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Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

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Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#161

Post by panabee »

11thEarlOfMar wrote: post #135
panabee wrote: post #112

Earlier quoted context omitted.

why is the semi industry so cyclical? do you see this changing?

The Semiconductor industry is driven by major market economic forces, like most. It's not terribly volatile. If you sell capital equipment to the semi makers, though, there's a compounding effect that makes the annual revenue for equipment makers very volatile. There are few Semi players, and their capital spend $s are huge and 'lumpy'. As in $10B for a new, state-of-the-art fab. 70% of that $10B is spent on capital…

fascinating. thanks for sharing. this explains why it's so lumpy. why hasn't someone tried to consolidate at the equipment layer and counter the forces from above?

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#162

Post by flamble »

AnthonyMouse wrote: post #109
flamble wrote: post #95

Earlier quoted context omitted.

The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. The growth centred around manufacturing has been the basis of Chinese prosperity and requires no speculating about devious motives to account for. As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being f…

> The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. This fails to explain why everything moved to China and not Mexico or Brazil or India. > As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being free of the particular ideological constraints which forc…

I understand now. Unfettered market freedom is the best way to organize things and at the same time, large-scale government intervention is an unfair competitive advantage.

> This fails to explain why everything moved to China and not Mexico or Brazil or India.

Of course, no industries moved from the US to Mexico, Brazil or India over the same period as China's rise.

> In other words it's completely different?

Yes, in the sense that a portion of massive Chinese government spending goes directly into producing things that people need, and almost all of massive US government spending goes into funding imperialist violence.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#163

Post by ppf »

imtringued wrote: post #157
ppf wrote: post #133

Earlier quoted context omitted.

Also, just for fun, the embodied energy of a 1960's Fiat 500 (assuming its entire 500kg weight is made of steel, which is probably a good enough approximation) is 3MWh, or three laptops. So what is more sustainable?

An electric bike?

You're not wrong. However, every time I think about that, I just tell myself to pedal harder ;)

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#164

Post by ppf »

imtringued wrote: post #158
ppf wrote: post #120

Earlier quoted context omitted.

Indeed. The embodied energy of the items we use every day is so under-appreciated, probably because we have outsourced the production of almost all of them to countries that have no problem burning oil and coal in the process. Really, if we actually wanted to make motoring sustainable, we would all be driving a 60's era Fiat 500 or Honda C50 moped. They cost very little to make, in every way, are very fuel effecient…

Is there anything wrong with that? If people want EVs that's better than people wanting modern gas guzzlers.

Yes. People are not being given a choice (at least, here in the UK). Petrol cars are being legislated out of existence. Ideally, I want a reliable, cost-effective family car without any extra gadgets, and I don't want an EV. However, those cars are just not made any more.

Also, I doubt the people that want a gas guzzler will be among the first to switch to an EV.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#165

Post by baybal2 »

11thEarlOfMar wrote: post #3

Equipment companies are running at an all-out sprint to ship fabrication equipment. Applied Materials, the world's largest by revenue, has 1,390 open positions. #4 Lam Research has 570. The equipment space is brutally cyclic, akin to the oil services industry. Revenue can jump as much as 60% year over year, only to plummet 40% the next. It's always worrisome to see these macro-trends, feasting now, but famine sure to…

Packaging is hot. The question how hot it is?

Buddies of mine want now explore a niche of very low end litho market for a brand new entry.

I want to throw them an idea of capitalising on very cheap interposers, but don't have much confidence in how long advanced packaging will be able to attract hot money.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#166

Post by xxs »

ppf wrote: post #164
imtringued wrote: post #158

Earlier quoted context omitted.

Is there anything wrong with that? If people want EVs that's better than people wanting modern gas guzzlers.

Yes. People are not being given a choice (at least, here in the UK). Petrol cars are being legislated out of existence. Ideally, I want a reliable, cost-effective family car without any extra gadgets, and I don't want an EV. However, those cars are just not made any more. Also, I doubt the people that want a gas guzzler will be among the first to switch to an EV.

