Tech Giants Join Call for Funding Chip Production (reuters.com) 241
Some of the world's biggest chip buyers, including Apple, Microsoft and Alphabet's Google, are joining top chip-makers such as Intel to create a new lobbying group to press for government chip manufacturing subsidies. From a report: The newly formed Semiconductors in America Coalition, which also includes Amazon.com's Amazon Web Services, said Tuesday it has asked U.S. lawmakers to provide funding for the CHIPS for America Act, for which President Joe Biden has asked Congress to provide $50 billion. "Robust funding of the CHIPS Act would help America build the additional capacity necessary to have more resilient supply chains to ensure critical technologies will be there when we need them," the group said in a letter to Democratic and Republican leaders in both houses of the U.S. Congress.
A global chip shortage has hit automakers hard, with Ford Motor saying it could halve second-quarter production. Automotive industry groups have pressed the Biden administration to secure chip supply for car factories. But Reuters last week reported administration officials were reluctant to use a national security law to redirect computer chips to automakers because doing so could hurt other industries. The new coalition includes some of those other chip-consuming industries, with members such as AT&T, Cisco Systems, General Electric, Hewlett Packard Enterprise and Verizon Communications. It cautioned against government actions to favor a single industry such as automakers.
A global chip shortage has hit automakers hard, with Ford Motor saying it could halve second-quarter production. Automotive industry groups have pressed the Biden administration to secure chip supply for car factories. But Reuters last week reported administration officials were reluctant to use a national security law to redirect computer chips to automakers because doing so could hurt other industries. The new coalition includes some of those other chip-consuming industries, with members such as AT&T, Cisco Systems, General Electric, Hewlett Packard Enterprise and Verizon Communications. It cautioned against government actions to favor a single industry such as automakers.
Let's see here... (Score:5, Insightful)
They made money when the shipped production overseas...
And NOW want to be paid to move it back?!
Did I just wake up on bizzaro world?
Re:Let's see here... (Score:5, Funny)
Re:Let's see here... (Score:5, Insightful)
Re:Let's see here... (Score:5, Insightful)
"Privatize the profits, socialize the losses"
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It's entirely consistent. They haven't moved one inch from the principle "We want money."
Socialize the losses (Score:5, Insightful)
It's worse than that. (Score:3)
Re:Let's see here... (Score:5, Insightful)
No, they want free money for doing what they're going to do anyway. A similar thing happened in the EU, with the different telcos getting together and petitioning for handouts claiming that despite all of the billions they had sunk into developing 5G they just couldn't afford to roll it out without a handout. The handout they were looking for was only in the area of a few billion, while some of the complaining companies had profits in excess of 12 billion per quarter. What's more likely, companies that already have accrued huge opportunity costs artificially holding back their path to market while they hemorrhage more money than they'd ever see in state aid, or companies just banding together trying to hoodwink a non-technical politician in exchange for free handouts? No government should ever give money to an industry for things they're going to do regardless.
Re:Let's see here... (Score:5, Interesting)
They made money when the shipped production overseas... And NOW want to be paid to move it back?!
Did I just wake up on bizzaro world?
People really need to read the South Korea/Park Chung-he chapter of Joe Studwell's "How Asia Works." Yes, they made money out of worked shipped overseas. It is called "market specialization." And when governments do not have the incentives for continuous development of high-value-added products and services, that's what happen.
In fact, the shift to specialization is supposed to happen, and governments (elected by their own damned voters) are supposed to work in tandem to create whatever is needed to fill that void home. And that's where Studwell's book/work is excellent at explaining this.
The South Korean dictator at the time recognized this and forced private companies to push towards continuous tech development home.
Private companies are good at making money in whatever ways public policy let them. Without public policy dictating what "national strategies" are, then there is an inevitable disconnect between what private companies produce and what societies need.
Let us understand that chip manufacturing went abroad to countries THAT SUBSIZIDED that type of manufacturing: Japan, South Korea, Taiwan.
The US should have done that. It didn't because *markets regulate themselves confused unga munga.* By ignorance or choice, the American voter has been voting for this shit for the last 40 years.
We gotta shift gears and create the incentives to manufacture high-value-added products (not low-value-added products, but HIGH-VALUE-ADDED.)
Either that or we ought to shut up and be content with what we have.
The choice is ours. And if we don't make it, some other country (read "competitor") will.
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We gotta shift gears and create the incentives to manufacture high-value-added products (not low-value-added products, but HIGH-VALUE-ADDED.)
