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

reuters.com

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

#101

Post by zepto »

cryptofistMonk wrote: post #90
zepto wrote: post #84

Earlier quoted context omitted.

Trade deals, plus subsidies by other governments are the general categories.

Right. Other governments are always going to subsidize though (unless you work that into the trade deals I suppose). Obviously any barriers to the success of US fabs should be removed, but it's not clear if there's a market for more expensive US chips - if there were, you'd think someone would build it without the need for a subsidy

> Other governments are always going to subsidize though (unless you work that into the trade deals I suppose).

Often trade deals do include agreements about subsidies.

> it's not clear if there's a market for more expensive US chips - if there were, you'd think someone would build it without the need for a subsidy

They wouldn’t be more expensive with the subsidy.

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

#102

Post by elevation »

Even if this consortium constructs a North American fab, a single natural disaster near that fab could wreak the same follow-on effects in the headlines today; the underlying problem isn't only that we've outsourced our critical manufacturing, but also that we keep so little buffer that any disruption could cause today's headlines.

The MBAs running US manufacturers need to scrap their JIT strategies, build some warehouses, and start keeping a store of the essentials. If a tangible good is essential to your business continuity on a 6 or 12 month horizon, then your business should not outsource the maintenance of this lifeline, regardless of whether your supplier is domestic.

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

#103

Post by lostlogin »

ohashi wrote: post #99

If the US tax payer gets a significant stake in the chip fab venture, I would be OK with this. We want to secure national security via chip manufacturing and you want billions of dollars? Give us some upside. I don't want to hear it creates jobs, it generates blah blah blah, a real equity stake and possibly repayment of the capital. Creating jobs should be a happy by-product of subsidizing an industry that is probabl…

> Amazon, Apple, Google, and Microsoft had 526 billion dollars between the four of them in cash reserves.

Presumably they would cooperate and do something about it if they saw the current situation as too risky?

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

#104

Post by [deleted] »

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.

[deleted]

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

#105

Post by tedivm »

Investments and funding can come in a variety of packages, some better or worse than others. Even something as simple as the government providing or backing loans can go a long way. The Energy Department's loan program has helped speed up investment in solar and has turned a profit- making it easier for production to move to the US doesn't always mean "giving" money away.

I guess my point here is that the devil is in the details, and an organization as large as the US Government has a lot of different options for incentivizing or assisting in starting up new industries.

https://www.csmonitor.com/Business/In-Gear/2016/1017/Solyndr...

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

#107

Post by jollybean »

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.

It doesn't matter what the economics adds up to when the government is printing trillions of dollars and spending it on 'what it thinks needs to happen', whereupon trillionaire companies can lobby for some of that money.

Perhaps these companies should create a fund to start a few foundries etc. because they can definitely afford it.

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

#108

Post by cryptofistMonk »

zepto wrote: post #101
cryptofistMonk wrote: post #90

Earlier quoted context omitted.

Right. Other governments are always going to subsidize though (unless you work that into the trade deals I suppose). Obviously any barriers to the success of US fabs should be removed, but it's not clear if there's a market for more expensive US chips - if there were, you'd think someone would build it without the need for a subsidy

> Other governments are always going to subsidize though (unless you work that into the trade deals I suppose). Often trade deals do include agreements about subsidies. > it's not clear if there's a market for more expensive US chips - if there were, you'd think someone would build it without the need for a subsidy They wouldn’t be more expensive with the subsidy.

> Often trade deals do include agreements about subsidies.

Yes but it's complicated when you're dealing with China where the govt is heavily involved in many "private" cos

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

#110

Post by leesalminen »

elevation wrote: post #102

Even if this consortium constructs a North American fab, a single natural disaster near that fab could wreak the same follow-on effects in the headlines today; the underlying problem isn't only that we've outsourced our critical manufacturing, but also that we keep so little buffer that any disruption could cause today's headlines. The MBAs running US manufacturers need to scrap their JIT strategies, build some wareh…

> The MBAs running US manufacturers need to scrap their JIT strategies, build some warehouses, and start keeping a store of the essentials.

Just the other day here on HN I read an account from a founder who did just that- in early 2008. He ended up having a warehouse full of raw materials and no cash to make payroll. That's one way a business dies.

So, this talking point sounds good, those damn MBAs and their JITs!, but carries its own set of risks. It's important for each business to balance those risks and arrive at their own decision. It's not as cut-and-dry as one would necessarily think.

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