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This is what happens when you try to on-shore a business that's been optimized for low standards of living. Everyone begs for these jobs to come back to America

This is what happens when you try to on-shore a business that's been optimized for low standards of living. Everyone begs for these jobs to come back to America, until some bean counter with a calculator reminds them that domestic microcontrollers will cost 15,000% more than their Chinese counterparts.

lenerdenator 2y ago
It's simply not an option to not have sizable silicon production stateside. It's one of those things you have to have as a superpower, unfortunately. Well, unfortunately for a shareholder or executive who expects an unreasonable payout for the operation of this business on American soil. They're now just paying for the sins of their forefathers who handed over a strategically-vital industry to a geopolitical rival in hopes of making the number bigger at the end of a 90-day period.
- downrightmike 2y ago
  We've given them billions of dollars to build here, they can afford to pull their heads our of their asses and suck it up.
  - talldayo 2y ago
    They can, their customers can't. What will we build here, state-side? Intel doesn't ship EUV yet, which means TSMC will have them beat on density for the next 5-10 years guaranteed. They could angle for the 14nm node they love so much, but Samsung is hot on their heels and does it all cheaper. Anything bigger than that can be had from a domestic GlobalFoundries fab that was built a decade ago. If America didn't have to compete with the free market to ship an attractive product, it would be a different story. But the parent is right; it's prospector-mentality to assume America would be fixed by fabbing silicon domestically.
    - lenerdenator 2y ago
      >If America didn't have to compete with the free market to ship an attractive product, it would be a different story That's why you invest in it until you have a competitive product. The "free market" is a myth anyways. Most of the competition is playing with house money. Forty-five years ago, there was no high-tech industry in most of Asia. Now it's the only place where you can get most electronic goods made at scale. Why? It's not just the cheaper labor. If that were the case, companies wouldn't have stayed in China or South Korea nearly as long as they have. It's because the governments in these countries, China especially, said "damn the externalities, full speed ahead" on a category of manufacturing that would give them incredible leverage over world affairs. They dumped products into the market, knowing that some Wharton-educated coke addict in lower Manhattan would cry "Uncle!" when he saw the prices his investment targets were going to have to compete against. Pump more money into manufacturing, lather, rinse, repeat. Now the majority of consumer goods of any type sold anywhere are Chinese. We could do the same, you just have to tell the Wall Street types it's their necks on the line if the US loses its competitive edge.
zug_zug 2y ago
Out of curiosity, where is that 150x number coming from? Is that just an off-the-cuff expression of frustration or is a real estimate from somewhere?
- talldayo 2y ago
  It's off-the-cuff, but you shouldn't be surprised if that's what the surcharge comes out to be. Chinese manufacturers can do things American ones can't, like ignore ARM licensing fees and abuse employees that are effectively political prisoners. Even if you pay the American workers minimum wage, you're still paying orders-of-magnitude more for the same product.
  - burgrchf 2y ago
    [dead]
tomschlick 2y ago
Unrelated to this specific plant, but it doesn't help that the government put all kinds of stipulations and pork into the CHIPS act that requires certain demographics of people hired, investments in unrelated things, etc. https://thehill.com/opinion/4517470-dei-killed-the-chips-act/ https://thehill.com/opinion/4517470-dei-killed-the-chips-act... If we want to get serious about ramping up domestically produced chips for critical applications, we need to cut that crap out and focus on efficiency and quality.
- micah94 2y ago
  why is this voted down? isn't it legitimately part of the story? gov't waste is gov't waste.
  - bediger4000 2y ago
    What about agriculture subsidies? Lots of earmarks pork and other things thrown into that bucket of money.
  - dwaltrip 2y ago
    The downvotes are probably because of the framing of DEI as “pork”. You are surprised people disagree about what qualifies as government waste? I find that surprising :)
- talldayo 2y ago
  I hate to be the bearer of bad news, but unless your criteria for efficiency and quality is bringing back slavery then we're not going to compete. The DEI requirements are a cherry on top of a pie-in-the-sky request that wouldn't meet it's goal with any demographics staffing it. If we want to get serious about ramping up domestically produced chips, the state has to do it itself. People piss and moan about Intel but it's not like Northrop Grumman could do their job any better. The best way for the US government to realize the scale of their requests is to fix the problem internally, instead of pitching it as a bidding war for Goofus and Gallant.
- blackeyeblitzar 2y ago
  I simply don’t understand how these types of diversity initiatives are legal. They are explicitly discriminatory and violate the fundamental principles underlying laws. And I agree with you that placing these social justice restrictions on a critical element of national security is incredibly irresponsible.
ranger_danger 2y ago
I like Dave Chappelle's version: "(Trump wants to) bring Chinese jobs back to America... for what, so iPhones can be $9000 dollars?" https://www.youtube.com/watch?v=inlDT62oGy8 https://www.youtube.com/watch?v=inlDT62oGy8 (NSFW language)
HeyLaughingBoy 2y ago
What percentage of the costs are salary vs. capital cost or (non-payroll) operating expenses? If the process is mostly automated, it should be able to absorb higher salaries without having much impact on the bottom line.