Chip Design which is the high value add part of Chip manufacturing stayed in the US. Chip manufacturing went abroad as it was less value add than Chip design. In fact Chip manufacturing is a low margin industry and most manufacturers need govt subsidies to survive. Why bring it back?
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Why bring it back?
NatSec strategy. Sometimes it pays to subsidize something if it makes sense within some strategic framework.
Consider this: Japan imports enormous amount of wood even though it has forest reserves up to the wazoo (despite what many geography-challenged people think, Japan is not a small country, with lots of land covered by forests.)
Similarly, it would be cheaper for Japan to import rice than to produce it locally.
Yet, it is part of Japan's strategy to import wood (to keep forests as a "strategic rese
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Apple, Amazon, Google, AT&T, Cisco Systems, General Electric, Dell, Hewlett Packard Enterprise, Microsoft and Verizon Communications. Surely, they can come up with $50B themselves instead of trying to suck the government teat.
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They made money when the shipped production overseas... And NOW want to be paid to move it back?!
Did I just wake up on bizzaro world?
When we turn massive corruption into nothing more than a punch line, it tends to be treated as such by lawmakers.
As taxpayers, we should remember that. I agree that this entire concept is complete bullshit coming from the worlds richest organizations. FUCK this subsidies bullshit. Whomever wants to profit from these chips, should foot the bill. Don't sit here and attempt to hold the taxpayer hostage by threatening an "or else" product shortage.
Besides, you can keep your overpriced disposable cars. Forc
invisible fisting of the market (Score:3)
Re:invisible fisting of the market (Score:4, Interesting)
TSMC planning to build a $12B plant in the Phoenix area.
Intel planning to build a $20B plant in Chandler, AZ.
You don't need to subsidize these companies. You just have to accept that they have been disrupted by the Pandemic, and by the government reactions to the Pandemic, responses that have caused significant and real harm.
But no surprise the Corporatists are looking for a way to get their hooks into this industry. This is about power, control, and domination. Watch and learn.
Re:invisible fisting of the market (Score:5, Interesting)
TSMC planning to build a $12B plant in the Phoenix area.
Intel planning to build a $20B plant in Chandler, AZ.
You don't need to subsidize these companies.
Both TSMC and Intel are building fabs in Arizona because they are receiving subsidies to do so.
Re: invisible fisting of the market (Score:2)
Excellent, no more need be offered. Yeah, but watch, there will be more.
Re: invisible fisting of the market (Score:4, Insightful)
The fabs under construction in Arizona are not sufficient to meet future demand.
More fabs will need to be built.
They are more cost-effective to build in Taiwan or Korea for many reasons. If America wants to on-shore them for national security reasons, the taxpayers will need to pick up the tab for the difference.
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If America wants to on-shore them for national security reasons, the taxpayers will need to pick up the tab for the difference.
Exactly, chips made in American fabs built at full price aren't going to be competitive on the world market, so if America wants locally made chips, either help built the plants, or guarantee a market for the chips through import tariffs or "Buy American" mandates so companies will buy them even if they cost more.
Otherwise, American companies are going to continue to buy from cheaper overseas plants.
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What they won't be receiving is water. The Southwest is under nasty drought conditions and projections are that condition won't improve. Soon they'll be petitioning the U.S. government to divert water resources to them. There are no laws preventing this sort of stupidity but we'll be expected to pay for it.
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The Southwest is under nasty drought conditions and projections are that condition won't improve.
The amount of water used by a fab is negligible compared to what is used for agriculture or watering lawns and golf courses.
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Why do I need to accept that these companies have been "disrupted by the pandemic?" What does that even mean? What government reactions have caused real and significant harm?
Who are "the corporatists?"
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I don't know about the US situation, but I worked for a large Japanese semiconductor during the Tohoku earthquake and tsunami in 2011 and can attest to the knock-on effects this had in other areas. My company in particular had fabs all around Japan, but the Tohoku region was one of its biggest, with most of the chips earmarked for Toyota product lines. When these facilities were knocked out, it basically disrupted the supply chain for Toyota and Sony and some others, pushing back their own production schedu
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Oh, you mean the gov. mandated shut downs to prevent people from dying. How thoughtful of you.
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And did they succeed? Does anyone know the impact on deaths? Seems my grocery store workers survived well.
You write as if this is a certain thing, but we know very little. All the data is questionable, the government doesn't tell us the truth, We really cannot stater with certainty that the shutdowns saved lives, and common sense was rejected in every other aspect of this. Why employ it now as an argument?
