GlobalFoundries wins $3.1B in CHIPS Act subsidies for NY, Vermont(syracuse.com)
syracuse.com
GlobalFoundries wins $3.1B in CHIPS Act subsidies for NY, Vermont
https://www.syracuse.com/business/2024/02/globalfoundries-wins-31-billion-in-chips-act-subsidies-for-upstate-ny-vermont-expansion.html
175 comments
It might be because GloFo always had foundaries in NY and VT (because it's the old IBM+AMD foundary spinoff).
IMO it's still fine to subsidize - everyone else (Taiwan, SK, China, MY) is doing it against WTO regulations, so we may as well
IMO it's still fine to subsidize - everyone else (Taiwan, SK, China, MY) is doing it against WTO regulations, so we may as well
> IMO it's still fine to subsidize
Of course it is.
> everyone else (Taiwan, SK, China, MY) is doing it against WTO regulations, so we may as well
You have it backwards. The US was/is/will be doing it so taiwan,sk,china, MY) is doing it. The biggest violators of WTO regulations is the US. And the WTO is pretty much defunct because of the US. The biggest and most egregious mercantilistic country is the US. Not china or any of the country you listed.
The sad thing is, the rest of the world should be subsidizing far more to offset unfair help US corporations get.
Of course it is.
> everyone else (Taiwan, SK, China, MY) is doing it against WTO regulations, so we may as well
You have it backwards. The US was/is/will be doing it so taiwan,sk,china, MY) is doing it. The biggest violators of WTO regulations is the US. And the WTO is pretty much defunct because of the US. The biggest and most egregious mercantilistic country is the US. Not china or any of the country you listed.
The sad thing is, the rest of the world should be subsidizing far more to offset unfair help US corporations get.
^it's crazy to me usa hasn't brought chip mfg in sooner, but easy to say in hindsight
Well, we’ve been of the collective mindset that internationalizing supply chains is best, for multiple reasons. And, under the right conditions, that may be true. However, the world is becoming morr multi-polar, so the calculations are changing. Lots of political, economic, and social inertia…
> we’ve been of the collective mindset that internationalizing supply chains is best, for multiple reasons.
Ultimately (multimately?) the collective mindset is of the investors and execs who directly, financially benefit from those reasons.
I know this is a narrow lens with which to view pub+corp financial decisions. But it keeps producing such stunningly accurate pictures and I find it hard to not use it.
Ultimately (multimately?) the collective mindset is of the investors and execs who directly, financially benefit from those reasons.
I know this is a narrow lens with which to view pub+corp financial decisions. But it keeps producing such stunningly accurate pictures and I find it hard to not use it.
I think thats a very simplistic view.
Yes labor is cheaper in Asia. But the other factor is the availability of a certain kind of labor force. You need a lot of people that are highly skilled to operate these facilities. There isn’t that kind of workforce available in NA today.
Yes labor is cheaper in Asia. But the other factor is the availability of a certain kind of labor force. You need a lot of people that are highly skilled to operate these facilities. There isn’t that kind of workforce available in NA today.
> I think thats a very simplistic view.
I think you're right and I'm not wrong. Wile picking apart the complexities, the drive to maximize profit will be a factor popping up again and again.
I think you're right and I'm not wrong. Wile picking apart the complexities, the drive to maximize profit will be a factor popping up again and again.
No “we” haven’t. Half of the ultra rich and the cadre of their supporters have, while most Americans have always though this was stripping them of their wealth and destroying their communities. To the point when offshoring began they were told every lie about how this would be a benefit to them.
Globalization has been a boon for just about anyone with a white collar job. It's not limited to the ultra rich at all.
While the middle class sure has shrunk, the life those in it live is markedly more materialistic than in the past. Fifty years ago there was no Temu, Alibaba, or Amazon TYEVRRTY brands to deck out facet of your life once you clear the cost of basic living. Houses are expensive as ever, but filling them has never been so cheap.
While the middle class sure has shrunk, the life those in it live is markedly more materialistic than in the past. Fifty years ago there was no Temu, Alibaba, or Amazon TYEVRRTY brands to deck out facet of your life once you clear the cost of basic living. Houses are expensive as ever, but filling them has never been so cheap.
The middle class has shrunk largely because the upper class has grown:
https://www.aei.org/carpe-diem/yes-the-us-middle-class-is-sh...
https://www.aei.org/carpe-diem/yes-the-us-middle-class-is-sh...
This is so false I can’t believe you’re posting it. Yes the amount of people making over 100k has grown since 1969 because inflation has eaten away how far that money goes. The top ten percent of earners today make >140k while the upper middle class is the top 10-20% (which includes those earning 100k.). Meanwhile the lowest earners as a class has definitely grown since 1969.
It cannot be stated enough that people who aren’t domain experts should not be using stats to push narratives because lots of nuance is lost when just numbers are shown.
It cannot be stated enough that people who aren’t domain experts should not be using stats to push narratives because lots of nuance is lost when just numbers are shown.
> Yes the amount of people making over 100k has grown since 1969 because inflation has eaten away how far that money goes.
Real dollars.
> It cannot be stated enough that people who aren’t domain experts should not be using stats to push narratives because lots of nuance is lost when just numbers are shown.
Agreed, so its really important for everyone right now that you personally refrain from commenting further.
Real dollars.
> It cannot be stated enough that people who aren’t domain experts should not be using stats to push narratives because lots of nuance is lost when just numbers are shown.
Agreed, so its really important for everyone right now that you personally refrain from commenting further.
More narrative pushing from the Federal Reserve:
Per capita disposable real income
https://fred.stlouisfed.org/series/A229RX0
Real median family income
https://fred.stlouisfed.org/series/MEFAINUSA672N
Per capita disposable real income
https://fred.stlouisfed.org/series/A229RX0
Real median family income
https://fred.stlouisfed.org/series/MEFAINUSA672N
The only one that is clearly not familiar with this domain here is you.
Really? Where?
You've been caught outright lying and you have no address for it other than calling me the idiot?
Please, leave.
You've been caught outright lying and you have no address for it other than calling me the idiot?
Please, leave.
Because you make this claim doesn’t imply at all that most white collar workers supported such a thing, which is what I was commenting on.
Turns out people want more from the market than a 401k and a cheap tv. Specifically a stable place to live with reliable employment and decent healthcare is worth sacrificing a hell of a lot for.
