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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

#71

Post by baybal2 »

11thEarlOfMar wrote: post #69
baybal2 wrote: post #68

Earlier quoted context omitted.

An actual RnD, or engineering? In the link you point to the need of "EU fab." Who do you think will buy its chips? Germans for their cars?

System engineering. We sell subsystems and components to the equipment companies. Chips are sold globally for the most part, regardless of where they are made. EU, US, Japan, Taiwan & Korea made chips are typically leading edge and sold globally. Some China-made chips are only used in China, but they have a large export market for low-cost chips.

> Chips are sold globally

Well, they aren't. I see really a lot of people even inside the industry not noticing the elephant in the room.

By some digits, China is 60%+ of the world semiconductor market, and much higher than even this digit if you remove secondary products from the calculation.

> System engineering. We sell subsystems and components to the equipment companies.

What kind of? Do you have a niche market, or you sell whatever toolmaker want to custom order?

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

#72

Post by FooBarWidget »

AnthonyMouse wrote: post #61
scott_codie wrote: post #59

Earlier quoted context omitted.

Are you saying that the Chinese government is subsidizing the entire semiconductor industry to drive US companies out of business?

Are you saying that the Chinese government is not subsidizing the entire semiconductor industry in China to drive companies outside of China out of business? They have a documented history of doing this in multiple industries over the course of many years. Notice how substantially all of the consumer electronics devices that used to be made in the US or Japan or Korea or Germany are now made in China.

I'd like to see this documented history.

You mentioned electronics, but have they raised prices?

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

#73

Post by UncleOxidant »

baybal2 wrote: post #57
UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

Making chips in US makes little sense except to get the coveted tarif relief for the very few remaining highly tarriffed goods. 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. Do not count the last point lightly. I'm fully serious saying that US will likely have nowhere to sell those chips to. And…

> 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).

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

#74

Post by avs733 »

TrispusAttucks wrote: post #44
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.

Here in the USA we're more focused on the important things, like passing identity politics legislation.

...citation?

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

#75

Post by klodolph »

HenryKissinger wrote: post #39
stupidcar wrote: post #37

Earlier quoted context omitted.

The DoD's Industrial Capabilities report to Congress[1] that got posted on HN last week recommended exactly this: > "Outside of the United States, foreign governments and their citizens pay the lion’s share, one way or another, of the cost of building the fab. The companies do not. They take on the other massive set of costs: running the fab. The hard truth is that if the United States does not start doing the same,…

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.

Maybe eventually, but at the moment they lag some generations behind US/Japan/Taiwan/Korea. This, in spite of the fact that China has been dumping money into the industry for years.

There’s a narrative in the west that China is “willing to spend what it takes to win”, but at the same time, China’s spending is tied up by internal politics (also, corruption, pork, kickbacks) as much as US spending is. China is also, for example, willing to spend as much money as it takes to make a mega-blockbuster movie and yet keeps churning out flops (again, due to causes that are intimately connected with internal Chinese politics).

If you look at major US boondoggles like the F-35 program you might think of it as a partial success (the plane works) and yet a massive waste of money (we could have spent the money better), and some of these massive initiatives in China suffer from the same problems.

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

#76

Post by FooBarWidget »

AnthonyMouse wrote: post #61
scott_codie wrote: post #59

Earlier quoted context omitted.

Are you saying that the Chinese government is subsidizing the entire semiconductor industry to drive US companies out of business?

Are you saying that the Chinese government is not subsidizing the entire semiconductor industry in China to drive companies outside of China out of business? They have a documented history of doing this in multiple industries over the course of many years. Notice how substantially all of the consumer electronics devices that used to be made in the US or Japan or Korea or Germany are now made in China.

There's a big difference between receiving an amount of government subsidy, and the government funding almost everything with nearly no budget limits.

The former is definitely true, though China is not the only country engaging in such a practice.

The latter claim needs sources to back up.

If you look at the Chinese chip industry, then you see that a lot of money comes from the private sector. Huawei, Xiaomi, etc are investing a ton of money in semiconductor companies. SMIC got a lot of funds through a stock market IPO. Clearly it's not all government money.