Besides, the real world approaches this as a risk decision. And with such poor data to work with, any w
Re:invisible fisting of the market (Score:4, Insightful)
Research conclusively shows that areas that do the most to prepare for pandemics ahead of time recover economically the quickest. I mean, not just in this pandemic but in every pandemic on record. It's common knowledge, and scientifically proven.
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I hope you get a name. FWIW I don't go to FN/OAN for this, the WAPO offers great material for those who can read. And yes, my radio gets a workout. I'm hooked on 70s rock again.
You really ought to put a name on it. AC is so 90s.
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Eh, I'd go as far as giving up to half a mil a year a pass. I just have the suspicion that for a lot of right wing types complaining about "corporatists," the actual distinction is ethnic. Because the right wing generally and very sloppily fellates the ultra wealthy whenever given the chance. So they have to imagine some simple difference between the good wealthy, and the bad wealthy.
Re: invisible fisting of the market (Score:2)
I know you're trying to be humorous, but please include a /sarcasm flag. Some might believe hydraulics in a chip fab would actually leak out, or worse dumb stuff.
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I know you're trying to be humorous, but please include a /sarcasm flag. Some might believe hydraulics in a chip fab would actually leak out, or worse dumb stuff.
As of two years ago, a whopping 23 former chip manufacturing locations in Santa Clara County alone were still superfund sites [theatlantic.com]. The potential environmental impact of chip manufacturing, if not properly regulated, is no laughing matter.
Here's hoping that when they say Chandler, they don't mean in the city limits. :-/
Re: invisible fisting of the market (Score:2)
No subsidies (Score:5, Insightful)
There's nothing wrong with the gov't making things we all need, and computer chips are one of those things. What's wrong is my tax dollars going out the door to private companies for nothing in return. If the gov't going to get into the semi conductor business then the gov't should get into the semi conductor business, profits and all.
Imagine not paying taxes because your gov't was profitable.
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Agree completely, there is a way to do this since it's an obvious matter of national security and functioning.
There was a similar article posted about the US building it's own vaccine factory for the future:
"How Joe Biden could vaccinate the world" [theweek.com]
Re:No subsidies (Score:5, Insightful)
What's wrong is my tax dollars going out the door to private companies for nothing in return.
What do you mean nothing in return?
The more successful these entrepreneurial enterprises are, the more opportunities open up for you to be a pool boy at executives' mansions. Don't be such an ingrate.
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Do you think Trump is personally hiring the seasonal workers at his golf courses? You are an imbecile.
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Well, let's see him fire his hiring managers now that he's aware.
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His orangeness is aware of something? Surely not!
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I am exceedingly willing to grant benefit of the doubt, but this is a man with little compunction about firing people who don't push his own agenda.
It's common public knowledge, he's not in the dark. It's tacit agreement at this point, if not direct order.
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Only if that ball-less freak can fire them without having to do it face-to-face.
Re: No subsidies (Score:2)
Yet you sound like a person who thinks someone who is so dopey and clueless about how his own company is run should be president. No wonder he got bamboozled by the Chinese and outplayed by the globalists. He had to eat crow and fire his own picks for high positions in his government. This is the best you nationalists have?
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They'd make you pay anyway.
The point is less about needing the money (they can just print that) and more about taking it from you to keep you from getting too far ahead.
If everyone had more cash, they could be farms instead of consumers of farms.
Property taxes make sure no one lives in houses without working, even if they figure out how to pay one off early in life.
Inheritance taxes make sure you can't pass too much wealth down to your kids so no building farms over time.
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Track record (Score:2)
There are certain things that have always been done by government, because they HAVE to be done by government.
You can't have competing privately-run justice systems, where Google's judge competes with Apple's. There needs to be one court system respected by all.
Similarly for policing. You do NOT want two police forces going against each other. Some third world countries have that since they don't have a functioning government, and it's not good.
So the government has always run the policing, always run the
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You mean like state and federal? FBI vs CIA? Sharks vs jets?
No, wait, some of these are criminals!
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There are certain things that have always been done by government, because they HAVE to be done by government.
You can't have competing privately-run justice systems
No, but it makes for some badass cyberpunk dystopias.
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The government owning "the means of production" is litteraly Marxism, so it must be even more evil than Putinism.
How long before you are arguing for a free 6502 in every cereal packet?
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Re:No subsidies (Score:4, Insightful)
There's nothing wrong with the gov't making things we all need, and computer chips are one of those things.
The last thing this country needs is the semiconductor equivalent of SLS.
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America First (Score:2)
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Where have I heard that before?
Lots of places: https://en.wikipedia.org/wiki/... [wikipedia.org]
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Well, there was once an alleged president who constantly whined about it. But mostly it meant paying farmers for the good they could no longer sell because he screwed up their markets. He destroys everything he touches.
