Intel to spend $20B on two new chip factories in Arizona(nytimes.com)
nytimes.com
Intel to spend $20B on two new chip factories in Arizona
https://www.nytimes.com/2021/03/23/technology/intel-arizona-chip-factories.html
93 comments
Everybody talks about TSMC/Intel. Nobody talks about ASML/AMAT. I would like to see a VC brave enough to invest in a photolithography stepper startup. I think it’s doable at 10% of the cost. I say this because I built a particle tracking Q-switch ablation laser many years ago, and this is what they said was the hardest part of EUV. I hadn’t thought about that application until I recently saw a video about It.
[dupe]
Lots of talk about this last week:
https://news.ycombinator.com/item?id=26573236
https://news.ycombinator.com/item?id=26568598
https://news.ycombinator.com/item?id=26560469
Lots of talk about this last week:
https://news.ycombinator.com/item?id=26573236
https://news.ycombinator.com/item?id=26568598
https://news.ycombinator.com/item?id=26560469
In the grand scheme of things, TSMC was extremely unlucky to have peaked during the pandemic. Assuming all the microchip companies generally operate on the same average level over the long long run, they may have enjoyed an abortive peak compared to what Intel will (eventually, not soon) get.
Can you explain what you mean when you say that TSMC 'peaked during the pandemic'?
I think he means technical achievements (5nm,7+?) occurred increasing the demand by the companies for new nm, and at the same time the pandemic increased the demand
Wouldn’t that be lucky, rather than unlucky?
And who says TSMC has peaked? Surely it’s best for everyone if Intel are kept under pressure.
And who says TSMC has peaked? Surely it’s best for everyone if Intel are kept under pressure.
It’s very likely the parent was referring to market cap. See TSM’s market cap over the past year. I don’t really understand the comment though.
I took ıt to mean that theır completive advantaged was mıtıgated because of the pandemıc. Normally wıth thıs lead TSMC would make much more than Intel, SMIC, ect., but because of the demand by the pandemıc all companıes are makıng more and very busy.
Lıke ın a normal year TSMC would make lots and competıtors fabs would be more empty
Lıke ın a normal year TSMC would make lots and competıtors fabs would be more empty
This and vaccine /med production from start to finish within borders is going to be the focus of US and EU going forward I think. For obvious reasons
It is all very stupid. I betcha that in ten years time. Global supply chains are going to be even more integrated than they are today. For "obvious" economic reasons.
> For "obvious" economic reasons.
Global integration of highly specialized industries not particularly dependent upon labor cost is not at all obvious--especially in the face of increasing political instability.
Part of the theory of engaging with China is that pulling it into the world would make them better worldwide citizens.
This has not worked. It has simply made China a bigger bully. So be it.
A gigantic amount of semiconductor manufacturing lives within 400 miles of China. That can't possibly be defended effectively against military action short of moving it a lot further away from China. That's what we're seeing the start of here.
Global integration of highly specialized industries not particularly dependent upon labor cost is not at all obvious--especially in the face of increasing political instability.
Part of the theory of engaging with China is that pulling it into the world would make them better worldwide citizens.
This has not worked. It has simply made China a bigger bully. So be it.
A gigantic amount of semiconductor manufacturing lives within 400 miles of China. That can't possibly be defended effectively against military action short of moving it a lot further away from China. That's what we're seeing the start of here.
I think both parties were just paying lipservice to the CCP/China issue as long as big businesses were raking in the cash and consumers were getting good deals on cheap plastic sht from them.
Huge failure. They should've squeezed them in 1990-1992 as the USSR was dissolving and there was no pressing power to contend with. And North Korea they should've attacked then as well. No other way to solve this when the opponent will use your goodwill against you to play you for decades straight like the Kim dynasty.
Huge failure. They should've squeezed them in 1990-1992 as the USSR was dissolving and there was no pressing power to contend with. And North Korea they should've attacked then as well. No other way to solve this when the opponent will use your goodwill against you to play you for decades straight like the Kim dynasty.