Most white collar workers have that. HN is packed with people who own homes, are highly employable, have excellent healthcare, and disposal income to splurge on consumerism.
The internet/social me is so hyper focused on those at the bottom that they have lost sight of what its like just a few levels up. But it's critical to understand in order to craft functional solutions.
The internet/social me is so hyper focused on those at the bottom that they have lost sight of what its like just a few levels up. But it's critical to understand in order to craft functional solutions.
Why are you under the impression white collar workers are all workers and the only ones that matter? You also are, again, assuming your statistics imply something about their politics
Ok, who gives a damn about that? White collar workers are still workers who are fucked by the current globalized market. Furthermore most folks don't have cushy salaried positions and they collectively matter a lot more than the folks on this forum.
No one wants manufacturing in their back yard.
From Vermont reporting -
"Meanwhile, part of the money will be used to modernize the Essex Junction campus. Officials say the upgrades will enable the Vermont operation to become the first high-volume manufacturing facility capable of making gallium nitride semiconductors, which are used in electric vehicles, power grids, smartphones and more."
"Meanwhile, part of the money will be used to modernize the Essex Junction campus. Officials say the upgrades will enable the Vermont operation to become the first high-volume manufacturing facility capable of making gallium nitride semiconductors, which are used in electric vehicles, power grids, smartphones and more."
The 'we give up R&D' GlobalFoundries? https://www.anandtech.com/show/13277/globalfoundries-stops-a...
From the Anandtech article, you'll note that a major challenge GloFo cited in bringing 7nm online was getting the fab space for it, citing that they would need to sink 10-15 billion to bring 7nm (and lower) nodes online.
You'll note that in the submitted article, GloFo is promising to do exactly that ("In return for the subsidies, GlobalFoundries said it would invest about $12.5 billion in the projects, most of which would be spent to expand the company’s Fab 8 in Malta, in Saratoga County."). Basically it seems like GloFo made a pretty hard nosed decision based on financing (guess they were just a few billion short last time) back in 2018, and now that they have those missing billions, they're going to go ahead.
Based on these numbers, it does seem likely this would allow GloFo to bring online 7nm. But getting much past that (5nm and lower) seems uncertain. That said, having additional domestic 7nm production (crucially, 7nm that does not displace existing 14nm+ production) would be useful.
You'll note that in the submitted article, GloFo is promising to do exactly that ("In return for the subsidies, GlobalFoundries said it would invest about $12.5 billion in the projects, most of which would be spent to expand the company’s Fab 8 in Malta, in Saratoga County."). Basically it seems like GloFo made a pretty hard nosed decision based on financing (guess they were just a few billion short last time) back in 2018, and now that they have those missing billions, they're going to go ahead.
Based on these numbers, it does seem likely this would allow GloFo to bring online 7nm. But getting much past that (5nm and lower) seems uncertain. That said, having additional domestic 7nm production (crucially, 7nm that does not displace existing 14nm+ production) would be useful.
If it’s not TSMC, it’s bad?
How's that related at all to the link? It's just a news article pointing out that GlobalFoundries gave up on making 7nm chips.
> The GlobalFoundries expansion would create up to 1,500 manufacturing jobs and 9,000 construction jobs over the next 10 years, federal officials said.
So assuming the construction jobs are temporary and the manufacturing jobs is what remains, this works out at around $2.066 million per employed personnel. Assuming a federal income tax rate of 20% and a 30 year tenure, this means the personnel should have a take home pay of $344k/year. And this is just for the scheme to break-even.
I think this IRA (the act) and CHIPS act are going to be just another wealth transfer where the "work" being done just to check boxes to be eligible for the money getting sloshed around.
So assuming the construction jobs are temporary and the manufacturing jobs is what remains, this works out at around $2.066 million per employed personnel. Assuming a federal income tax rate of 20% and a 30 year tenure, this means the personnel should have a take home pay of $344k/year. And this is just for the scheme to break-even.
I think this IRA (the act) and CHIPS act are going to be just another wealth transfer where the "work" being done just to check boxes to be eligible for the money getting sloshed around.
The point of all these breaks is to alleviate a critical dependency on two foreign advanced chip makers. Especially one that is under military threat by a huge political economic and military rival.
Losing out on a big percentage of advanced chip making capacity could be catastrophic for the US economy and technological advancement. And military.
This is not an "investment" in future tax revenue via jobs, although jobs are nice.
Losing out on a big percentage of advanced chip making capacity could be catastrophic for the US economy and technological advancement. And military.
This is not an "investment" in future tax revenue via jobs, although jobs are nice.
I understand the point of these subsidies. I am just doubting (a personal opinion) that they'll actually work and calculating the wealth transfer happening here.
Do you think that the gain from this (investment into Saratoga Fab) is useless or that the state pays too much for it?
Because I personally believe that this is a decent deal; I hate the idea and it still reeks of protectionism to me, but I think this serves US (taxpayers!) interests decently well.
I especially like the investment matching aspect, where the necessary commitment from the company is much larger than the grants, so in the end, they are dropping money into that fab (fudging numbers only gets you so far), and its in their best interest to make it work out.
I'd be very careful with characterising this as "wealth transfer", because it seems significantly less questionable than most defense spending to me and even that I wouldn't label as "wealth transfer".
Out of personal curiosity: Are you similarly opposed to agriculture subsidies, or do you consider those less problematic (magnitude is somewhat comparable at ~20billion$/year)?
Because I personally believe that this is a decent deal; I hate the idea and it still reeks of protectionism to me, but I think this serves US (taxpayers!) interests decently well.
I especially like the investment matching aspect, where the necessary commitment from the company is much larger than the grants, so in the end, they are dropping money into that fab (fudging numbers only gets you so far), and its in their best interest to make it work out.
I'd be very careful with characterising this as "wealth transfer", because it seems significantly less questionable than most defense spending to me and even that I wouldn't label as "wealth transfer".
Out of personal curiosity: Are you similarly opposed to agriculture subsidies, or do you consider those less problematic (magnitude is somewhat comparable at ~20billion$/year)?
> Out of personal curiosity: Are you similarly opposed to agriculture subsidies, or do you consider those less problematic (magnitude is somewhat comparable at ~20billion$/year)?
European here, we could and should close our borders for agricultural goods that we can grow ourselves (and you Americans should ban alfalfa exports from California, while you're at it). Ag subsidies are only required because there's no way an US or European farmer can compete with Russian, Ukrainian, South American or African labor and land costs, but we still need farmers to ensure we're self-sufficient and don't end up like many developing nations did once Russia blockaded Ukrainian grain exports.