Corporate Socialism. (Score:5, Insightful)
Re:Corporate Socialism. (Score:4, Insightful)
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If they want local, reliable production, they have the means to fund it.
They only care that production is reliable. They don't care if it is local.
The corporations are happy to buy from Taiwan. Shifting production to America is a national security issue, not an economic issue.
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having all the production in Taiwan is by definition NOT reliable.
There is a shortage of capacity worldwide.
That has nothing to do with where the fabs are located.
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Very few companies in the world at this point can fund a state of the art fab. The current cost is about $14Billion, the next nodes are projected at around $20B.
There are only a handful of Tech companies that can fund that, currently Intel, TSMC and Samsung. And it's questionable how long Samsung can afford to continue because those costs will consume the entire Samsung conglomerate's free cash and halt all R&D in all their other enterprises.
And car companies and others don't make nearly enough money to
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This doesn't make sense. If there's a shortage of fab capacity, prices will rise to make it profitable to address that shortage. Then it will be profitable for anyone with sufficient credit to get some of the free money banks are giving out at the moment and build one.
The companies mentioned don't want to own a fab. They just want to buy chips. They see an opportunity to get those chips cheap by appealing to the US government's insecurity.
And don't pretend that 99.9% of the chips in a Ford need a cutting ed
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How about using the money to subsidize it yourself (Score:3)
If you are already getting together many different companies, just fund it directly. Pulling the government into it is just pathetic.
Re:How about using the money to subsidize it yours (Score:4, Insightful)
Re:How about using the money to subsidize it yours (Score:4, Insightful)
> Most of that money is overseas.
No problem, we can tax overseas profits thereby removing any hinderance to bring it back to the US. Now that's what I call globalism.
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Honestly I thought one of the biggest, if not the biggest, barriers to bringing high tech manufacturing back to the USA is that we don't have the workforce that is capable of it. The USA has plenty people in white collar jobs and then low skill labor for the most part. We don't have lot of that third type of highly skilled/trained but technically speaking "manual" labor.
Which is where free community college for all comes in. Ramp up programs for high skill labor.
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Taxes (Score:3)
Letâ(TM)s make the subsidies a percentage of how much they paid in taxes.
Need Our Tax Dollars (Score:5, Insightful)
Clearly Apple, Microsoft and Alphabet need our tax dollars cause they don't have any money of their own to fund semiconductor plants. See "rent-seeking".
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If they get into the chip business, it could make them more oligoplier than they already are, . Be careful what you ask for.
All of these companies have the money (Score:4, Insightful)
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Yeah fuck them. No more bailouts for the 0.01%.
will the profits run thru Ireland? (Score:2)
Brother can you spare a dime (Score:5, Insightful)
Apple has 200B cash on hand.
Microsoft has 125B cash on hand.
Alphabet has 135B cash on hand.
Intel has 20B cash on hand.
Jointly they have 500B cash. I can see why they need 50B in tax payer dollars to ensure their ability to continue to make money efficiently is not interrupted.
One would think that if ramping up US chip manufacturing was a long term economically winning strategy some company would swoop in to fill the vacuum, or is that not how capitalism works ?
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Mod parent up.
Or tax the living hell out of them, then give them the subsidy; problem solved.
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This doesn't even include the fact that getting loans has never been cheaper than ever before, considering that it's close to 0% these days. Are they saying they can't enough profit to cover a 0% loan?
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One would think that if ramping up US chip manufacturing was a long term economically winning strategy ...
It is not an economically winning strategy.
Economically, it makes more sense to build the new fabs in Taiwan and Korea.
Shifting the fabs to America is about national security, not economics.
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If these companies can't make a profit without resorting to pickpicketing the taxpayer, they should go out of business.
Pick someone else's pockets, assholes.
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If these companies can't make a profit without resorting to pickpicketing the taxpayer, they should go out of business.
They won't go out of business. They will just continue to buy from foreign sources.
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We've spent about 80 years in an environment of massive profiteering on national security.
I actually buy the argument that it's about national security, I do not buy the solution.
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I actually buy the argument that it's about national security, I do not buy the solution.
What alternative solution do you recommend?
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National security does impact the economics. It is all interconnected. However, if the U.S. Gov. had the right stuff, they throw up roadblocks to putting water-hungry chip plants in arid part of the country and force them into locating in, say, the upper Midwest around the Great Lakes.
