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Yup. This is more of a signal on 1) experience with new EUV processes and 2) cost of labor. That's not taking into account the expensive EUV amortization. A ha

Yup. This is more of a signal on 1) experience with new EUV processes and 2) cost of labor. That's not taking into account the expensive EUV amortization. A hard truth I've heard in CEO circles is that western middle classes are falling down in terms of purchasing-power; And they will continue to do so until they join Chinese middle classes levels of revenue.

consp 3y ago
> western middle classes are falling down in terms of purchasing-power Do you mean they finally figured that they can just continue the shift of wealth to the few?
alephnerd 3y ago
Which country's business leadership did you hear that from? I'd be fairly surprised that American disposable purchasing power would fall to around $3-4k USD a year, unless by "middle class" your peers meant the professional class in China (the kind that can afford to splurge on a new iPhone every year, buy a Xiaomi SU7, and send their kids to do a bachelors degree at UCB, UCLA, or UIUC), in which case I wouldn't be too surprised simply because of how much growth was captured by that subset, and salaries for that subset are at France/Germany levels, but those countries also severely underpay professionals tbh. Even professional salaries at employers like Google India or Gojek Engineering in Bangalore, Jakarta, etc can pay German or French level dev salaries, let alone the subset of similar companies in China that can afford to pay around $20-100k USD salaries (depends on the city) > signal on 1) experience with new EUV processes and 2) cost of labor. That's not taking into account the expensive EUV amortization Yep. There's a reason Intel and GlobalFoundaries have the last American owned Fabs - most other players left the industry in the 2010s due to the massive costs, though it's a similar story in China as well which was only solved by the "Big Fund", but a similar Cambrian die off happened in the 2017-20 period which basically only left SMIC (comparable to TSMC or Intel in the early 2010s), Hong Hua (comparable to Tower), and YMTC (comparable PSMC or SK Hynix)
- Rinzler89 3y ago
  > like Google India or Gojek Engineering in Bangalore, Jakarta, etc can pay German or French level dev salaries Not even close. Indian devs at top companies earn way more then European devs at local non-top-tech companies. >unless by "middle class" your peers meant the professional class in China (the kind that can afford to splurge on a new iPhone every year, buy a Xiaomi SU7, and send their kids to do a bachelors degree at UCB, UCLA, or UIUC) How many Chinese families (percentual speaking) can actually afford that?
  - alephnerd 3y ago
    Depends on the company you are working for in India. At a product company like Ola or a top MNC like Google you are earning way above most Europeans excluding Netherlands, Switzerland, and maybe London, but if I had to estimate, Product+MNC companies only make up like 30-40% of the ecosystem in India today. If you're working for a mass recruiter your mid-career salary will top off around the $8-20k range, which is Eastern European level, but lower than France and Germany (where it's around the $40-60k range). Also, there are regional variations in salaries in India as well. You're more likely to earn much higher working in an established tech or MNC hub like BLR, HYD, NCR, or PN than in Indore, Kolkata, Chennai, or Ahmedabad, where the tech scene skews towards outsourced contracting. Government dev salaries are lowish (depending on the Ministry and whether it's central or state), but the perks are solid. I'd probably say the split is 35-45-20 Product-WITCH-Govt. Edit: You said "Top". Fair enough. Yea, the salaries at top employers like Google India or Flipkart are extremely competitive by European standards and are comparable to those in Mainland China, Israel, and Canada.
    - Wytwwww 3y ago
      > $8-20k range, which is Eastern European level Are you talking about software and tech in general? Because that's several times lower than the average. In every single East European country in the EU, the average ~~monthly~~ [edit: yearly] wage (I'm talking about the whole population) is at least 18-20k and you certainly can't find any actual developers for anything even close to that.
roenxi 3y ago
In real terms I'd expect Chinese middle class to be converging up to European standards right now. The Chinese have quite a lot of infrastructure; by the numbers [0] they're capable of sustaining a really comfortable existence. It hasn't stabilised but China isn't a byword for poverty any more. That being said, it does seem likely that the US living standards will drop. It isn't obvious what is supposed to be driving living standards given that the US has been undermining its own energy and manufacturing sectors. Their political situation also seems to be deteriorating. [0] https://ourworldindata.org/grapher/per-capita-energy-use?tab=chart&country=CHN~GBR https://ourworldindata.org/grapher/per-capita-energy-use?tab...
- georgeplusplus 3y ago
  The difference is population, there are A LOT of Chinese that are in the rural areas still making very little. European wealth is generational. Land and homes that have been in the family from infrastructure that has stood the test of time. Chinese wealth is rather New money and it’s all paper thin based on construction that isn’t built to last. Look at Guangzhou they are already relocating their downtown. Before it was Baiyun then it became tianhe, now they’re focusing on making New Baiyun already in just 20 years.
- alephnerd 3y ago
  > Chinese middle class to be converging up to European standards Depends where in Europe and where in China. Beijing, Shanghai, and Greater Bay Area have definitely converged with Central Europe (eg. Praha, Warsaw, Budapest, maybe even Wien) The rest of urban China has converged with Eastern Europe (Russia, Poland, Türkiye, Serbia) and Thailand+Malaysia. Rural and some of the poorer provinces are still stuck around India levels. There's a reason why household incomes per capita are still around $450/mo [0] - significantly lower than Thailand [1] or Serbia [2]. Per Capita Urban Household Income is around $7k/yr but for Rural Households it is around $2.5k/yr I know some Chinese will find this a hot take, but this urban-rural divide is very similar to Brazil and Mexico, both countries that share similar developmental indicators to China. [0] - https://www.stats.gov.cn/english/PressRelease/202402/t20240201_1947120.html https://www.stats.gov.cn/english/PressRelease/202402/t202402... [1] - https://www.nso.go.th/nsoweb/storage/survey_detail/2023/20231018103954_32528.pdf https://www.nso.go.th/nsoweb/storage/survey_detail/2023/2023... [2] - https://www.stat.gov.rs/en-us/vesti/statisticalrelease/?p=15069&a=24&s=2403?s=2403 https://www.stat.gov.rs/en-us/vesti/statisticalrelease/?p=15...
Vegenoid 3y ago
The phrasing of 'a hard truth' makes it sound as if it is inevitable, and those in 'CEO circles' are simply bystanders to the phenomenon. Why is it that the purchasing power of CEOs has drastically increased, while the purchasing power of the middle class has decreased? I guess it's just one of those darned hard truths.
- danielmarkbruce 3y ago
  The average CEO's insight into the wider economy is zero. When a CEO (or anyone for that matter) says "a hard truth about x" where x is some complex system like the economy, roll your eyes.

