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Chips are like agriculture: It does not matter that the home grown product can only compete with government support, you never want to be in a position where yo
by niemandhier 1y ago
Chips are like agriculture: It does not matter that the home grown product can only compete with government support, you never want to be in a position where you cannot provide for your country’s minimal needs purely from local sources.
- mgraczyk 1y agoHow? What if we just decide we will never go to war with Mexico or Canada and get comfortable with the idea of importing from our allies? There is no serious future risk from doing that
- fidotron 1y agoThis kind of answers your own question: the reality is you are only a reliable US ally [1] if you can hold them by the balls TSMC style. Given that countries go to great lengths to develop and maintain such dependencies. Canada's current weakness is at least in part because it has failed to do so. [1] Edit to add: This was/is poorly worded - I mean that the US will only guarantee that you remain an ally while they are in some sense dependent on you, and while doing so they may work to break that dependence, which you may interpret as them trying to abandon you.
- mgraczyk 1y agoYou are claiming that Canada will stop exporting to the US in the future? Populism does the opposite, they would likely stop importing. There's almost no risk to us that they would not export chips
- fidotron 1y agoMy claim is Canada has no unique product that it offers that the US is sufficiently conspicuously dependent on for it to guarantee any real sense of true independence, and so it finds itself subject to the whims of a foreign state. Right now there is a very large Canadian boycott of US products, services and tourism. I also had to explain to a client this week that because of the import tariffs on Chinese goods to the US the US assembled products are now no longer competitive with alternatives. The fact you were seemingly unaware of this kind of demonstrates the level of effect of it.
- mgraczyk 1y agoYou are arguing my point. Canada may stop importing from us but will never stop exporting. There are no incentives for that and never will be. We import tons of food and energy from them and have no alternative on time scales or 10 years If we imported chips from Canada, that supply chain would be safe for at least 50 years, probably hundreds
- fidotron 1y agoThe Nintendo Wii SoC was actually fabbed in Canada and exported, but that facility has changed into something slightly different because the whole east coast/hudson river valley fab world went sideways a while ago. > We import tons of food and energy from them and have no alternative on time scales or 10 years More importantly for Canadians that food or energy has no alternative competing market to sell into. Consequently the Canadians are totally dependent on the US market to even set the price of it. This applies to many other sectors as well. Canada is currently having a huge desperate push to export to non US markets because of the levels of uncertainty that have been created. And I say this as someone not totally dismissive of the US position, but they need to do a far better job of bringing their allies into the tent with them.
- SJC_Hacker 1y agoHistorically there have been plenty of incentives to stop exporting. Its called an embargo. Usually in an attempt to get the host country to change foreign policy, though I can't think of any situation where it actually worked. Examples: Napoleon's "Continental System" against Great Brtain, US oil embargo against Japan prior to WWII, Confederate States of America cotton embargo against the UK during the early years of the American Civil War
- mgraczyk 1y agoYes it's definitely possible, but very rare and as you pointed out (especially in the confederacy's case) it usually harms the exporter much more than it helps. I'd say that in any case of a serious Canadian export embargo, it will have been in retaliation to US trade policy or US invasion, not the other way around. We had essentially no risk that Canada would embargo us, there was no possibility of this happening for the last 150 years until we became the aggressors
- theteapot 1y agoIt's an extension of a peace through strength philosophy. If you lose your critical sovereign capabilities you become weak and vulnerable. You no longer get to decide who you do and don't "never go to war with".
- mgraczyk 1y agoYes I understand the reasoning, it's just obviously wrong. This doesn't happen and hasn't happened in hundreds of years. This is not why people get invaded, otherwise Switzerland would have been invaded many times over the last century
- 1718627440 1y agoThat's exactly why Switzerland didn't got invaded in the last century. Every side depended on them for money supply, so they couldn't risk bringing the war to Switzerland. Also it had a track record of staying neutral, so they didn't feared it may pick a side, because it largely made money from selling stuff from both sides.
- deleted 1y ago[deleted]
- topspin 1y ago> if we just decide we will never go to war with... That's hubris. Although the US does indulge elective wars, one does not always get to choose with whom one will war.
- mgraczyk 1y agoOkay so make a prediction. What is the probability that Canada or Mexico will declare war on the United States in the next 100 years?
- topspin 1y ago100 years? Only a fool would attempt that. 100 years from now Uzbekistan could be fighting Brazil in orbit around Venus.
- lm28469 1y ago100 years ago the British Empire ruled the world, now it's a small island you don't hear much about... The US is only about 250 years old, I'd be cautious about predicting the future
- mgraczyk 1y agoYou're off by about 150 years. 100 years ago was 1925, the British has already largely collapsed losing the US, Canada, Australia. 100 years isn't forever but it's a long time And we haven't had any serious threats from Canada since 1812. I think the most reasonable estimate is 100-200 years
- simianparrot 1y agoSurely based on history the odds of a conflict between neighbouring countries increases with time passed.