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The USA is competing against the Chinese. The Chinese state subsidize industry because dominance of industry is a state goal. The Chinese government will grant land, provide low or no interest loans, fund overseas marketing, purchase machinery, and provide paid training for operators. This essentially wipes out the overhead and startup costs. Labor rates are around $400-$500/mo for a 60 hour work week. There are no meaningful unions. These companies are spoiled rotten by cheap labor, yet terrified of IP the
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... and that makes it cheaper to import Chinese products into the American market. The large Co's are clammoring for cash to bring some manufacturing back to the US.
The proper response is to inflate the cost of Chinese products proportional to the deflation of price that is seen due to Chinese state sponsorship. The method is to impose tariffs on Chinese-subsidized products. You could alternatively say, "Give the rich free money!!!" -- but that's a different type of market-thing..
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Nationalize them. That's the payment for the subsidy. The taxpayers pay you money, we want to buy something for that money. You can have the money from my pocket in taxes if you agree to sell me (the People) your company for the aforementioned consideration.
Wrong solution to single-basket problem (Score:2)
This could trigger trade-wars and doesn't fully solve the problem.
Instead require or give tax-breaks for chips that have multiple suppliers in different countries and regions, preferably democracies. Having a single supplier is the real issue, not so much "Made in USA". We have weather problems and disruptions also, as the TX freeze situation recently illustrated, creating shortages in certain materials and chemicals.
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This could trigger trade-wars and doesn't fully solve the problem.
We're in a trade war. We've been in a trade war since the late sixties when container ships started flooding the US with slave labor made goods and we've been getting our asses handed to us the whole time. It just took this long for anyone above the level of a factory worker to feel the pain of it.
Trillion dollar companies don't need subsidies (Score:4, Insightful)
They can spend their own money
Greedy fuck heads (Score:2, Insightful)
Looking at that company list, why lobby? (Score:2)
Looking at the massive values, banks, holdings of the companies listed, WTF do they need to lobby? Apple alone could put up 20 world class chip plants with what they have in the bank.
Corporate Douchebags (Score:2)
So emotional, lol. (Score:2)
Reading these broken record replies reminds me of how many people make decisions on emotion, jealousy, or a misplaced sense of "fairness".
The question isn't whether we "taxpayers" (literally about what, 25% of the population pay more in taxes than they get in services/refunds/credits/etc...?) should pay for it. It isn't whether they can afford it.
The question is simply will we, the US citizens, be better off if the government invests in loans or other ways to increase US chipmaking. That's it. Is it better
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I can see this from multiple angles. I mean, I definitely understand the desire to analyze whether the US would be better off to spin up new fabs in country or not, but I also understand not wanting to hand fistfuls of taxpayer money over to some of the richest corporate entities in the world to do something they should consider doing with their own huge nest-eggs that currently just sit somewhere in a list of 1s and 0s rather than doing any real work in the economy.
I don't see the point of getting super e
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The problem is this is the worst combination of government and private partnership for the taxpayer.
So a combination of companies *each* with enough net profit to substantially fix the problem on their own as-is is telling the government that they should be given handouts to fix the current constraint issues. They are effectively colluding to hold hostage the economy to defray their expenses across all taxpayers, rather than tighten margins or increase prices to their customers. They collectively created th
National security interest is understandable (Score:2)
TSMC has done an awesome job, but it is simply too dangerous to have all of these eggs in one basket. Imagine some surgical strike from e.g. China or a terrorist attack on the TSMC facilities. The global repercussions would be unfathonamble.
And, maybe ironically, because TSMC doesn't seem to be abusing it's quasi-monopolistic position and jacked up prices to where ever the
Robot and Display manufacturing (Score:2)
How about investing in robotic manufacturing instead? Have robots build everything from apartment complexes to smartphones. As for jobs paranoia. Just put the name of a person on some of the robots and have that person collect the paycheck of the robot. Weâ(TM)ll have increased productivity and universal basic income. There will still be jobs for designers and engineers of course. Someone has to do product design and programming/maintenance. And of course investing, you will have reduce work hours and
Only buy US Chips (Score:4, Interesting)
It's simpler than this. The US Federal Government should be mandated by executive order to only purchase chips manufactured in the US.
You want to sell an $100mm F-35 to the Air Force? Great, all of the chips used in the fighter jet have to be manufactured here. I bet you would find that chip manufacturers suddenly won't have a problem finding private financing for their factories.
Problem solved.
Job Creating Libertarians Demand Govt. Money! (Score:2)
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See Wisconsin and Foxconn. And the lobbyists money will go towards Congress which would have to vote on any measures diverting tax money to this. Wanna bet it becomes bi-partisan?