European here, we could and should close our borders for agricultural goods that we can grow ourselves (and you Americans should ban alfalfa exports from California, while you're at it). Ag subsidies are only required because there's no way an US or European farmer can compete with Russian, Ukrainian, South American or African labor and land costs, but we still need farmers to ensure we're self-sufficient and don't end up like many developing nations did once Russia blockaded Ukrainian grain exports.
Well, agricultural subsidies are also needed because agriculture has become too efficient. The dairy industry is prime example in both US and EU of agriculture that overproduces so much milk that the US has farmers demanding we sanction Canada for their milk quotas (Canada using the quotas on all their farmers to prevent overproduction) and the EU dumps their milk on Africa and prevents any development of the dairy industry in Africa.
The same applies to so many other types of agriculture. Nobody wants to let farmers go out of business for decades now in the Western world. And the rate of "natural attrition" hasn't matched the rate of technological efficiency improvements.
There is of course agriculture that isn't as efficient because higher human labor required for things like picking and sorting. But the automation for that is slowly coming.
The same applies to so many other types of agriculture. Nobody wants to let farmers go out of business for decades now in the Western world. And the rate of "natural attrition" hasn't matched the rate of technological efficiency improvements.
There is of course agriculture that isn't as efficient because higher human labor required for things like picking and sorting. But the automation for that is slowly coming.
> there's no way an US or European farmer can compete with Russian, Ukrainian, South American or African labor and land costs
For certain agricultural goods perhaps, but the Midwest is the most productive region for agriculture on the planet. Russia and Ukraine have vast areas of land, they focus on wheat because they mainly have marginal land and a limited growing season and wheat is perfect for that. Most of Africa and much of South America (Argentina being a notable exception) have terrible soil and require significantly more fertilizer to grow crops at scale. Labor is cheaper in those regions but that’s only one factor and it’s why so much farm labor has been automated in the US.
For certain agricultural goods perhaps, but the Midwest is the most productive region for agriculture on the planet. Russia and Ukraine have vast areas of land, they focus on wheat because they mainly have marginal land and a limited growing season and wheat is perfect for that. Most of Africa and much of South America (Argentina being a notable exception) have terrible soil and require significantly more fertilizer to grow crops at scale. Labor is cheaper in those regions but that’s only one factor and it’s why so much farm labor has been automated in the US.
to this point, the US isn't the single biggest producer, or consumer -- that'd be China.
but they are the single largest exporter of grain overall, mostly corn from the midwest and California produce. the Green Revolution hit hard, and most farms are now huge consolidated enterprises. by comparison, in a lot of the world, most farms are smaller and often single family, and in many cases still using old world techniques -- e.g. non-trivial numbers of people plowing their fields with oxen, etc.
but they are the single largest exporter of grain overall, mostly corn from the midwest and California produce. the Green Revolution hit hard, and most farms are now huge consolidated enterprises. by comparison, in a lot of the world, most farms are smaller and often single family, and in many cases still using old world techniques -- e.g. non-trivial numbers of people plowing their fields with oxen, etc.
That is an interesting take. If I'm not mistaken in India at least (which one would imagine has fairly cheap labour) sugar and corn is still cheaper imported, although in sugar's case I think the production costs are higher due to water requirements. The sugar import situation had become highly political some years back.
I agree with you in principle, but I believe this is basically impossible in any democracy because you just get un-elected immediately.
Just consider the Polish protests against Ukrainian grain, or the recent German protests against cutting fuel subsidies for agriculture. It just costs too much political capital to do anything about this...
Just consider the Polish protests against Ukrainian grain, or the recent German protests against cutting fuel subsidies for agriculture. It just costs too much political capital to do anything about this...
As a New Zealander: please don't.
If only it were protectionism!
Which parts of the CHIPS act would you like to see changed?
I personally think that its quite difficult to make protectionism happen in a way where you don't prop up an inefficent industry with continuous infusions of tax dollars in the end...
I personally think that its quite difficult to make protectionism happen in a way where you don't prop up an inefficent industry with continuous infusions of tax dollars in the end...
Your comment doesn't address the parent comment's point though. You'd have to make an argument that the chip factories won't get built at all.
Why do you doubt they'll accomplish their goal of removing dependency on foreign chip makers?
Global Foundries promised 7nm tech to IBM and dropped it after winning the contract.
https://www.datacenterdynamics.com/en/news/ibm-sues-globalfo...
https://www.datacenterdynamics.com/en/news/ibm-sues-globalfo...
Because they do not fix the underlying causes; and also they create perverse incentives. Most companies are in the business of extracting money and will see this as such: an opportunity to extract money and the product is bureaucracy checkboxes. It would make more sense, in this personal view, to restrict sales to domestic production only and make sure the field is even for competitors to out-compete one another. This guarantee the dependency aspect at least (as you already restricted yourself!).
Another solution: Move the manufacturing to a near-shore and friendly country (ie: Mexico or Puerto Rico) and keep the design part in the US. But of course, that wouldn’t be as politically popular and wouldn’t create the extraction opportunity (which lots of companies will want to benefit from).
Another solution: Move the manufacturing to a near-shore and friendly country (ie: Mexico or Puerto Rico) and keep the design part in the US. But of course, that wouldn’t be as politically popular and wouldn’t create the extraction opportunity (which lots of companies will want to benefit from).
> Move the manufacturing to a near-shore and friendly country (ie: Mexico or Puerto Rico)
Puerto Rico isn't a foreign country, it's a territory of the United States. Regardless of that, semiconductor fabrication is one of, if not THE most complex form of manufacturing.
It's not enough to simply build a fab in Mexico, the supply chain of materials and highly skilled labor that runs these fabs needs to exist there too. That's not to say that it can't exist somewhere like Mexico, but currently it doesn't and it would take longer to build up.
So while moving it to Mexico would remove the geopolitical risk problem, putting it there instead of the US would only give the advantage of cheaper labor but at the cost of taking much much longer to ramp up.
Puerto Rico isn't a foreign country, it's a territory of the United States. Regardless of that, semiconductor fabrication is one of, if not THE most complex form of manufacturing.
