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TSMC eyes Germany as possible location for first Europe chip plant

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Re: TSMC eyes Germany as possible location for first Europe chip plant

#91

Post by fundatus »

nbevans wrote: post #57

I find it surprising that they are choosing Germany - after everybody is seeing what Germany is doing to Tesla's Gigafactory there (embroiling it in so much red tape that Elon wishes he could pull out if it weren't for sunk cost). It seems that Germany has a very good ability to convince and lobby these mega-manufacturers to base themselves there, but a very poor ability to actually let them succeed after making that…

Well, the UK just willingly put up giant trade barriers with their biggest trading partner. Doesn't really scream "free trade" to most people outside the UK. There is a reason why annual foreign direct investment into the UK almost halved (!) after the Brexit referendum. Probably one of the main reasons why TSMC doesn't consider the UK for this.

Also skilled immmigration to Germany is MUCH easier compared to the UK, which also plays in huge role in these kind of projects.

Re: TSMC eyes Germany as possible location for first Europe chip plant

#92

Post by nkmnz »

sabjut wrote: post #66
corty wrote: post #37

Earlier quoted context omitted.

Practically all went bancrupt between 10 and 12 years ago. Starting around 2000, Germany began to heavily subsidize private solar panel installations with guaranteed prices around 1Eur/kWh (later falling to 0.5Eur/kWh, now around 0.1Eur/kWh). With subsidies falling, demand dropped. And initial high subsidies (some claim, see [0]) made the industry too lazy to get competitive abroad, so around 2008 China began to ramp…

I knew the Government mess up the solar market but I never knew just how much incompetence was at play there. Loosing industry to China (I am still furious about KUKA) is apparently a recreational sport for the CDU.

You got it wrong. The policies that heavily subsidized the solar industry were written by Merkel when she was the Minister for the Environmental Affairs in the 90s, but put in place by Minister Trittin from the Green Party after the '98 elections. The death of the German Solar industry was the result of KEEPING those subsidies TOO HIGH FOR TOO LONG. If the government makes sure that the demand is increasing at a very high pace, all you will do as a manufacturer is t put all the cash you can get your hands on into scaling your production with the current state of technology. You'll stop all R&D, because the immediate ROI of selling "state of the art crap" is much higher. In the mean time, China created competitive technology with lower cost and finally, at some point in time, they've even created the better solar panels.

Re: TSMC eyes Germany as possible location for first Europe chip plant

#93

Post by rsynnott »

reader_mode wrote: post #68
ChemSpider wrote: post #36

Earlier quoted context omitted.

Germany is a great place to invest. So is most of Western Europe. The #1 thing you are looking for is _stability_ and a good engineering job market. Both is available. For this kind of automated high-tech manufacturing, nobody cares about salaries. They are <<1% of the cost.

Is Germany really stable considering Tesla story ? Chip making isn't clean by any standard.

Tesla's problem, from the outside, looks like they didn't ask for expert advice, or ignored it if they got it. Which seems to be a recurring problem with Telsa in technical fields, but it's interesting that it comes up in business and regulatory fields.

Re: TSMC eyes Germany as possible location for first Europe chip plant

#94

Post by MarcusE1W »

gallexme wrote: post #17
martin_a wrote: post #6

Earlier quoted context omitted.

As a German myself: Why would you not invest? Infrastructure, state of mind? I'd really love to see more high-tech companies invest here, after we've managed to kill the solar companies... :-/

As a German Permits, the government is V slow. And labor is expensive. Also sounds expensive to use all the water they need, since they would need to clean it up very good and align the temperature with the rest of the attached rivers or what they use. And other climate relevant regulations.

I am not sure that it is a bad thing that a company, any company really is not allowed to play fast and loose with the environment they operate in.

It’s not that the relevant laws are a secret and used to club you over the head once you nicely settled in and set up everything to your own advantage

Re: TSMC eyes Germany as possible location for first Europe chip plant

#95

Post by lentil_soup »

suction wrote: post #76
Heliosmaster wrote: post #46

Earlier quoted context omitted.

For those companies involved in semiconductor industry, where machines cost 100M usd EACH... People are just a rounding error. Should we hire 100 more? 1000 more? Whatever

Keep in mind that for a high-profile engineer or lead who expects to make 400k at least per year, the company would actually have to pay him 800k to make that much net. Labor cost in Germany is sky high. That times a thousand is not insignificant.

According to [1] if you make 400k a year your employer has to pay 413k in total

[1] https://www.brutto-netto-rechner.info/gehalt/gehaltsrechner-...