I have a hybrid (so it can be charged home, for 3000km we used only 50L of gasoline) - the EV drive is amazing, (if not spooky) - silent start, no noise, no vibrations (of course no exhaust), so it's great for city drive. For longer haul - there is the gasoline. For added benefit the total power of both engines engaged is quite impressive, along with acceleration.

Until there is a massive network that can reliably charge on the go, gasoline is there to stay. Also flip note: I know Norway loves EV (due to tons of tax breaks), yet EV do suck at lower temps (say below -10C)

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#167

Post by baybal2 »

FooBarWidget wrote: post #102
UncleOxidant wrote: post #73

Earlier quoted context omitted.

> And if China decides to put sanctions on your fabs, you will just get a $10B microelectronics theme park on your hands because you will have nowhere to sell your chips. China could also decide that they won't sell their more advanced chips to the US (or any chips for that matter if it got serious).

Ironically, this is exactly what's going on right now... Except it's the US denying advanced chips to China. The US forced TSMC and Samsung not to sell to Huawei for example.

It also denied a big chunk of chip market to the automotive industry, including its own.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#168

Post by totalZero »

vkou wrote: post #152
totalZero wrote: post #150

Earlier quoted context omitted.

No corporation would finish construction of a factory ten years prior to the existence of demand. Companies like to lay out capex as close to income generation as possible. That comes from a shareholder-driven pressure for operational efficiency. It looks bad if Samsung (for example) spends $30B on a fab for which there is little demand. Fab utilization needs to be as close to 100% as possible; even at high utilizati…

The thing is, in China, government can create that demand, by moving government jobs to that city (thus bootstrapping the employment market as a primary employer), or having a state-owned enterprise open a branch office there (again, bootstrapping the employment market.) Once there's a reason for people to live there, other services and businesses organically move in, to serve those people's market needs. It's not ju…

That's a good argument for a different conversation. No sarcasm. It's a fair point but it takes a bit of a detour from the topic of semiconductors.

My point vis a vis semiconductors is that firms don't leap before they look. Governments can and do. You say they do it because they can guarantee demand. I say they can do it because they are more patient and risk tolerant. Either way, the logical conclusion is the same:

Firms can't lay out capex the way that governments can. Firms are held accountable for ROI, their shareholders have little patience for delayed gratification, and their ability to spend is very small relative to that of governments.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#169

Post by astrange »

roenxi wrote: post #125
HenryKissinger wrote: post #39

Earlier quoted context omitted.

The Chinese government is willing to spend what it takes to win and this is the reason why they will win. The US government is way too reluctant to spend in this regard. The Chinese government is investing hundreds of billions in artificial intelligence, hundreds of billions more in renewables, and so on. I don't see Congress giving a blank check to scientists and engineers, like China does.

The US has never won any fight by their government being great. They've won a lot of fights by US capitalists grinding their opponents into powder and selling the remains for fertiliser. If the governments go head to head, China wins easily. Their government is stuffed with PhDs, scientists and engineers. The US government has lawyers.

China's government has a lot of people with engineering degrees. That doesn't mean they're engineers, they were aiming for party positions from birth.

Re: Semiconductors Demand 30% Above Supply, 20% Year-on-Year Growth

#170

Post by astrange »

AnthonyMouse wrote: post #109
flamble wrote: post #95

Earlier quoted context omitted.

The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. The growth centred around manufacturing has been the basis of Chinese prosperity and requires no speculating about devious motives to account for. As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being f…

> The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. This fails to explain why everything moved to China and not Mexico or Brazil or India. > As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being free of the particular ideological constraints which forc…

Tariffs don't do much to hurt the other country. What they do is hurt yourself by making your consumers pay more for things.

If you want to make your country more competitive, you want Asian-style industrial policy and export discipline - as found not just in China but in Korea and Japan.

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