It's not enough to simply build a fab in Mexico, the supply chain of materials and highly skilled labor that runs these fabs needs to exist there too. That's not to say that it can't exist somewhere like Mexico, but currently it doesn't and it would take longer to build up.
So while moving it to Mexico would remove the geopolitical risk problem, putting it there instead of the US would only give the advantage of cheaper labor but at the cost of taking much much longer to ramp up.
Not everything needs to be fabbed at 7 or 3 nm. Malaysia does well as a place where industrial nations can put mature manufacturing processes and get high quality outputs.
> to restrict sales to domestic production only
You think people will stop buying NVidia GPUs, AMD GPUs, PS5, XBox, Nintendo Switch, iPhone, Pixels, Samsung Galaxies, and a litany of major automotive parts from Microchip/STMicro/etc. etc.?
Because none of these are made in the USA. The only major chips made here are Flash/RAM by Crucial, CPUs by Intel, and some lower-tech (but still important) chips by TI. The vast majority of chips, well over 60% of the worldwide supply, is made by TSMC IIRC, and another huge chunk are made by other companies located in Taiwan.
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Furthermore, Taiwan is a close ally who has extremely friendly relations with USA. Yes, there's a war-risk with China here, but Taiwan fairly competes with us. I don't think anyone has a single piece of anti-Taiwan hate inside of them.
Its not a protectionist thing. Its purely the "what if China attacks Taiwan" thing. Economically speaking, trade with Taiwan and USA is a good thing. Geopolitically, trade with Democracies is a good thing, and trade with a century+ old friendly nation is a good thing.
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Taiwan can create this tech because they are smarter than us and outcompeted us on this subject. Its not "low tech", its extremely difficult chemistry, high-end PH.d stuff here.
Taiwan is basically the Vulkans from Star Trek. They're smaller, more technologically advanced, but weaker militarily. They're so obviously good allies that its unthinkable to do anything against them. We need a "just in case" plan if trade between our nations gets interrupted because chips are a strategic good, but... cutting them off would mean that they ally with someone else and that's even worse.
You think people will stop buying NVidia GPUs, AMD GPUs, PS5, XBox, Nintendo Switch, iPhone, Pixels, Samsung Galaxies, and a litany of major automotive parts from Microchip/STMicro/etc. etc.?
Because none of these are made in the USA. The only major chips made here are Flash/RAM by Crucial, CPUs by Intel, and some lower-tech (but still important) chips by TI. The vast majority of chips, well over 60% of the worldwide supply, is made by TSMC IIRC, and another huge chunk are made by other companies located in Taiwan.
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Furthermore, Taiwan is a close ally who has extremely friendly relations with USA. Yes, there's a war-risk with China here, but Taiwan fairly competes with us. I don't think anyone has a single piece of anti-Taiwan hate inside of them.
Its not a protectionist thing. Its purely the "what if China attacks Taiwan" thing. Economically speaking, trade with Taiwan and USA is a good thing. Geopolitically, trade with Democracies is a good thing, and trade with a century+ old friendly nation is a good thing.
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Taiwan can create this tech because they are smarter than us and outcompeted us on this subject. Its not "low tech", its extremely difficult chemistry, high-end PH.d stuff here.
Taiwan is basically the Vulkans from Star Trek. They're smaller, more technologically advanced, but weaker militarily. They're so obviously good allies that its unthinkable to do anything against them. We need a "just in case" plan if trade between our nations gets interrupted because chips are a strategic good, but... cutting them off would mean that they ally with someone else and that's even worse.
It’s an accident of history and the hubris of Intel that they passed over an opportunity to buy the last generation machines from ASML leading to TSMC taking the advantage.
It’s not that they are intrinsically superior Vulkans as you’ve described.
It’s a temporary distortion caused by Intel trying to rest on their laurels and drip feed advancements.
It’s not that they are intrinsically superior Vulkans as you’ve described.
It’s a temporary distortion caused by Intel trying to rest on their laurels and drip feed advancements.
Even *IF* Intel reaches parity with TSMC (which seems unlikely...), Intel doesn't have much experience with external customers (like Apple, Qualcomm, AMD, NVidia) like TSMC does.
Even if we magically wave a wand and give Intel next-generation lithography today, they still don't have the capabilities to take orders from customers and translate them to designs.
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Its not Intel who needs to catch up to TSMC. Its a 3rd party fab like GloFo who needs to catch up for USA to recapture that market share.
I'm happy that GloFo is getting some scraps and investment from this CHIPS act, its the right move. But I have my doubts that we'll reach the technological level of TSMC / Taiwan any time soon. But whatever we get its still better than nothing.
Even if we magically wave a wand and give Intel next-generation lithography today, they still don't have the capabilities to take orders from customers and translate them to designs.
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Its not Intel who needs to catch up to TSMC. Its a 3rd party fab like GloFo who needs to catch up for USA to recapture that market share.
I'm happy that GloFo is getting some scraps and investment from this CHIPS act, its the right move. But I have my doubts that we'll reach the technological level of TSMC / Taiwan any time soon. But whatever we get its still better than nothing.
> Even if we magically...
ASML began to ship its first High-NA lithography tool to Intel late last year ,and the machine will be fully assembled in Oregon in the coming months. [1]
[1] https://www.anandtech.com/show/21264/asml-to-ship-multiple-h...
ASML began to ship its first High-NA lithography tool to Intel late last year ,and the machine will be fully assembled in Oregon in the coming months. [1]
[1] https://www.anandtech.com/show/21264/asml-to-ship-multiple-h...
> some lower-tech (but still important) chips by TI
TI makes plenty of pretty high-tech chips, just not necessarily bleeding edge digital logic processors. Their real high-tech stuff are analog devices, something far less sexy to people on HN but still incredibly crucial.
TI makes plenty of pretty high-tech chips, just not necessarily bleeding edge digital logic processors. Their real high-tech stuff are analog devices, something far less sexy to people on HN but still incredibly crucial.
Analog is important for cutting another 20% off of MOSFET resistances or whatever, which means even more efficient electric engines or other electric components.
Yeah, important but not as much of a headline as 20% more GHz or FLOPs for some reason.
Yeah, important but not as much of a headline as 20% more GHz or FLOPs for some reason.
Not really. It’s because the government of Taiwan poured a lot of money into these chip companies. Which is the smart thing to do.
A lot of countries shoved tons of money into chips. In fact, a ton of countries have more money than Taiwan.