Yeah. It is internal US politics. Not really rational.
It's all very stupid until a ship gets stuck or a global pandemic means people will rush to resources.
Props to economists on having zero foresight ability
Props to economists on having zero foresight ability
How do you figure that everyone on the planet being a good deal poorer is preferable to having a boat stuck in the mud for 6 days?
The problem with integration is that it is more efficient until there's a problem, at which point it can be catastrophic. The one boat held up 300 other ones, and while 6 days probably isn't a huge problem, suppose the country you outsource all your manufacturing to decides to go to war with you? Now you don't have any manufacturing because it was cheaper to outsource it. Or maybe your supplier of soybeans gets a nationalistic ruler who decides to not ship you any soybeans.
Also, I'm not convinced that maximum efficiency is good for everyone. The US had a lot more manufacturing jobs before outsourcing to China. Sure, stuff is cheaper now, but a bunch of people no longer have decent paying jobs, and the labor market is now minimum wage or requires a college degree. I those people formerly doing manufacturing are a good deal poorer thanks to global integration. And we all are going to be poorer if all the economic-losers elect populists, since I can't think of any populists who didn't ruin their country if in power long enough.
Also, I'm not convinced that maximum efficiency is good for everyone. The US had a lot more manufacturing jobs before outsourcing to China. Sure, stuff is cheaper now, but a bunch of people no longer have decent paying jobs, and the labor market is now minimum wage or requires a college degree. I those people formerly doing manufacturing are a good deal poorer thanks to global integration. And we all are going to be poorer if all the economic-losers elect populists, since I can't think of any populists who didn't ruin their country if in power long enough.
Integration reduces risk of conflict. You don't want to attack the country that buys your grain, and they don't want to attack the country that buys their steel. It's a mutually beneficial relationship, and it's one reason why global conflict is near all time lows today.
Furthermore, I don't understand the fetishization of factory work (that both the left and right seem to have). It's menial, tough, body-breaking work, with long hours in sweaty, dangerous conditions. It's main appeal is to very poor nations where it is less awful than the alternative they had anyway (substance agriculture or starving). It's a good thing that we can become more productive and have higher paying safer jobs in the west and that in 'third world nations', they can find productive work that is safer and higher paying than their previous situation. The US had a lot of factory work when it was a poor nation, but there is no good reason to return. It's the concept of comparative advantage, and it makes us all better off on net.
Furthermore, I don't understand the fetishization of factory work (that both the left and right seem to have). It's menial, tough, body-breaking work, with long hours in sweaty, dangerous conditions. It's main appeal is to very poor nations where it is less awful than the alternative they had anyway (substance agriculture or starving). It's a good thing that we can become more productive and have higher paying safer jobs in the west and that in 'third world nations', they can find productive work that is safer and higher paying than their previous situation. The US had a lot of factory work when it was a poor nation, but there is no good reason to return. It's the concept of comparative advantage, and it makes us all better off on net.
Yeah. It is a bit like that.
A ship gets stuck in the Suez channel.
Let's drill a new channel ...
A ship gets stuck in the Suez channel.
Let's drill a new channel ...
> Let's drill a new channel ...
Which is actually what Egypt is doing, parts of the Canal are already redundant. The Ever Given had the bad luck of getting stuck in a non-redundant section.
Which is actually what Egypt is doing, parts of the Canal are already redundant. The Ever Given had the bad luck of getting stuck in a non-redundant section.
Wrt. "obvious": The reason why TSMC is the global leader in chip manufactoring is not because of cheap labour. It is because of specialisation and that they are the best at what they do. The combination of global trade and massive specialisation, creates this situation where no country can make everything on their own. And insisting in doing so will only result in poorer products at higher prices with lots of wasted capital.
