5 ms·

Here's the crazy one. Punishing a company just because it's american.

by _giorgio_ 3y ago

harimau777 3y ago
Alternative take: Punishing a company because it's selling out Americans in favor of cheap labor.
- gruez 3y ago
  Yeah I'm sure that's going to cause investors/other companies to think that the US is a good place to set up shop and/or make further investments.
  - belorn 3y ago
    I believe that $77B as a fairly good cause for investors/other companies to set up shop and make investment into the US semiconductors market. According to random market statistic site, it is also currently growing by 10% each year. Is that market so poor that subsidies really is needed on the basis of profitability?
    - gruez 3y ago
      A $77B market that's growing by 10% each year doesn't mean much when the government turns against you demands you do a bunch of expensive investments for nationalist reasons. See also: all the investors fleeing china because they were spooked by the tech crackdown/covid lockdowns. "Punishing a company because it's selling out Americans in favor of cheap labor" is basically the same thing but with a different coat of paint.
- addicted 3y ago
  This is a myth. Cheap labor is a benefit but not the primary reason companies are manufacturing in the U.S. today. Look at TSMC. It started setting up US operations years ago and is expecting to complete many years from now. OTOH they started setting up in Japan about a year or so ago and are already cranking out chips.
  - api 3y ago
    I think you meant “aren’t manufacturing” and you are correct. It’s not cheap labor, except for the lowest end manufacturing. It’s that you can’t build anything in America anymore. The government needs to address that instead of subsidizing one off efforts.
  - fancyfredbot 3y ago
    The Japanese plant is less ambitious, using an older process on a smaller scale. The fact the Japanese plant was finished first says little about manufacturing in the US vs Japan.
  - roody15 3y ago
    https://www.bnnbloomberg.ca/tsmc-s-second-fab-in-arizona-delayed-as-us-grants-remain-in-flux-1.2023491 https://www.bnnbloomberg.ca/tsmc-s-second-fab-in-arizona-del... TSMC is looking to bail completely on the second fab / even intel is now looking at delaying. The problem we are running into is a lot of DEI language was included in the chips act which is making it hard for TSMC (and Intel) to comply. This is not a good PR move to say this outright so they will just give more generic "labor" shortages etc as the official reason.
- helsinkiandrew 3y ago
  > it's selling out Americans in favor of cheap labor. Perhaps American workers. But an alternate take is that American consumers got cheaper chips and PCs - which resulted in more being sold, more companies and people using them, greater efficiency and new ideas and perhaps a more productive economy. It will be interesting in 5-10 years if the US needs to tax/block possibly cheaper and better components built outside the US being sold
  - 34679 3y ago
    Intel, like any other succesful company, prices its goods based on what the market will pay, not what it costs to make. Lower costs does not mean lower prices for customers, it means more profits for Intel.
    - amarcheschi 3y ago
      Furthermore, up until at least a few years ago (i don't know how it is now) intel chips were more expensive than amd's, especially on server side, even accounting on performance/watt and intel adopted practices such as locking mobo to just one chipset and things like that. the situation might be different now tho
    - helsinkiandrew 3y ago
      > Intel, like any other succesful company, prices its goods based on what the market will pay, not what it costs to make That may be true for Intel's CPUs but when products aren't produced by monopolies, those that have the cheapest costs and are in competition with others, often lower their prices to compete where the competitor can't. For example: AMD, graphics and motherboard parts
      - prerok 3y ago
        Well, I take it that it's always true and is a good lesson for anyone trying to set the price for their own product (like a hacked together side project one of us might be working on :) ). My understanding is that the price should never be set based on production cost but on the value it brings to the customer. Thereby, a simple program you or I could hack together in a month, might have a cost of 10k in labor only cost, but if it would save the customer millions each year, they would pay a million for it. So, you set the cost based on how much they are willing to pay, based on how much they would profit/save. If another competitor offers a similar solution, you just undercut them by 10%, or invest another 10k for superior features.
owisd 3y ago
Intel is a product of Shockley, which was a product of Bell Labs, which was a product of “punishing” AT&T for “being American”. AT&T would have zealously guarded the transistor patent and never have licenced it out to Motorola, TI, etc. if they only cared about maximising shareholder value.