And yet, it's Taiwan who won. We gotta give them props for that, and we can also thank the gods that it was a close ally of the USA who got so good at it.
And yet, it's Taiwan who won. We gotta give them props for that, and we can also thank the gods that it was a close ally of the USA who got so good at it.
This is a compelling perspective. But putting sales or import restrictions in place right now would be damaging in the short term both for the manufacturing partners and the US. They’ve already put some export restrictions in place (ie preventing nvidia from selling their most powerful chips to china).
In terms of nearshoring - that’s a good idea too but I think the workforce training would be even more difficult than it has been in the US and it would be less popular politically as you said. (Side note: PR is part of the US - maybe you meant Costa Rica)
In terms of nearshoring - that’s a good idea too but I think the workforce training would be even more difficult than it has been in the US and it would be less popular politically as you said. (Side note: PR is part of the US - maybe you meant Costa Rica)
Intel does (or used to do) wafer packaging in Costa Rica. On paper, CR is an attractive near shore location: Good amount of English speakers, time zone parity with the US, and not difficult to travel to.
If a certain former president is reelected he will likely continue to push for the type of tariffs that will incentivize domestic production over foreign imports. If that happens the chips act will have put us on the footing required for that ramp up to begin.
Not parent poster, but there's a long track record of these sorts of subsidies to big tech companies already rolling in money to go bust with little oversight, investigation, or prosecution.
The big one everyone remembers is the set of grants giving to incumbent providers to expand access to broadband (25 Mbps down/3 Mbps minimum) to everyone in the country - a promise that, despite three rounds of grants in the billions, has not materialized.[1]
[1] https://www.jsonline.com/in-depth/news/2021/07/14/weve-spent...
The big one everyone remembers is the set of grants giving to incumbent providers to expand access to broadband (25 Mbps down/3 Mbps minimum) to everyone in the country - a promise that, despite three rounds of grants in the billions, has not materialized.[1]
[1] https://www.jsonline.com/in-depth/news/2021/07/14/weve-spent...
Chips and telecom are pretty different markets, right? GlobalFoundries needs a leg up, most of the big telecom companies are already abusive monopolies.
> I am just doubting (a personal opinion) that they'll actually work and calculating the wealth transfer happening here.
The goal is not wealth transfer.
If you want that, move to Europe.
The goal is not wealth transfer.
If you want that, move to Europe.
Europe does a lot of income transfer, but not much wealth transfer.
It's always good to question subsidies like this, but the question you ask ("does income tax on the created jobs pay for the subsidies") is the wrong one: The state is not investing into this for a monetary return from income taxes-- he is paying for strategical reasons/supply chain security, and the "price" is to compensate for the fact that labor costs and regulations make building chip foundries in the US more expensive.
So what you would need to ask would be more like: Is the subsidiy higher than it needs to be to lure chipmakers into the US? And that is much harder to answer...
So what you would need to ask would be more like: Is the subsidiy higher than it needs to be to lure chipmakers into the US? And that is much harder to answer...
Oxford Economics estimates that there's a 6.7x multiplier on each new role created in the semiconductor industry[1]. That is, each role in the semiconductor industry supports an additional 5.7 jobs indirectly in other domestic industries. The only two sectors that are higher are Computer Storage manufacturing and Aircraft Manufacturing.
You'd need to split the pay between all 6.7 newly created roles, meaning they only need ~$60k take-home or so each - which is right around the US mean salary.
[1] https://www.oxfordeconomics.com/resource/chipping-in-the-us-...
You'd need to split the pay between all 6.7 newly created roles, meaning they only need ~$60k take-home or so each - which is right around the US mean salary.
[1] https://www.oxfordeconomics.com/resource/chipping-in-the-us-...
But those employees also do things like buy cars and lattes, and they also pay state and local taxes, sales tax, etc. as does the foundry.
There are other economic benefits too.
But even if your simple calculation was correct and all there was to this story, what you’re missing in your post is that America as a nation has decided we need to produce semiconductors here for economic and national security purposes and so therefore subsidizing their manufacture is a normal thing that would occur.
There are other economic benefits too.
But even if your simple calculation was correct and all there was to this story, what you’re missing in your post is that America as a nation has decided we need to produce semiconductors here for economic and national security purposes and so therefore subsidizing their manufacture is a normal thing that would occur.
they would buy cars, lattes and pay tax on non-subsidized jobs, too. Why should the latte shop owner have to pay tax to run their business, while the chip mfg doesn't? it just creates two classes of people.
> America as a nation has decided we need to produce semiconductors here for economic and national security purposes
a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment?
> America as a nation has decided we need to produce semiconductors here for economic and national security purposes
a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment?
> a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment?
Because it was dumb, changing away from a path when you see it is a dead end is a good thing to do.
Also I’m not sure “we” (to the extent that there even is an “we” here, there are always winners and losers with these sorts of policies so I bet the whole country didn’t agree) ever intended to move high-tech manufacturing away from the US. I think we want to outsource the bad jobs and keep the good ones. Of course it is a game everybody is playing, we’re shifting our strategy to hopefully more effectively keep the high-tech stuff.
Because it was dumb, changing away from a path when you see it is a dead end is a good thing to do.
Also I’m not sure “we” (to the extent that there even is an “we” here, there are always winners and losers with these sorts of policies so I bet the whole country didn’t agree) ever intended to move high-tech manufacturing away from the US. I think we want to outsource the bad jobs and keep the good ones. Of course it is a game everybody is playing, we’re shifting our strategy to hopefully more effectively keep the high-tech stuff.
Everyone involved with floating the dollar and running a deficit understood that it would pump the asset sector and dump the export sector. There were fights about it. Keynes got himself ejected from elite circles by lobbying a bit too hard for his pet alternative.
If you want a more visible and recent datapoint, look to the perennial fights in the UN over the opposite, where a country that promised not to devalue their currency devalued their currency. Note that these discussions generally start from a point where everyone understands why it might be desirable to devalue one's currency, pumping exports & the real economy while dumping assets. This is macroeconomics 101 stuff.
The surprising thing is not that high tech manufacturing left, it's that for a while it was actually able to compete with a money printer for access to talent and resources.
If you want a more visible and recent datapoint, look to the perennial fights in the UN over the opposite, where a country that promised not to devalue their currency devalued their currency. Note that these discussions generally start from a point where everyone understands why it might be desirable to devalue one's currency, pumping exports & the real economy while dumping assets. This is macroeconomics 101 stuff.