At that point it won't matter anymore. China and the surrounding region is so big that even cutting off Europe and North America would be very painful,it won't be as bad if the same would have happened 10-20 years ago.
Probably not just the US and EU that will seek out domestic vaccine and medicine production. Who knows how much worse off the UK would be if the EU could actually seize the UK supply of AstraZeneca's vaccine once our vaccination program pulling ahead of theirs became a political headache?
I would add sustainable energy, for similar reasons.
> TSMC previously announced plans for a new factory in Arizona, a project that it valued at $12 billion and that is expected to receive federal subsidies. Samsung is seeking government incentives for a $17 billion expansion of its facilities in Austin, Texas.
I found that point really interesting - and also perplexing.
I can understand why US companies would choose to outsource manufacturing concerns to East Asian countries, but I'm wondering why the opposite is true in this case here.
Could someone with insight into these matters please help me understand - why would TSMC or Samsung choose to build factories in the US?
Government subsidies on the upfront CapEx aside - I'm curious what the long term benefits to them would be.
Thanks :)
I found that point really interesting - and also perplexing.
I can understand why US companies would choose to outsource manufacturing concerns to East Asian countries, but I'm wondering why the opposite is true in this case here.
Could someone with insight into these matters please help me understand - why would TSMC or Samsung choose to build factories in the US?
Government subsidies on the upfront CapEx aside - I'm curious what the long term benefits to them would be.
Thanks :)
A semiconductor factory is very expensive to build and run in terms of the actual building (vibration resistant, advanced ventilation with purified air etc) and the equipment inside (some of the most expensive machines you can buy). It's all extremely expensive. It is also fairly automated and requires few people to run compared to the value it outputs. So the cost of labor is low in comparison and thus it's not a big deal to put it in a high cost country.
How about also the legacy of a large number of fabs and of electronics design, manufacturing, and education in Arizona? Intel, Honeywell, Motorola, ASU ..., the list is large. Arizona has a wealth of semiconductor know-how.
EDIT: not the best article but deals briefly with Arizona semiconductor history toward end of story article: https://www.allaboutcircuits.com/news/semiconductor-fabs-dot...
EDIT: not the best article but deals briefly with Arizona semiconductor history toward end of story article: https://www.allaboutcircuits.com/news/semiconductor-fabs-dot...
Korean corps hate china almost as much as us corps. CCP has been running anti korea product news for years which have eviscerated their businesses. Lately they have been going after cultural theft saying that they invented their language, their traditional clothing and even kimchi. Korea is fed up, and when forced to choose china or the west, they are choosing the west as a long term business investment.
If it was the main reason, wouldn’t it have made more sense in more politically stable regions, like Germany or France, which are in good term with the US as well, and first level EU access as a bonus.
Tariffs and such. Intel will always be more protected by the government, just because they are from the USA and very valuable.
They gain a massive new customer who still primarily relies on older nodes and will need to buy a staggering amount of new chips: the US military.
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Don't you think it's wise for various reasons to have "offsite backups" of their technologies and production capacity?
Even ignoring the political reasons, just consider what happened to WD and Seagate during the floods in Thailand in 2011.
Even ignoring the political reasons, just consider what happened to WD and Seagate during the floods in Thailand in 2011.
For the same reasons Foxconn made a factory in Wisconsin?
Did that actually happen?
The tax incentives and political celebration certainly did.
No - it never did.
They built buildings, they just never really did anything with them...
https://en.wikipedia.org/wiki/Foxconn_in_Wisconsin
https://en.wikipedia.org/wiki/Foxconn_in_Wisconsin
Am I the only one who is worried every time such a news drops? Achieving high-tech autarky is a first step towards a war with china becoming viable. Not that the alternative would be much better: a war being nonviable and the west bending to their wishes. But still, I think it shows there are real concerns on the highest levels and it is considered an actual possibility. Scary.
