Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tech giants join call for funding U.S. chip production

reuters.com

Post reply on HN
Print view View original

71–80 of 301 posts

Re: Tech giants join call for funding U.S. chip production

#71

Post by cryptofistMonk »

zepto wrote: post #54
protomyth wrote: post #4

How about you spend some of that cash hoard and do it yourself? I would rather the government start dealing with cyber attacks because that's going to affect the east coast something fierce if this crap keeps going. If the government gives money then it better talk to these companies about where their items are produced.

The reason these items are not produced at home is because of government policies. I agree that they should be the ones to invest in these fabs, but it also makes sense for the government to make sure that is an internationally competitive move for them to make, rather than forcing them to pour water uphill.

> The reason these items are not produced at home is because of government policies.

Which policies? I believe you, genuinely curious

Re: Tech giants join call for funding U.S. chip production

#72

Post by bpodgursky »

throwaway481048 wrote: post #62
robbrown451 wrote: post #31

To all those saying that those companies can afford it themselves, remember that there are reasons they don't. The economics don't add up. Companies tend to do what is in their economic interest to do. Something like this can change the economics, which could be a good thing.

Can you please elaborate? I struggle to discern the ultimate effect of private capital versus government funds in this situation. Ideally, a business’ problems are handled by itself, not via the federal government using taxpayer monies.

If Google thought they could get a solid return on investing $50B rather than holding cash, they would do so.

The fact they are holding it as cash is an indication they are not bullish on the fundamentals.

Re: Tech giants join call for funding U.S. chip production

#73

Post by foobarbaz33 »

throwaway481048 wrote: post #62
robbrown451 wrote: post #31

To all those saying that those companies can afford it themselves, remember that there are reasons they don't. The economics don't add up. Companies tend to do what is in their economic interest to do. Something like this can change the economics, which could be a good thing.

Can you please elaborate? I struggle to discern the ultimate effect of private capital versus government funds in this situation. Ideally, a business’ problems are handled by itself, not via the federal government using taxpayer monies.

In a vacuum, sure. But these companies are competing with foreign governments using taxpayer monies to make a product.

Cheaper just to buy from the foreign government? sure. But if a product is considered core to survival it may be good to have domestic production. Whether it's food, weapons, computer chips, water supply, etc.

Re: Tech giants join call for funding U.S. chip production

#75

Post by [deleted] »

meowkit wrote: post #45
diegocg wrote: post #8

> Some of the world’s biggest chip buyers, including Apple Inc, Microsoft Corp and Alphabet Inc’s Google, are joining top chip-makers such as Intel Corp > to create a new lobbying group to press for government chip manufacturing subsidies None of those companies need subsidies.

Obviously they don’t need subsidies. But economics works on incentives. Problem is these incentives are discontinuous and can change on a dime. You can accelerate a change by aligning incentives. Chip manufacturing is important for products, but its also a security risk. The government should put up support to incentivize these companies to redirect capital towards US manufacturing. Otherwise the incentives for these…

[deleted]

Re: Tech giants join call for funding U.S. chip production

#76

Post by resonantjacket5 »

dageshi wrote: post #41

I feel like in about 4 years time there's going to be a massive bust in chip prices from massive oversupply based on the plans for chip manufacture around the world?

I agree, there's going to be a massive oversupply of chips. If the US, EU, China, and also the current chip producers all increase output that's way too many chips.

I recently watched a youtube video predicting a semiconductor bust that https://www.youtube.com/watch?v=Z7QkIECEkVc, though I don't quite understand if the differing say <7nm versus mid range 14~28 nm chips will have differing oversupply in the future.

Re: Tech giants join call for funding U.S. chip production

#77

Post by seieste »

> But economics works on incentives.

> The economics don't line up.

Suppose you're Google. You know what's cheaper than investing $100m in a new chip manufacturing company? Lobbying for the government to invest $100m in the chip manufacturing company.

This is why "the economics don't line up", and "the incentives don't align". No shareholder would want you to do the financially irresponsible thing of investing in a risky, capital-intensive venture when governments can do that for you.

As a result, companies have the incentive to invest in lobbying rather than actually fund the chip production themselves. Essentially the companies believe that chip production will result in $X/yr, but investing in it themselves would be $Y/yr, whereas they could just invest in lobbying for $Z/yr, where $Z << $Y.

Re: Tech giants join call for funding U.S. chip production

#78

Post by pwdisswordfish8 »

protomyth wrote: post #4

How about you spend some of that cash hoard and do it yourself? I would rather the government start dealing with cyber attacks because that's going to affect the east coast something fierce if this crap keeps going. If the government gives money then it better talk to these companies about where their items are produced.

I've said it before: there's lots of low-hanging fruit in semiconductor manufacturing. Even ignoring the present shortage, it's been the case for a while that there are gains to be had for a competent tech giant with deep enough pockets to take on manufacturing themselves.

Too many outsiders tend to err on giving the benefit of the doubt, thinking that there's some sort of Chesterton's fence (you can see this in the comments here), but it's just not true. So much of what causes delays that I've seen firsthand comes down to unbelievably inefficient business processes plus the less-than-stellar pool of candidates that the industry overwhelmingly prefers to hire from.

Re: Tech giants join call for funding U.S. chip production

#79

Post by dylan604 »

sremani wrote: post #55

This is what bringing back supply chain looks like. I am not against it. What is happening is not great, but you know the whole necessary evil thing.. this is it. This will start with Tech, but will extend to other domains.

Will extend, or already has extended?

The gas pipeline shut down is currently showing this to be an issue for refined fuel. The hurricane that squatted on top of Houston a couple of years ago also shows that to be true as well. We also saw that in toilet paper as well.

Re: Tech giants join call for funding U.S. chip production

#80

Post by zitterbewegung »

seieste wrote: post #77

> But economics works on incentives. > The economics don't line up. Suppose you're Google. You know what's cheaper than investing $100m in a new chip manufacturing company? Lobbying for the government to invest $100m in the chip manufacturing company. This is why "the economics don't line up", and "the incentives don't align". No shareholder would want you to do the financially irresponsible thing of investing in a r…

ROI of investing the money vs Lobbying is ~ $100 to $1

[1] https://www.bloomberg.com/news/articles/2021-04-23/google-am...

Post reply on HN