The surprising thing is not that high tech manufacturing left, it's that for a while it was actually able to compete with a money printer for access to talent and resources.
why is building a washer that keeps peoples clothing clean a 'bad job' and building tech components a 'good job'?
Because computer chips are cool and washing machines are boring.
The game the manufactures are playing is to get extra good conditions for them by pressing the government that they would produce abroad.
Local manufacturing in any reasonable volume is not coming back. Highly automated - yes, maybe, if there are dotations/tax cuts/high import tariffs. Highly automated means 1.5k people working on a giant fab and rest are robots.
>I’m not sure “we” ever intended to move high-tech manufacturing away from the US.
Until the recent turnaround, it was understood the west was moving to a service industry. Someone Else(tm) (read: China) would manufacture everything (the "dirty", "cheap" work) and we would provide the service (the "clean", "expensive" work).
Of course, an economy can't be valuable if it can't actually make anything. As it stands, the US can't even make chopsticks by itself let alone microprocessors.
I actually have significant doubt CHIPS will be successful in bringing back microprocessor manufacturing, and more broadly bringing back manufacturing in general to the west at all, but we have to start somewhere if we don't want to be beholden.
Until the recent turnaround, it was understood the west was moving to a service industry. Someone Else(tm) (read: China) would manufacture everything (the "dirty", "cheap" work) and we would provide the service (the "clean", "expensive" work).
Of course, an economy can't be valuable if it can't actually make anything. As it stands, the US can't even make chopsticks by itself let alone microprocessors.
I actually have significant doubt CHIPS will be successful in bringing back microprocessor manufacturing, and more broadly bringing back manufacturing in general to the west at all, but we have to start somewhere if we don't want to be beholden.
I’m not sure what you mean by “can’t even make chopsticks by itself,” which is to say, obviously that is an exaggeration but on the other hand, lots of products do touch multiple countries…
Anyway, US manufacturing output still seems to be second in the world, around 1/2 that of China with 1/4 the population. Microprocessors are already made in the US, Intel (despite their struggles) is still making plenty of chips here.
I’m not really sure what the plan is with Global Foundries, in the sense that they presumably won’t keep up with TSMC or even Intel… but maybe 7nm will be the next or next-next generation automotive chip node or something.
Anyway, US manufacturing output still seems to be second in the world, around 1/2 that of China with 1/4 the population. Microprocessors are already made in the US, Intel (despite their struggles) is still making plenty of chips here.
I’m not really sure what the plan is with Global Foundries, in the sense that they presumably won’t keep up with TSMC or even Intel… but maybe 7nm will be the next or next-next generation automotive chip node or something.
Intel designs their chips here, but Intel makes their chips in Israel, Vietnam, Malaysia, Costa Rica, etc.
This is what the west was trying to do before: Providing services like microprocessor design for the manufacturing industries overseas.
But of course, simply drawing stuff on paper for others to peruse doesn't actually produce value. It's the act of making something that produces value, and we finally realized that grave error.
Not to mention the people doing the manufacturing work will inevitably accrue the know-how to also just do the designing themselves too, and then we in the service industry really are worthless fools.
>I’m not sure what you mean by “can’t even make chopsticks by itself,”
I mean that quite literally. I know Georgia (the state, to be clear) has (or had) a robust disposable chopstick manufacturing industry, but nearly every disposable chopstick I see sold or given out are Made In China these days.
If we can't (or won't) even figure out the means to making some wooden sticks, we definitely aren't manufacturing microprocessors.
This is what the west was trying to do before: Providing services like microprocessor design for the manufacturing industries overseas.
But of course, simply drawing stuff on paper for others to peruse doesn't actually produce value. It's the act of making something that produces value, and we finally realized that grave error.
Not to mention the people doing the manufacturing work will inevitably accrue the know-how to also just do the designing themselves too, and then we in the service industry really are worthless fools.
>I’m not sure what you mean by “can’t even make chopsticks by itself,”
I mean that quite literally. I know Georgia (the state, to be clear) has (or had) a robust disposable chopstick manufacturing industry, but nearly every disposable chopstick I see sold or given out are Made In China these days.
If we can't (or won't) even figure out the means to making some wooden sticks, we definitely aren't manufacturing microprocessors.
> Intel designs their chips here, but Intel makes their chips in Israel, Vietnam, Malaysia, Costa Rica, etc.
> But of course, simply drawing stuff on paper for others to peruse doesn't actually produce value.
Intel actually manufactures quite a bit in the US. The bulk of their fabs are here, and they ensure they can produce the wafers with good yields in the US. Once they've got the process down, the other fabs kick in. And even then, I believe a fair amount of the mass production is still in the US. It's the packaging that is mostly offshored.
So no, not just designing on paper.
> But of course, simply drawing stuff on paper for others to peruse doesn't actually produce value.
Intel actually manufactures quite a bit in the US. The bulk of their fabs are here, and they ensure they can produce the wafers with good yields in the US. Once they've got the process down, the other fabs kick in. And even then, I believe a fair amount of the mass production is still in the US. It's the packaging that is mostly offshored.
So no, not just designing on paper.
If that's true Intel needs to advertise that better, especially in today's geopolitical climate.
I'm aware they have fabs (mostly R&D) in Oregon and have manufacturing fabs planned in Arizona, New Mexico, and I recall Ohio, but I've mostly heard praise of their Israel fabs and all the CPUs I've ever bought from them have said some variation of "Made in Costa Rica/Malaysia/Vietnam".
To be fair my latest purchase, a 14700K, says "Manufactured in US with global content." which is a slight improvement, but that could just as well mean "We shipped chips in from Israel and soldered a heat spreader on it." and it still ultimately says "Final assembly in VN." (Vietnam) right under it.
Made in USA this is not (yet?).
I'm aware they have fabs (mostly R&D) in Oregon and have manufacturing fabs planned in Arizona, New Mexico, and I recall Ohio, but I've mostly heard praise of their Israel fabs and all the CPUs I've ever bought from them have said some variation of "Made in Costa Rica/Malaysia/Vietnam".
To be fair my latest purchase, a 14700K, says "Manufactured in US with global content." which is a slight improvement, but that could just as well mean "We shipped chips in from Israel and soldered a heat spreader on it." and it still ultimately says "Final assembly in VN." (Vietnam) right under it.
Made in USA this is not (yet?).