lenerdenator 2y ago

It's simply not an option to not have sizable silicon production stateside. It's one of those things you have to have as a superpower, unfortunately. Well, unfortunately for a shareholder or executive who expects an unreasonable payout for the operation of this business on American soil. They're now just paying for the sins of their forefathers who handed over a strategically-vital industry to a geopolitical rival in hopes of making the number bigger at the end of a 90-day period.

downrightmike 2y ago
We've given them billions of dollars to build here, they can afford to pull their heads our of their asses and suck it up.
- talldayo 2y ago
  They can, their customers can't. What will we build here, state-side? Intel doesn't ship EUV yet, which means TSMC will have them beat on density for the next 5-10 years guaranteed. They could angle for the 14nm node they love so much, but Samsung is hot on their heels and does it all cheaper. Anything bigger than that can be had from a domestic GlobalFoundries fab that was built a decade ago. If America didn't have to compete with the free market to ship an attractive product, it would be a different story. But the parent is right; it's prospector-mentality to assume America would be fixed by fabbing silicon domestically.
  - lenerdenator 2y ago
    >If America didn't have to compete with the free market to ship an attractive product, it would be a different story That's why you invest in it until you have a competitive product. The "free market" is a myth anyways. Most of the competition is playing with house money. Forty-five years ago, there was no high-tech industry in most of Asia. Now it's the only place where you can get most electronic goods made at scale. Why? It's not just the cheaper labor. If that were the case, companies wouldn't have stayed in China or South Korea nearly as long as they have. It's because the governments in these countries, China especially, said "damn the externalities, full speed ahead" on a category of manufacturing that would give them incredible leverage over world affairs. They dumped products into the market, knowing that some Wharton-educated coke addict in lower Manhattan would cry "Uncle!" when he saw the prices his investment targets were going to have to compete against. Pump more money into manufacturing, lather, rinse, repeat. Now the majority of consumer goods of any type sold anywhere are Chinese. We could do the same, you just have to tell the Wall Street types it's their necks on the line if the US loses its competitive edge.

zug_zug 2y ago

Out of curiosity, where is that 150x number coming from? Is that just an off-the-cuff expression of frustration or is a real estimate from somewhere?

talldayo 2y ago
It's off-the-cuff, but you shouldn't be surprised if that's what the surcharge comes out to be. Chinese manufacturers can do things American ones can't, like ignore ARM licensing fees and abuse employees that are effectively political prisoners. Even if you pay the American workers minimum wage, you're still paying orders-of-magnitude more for the same product.
- burgrchf 2y ago
  [dead]

tomschlick 2y ago

Unrelated to this specific plant, but it doesn't help that the government put all kinds of stipulations and pork into the CHIPS act that requires certain demographics of people hired, investments in unrelated things, etc. https://thehill.com/opinion/4517470-dei-killed-the-chips-act/ https://thehill.com/opinion/4517470-dei-killed-the-chips-act... If we want to get serious about ramping up domestically produced chips for critical applications, we need to cut that crap out and focus on efficiency and quality.

micah94 2y ago
why is this voted down? isn't it legitimately part of the story? gov't waste is gov't waste.
- bediger4000 2y ago
  What about agriculture subsidies? Lots of earmarks pork and other things thrown into that bucket of money.
- dwaltrip 2y ago
  The downvotes are probably because of the framing of DEI as “pork”. You are surprised people disagree about what qualifies as government waste? I find that surprising :)
talldayo 2y ago
I hate to be the bearer of bad news, but unless your criteria for efficiency and quality is bringing back slavery then we're not going to compete. The DEI requirements are a cherry on top of a pie-in-the-sky request that wouldn't meet it's goal with any demographics staffing it. If we want to get serious about ramping up domestically produced chips, the state has to do it itself. People piss and moan about Intel but it's not like Northrop Grumman could do their job any better. The best way for the US government to realize the scale of their requests is to fix the problem internally, instead of pitching it as a bidding war for Goofus and Gallant.
blackeyeblitzar 2y ago
I simply don’t understand how these types of diversity initiatives are legal. They are explicitly discriminatory and violate the fundamental principles underlying laws. And I agree with you that placing these social justice restrictions on a critical element of national security is incredibly irresponsible.

ranger_danger 2y ago

I like Dave Chappelle's version: "(Trump wants to) bring Chinese jobs back to America... for what, so iPhones can be $9000 dollars?" https://www.youtube.com/watch?v=inlDT62oGy8 https://www.youtube.com/watch?v=inlDT62oGy8 (NSFW language)

HeyLaughingBoy 2y ago

What percentage of the costs are salary vs. capital cost or (non-payroll) operating expenses? If the process is mostly automated, it should be able to absorb higher salaries without having much impact on the bottom line.