I'm confused as to your assertion that war somehow wouldn't be viable. WW1 was previously thought to be impossible because of the economic interdependence and trade and yet all the same it had happened.
We're talking about a a revisionist, expansionist state that is rising, believes the existing power to be fragile, weak, and on the decline. It isn't a question of "Viability". The CCP sees serious geopolitical benefits to an armed conflict.
We're talking about a a revisionist, expansionist state that is rising, believes the existing power to be fragile, weak, and on the decline. It isn't a question of "Viability". The CCP sees serious geopolitical benefits to an armed conflict.
> Achieving high-tech autarky is a first step towards a war with china becoming viable.
That's a false dillema. The choice is not between self-sufficiency and war with China, and dependency and ever-lasting peace with China.
The choice is actually between war with China when China controls all the industry, and war with China when it fails to control and restrict access to that resource.
Given the choice, achieving self-sufficiency is more likely to ensure peace/dissuade war than dependency.
That's a false dillema. The choice is not between self-sufficiency and war with China, and dependency and ever-lasting peace with China.
The choice is actually between war with China when China controls all the industry, and war with China when it fails to control and restrict access to that resource.
Given the choice, achieving self-sufficiency is more likely to ensure peace/dissuade war than dependency.
I see, it looks to me like you've replaced one false dilemma with another false dilemma.
Why would a war with China be inevitable?
Why would a war with China be inevitable?
CCP is going to start the war. That's the problem with autocratic ethnostates.
Given the history of the number of wars started by the United States vs. started by China in the past 80 years, this comment seems highly ahistorical.
The US has a long history of taking on small countries. They usually don’t start something against a strong opponent.
Ah yes, so the conclusion is that the US will start all wars and poor China will start 0 wars and do 0 aggressive things. So glad we have such a critical geopolitical mind here to show us the way.
Or... it's much more complicated and China has been slowly angling to usurp control (unjustly) for decades.
Or... it's much more complicated and China has been slowly angling to usurp control (unjustly) for decades.
ASML builds the machines that Intel, TSMC and every other fab relies on. You never hear much about them. They are based in the Netherlands- a country that prefers to operate below the radar.
And below sea level! I'll be here all week folks!
I believe this was disproven with the war of 1995.
https://www.quora.com/What-you-think-about-Golden-Arches-the...
https://www.quora.com/What-you-think-about-Golden-Arches-the...
Thx for the pointer, nice to know the name of the theory. Although it only covers a part of my argument. My concern was also in regards to how much military tech could be built on short notice inside the US if it came to a prolonged war and most of the existing toys were destroyed after some months. That was what I meant with a war being nonviable (would end in a nuclear MAD scenario imo without the capacity to rebuild conventional weapons).
The US's current dependency on China is one-way. China is not co-dependent on the US. The existing dependency structure does not incentivize China to avoid war.
Besides, most of the US wars in the last half century have been started because the US was dependent on another nation. It seems a self-sufficient US may actually be less likely to go to war.
Besides, most of the US wars in the last half century have been started because the US was dependent on another nation. It seems a self-sufficient US may actually be less likely to go to war.
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People aren't logical, there's no magical economic connection, or even military deterrent that you can rely on to prevent a war.
I like this guy's take on things:
https://youtu.be/mX4owHcVjFo
https://youtu.be/mX4owHcVjFo
If it is so "cheap" in comparison to the wealth some people have, why they don't build fabs? Nobody seems to want to make a Tesla of semiconductors...
it's 20b for intel, for everyone else it's 20b+cost of major stake in intel
this kind of buisness is hard and can only be done by a corporation of smart, knowledgeable and experienced individuals, it took a few decades for tsmc to get into a position of advantage in silicon manufacturing
Doesn't chip fabrication require massive amounts of water?
Chip fabs ultra-purify water for rinsing wafers. They can reduce water use by doing more dry processes instead of rinsing with water. They can also recycle rinse water, which can have fewer contaminants than the municipal water feed. The water has to be almost perfectly pure. New plants will probably be state of the art in minimizing water use.