Re: TSMC eyes Germany as possible location for first Europe chip plant

#96

Post by rsynnott »

nbevans wrote: post #57

I find it surprising that they are choosing Germany - after everybody is seeing what Germany is doing to Tesla's Gigafactory there (embroiling it in so much red tape that Elon wishes he could pull out if it weren't for sunk cost). It seems that Germany has a very good ability to convince and lobby these mega-manufacturers to base themselves there, but a very poor ability to actually let them succeed after making that…

> after everybody is seeing what Germany is doing to Tesla's Gigafactory there

Requiring it to follow the rules? As a portion of GDP, manufacturing is a bigger part of Germany's economy than nearly any other developed country. It is even higher as a portion of GDP than _China_ (edit not China, see below). Pretty much everyone except Tesla seems to cope, so I'm inclined to assume that this is more a Tesla incompetence problem than a Germany problem.

> There is also far less likelihood of exports being restricted during a possible future crisis by the political whims of failed politicians

"What is Brexit?"

Re: TSMC eyes Germany as possible location for first Europe chip plant

#97

Post by volta83 »

martin_a wrote: post #6
alexanderklein wrote: post #2

If i were TCMS, i would not invest in Germany. But as a german, living in Germany, i am happy that they consider an investment in Germany.

As a German myself: Why would you not invest? Infrastructure, state of mind? I'd really love to see more high-tech companies invest here, after we've managed to kill the solar companies... :-/

Top technical talent scarcity and cost.

In Silicon Valley, you can find a dozen 600k$ engineers relatively quickly to scale up a random startup.

In Germany... the salaries these people would be making would be This disparity in the valuation of top engineers cause many to emigrate, and once you are in the US, it is impossible to financially justify taking a 5x pay cut to go back to Germany. (You can justify it "non-financially", but these other justifications would need to offset the 500k$ yearly that you are leaving behind).

So... finding top talent in Germany is hard. If you were to find them, hiring them would be 2x more expensive than in the US. Which makes a good that's very expensive, twice as expensive.

This is one of the many reasons why the startup scene in Germany is poor. Nobody wants to be the engineer that actually builds the stuff, everybody wants to be a "manager".

It turns out that many of the engineers that get to build the stuff become excellent managers once the company grows because they know it inside out.

---

TL;DR: if you are a tech company that needs top engineering talent to grow a super high tech facility up, you can't find enough talent there, and the one you find is twice as expensive as somewhere else.

As others have mentioned, the price of talent is insignificant for TSMC compared to the price of their machinery, so they can afford the 2x increased costs, but the lack of talent is harder to offset.

Re: TSMC eyes Germany as possible location for first Europe chip plant

#98

Post by nixass »

nbevans wrote: post #57

I find it surprising that they are choosing Germany - after everybody is seeing what Germany is doing to Tesla's Gigafactory there (embroiling it in so much red tape that Elon wishes he could pull out if it weren't for sunk cost). It seems that Germany has a very good ability to convince and lobby these mega-manufacturers to base themselves there, but a very poor ability to actually let them succeed after making that…

> after everybody is seeing what Germany is doing to Tesla's Gigafactory there

Yeah, the Walmart said the same in the 90s when they tried to concur Germany, only to miserably fail. The thing is that the Germany (and the EU as a whole) is no Wild West and there are actually rules, environmental responsibility and labor laws to follow.

Re: TSMC eyes Germany as possible location for first Europe chip plant

#99

Post by LatteLazy »

nbevans wrote: post #57

I find it surprising that they are choosing Germany - after everybody is seeing what Germany is doing to Tesla's Gigafactory there (embroiling it in so much red tape that Elon wishes he could pull out if it weren't for sunk cost). It seems that Germany has a very good ability to convince and lobby these mega-manufacturers to base themselves there, but a very poor ability to actually let them succeed after making that…

The uk is horrible political mess at the moment. God knows if we'll be able to import or export anything or keep the lights on next week. Not a great place to put a billion dollar global supply investment.

Re: TSMC eyes Germany as possible location for first Europe chip plant

#100

Post by MarcusE1W »

nbevans wrote: post #57

I find it surprising that they are choosing Germany - after everybody is seeing what Germany is doing to Tesla's Gigafactory there (embroiling it in so much red tape that Elon wishes he could pull out if it weren't for sunk cost). It seems that Germany has a very good ability to convince and lobby these mega-manufacturers to base themselves there, but a very poor ability to actually let them succeed after making that…

By strong political will to remove barriers you mean that certain politicians with the right motives (whatever that might be) are willing to wave any legal barriers ? Not sure I see this as a good thing.

And with regards to political whims, From the outside it seems that is the specialty of the UK right now. Right now, in my view the UK does not look like a stable international partner, it could go in any direction, who knows ?

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