Samsung boosts non-memory chip investment to $151B • Hacker News Board

Re: Samsung boosts non-memory chip investment to $151B

#31

Post by irjustin » Sun, May 16, 2021, 10:25 AM UTC

ithkuil wrote: post #24

lifeisstillgood wrote: post #21

This is not just some pork-barrel politics of bribing a company to stay in a given country. S Korea will view this similarly to Taiwan - their chip fabs are existential to their country and state. The USA is becoming more isolationist - it is nearly oil-independent, so it's signalling pulling out of the middle east (deals with Iran etc). But it is not silicon-independent. So S Korea and Taiwan are totally dependent o…

Did anybody do the math of whether it's more cost effective to pay for all that military to ensure you get cheap silicon made in countries with cheaper labor that in the US rather than just subsidizing the production of semiconductors domestically?

As the US gets more than "cheap labor" for its troop deployments.

Very large parts of it is protecting democracy. Whether you believe that's worth protecting is a different question, but it's left over from cold war & proxy wars against Russia in both Vietnam and Korea.

This is still once way the US exerts its presence against China. Maybe futile, but it is more than just "cheap labor".

Re: Samsung boosts non-memory chip investment to $151B

#32

Post by [deleted] » Sun, May 16, 2021, 10:28 AM UTC

ithkuil wrote: post #24

lifeisstillgood wrote: post #21

This is not just some pork-barrel politics of bribing a company to stay in a given country. S Korea will view this similarly to Taiwan - their chip fabs are existential to their country and state. The USA is becoming more isolationist - it is nearly oil-independent, so it's signalling pulling out of the middle east (deals with Iran etc). But it is not silicon-independent. So S Korea and Taiwan are totally dependent o…

Did anybody do the math of whether it's more cost effective to pay for all that military to ensure you get cheap silicon made in countries with cheaper labor that in the US rather than just subsidizing the production of semiconductors domestically?

[deleted]

Re: Samsung boosts non-memory chip investment to $151B

#33

Post by baybal2 » Sun, May 16, 2021, 10:29 AM UTC

ithkuil wrote: post #30

baybal2 wrote: post #28

Earlier quoted context omitted.

Modern fabs are nearly completely lights out. There are more people sitting in offices there than on the floor. I fact there is a huge oversupply of semiconductor engineers globally because of fabs becoming less, and less labour intensive. Companies take a big effort to reduce the number of people on the floor futher, but now not so much for labour cost readon, but security. The chance of somebody who shouldn't reall…

Two related questions: 1. Would it thus cost the same to operate such a fab in the US? 2. Why did the US outsourced the semiconductor fabrication in the first place? Was it more labour intensive in the past?

1. Labour-wise probably 3-4 times the Taiwan, but labour cost of fabs is microscopic in comparison to everything else.

Taiwan does not have dramatically lower taxes than US, but there is something particular to how working capital is accounted which will make for a double digit difference in the in TW vs. US.

Third is supplies. Even before the semi moving to Asia, US fabs had to import a big portion of their supplies.

2. > Why did the US outsourced the semiconductor fabrication in the first place

Why did US outsource almost everything, even when it makes no sense?

It simply tough, tedious, problematic doing business in the US.

I wrote about it many times before here.

You mind your own business, very much literally. Few month down the line some trouble comes: lawsuit, taxmen, utilities, creditors, SEC, city hall, suppliers, random activists, labour union... pick any.

Re: Samsung boosts non-memory chip investment to $151B

#34

Post by throwaway4good » Sun, May 16, 2021, 10:32 AM UTC

lifeisstillgood wrote: post #21

This is not just some pork-barrel politics of bribing a company to stay in a given country. S Korea will view this similarly to Taiwan - their chip fabs are existential to their country and state. The USA is becoming more isolationist - it is nearly oil-independent, so it's signalling pulling out of the middle east (deals with Iran etc). But it is not silicon-independent. So S Korea and Taiwan are totally dependent o…

That is a very American perspective on things. Hundreds of thousands of US troops are stationed in Germany, Japan, Korea here 75 years after the end of the second world war. Do you think we would like them to stay for another decade? Our politicians may not be in a position to say so, but we would really like our land to be free of foreign troops. As would any other nation.

Re: Samsung boosts non-memory chip investment to $151B

#35

Post by throwaway4good » Sun, May 16, 2021, 10:35 AM UTC

FooBarWidget wrote: post #27

threeseed wrote: post #17

Earlier quoted context omitted.

It doesn't make any business sense at all. Huawei doesn't have much of a future outside of China and the increasing distrust towards CPP doesn't look like changing this anytime soon. So why would you want to help them out instead of trying to win business from US/EU companies who are desperately looking to diversify.

That is a very western-centric view. Outside of the west and India, Huawei is still going strong. Support for China is quite high in the middle east and in Africa, where many people are skeptical of western narratives about China. Furthermore, Huawei isn't the only Chinese party that needs advanced chips. Other Chinese phone makers such as Oppo and Xiaomi aren't banned. But they have become wary of US dependence and…

Exactly. If Korean semi can position itself correctly it has a massive opportunity.

Re: Samsung boosts non-memory chip investment to $151B

#36

Post by lifeisstillgood » Sun, May 16, 2021, 10:38 AM UTC

ithkuil wrote: post #24

lifeisstillgood wrote: post #21

This is not just some pork-barrel politics of bribing a company to stay in a given country. S Korea will view this similarly to Taiwan - their chip fabs are existential to their country and state. The USA is becoming more isolationist - it is nearly oil-independent, so it's signalling pulling out of the middle east (deals with Iran etc). But it is not silicon-independent. So S Korea and Taiwan are totally dependent o…

Did anybody do the math of whether it's more cost effective to pay for all that military to ensure you get cheap silicon made in countries with cheaper labor that in the US rather than just subsidizing the production of semiconductors domestically?