consp 3y ago

> western middle classes are falling down in terms of purchasing-power Do you mean they finally figured that they can just continue the shift of wealth to the few?

alephnerd 3y ago

Which country's business leadership did you hear that from? I'd be fairly surprised that American disposable purchasing power would fall to around $3-4k USD a year, unless by "middle class" your peers meant the professional class in China (the kind that can afford to splurge on a new iPhone every year, buy a Xiaomi SU7, and send their kids to do a bachelors degree at UCB, UCLA, or UIUC), in which case I wouldn't be too surprised simply because of how much growth was captured by that subset, and salaries for that subset are at France/Germany levels, but those countries also severely underpay professionals tbh. Even professional salaries at employers like Google India or Gojek Engineering in Bangalore, Jakarta, etc can pay German or French level dev salaries, let alone the subset of similar companies in China that can afford to pay around $20-100k USD salaries (depends on the city) > signal on 1) experience with new EUV processes and 2) cost of labor. That's not taking into account the expensive EUV amortization Yep. There's a reason Intel and GlobalFoundaries have the last American owned Fabs - most other players left the industry in the 2010s due to the massive costs, though it's a similar story in China as well which was only solved by the "Big Fund", but a similar Cambrian die off happened in the 2017-20 period which basically only left SMIC (comparable to TSMC or Intel in the early 2010s), Hong Hua (comparable to Tower), and YMTC (comparable PSMC or SK Hynix)