There's also a big difference between investing in an industry with the goal of dominating the world and eliminating competition, vs the goal of becoming a sovereign equal. Why is it necessarily the former, and not the latter?

The reason why the Chinese government invests in many sectors, is because they want to be independent instead of being at the mercy of foreign sanctions. If it weren't for that, they'd happily buy from foreign suppliers because that's cheaper than developing the technology themselves.

There is another documented history: that of the US sanctioning China, preventing China from accessing all sorts of western technology. For example, the US denied China of space technology. So now, China has wholly self-developed space technology. China isn't selling space technology below production costs to kill competitors. China invested in this sector in order to safeguard their access to space. https://www.businessinsider.com/nasa-china-collaboration-ill...

The US forced TSMC to not supply to many Chinese companies, and TSMC isn't even a US company. The US is trying to kill the Chinese semiconductor industry, making it wholly reliant on foreign suppliers. For years, Chinese companies have bought from foreign semiconductor suppliers because those are better. But the US has now turned this matter into an existential crisis, a matter of survival. Is it then any wonder that China, both public and private actors, are now pouring billions into the domestic semiconductor industry?

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

#77

Post by klodolph »

AtlasBarfed wrote: post #67
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.

Well we did it for the F-35. Defense pork/corruption is a liability in economic war. We need to wake up and realize that China is kicking it into high gear.

Do note that there is also plenty of pork/corruption in China. Massive amounts. We just understand the US pork/corruption better because we can read English-language news sources.

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

#78

Post by 11thEarlOfMar »

baybal2 wrote: post #71
11thEarlOfMar wrote: post #69

Earlier quoted context omitted.

System engineering. We sell subsystems and components to the equipment companies. Chips are sold globally for the most part, regardless of where they are made. EU, US, Japan, Taiwan & Korea made chips are typically leading edge and sold globally. Some China-made chips are only used in China, but they have a large export market for low-cost chips.

> Chips are sold globally Well, they aren't. I see really a lot of people even inside the industry not noticing the elephant in the room. By some digits, China is 60%+ of the world semiconductor market, and much higher than even this digit if you remove secondary products from the calculation. > System engineering. We sell subsystems and components to the equipment companies. What kind of? Do you have a niche market,…

For example, nVidia's chips are made in Taiwan and Korea, and end up in devices sold globally. It's true that a large % of the assembly of circuit boards and electronic products are made in China.

We make control system computers. It's very, very niche. Typically, what we sell to one equipment company, we can sell to others. It's very difficult for companies that are outside of the sub-supplier ecosystem to break in. The controllers are usually customized to some extent, then we sell a few hundred annually of that design.

'A few hundred a year' is a home run product.

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

#79

Post by TrispusAttucks »

avs733 wrote: post #74
TrispusAttucks wrote: post #44

Earlier quoted context omitted.

Here in the USA we're more focused on the important things, like passing identity politics legislation.

...citation?

Just hours ago [1] H.R.5 — 116th Congress (2019-2020) was passed in the house. Also known as the Equality Act. It appears well intentioned, great name, but some of the demands are gonna be a challenge, specifically, bathroom accomodations, and potential to disrupt traditional women's programs.

[1] https://www.congress.gov/bill/116th-congress/house-bill/5/te...

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

#80

Post by wbl »

baybal2 wrote: post #57
UncleOxidant wrote: post #17

Given the strategic importance of semiconductors and how expensive new fabs are and how long they take to start production (if you start planning a new state of the art fab now it'll take ~5 years before it's ready to produce chips) it seems like perhaps we need to look a public-private partnerships here in the US. The Chinese government is funding fabs. While we tend to be squeamish about such things here in the US,…

Making chips in US makes little sense except to get the coveted tarif relief for the very few remaining highly tarriffed goods. 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. Do not count the last point lightly. I'm fully serious saying that US will likely have nowhere to sell those chips to. And…

Do you think the US can't retaliate by throwing sanctions on consumer goods back? Board assembly is automated. It can move back here.
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