- mgraczyk 1y agoNo, based on the history of conflict we can say that the more time that passes with neighbors not invading one another, the less likely they will in the future
- like_any_other 1y ago> go to war It won't be war. It'll be one-sided trade deals [1,2], and a slow erosion of economic and political sovereignty, culminating in a puppet state. [1] https://en.wikipedia.org/wiki/Canada-China_Promotion_and_Reciprocal_Protection_of_Investments_Agreement https://en.wikipedia.org/wiki/Canada-China_Promotion_and_Rec... [2] https://www.cbc.ca/news/canada/fipa-agreement-with-china-what-s-really-in-it-for-canada-1.2770159 https://www.cbc.ca/news/canada/fipa-agreement-with-china-wha...
- mgraczyk 1y agoOne sided trade deals in which they continue exporting to us and import less There is plenty of risk that our neighbors stop importing and almost no risk they stop exporting
- dmix 1y agoRussia has been totally isolated from global market and they are still producing hundreds of cruise missiles a month just fine. America could easily figure it out long enough to survive a few yrs of conflict. Even stockpiling 10yr old chips would be good enough 95% of military industry. Then emergency investment and smuggling will cover the rest. Meanwhile cutting off your markets and wasting hundreds of billions on a long term bet with a small probability that another global war will happen is pretty dumb financial thinking. Tariffs and corporate welfare will actively make a country poorer and create unproductive zombie markets while raising taxes on everyone. Not to mention diverting budgets and new revenue away from actual national security investment.
- msgodel 1y agoUp until relatively recently we were the SOTA and #1 semiconductor exporter. When people talked about the "american manufacturing sector" a significant portion of it was actually that. Those foundries didn't go away, they're still manufacturing with the same capabilities they used to (and they're much cheaper now since they're competing with the better ones in Taiwan.) It's good to hear TI hasn't given up on high performance SOCs as it was beginning to look like they had. But most of this stuff is still here. Freescale and many other American companies are still making the same (better even) chips they always have which is more than enough for cruise missiles (more than enough for decent PDAs and smartphones really) even without "stockpiling."
- dmix 1y agoYes and those Russian semiconductors aren't sophisticated or high end at all which supports my point. The military isn't making cellphones, they make missiles and fly jets with decade old computer chips. A few years of war with China is not going to magically eliminate all computer chips. The global market will still exist in some form and wars are far more motivating than a few government grants. Not to mention China (and/or Taiwan) is still going to want to sell to someone to survive, and those countries can smuggle them into America - just like Russia does for it's drone industry and oil. America is much more capable in that regards with NATO and it's huge purchasing power. I still think TI and Apple should be investing in foundries and domestically. It should just make sense as a business otherwise it's going to be a very expensive embarrassment.
- Barrin92 1y ago>It does not matter that the home grown product can only compete with government support, Even that isn't a given, because unless you have amassed a certain amount of technocratic and governmental competency chances are it can't compete even with government support and you just produce crony dysfunctional companies. And of course there's economic trade offs. If you're politically ordering your economy to make chips, it doesn't make something else, and whatever it was making and trading for chips it was better at, and so you get fewer chips, that's comparative advantage. Industrial policy (and tariffs) do not increase aggregate production, they reduce it. And given that the circle of items you "can't do without" seems to be a bit of a moving target these days, at some point you're actually more brittle because you've replaced large chunks of the market with state production.
- treyd 1y agoPeople take it as an assumption that cronyism will always happen if the government invests too strongly/consistently in a certain thing. But cronyism is a policy and structural failure, it's usually because the incentives for the different parties involved encourage it to happen. Institutions can be designed carefully if policymakers actually want to do it. USPS is a great example of an organization that's managed to largely avoid this. Whenever you mention that people crawl out of the woodwork to complain about the 7 different times they lost their package, but their logistics at scale is still unmatched by the private sector, while also not completely negating the value of private sector alternatives (which so often is argued would happen if the government actively started doing anything new).
