsung Galaxies, and a litany of major automotive parts from Microchip/STMicro/etc. etc.? Because none of these are made in the USA. The only major chips made here are Flash/RAM by Crucial, CPUs by Intel, and some lower-tech (but still important) chips by TI. The vast majority of chips, well over 60% of the worldwide supply, is made by TSMC IIRC, and another huge chunk are made by other companies located in Taiwan. -------------- Furthermore, Taiwan is a close ally who has extremely friendly relations with USA. Yes, there's a war-risk with China here, but Taiwan fairly competes with us. I don't think anyone has a single piece of anti-Taiwan hate inside of them. Its not a protectionist thing. Its purely the "what if China attacks Taiwan" thing. Economically speaking, trade with Taiwan and USA is a good thing. Geopolitically, trade with Democracies is a good thing, and trade with a century+ old friendly nation is a good thing. ------------- Taiwan can create this tech because they are smarter than us and outcompeted us on this subject. Its not "low tech", its extremely difficult chemistry, high-end PH.d stuff here. Taiwan is basically the Vulkans from Star Trek. They're smaller, more technologically advanced, but weaker militarily. They're so obviously good allies that its unthinkable to do anything against them. We need a "just in case" plan if trade between our nations gets interrupted because chips are a strategic good, but... cutting them off would mean that they ally with someone else and that's even worse.
- vel0city 3y ago
  > some lower-tech (but still important) chips by TI TI makes plenty of pretty high-tech chips, just not necessarily bleeding edge digital logic processors. Their real high-tech stuff are analog devices, something far less sexy to people on HN but still incredibly crucial.
  - dragontamer 3y ago
    Analog is important for cutting another 20% off of MOSFET resistances or whatever, which means even more efficient electric engines or other electric components. Yeah, important but not as much of a headline as 20% more GHz or FLOPs for some reason.

by csomar 3y ago

edgyquant 3y ago

If a certain former president is reelected he will likely continue to push for the type of tariffs that will incentivize domestic production over foreign imports. If that happens the chips act will have put us on the footing required for that ramp up to begin.

jacobsimon 3y ago

This is a compelling perspective. But putting sales or import restrictions in place right now would be damaging in the short term both for the manufacturing partners and the US. They’ve already put some export restrictions in place (ie preventing nvidia from selling their most powerful chips to china). In terms of nearshoring - that’s a good idea too but I think the workforce training would be even more difficult than it has been in the US and it would be less popular politically as you said. (Side note: PR is part of the US - maybe you meant Costa Rica)

coredog64 3y ago
Intel does (or used to do) wafer packaging in Costa Rica. On paper, CR is an attractive near shore location: Good amount of English speakers, time zone parity with the US, and not difficult to travel to.

KoftaBob 3y ago

> Move the manufacturing to a near-shore and friendly country (ie: Mexico or Puerto Rico) Puerto Rico isn't a foreign country, it's a territory of the United States. Regardless of that, semiconductor fabrication is one of, if not THE most complex form of manufacturing. It's not enough to simply build a fab in Mexico, the supply chain of materials and highly skilled labor that runs these fabs needs to exist there too. That's not to say that it can't exist somewhere like Mexico, but currently it doesn't and it would take longer to build up. So while moving it to Mexico would remove the geopolitical risk problem, putting it there instead of the US would only give the advantage of cheaper labor but at the cost of taking much much longer to ramp up.

coredog64 3y ago
Not everything needs to be fabbed at 7 or 3 nm. Malaysia does well as a place where industrial nations can put mature manufacturing processes and get high quality outputs.

dragontamer 3y ago

> to restrict sales to domestic production only You think people will stop buying NVidia GPUs, AMD GPUs, PS5, XBox, Nintendo Switch, iPhone, Pixels, Samsung Galaxies, and a litany of major automotive parts from Microchip/STMicro/etc. etc.? Because none of these are made in the USA. The only major chips made here are Flash/RAM by Crucial, CPUs by Intel, and some lower-tech (but still important) chips by TI. The vast majority of chips, well over 60% of the worldwide supply, is made by TSMC IIRC, and another huge chunk are made by other companies located in Taiwan. -------------- Furthermore, Taiwan is a close ally who has extremely friendly relations with USA. Yes, there's a war-risk with China here, but Taiwan fairly competes with us. I don't think anyone has a single piece of anti-Taiwan hate inside of them. Its not a protectionist thing. Its purely the "what if China attacks Taiwan" thing. Economically speaking, trade with Taiwan and USA is a good thing. Geopolitically, trade with Democracies is a good thing, and trade with a century+ old friendly nation is a good thing. ------------- Taiwan can create this tech because they are smarter than us and outcompeted us on this subject. Its not "low tech", its extremely difficult chemistry, high-end PH.d stuff here. Taiwan is basically the Vulkans from Star Trek. They're smaller, more technologically advanced, but weaker militarily. They're so obviously good allies that its unthinkable to do anything against them. We need a "just in case" plan if trade between our nations gets interrupted because chips are a strategic good, but... cutting them off would mean that they ally with someone else and that's even worse.

vel0city 3y ago
> some lower-tech (but still important) chips by TI TI makes plenty of pretty high-tech chips, just not necessarily bleeding edge digital logic processors. Their real high-tech stuff are analog devices, something far less sexy to people on HN but still incredibly crucial.
- dragontamer 3y ago
  Analog is important for cutting another 20% off of MOSFET resistances or whatever, which means even more efficient electric engines or other electric components. Yeah, important but not as much of a headline as 20% more GHz or FLOPs for some reason.