We can call the effort 'Sematech'.
Tech giants join call for funding U.S. chip production
131–140 of 301 posts
Re: Tech giants join call for funding U.S. chip production
#132The problem with this governmental intervention is that you can't have it both ways. These companies want the governmetn to step in to hlp them with their problems, but let's take a look - are they going to contribute back once the government has intervened? What are they really proposing, a 20% revenue tax on consumer products that are sold with these new US sourced chips? No. Of course not. God forbid they actually…
Just to play devil's advocate, what would the world look like had there been massive investment 5-10 years ago? The benefits would probably have been a chip shortage that wasn't and we'd be free to complain about other things.
In this world, obviously, we would be complaining about the government subsidising unprofitable chip factories with billions of tax credits. Since we wouldn't have a chip supply crisis, we wouldn't know what its like to have one :D
Re: Tech giants join call for funding U.S. chip production
#133This is a much better investment than more f22
And it blows the f35 out of the water.
Re: Tech giants join call for funding U.S. chip production
#134> 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…
Ummm if the government does the investing they get all the returns. If google does the investing they get the returns. If they are lobbying rather than investing, this suggests they think the ROI would be negative.
That's not how government funding of sports stadiums work, why would fabs be any different?
Re: Tech giants join call for funding U.S. chip production
#135Even 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…
Isn't one of the problems that JIT was made to solve that there is a tax on inventory? That the government punishes you for maintaining slack in the manufacturing chain by taxing it?
I would expect that it depends on the state.
Re: Tech giants join call for funding U.S. chip production
#136Why would firms like TSMC be members of this lobbying group? https://www.chipsinamerica.org/about/
TSMC is currently headquartered on land which is:
* undergoing a drought and they're having to truck in water to sustain their operations.
* claimed by a powerful country different than the one currently controlling it.
Sounds like a lot of risk that they probably would otherwise not want.
Re: Tech giants join call for funding U.S. chip production
#137Even 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…
Business idea: caching layer for kit manufacturing.
You have a warehouse that stores stuff, and sells it to manufacturers when JIT runs into issues.
Re: Tech giants join call for funding U.S. chip production
#138Why would firms like TSMC be members of this lobbying group? https://www.chipsinamerica.org/about/
TSMC is planning to spend $12bn in the next decade on the fab they're building in Arizona (which I believe has some level of US government subsidy). I am sure they would be quite happy to get further government $$$ for their operations.
(TSMC also owns WaferTech and their US fab in Washington state).
Re: Tech giants join call for funding U.S. chip production
#139These industries squeezed the blood out of US suppliers to compete on cost. I don't think a correct solution is the government building capacity and supply chains. IMHO a more sustainable strategy is the government taxing the environmental and human rights externalities of off-shore production.
This type of government/corporate collaboration is similar to how other traditional industries like autos, oil & gas, steel, etc., usually operate. That's because the capital cost of building factories and supply chains exceed the private sector's ability to tolerate the risk of such investments. And a big reason why the risk is so high is because the business is both unpredictable and low margin.
This has never been an issue in the semiconductor industry until now. Demand was always increasing and margins have been high enough to allow them to self-fund. If semiconductor companies now need subsidies to expand then we are probably past the "exponential growth" era of semiconductors. Technological gains will be much slower and much more consistent with traditional industries rather one that what we're use to.
Re: Tech giants join call for funding U.S. chip production
#140US corporations have recently been given a corporate revenue tax cut, from 35% to 21% (and beyond this they apparently enjoy a bunch of loopholes bringing their taxes much further down). Surely that is more than enough for them to be able to bankroll chip fabrication in the US - individually or together.
Isn't this simply an attempt at "double-dipping"?
"Please subsidize us! The humongous corporate income tax deduction you gave us is not nearly enough!"