- manquer 1y agoIt is established economic theory not just some opinion . Constraints in form of regulations, subsidies, tariffs by government intervention will produce inefficiencies. This is the core economic philosophy behind both the modern centre right[2] i.e. neoliberal democrats (80s-today) and the right wing republican conservatives (pre MAGA -2016).[1] Even communists would agree this is correct, it is understood in different levels since Adam Smith invisible hand, from far left to centre left just posit that different polices that benefit the people not the economy are worth the cost . That is actually true for all other groups except anarchists and libertarians all agree government intervention is needed in some form, they just disagree on how . ——- Postal services anywhere in the world are inefficient by design. They are governed by universal service obligation principles not efficiency same with telecom providers and other utilities. The question then becomes how much inefficiency is acceptable given the objectives . There are no right answers, you could have competing private couriers who dump unprofitable low density routes to USPS while serving profitable ones themselves (UPS, fedEX, Amazon ) or you could have gigantic postal service which is sole delivery provider socialist style, there are going to be some problems either way. It is just matter of preference which set of trade offs we are okay with . —- [1] Post MAGA it is a populist party economically there is no fixed ideology to be characterized [2] the centre right label is economic and technical to contrast say the socialist left party of FDR/New Deal 1930-70s, not meant to offend.
- simonh 1y agoIt depends what the minimal needs are, but basically the US has this for chips already. Yes the US only makes older chips, but in fact those are the ones that really matter, that you can’t do without. The ones that are in everything. However making everything domestically just isn’t really viable for any country any more. The scale of our technological civilization and the diversity of goods and materials it depends on is more that any one continent can support, let alone one country. It would be possible to collapse that down to one continent if absolutely necessary, but it would be incredibly economically painful and the US would need to give up on a lot of non-essentials and other priorities to devote resources to duplicating capacity that already exists elsewhere.
- jvanderbot 1y agoBuying rocks and exporting chips is fine. Of course it's not that extreme but the sentiment is there. It's about expertise capital and concentrating that domestically.
- estearum 1y agoBut at the expense of what? We’re not lopping off the rock farmer end of the economy to redirect efforts toward chips.
- ksec 1y agoI think it is not about one country doing to all. But technology transfer should happen within like minded countries and within a smaller circle. So may be two continents max.
- onetimeusename 1y agoI am not sure about this. There was a chip shortage from Taiwan a few years ago that led to an auto shortage https://www.npr.org/2021/04/28/991270369/taiwan-races-to-remedy-car-chip-shortage-but-no-end-in-sight-says-economy-minist https://www.npr.org/2021/04/28/991270369/taiwan-races-to-rem...
- ahmeneeroe-v2 1y agoThis is true. Also true for oil production.
- notatoad 1y agoThis is a completely meaningless statement. It sounds good, but contains no actual argument. why are chips like agriculture? What makes that statement not apply to literally every product category that exists? Agriculture is self-evident, we need food on a daily basis to live. I don’t need three square microprocessors a day.
- mlyle 1y agoJust like you don’t want to wait many months to tool up to make food if there is conflict… You don’t want to wait many years to tool up to make chips that go in weapons, either. Else, you risk being structurally defeated very early, and this leads to others concluding that they can take you on. It undermines other preparations.
- melenaboija 1y agoYes, we understand that, but it’s not a good comparison. Producing chips and agricultural goods are fundamentally different, starting with limits like climate, seasonality, and land. At most, you could compare it to mining minerals for chip production
- knifie_spoonie 1y agoI don't think they're referring at all to any similarities in how they're produced. It's more to do with similarities in the consequences of not have any local supply in times of emergency.
- mlyle 1y agoThe only things that matters for this consideration are: A. How bad is the consequence of not having them? B. How long does it take to tool up domestic production if there's a supply disruption? C. How long can you tolerate the shortage of them? D. How easy is it for a disruption or disaster to disrupt international supply? The answers to A and D are fairly different, but both are "bad enough" to trigger this kind of thinking. The ratio of B to C are probably similar between food and critical integrated circuits.
- favflam 1y agoAre there going to be Congressional hearings at least where Citizens can see a debate with witnesses testifying under oath? Will the Congressional research office publish statistics and data we can read together to debate? Or will some backroom deal be made without any Congressional approval? I got a lot of questions and basically there is no way to get answers since Republicans gave the president: 1. unilateral authority to set tax rates (tariffs and illegal export levies) 1. impound Congressionally appropriated funds on an ad-hoc basis 1. unilaterally close down federal agencies created by Congress I refuse to debate the merits of this industrial policy while the above three things are true. There is nothing to debate here because no one outside the administration's inner circle (industrialists bribing) who knows what is going on. I feel like my 7th grade Civics class has been a complete waste. Or, it lets me see what is happening in the correct light.
- rayiner 1y ago[flagged]
- threemux 1y agoShame you've been downvoted. Regarding federal agencies, the Constitution indeed means what it says when it says "The executive Power shall be vested in a President of the United States of America." If some agency can wield executive power, it is under the exclusive control of the president. Looking forward to the likely overturning of Humphrey's Executor soon. It's gone in all but name anyway. Perhaps this will spur some future Congress to take back what they've delegated (like sweeping tariff power)