That is false. All the advanced Intel fabs are located in the U.S. And in fact, the design has actually been done in Israel in previous generations.[0] Much of the equipment needed to run advanced fabs are made in the US as well.
[0] eg. https://en.wikipedia.org/wiki/Intel_8088
[0] eg. https://en.wikipedia.org/wiki/Intel_8088
[deleted]
Intel has production fabs in the US.
https://www.intel.com/content/www/us/en/support/articles/000...
>> I’m not sure what you mean by “can’t even make chopsticks by itself,”
> I mean that quite literally. I know Georgia (the state, to be clear) has (or had) a robust disposable chopstick manufacturing industry, but nearly every disposable chopstick I see sold or given out are Made In China these days.
But these are different things. “Can’t make chopsticks by itself” is clearly not true, I could just go make a pair of chopsticks if I wanted. You can find expensive hand-made chopsticks from the US. The US might not have a huge production of disposable chopsticks, but making really simple things at scale is a place where we don’t have a competitive advantage, and I wouldn’t be surprised if we have a relatively low demand for chopsticks, so this doesn’t seem surprising or indicative of anything in particular.
https://www.intel.com/content/www/us/en/support/articles/000...
>> I’m not sure what you mean by “can’t even make chopsticks by itself,”
> I mean that quite literally. I know Georgia (the state, to be clear) has (or had) a robust disposable chopstick manufacturing industry, but nearly every disposable chopstick I see sold or given out are Made In China these days.
But these are different things. “Can’t make chopsticks by itself” is clearly not true, I could just go make a pair of chopsticks if I wanted. You can find expensive hand-made chopsticks from the US. The US might not have a huge production of disposable chopsticks, but making really simple things at scale is a place where we don’t have a competitive advantage, and I wouldn’t be surprised if we have a relatively low demand for chopsticks, so this doesn’t seem surprising or indicative of anything in particular.
> they would buy cars, lattes and pay tax on non-subsidized jobs, too
The point here was that your assumption of the economic effects of the subsidies didn’t include other meaningful factors.
The point here was that your assumption of the economic effects of the subsidies didn’t include other meaningful factors.
Why continue to ignore the answer given in favor of purely economic arguments? We need chips built at home so we’re making it happen, it isn’t complicated.
"we" is doing a lot of work there. a multiple-trillion-dollar company could do the investing (since their products depend on this silicon) instead of the American taxpayer. But lets blur the lines with the word "we".
All of their competitors are subsidized by their governments and chips are as important as energy or agricultural today. It’s not realistic for us to expect a free market to compete with non free ones
This has nothing to do with jobs.
Read Chip War by Chris Miller
https://en.m.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_...
Read Chip War by Chris Miller
https://en.m.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_...
Is the only reason governments subsidize things for employment? Could it not just be here, have $3.1B and further us as a species by producing chips needed for AI, ML, cars, cellphones, etc.
We give giant science grants all the time, tons of money for infrastructure, etc, what makes this one immediately go into X dollars / jobs created * tax generated?
We give giant science grants all the time, tons of money for infrastructure, etc, what makes this one immediately go into X dollars / jobs created * tax generated?
In addition to the point of this not being to make money, more than half of this is loans, so is intended to be paid back. 1.5B is grants, so closer to $1M per manufacturing job in your framing.
The other economic benefit is moving one part of the supply chain here may enable more of the supply chain to be completed here. For some of the hardware companies I work with, if you have to make a few parts in China, it's vastly cheaper and more flexible to do the whole assembly there.
The other economic benefit is moving one part of the supply chain here may enable more of the supply chain to be completed here. For some of the hardware companies I work with, if you have to make a few parts in China, it's vastly cheaper and more flexible to do the whole assembly there.
The 9,000 construction jobs will also pay taxes while they're working for 2-3 years. The 1,500 people will buy houses and go to restaurants and dry cleaners and have lawn care and create much other economic activity that will also generate tax revenue.
Simply diving the subsidy by the 1,500 permanent employees doesn't capture the value that's created, along with the strategic value of bringing more chip manufacturing to the US.
Simply diving the subsidy by the 1,500 permanent employees doesn't capture the value that's created, along with the strategic value of bringing more chip manufacturing to the US.
Its not about this being a "winner" it's about being able to make the dam things domestically. Full Stop.
We have national defense concerns and zero faith in intel.
EDIT: This makes it "defense spending" in a civilian line item.
We have national defense concerns and zero faith in intel.
EDIT: This makes it "defense spending" in a civilian line item.
Intel is one of the recipients/beneficiaries.[1]
[1]: https://www.intel.com/content/www/us/en/corporate/usa-chipma...
[1]: https://www.intel.com/content/www/us/en/corporate/usa-chipma...
Yes but the point stands. “Zero faith in intel being able to fill the gap if left to its own devices,” would be a better wording
TSMC, SMIC, and Samsung among others all have the financial and political will of entire countries behind them. It's unreasonable to expect anyone to fight equally if not better without similar terms like CHIPS.
You are absolutely right but missing the point. The CHIPS act is to make domestic foundries for companies where the manufacturing is outside of the United States. It is to make us resistant to supply chain problems and also the possibility of tampering of computer components. Foundry creation is incredibly expensive and to get to the state of the art lithography is hard but global foundries can make chips for things that don't require that. The subsidies should reflect that (Intel / TSMC have had this grant also).
On the other hand they could just not complete what they promised and we would be in a bad position: https://www.theverge.com/2019/4/10/18296793/foxconn-wisconsi...
Others have said about trickle down economics (this can be debated).
On the other hand they could just not complete what they promised and we would be in a bad position: https://www.theverge.com/2019/4/10/18296793/foxconn-wisconsi...
Others have said about trickle down economics (this can be debated).
At $344K/year, I can assure you the federal income tax will be higher!
Also, did you not account for capital costs? I know that at Intel fabs, labor costs are significantly lower than capital costs.
Consider, for example, that ASML charges $0.5B for a single unit.
Also, did you not account for capital costs? I know that at Intel fabs, labor costs are significantly lower than capital costs.
Consider, for example, that ASML charges $0.5B for a single unit.
The government is not a business, it's "investments" do not have to "break-even" in raw financial terms.
Maintaining supply chain diversity is critical for national security. The US Military does not want to be dependent on foreign manufacturers for its equipment.
Furthermore the business and employees will be paying sales and property taxes, in addition to federal income tax, and will have 2nd & 3rd order effects from their spending.