Intel builds, TSMC builds and nobody builds in the EU market.
Der letzte macht das Licht aus....
Der letzte macht das Licht aus....
Intel’s bringing 7nm to Kildare https://www.irishtimes.com/business/technology/intel-to-crea... and it’s promised to make a further announcement about Europe later this year. ASML is no small thing, either: https://www.economist.com/business/2020/02/29/how-asml-becam...
> Intel builds, TSMC builds and nobody builds in the EU market.
A few months ago there was a newspiece posted here in HN about a strategic billion-euro EU program that was aimed at subsidizing chip production capacity.
https://digital-strategy.ec.europa.eu/en/news/member-states-...
A few months ago there was a newspiece posted here in HN about a strategic billion-euro EU program that was aimed at subsidizing chip production capacity.
https://digital-strategy.ec.europa.eu/en/news/member-states-...
While being very pro-market, I don't mind strong government action and strong government action is needed here an can work (see Airbus). But I am skeptical the EU has the will and is willing to spend the amount of money needed to pull this off.
There is still the brain power, knowledge and money to compete with the US and China, the will and foresight is lacking. It is totally unclear that the EU could still pull this off in 30 years.
There is still the brain power, knowledge and money to compete with the US and China, the will and foresight is lacking. It is totally unclear that the EU could still pull this off in 30 years.
Arguably the EU already has the brain power and knowledge, and more importantly the industry to supply the pick-axes to the chip gold-rush miners.
For example, ASML is an european company.
Jump-starting a manufacturing hub might be all it takes to be self-sufficient throughout the whole process.
For example, ASML is an european company.
Jump-starting a manufacturing hub might be all it takes to be self-sufficient throughout the whole process.
Perhaps the EU should threaten to restrict exports of AMSL tech to only companies with fabs in Europe.
Is anything with future value being build by European companies?
AI, Crypto, VR, Robots ... not a single market leader is located in the EU.
I find it amazing that after missing the internet there is no discussion in Europe on how to avoid the same fate with artificial intelligence. There is only one European website in top 100 websites. And that is an Hungarian porn site.
AI will be 10x bigger than the internet. Yet it seems Europe does not even have it on the radar.
AI, Crypto, VR, Robots ... not a single market leader is located in the EU.
I find it amazing that after missing the internet there is no discussion in Europe on how to avoid the same fate with artificial intelligence. There is only one European website in top 100 websites. And that is an Hungarian porn site.
AI will be 10x bigger than the internet. Yet it seems Europe does not even have it on the radar.
Most of the things you mention are associated with the hype cycle peak and have not found their big use-case yet.
VR has only a few niche applications in entertainment. Crypto is a solution in search of a problem, and a gambling platform in the meantime.
AI isn't driving our cars, handling our customer service, or analyzing our business data. Good old fashioned algorithms written by humans are now being branded by marketing as "AI" which demonstrates we don't know what AI really is and we can't fend off its redefinition.
Robots is a tricky one because it's such a broad topic. Is an arm on an assembly line a robot? What about complex farming machinery? Does it have to look anthropomorphic?
From my bearish perspective on the first three industries, Europe and the EU (these are not interchangeable terms) have a pretty good track record this last decade compared to SV
VR has only a few niche applications in entertainment. Crypto is a solution in search of a problem, and a gambling platform in the meantime.
AI isn't driving our cars, handling our customer service, or analyzing our business data. Good old fashioned algorithms written by humans are now being branded by marketing as "AI" which demonstrates we don't know what AI really is and we can't fend off its redefinition.
Robots is a tricky one because it's such a broad topic. Is an arm on an assembly line a robot? What about complex farming machinery? Does it have to look anthropomorphic?