Here's the crazy one. Punishing a company just because it's american.

harimau777 3y ago

Alternative take: Punishing a company because it's selling out Americans in favor of cheap labor.

gruez 3y ago
Yeah I'm sure that's going to cause investors/other companies to think that the US is a good place to set up shop and/or make further investments.
- belorn 3y ago
  I believe that $77B as a fairly good cause for investors/other companies to set up shop and make investment into the US semiconductors market. According to random market statistic site, it is also currently growing by 10% each year. Is that market so poor that subsidies really is needed on the basis of profitability?
  - gruez 3y ago
    A $77B market that's growing by 10% each year doesn't mean much when the government turns against you demands you do a bunch of expensive investments for nationalist reasons. See also: all the investors fleeing china because they were spooked by the tech crackdown/covid lockdowns. "Punishing a company because it's selling out Americans in favor of cheap labor" is basically the same thing but with a different coat of paint.
addicted 3y ago
This is a myth. Cheap labor is a benefit but not the primary reason companies are manufacturing in the U.S. today. Look at TSMC. It started setting up US operations years ago and is expecting to complete many years from now. OTOH they started setting up in Japan about a year or so ago and are already cranking out chips.
- api 3y ago
  I think you meant “aren’t manufacturing” and you are correct. It’s not cheap labor, except for the lowest end manufacturing. It’s that you can’t build anything in America anymore. The government needs to address that instead of subsidizing one off efforts.
- fancyfredbot 3y ago
  The Japanese plant is less ambitious, using an older process on a smaller scale. The fact the Japanese plant was finished first says little about manufacturing in the US vs Japan.
- roody15 3y ago
  https://www.bnnbloomberg.ca/tsmc-s-second-fab-in-arizona-delayed-as-us-grants-remain-in-flux-1.2023491 https://www.bnnbloomberg.ca/tsmc-s-second-fab-in-arizona-del... TSMC is looking to bail completely on the second fab / even intel is now looking at delaying. The problem we are running into is a lot of DEI language was included in the chips act which is making it hard for TSMC (and Intel) to comply. This is not a good PR move to say this outright so they will just give more generic "labor" shortages etc as the official reason.
helsinkiandrew 3y ago
> it's selling out Americans in favor of cheap labor. Perhaps American workers. But an alternate take is that American consumers got cheaper chips and PCs - which resulted in more being sold, more companies and people using them, greater efficiency and new ideas and perhaps a more productive economy. It will be interesting in 5-10 years if the US needs to tax/block possibly cheaper and better components built outside the US being sold
- 34679 3y ago
  Intel, like any other succesful company, prices its goods based on what the market will pay, not what it costs to make. Lower costs does not mean lower prices for customers, it means more profits for Intel.
  - amarcheschi 3y ago
    Furthermore, up until at least a few years ago (i don't know how it is now) intel chips were more expensive than amd's, especially on server side, even accounting on performance/watt and intel adopted practices such as locking mobo to just one chipset and things like that. the situation might be different now tho
  - helsinkiandrew 3y ago
    > Intel, like any other succesful company, prices its goods based on what the market will pay, not what it costs to make That may be true for Intel's CPUs but when products aren't produced by monopolies, those that have the cheapest costs and are in competition with others, often lower their prices to compete where the competitor can't. For example: AMD, graphics and motherboard parts
    - prerok 3y ago
      Well, I take it that it's always true and is a good lesson for anyone trying to set the price for their own product (like a hacked together side project one of us might be working on :) ). My understanding is that the price should never be set based on production cost but on the value it brings to the customer. Thereby, a simple program you or I could hack together in a month, might have a cost of 10k in labor only cost, but if it would save the customer millions each year, they would pay a million for it. So, you set the cost based on how much they are willing to pay, based on how much they would profit/save. If another competitor offers a similar solution, you just undercut them by 10%, or invest another 10k for superior features.

owisd 3y ago

Intel is a product of Shockley, which was a product of Bell Labs, which was a product of “punishing” AT&T for “being American”. AT&T would have zealously guarded the transistor patent and never have licenced it out to Motorola, TI, etc. if they only cared about maximising shareholder value.