Rinzler89 3y ago
> like Google India or Gojek Engineering in Bangalore, Jakarta, etc can pay German or French level dev salaries Not even close. Indian devs at top companies earn way more then European devs at local non-top-tech companies. >unless by "middle class" your peers meant the professional class in China (the kind that can afford to splurge on a new iPhone every year, buy a Xiaomi SU7, and send their kids to do a bachelors degree at UCB, UCLA, or UIUC) How many Chinese families (percentual speaking) can actually afford that?
- alephnerd 3y ago
  Depends on the company you are working for in India. At a product company like Ola or a top MNC like Google you are earning way above most Europeans excluding Netherlands, Switzerland, and maybe London, but if I had to estimate, Product+MNC companies only make up like 30-40% of the ecosystem in India today. If you're working for a mass recruiter your mid-career salary will top off around the $8-20k range, which is Eastern European level, but lower than France and Germany (where it's around the $40-60k range). Also, there are regional variations in salaries in India as well. You're more likely to earn much higher working in an established tech or MNC hub like BLR, HYD, NCR, or PN than in Indore, Kolkata, Chennai, or Ahmedabad, where the tech scene skews towards outsourced contracting. Government dev salaries are lowish (depending on the Ministry and whether it's central or state), but the perks are solid. I'd probably say the split is 35-45-20 Product-WITCH-Govt. Edit: You said "Top". Fair enough. Yea, the salaries at top employers like Google India or Flipkart are extremely competitive by European standards and are comparable to those in Mainland China, Israel, and Canada.
  - Wytwwww 3y ago
    > $8-20k range, which is Eastern European level Are you talking about software and tech in general? Because that's several times lower than the average. In every single East European country in the EU, the average ~~monthly~~ [edit: yearly] wage (I'm talking about the whole population) is at least 18-20k and you certainly can't find any actual developers for anything even close to that.

roenxi 3y ago

In real terms I'd expect Chinese middle class to be converging up to European standards right now. The Chinese have quite a lot of infrastructure; by the numbers [0] they're capable of sustaining a really comfortable existence. It hasn't stabilised but China isn't a byword for poverty any more. That being said, it does seem likely that the US living standards will drop. It isn't obvious what is supposed to be driving living standards given that the US has been undermining its own energy and manufacturing sectors. Their political situation also seems to be deteriorating. [0] https://ourworldindata.org/grapher/per-capita-energy-use?tab=chart&country=CHN~GBR https://ourworldindata.org/grapher/per-capita-energy-use?tab...

georgeplusplus 3y ago
The difference is population, there are A LOT of Chinese that are in the rural areas still making very little. European wealth is generational. Land and homes that have been in the family from infrastructure that has stood the test of time. Chinese wealth is rather New money and it’s all paper thin based on construction that isn’t built to last. Look at Guangzhou they are already relocating their downtown. Before it was Baiyun then it became tianhe, now they’re focusing on making New Baiyun already in just 20 years.
alephnerd 3y ago
> Chinese middle class to be converging up to European standards Depends where in Europe and where in China. Beijing, Shanghai, and Greater Bay Area have definitely converged with Central Europe (eg. Praha, Warsaw, Budapest, maybe even Wien) The rest of urban China has converged with Eastern Europe (Russia, Poland, Türkiye, Serbia) and Thailand+Malaysia. Rural and some of the poorer provinces are still stuck around India levels. There's a reason why household incomes per capita are still around $450/mo [0] - significantly lower than Thailand [1] or Serbia [2]. Per Capita Urban Household Income is around $7k/yr but for Rural Households it is around $2.5k/yr I know some Chinese will find this a hot take, but this urban-rural divide is very similar to Brazil and Mexico, both countries that share similar developmental indicators to China. [0] - https://www.stats.gov.cn/english/PressRelease/202402/t20240201_1947120.html https://www.stats.gov.cn/english/PressRelease/202402/t202402... [1] - https://www.nso.go.th/nsoweb/storage/survey_detail/2023/20231018103954_32528.pdf https://www.nso.go.th/nsoweb/storage/survey_detail/2023/2023... [2] - https://www.stat.gov.rs/en-us/vesti/statisticalrelease/?p=15069&a=24&s=2403?s=2403 https://www.stat.gov.rs/en-us/vesti/statisticalrelease/?p=15...

Vegenoid 3y ago

The phrasing of 'a hard truth' makes it sound as if it is inevitable, and those in 'CEO circles' are simply bystanders to the phenomenon. Why is it that the purchasing power of CEOs has drastically increased, while the purchasing power of the middle class has decreased? I guess it's just one of those darned hard truths.

danielmarkbruce 3y ago
The average CEO's insight into the wider economy is zero. When a CEO (or anyone for that matter) says "a hard truth about x" where x is some complex system like the economy, roll your eyes.