From my bearish perspective on the first three industries, Europe and the EU (these are not interchangeable terms) have a pretty good track record this last decade compared to SV
AI = DeepMind
Cypto = Switzerland basically the home of crypto if it has one
VR = Improbable. Multi $B from softbank
Robots = Europe is far ahead of the US in robotics, ABB / Universal robotics etc.
Cypto = Switzerland basically the home of crypto if it has one
VR = Improbable. Multi $B from softbank
Robots = Europe is far ahead of the US in robotics, ABB / Universal robotics etc.
Deepmind is owned by a US company (Alphabet) and located in the UK.
Universal Robots is owned by Teradyne, also in the US.
ABB I don't know. How are they market leaders?
Also, looking at ABB it seems this are those old industrial robots with few degrees of freedom. The future will be less specialized robots with more degrees of freedom. Powered by AI, not by explicitly coded motions.
Universal Robots is owned by Teradyne, also in the US.
ABB I don't know. How are they market leaders?
Also, looking at ABB it seems this are those old industrial robots with few degrees of freedom. The future will be less specialized robots with more degrees of freedom. Powered by AI, not by explicitly coded motions.
To your original point. Broadly I would say Europe creates enormous value. Which is then captured by the US. DeepMind being a good example.
DeepMind was never a business (and never will be), it's an AI R&D toy for a trillion dollar tech company. It was always going to end up in the belly of a larger tech company, and the US has all the dominant tech companies outside of China.
Besides, it's fair game. The US had one of the two global leaders in AgTech in Monsanto, which was captured by the Germans. That repeatedly happens in biotech as a prominent example, most of the European biotech industry was built up on the back of acquiring US biotech companies.
Even ARM Holdings was originated heavily by US companies. There is hardly a piece of the global tech market that wasn't directly financed or made possible by the US tech industry and its mountain of profits and VC money, from SoftBank to China's tech companies to Shopify or Atlassian.
Besides, it's fair game. The US had one of the two global leaders in AgTech in Monsanto, which was captured by the Germans. That repeatedly happens in biotech as a prominent example, most of the European biotech industry was built up on the back of acquiring US biotech companies.
Even ARM Holdings was originated heavily by US companies. There is hardly a piece of the global tech market that wasn't directly financed or made possible by the US tech industry and its mountain of profits and VC money, from SoftBank to China's tech companies to Shopify or Atlassian.
Captured? Enabled. DeepMind runs at big losses, only a company with enough firepower and vision such as the GAFAMs could (and luckily did) save DeepMind.
> Is anything with future value being build by European companies?
Aren't the EUV lithography machines that all advanced semiconductor manufacturers are dependent on made by a Dutch company?
https://en.wikipedia.org/wiki/ASML_Holding
Aren't the EUV lithography machines that all advanced semiconductor manufacturers are dependent on made by a Dutch company?
https://en.wikipedia.org/wiki/ASML_Holding
Well, Kuka was competitive but sold to China.
If something is lacking in Europe it is:
* Scale
* The idea to dream big
If something is lacking in Europe it is:
* Scale
* The idea to dream big
Europe also has little capital and massive amounts of regulation. France is starting to unwind some of it but it will be a long time before capital is wiling to risk European regulation again.
"Is anything with future value being build by European companies?"
Ehhhhh, the machines that are going to be in the chip factories mentioned here for example (ASML).
Ehhhhh, the machines that are going to be in the chip factories mentioned here for example (ASML).
Why would you produce chips in Europe? To send the chips to the US so they can do something meaningful with them?
AI will not be owned by companies, but it will be democratized and owned by the people.
/s
/s
Honest question, do they have the cash at hand for that?
They have 23B in cash and short term investments. But with rates so low its probably wiser to finance it out over 50 years and pay a couple percent in interest.
even if they didn't, I'm almost certain US would loan it to them at -% interest. Chips today are like grain supplies and heavy industry. You need them in your country
All of these companies are building in an area where it isn't clear if things will stay livable for the next 30 years.