The math is complicated

- How much military spending is really what other Western countries would call welfare - not only do you pay the US recruits, they get pensions, they and their families get healthcare etc etc.

- The payback of being the worlds only superpower has been enormous anyway. This is probably a marginal cost.

- It's not entirely clear that building a fab is like dropping a supermarket into place. Whilst in operation they are lights out I sincerely doubt they can be easily replicated - at the very least you will need to just kidnap the whole middle management layer of TSMC and move them to Texas. Which is more or less the current negotiations:-)

In short, yeah the US (and EU) should spend a fortune to build out their own internal chip capacity. Just as we should have done it for oil or electric batteries or ... but we just don't. China however has. Something democracy is good at. Somethings it ain't.

We should fix that :-)

Re: Samsung boosts non-memory chip investment to $151B

#37

Post by threeseed » Sun, May 16, 2021, 10:38 AM UTC

FooBarWidget wrote: post #27

threeseed wrote: post #17

Earlier quoted context omitted.

It doesn't make any business sense at all. Huawei doesn't have much of a future outside of China and the increasing distrust towards CPP doesn't look like changing this anytime soon. So why would you want to help them out instead of trying to win business from US/EU companies who are desperately looking to diversify.

That is a very western-centric view. Outside of the west and India, Huawei is still going strong. Support for China is quite high in the middle east and in Africa, where many people are skeptical of western narratives about China. Furthermore, Huawei isn't the only Chinese party that needs advanced chips. Other Chinese phone makers such as Oppo and Xiaomi aren't banned. But they have become wary of US dependence and…

This comment would have been more accurate a year or two ago.

But with the Belt and Road Initiative struggling to deliver on many of its infrastructure projects countries are increasingly reluctant to get back into bed with China. More so now that the world has seen what happens if you don't bow down to China's every demand i.e. Australian style economic blackout.

My point still stands that if I was a fab right now I would be far more attracted to the growth prospects of US/EU companies than Chinese ones.

Re: Samsung boosts non-memory chip investment to $151B

#38

Post by inglor_cz » Sun, May 16, 2021, 10:39 AM UTC

ithkuil wrote: post #24

lifeisstillgood wrote: post #21

This is not just some pork-barrel politics of bribing a company to stay in a given country. S Korea will view this similarly to Taiwan - their chip fabs are existential to their country and state. The USA is becoming more isolationist - it is nearly oil-independent, so it's signalling pulling out of the middle east (deals with Iran etc). But it is not silicon-independent. So S Korea and Taiwan are totally dependent o…

Did anybody do the math of whether it's more cost effective to pay for all that military to ensure you get cheap silicon made in countries with cheaper labor that in the US rather than just subsidizing the production of semiconductors domestically?

The picture of silicon industry that you paint is very far from reality. Neither Taiwan nor South Korea are third world countries and baking top chips isn't the same as sewing cotton T-shirts or gathering strawberries under the scorching sun. Instead of "cheaper labor", you need top talent and very high quality equipment. That top talent collects very good salaries.

If chip production was just a matter of money, both China and the U.S. would rule the roost. The real bottleneck is talented and loyal engineers.

Re: Samsung boosts non-memory chip investment to $151B

#39

Post by inglor_cz » Sun, May 16, 2021, 10:42 AM UTC

ithkuil wrote: post #30

baybal2 wrote: post #28

Earlier quoted context omitted.

Modern fabs are nearly completely lights out. There are more people sitting in offices there than on the floor. I fact there is a huge oversupply of semiconductor engineers globally because of fabs becoming less, and less labour intensive. Companies take a big effort to reduce the number of people on the floor futher, but now not so much for labour cost readon, but security. The chance of somebody who shouldn't reall…

Two related questions: 1. Would it thus cost the same to operate such a fab in the US? 2. Why did the US outsourced the semiconductor fabrication in the first place? Was it more labour intensive in the past?

As for 2), it is less about outsourcing and more about gradual loss of competitiveness. The scientific and technological development between 2000 and 2020 led to a lot of corporations, not just in the U.S., falling out of the race because they could not keep up the pace. Nowadays, only Samsung and TSMC are left, with Intel lagging behind, but still not completely out.

Similar consolidations have happened in the past and in other industrial fields. This time, two of the three surviving champions are simply not American.

Re: Samsung boosts non-memory chip investment to $151B

#40

Post by baybal2 » Sun, May 16, 2021, 10:43 AM UTC

inglor_cz wrote: post #38

ithkuil wrote: post #24

Earlier quoted context omitted.

Did anybody do the math of whether it's more cost effective to pay for all that military to ensure you get cheap silicon made in countries with cheaper labor that in the US rather than just subsidizing the production of semiconductors domestically?

The picture of silicon industry that you paint is very far from reality. Neither Taiwan nor South Korea are third world countries and baking top chips isn't the same as sewing cotton T-shirts or gathering strawberries under the scorching sun. Instead of "cheaper labor", you need top talent and very high quality equipment. That top talent collects very good salaries. If chip production was just a matter of money, both…

> That top talent collects very good salaries.

Semiconductor engineers salaries in Taiwan could've been as low as $26k-$28k USD back in 2007-2009. Multi-year long PhD "interships" can be unpaid, or completely minimally so.

A chance for an average semi process engineer graduate to survive to doing real RnD was close to 80-100 to 1.