Maintaining supply chain diversity is critical for national security. The US Military does not want to be dependent on foreign manufacturers for its equipment.
Furthermore the business and employees will be paying sales and property taxes, in addition to federal income tax, and will have 2nd & 3rd order effects from their spending.
But the jobs aren't the only nor primary benefit.
Don't forget that TSMC was essentially a government enterprise when it started.
Be cynical if you want, but the one thing that has a 0% track record of effective results is calling every government function wasteful, corrupt, and untrustworthy and responding by dismantling government institutions and investments.
Don't forget that TSMC was essentially a government enterprise when it started.
Be cynical if you want, but the one thing that has a 0% track record of effective results is calling every government function wasteful, corrupt, and untrustworthy and responding by dismantling government institutions and investments.
This isn't about creating jobs. The US has more Jobs than people who're willing to work.
This is about creating strategic independence.
This is about creating strategic independence.
No a big part of the chips and inflation reduction acts are definitely the creation of jobs and the bringing of manufacturing back to parts of America that has been deindustrialized due to offshoring.
While policies can have multiple goals, the primary goal of the CHIPS Act is definitely supply chain independence for the US Military, Job creation is a nice side effect.
That is just what they say to get support from constituents who don't understand international power struggles and the strategic importance of chip production capabilities. The overarching motivation is global strategic power and security. Read Chip War: The Fight for the World's Most Critical Technology.
The value of a job for the state is limited to ... federal income tax? That's certainly a view to hold.
I imagine that $2 million also includes land purchases, materials, and equipment on top of salaries.
National security considerations and second order economic stimulus effects aside, rounding 9000 construction jobs down to 0 is also doing a lot of work here. If you assume the average duration of those jobs is just 5 years, that doubles the number of job-years...
Don't you think they have to pay for the machines?
> Gina Raimondo said the plant will make “high-value chips” that are currently not made in the United States. The 300-millimeter chips are essential for national security [...]
300mm? What dimension is this measuring? I would expect feature size to be 300nm, but 30nm or 3nm is surely more likely.
300mm? What dimension is this measuring? I would expect feature size to be 300nm, but 30nm or 3nm is surely more likely.
> What dimension is this measuring?
Twenty bucks says wafer size, since 300 mm wafers are standard.
Edit: Also, here's the press release for the announcement:
https://www.nist.gov/news-events/news/2024/02/biden-harris-a...
Twenty bucks says wafer size, since 300 mm wafers are standard.
Edit: Also, here's the press release for the announcement:
https://www.nist.gov/news-events/news/2024/02/biden-harris-a...
That’s a shorthand for modern processes. Older process technology was made before 300mm wafers were standard, and retrofitting old processes to use larger wafers is generally considered to be not worth the cost since all the tooling is depreciated and paid for in 200mm or smaller wafers.
Anything made today from the ground up would use 300mm wafers, though. Even slightly older process nodes (55nm, for instance).
Anything made today from the ground up would use 300mm wafers, though. Even slightly older process nodes (55nm, for instance).
This is talking about pre-diced wafer diameter.
https://en.m.wikipedia.org/wiki/Wafer_(electronics)
https://en.m.wikipedia.org/wiki/Wafer_(electronics)
Certainly not the transistor size unless they’ve invented some new Gate All Around Ingot technology, hahaha.
I suspect they mean wafer size, 300mm is a common wafer size.
300mm is the new wafer standard.
200mm was the standard a few years ago.
200mm was the standard a few years ago.
I was in the industry for a decade and never saw 200mm
200mm was also called 8-inch wafers.
I think you’re missing my point. I have since come and gone from a decade-long career in semiconductors, and it’s always been 300mm for logic. 200mm is early 2010s at the latest
I'm under the impression that USAs lines are mostly 200mm though. It's not like anyone throws away a fab line just because a better one was made elsewhere.
I swear I read an article about new 200mm lines being setup somewhere. Demand keeps growing even for older lines.
I guess to your point is that 300mm is the standard for any top-end line in the past decade? Which is good info for sure.
I swear I read an article about new 200mm lines being setup somewhere. Demand keeps growing even for older lines.
I guess to your point is that 300mm is the standard for any top-end line in the past decade? Which is good info for sure.
As a native upstate new yorker, I root for the success of GlobalFoundries. But it was exceedingly frustrating to me that they went and did layoffs in 2022 despite their booming revenues and incoming subsidies [0].
It seems to me there should be some kind of rule to prevent these layoffs for companies that receive billions of federal dollars.
[0] - https://vtdigger.org/2022/12/01/globalfoundries-to-cut-up-to...
It seems to me there should be some kind of rule to prevent these layoffs for companies that receive billions of federal dollars.
[0] - https://vtdigger.org/2022/12/01/globalfoundries-to-cut-up-to...
Such a rule can have the opposite effect though, a company may choose to hire/grow more conservatively if it is subject to a condition that it cannot layoff.
Isn't their layoff a tacit admission that they should have grown more slowly, though?
When the Fed raises interest rates, it slams on everyone's brakes. Should GlobalFoundries somehow predicted the macro environment, better than everyone else, and followed their gut on reading macro tea leaves and pre-anticipated what the Fed would do? Ideally, yes, they would know the future, but in reality the best laid plans must change to meet reality, as current events always has surprises that can not be 100% derisked.
Layoffs are necessary from time to time to keep org chart bloat down. It's not just about the money. I don't mean this in a callous way and I understand that layoffs are painful for those getting fired. But for a business to thrive it has to make the correct strategic choices.
I guess I am too humanist to believe this sort of rhetoric is not callous. I know people who lost their jobs in that layoff. It hurts a lot of families.
Companies should think about organizational bloat during hiring. If their revenues are soaring and they’re getting free money from the feds, they should shuffle the people they have into more efficient roles.
I know there are fiscal reasons why this kind of thing happens. But workers in the US do not have the protections to balance it out. Healthcare, unemployment insurance, etc are not sufficiently strong to keep people afloat for the sake of “reducing organizational bloat.”
Companies should think about organizational bloat during hiring. If their revenues are soaring and they’re getting free money from the feds, they should shuffle the people they have into more efficient roles.
I know there are fiscal reasons why this kind of thing happens. But workers in the US do not have the protections to balance it out. Healthcare, unemployment insurance, etc are not sufficiently strong to keep people afloat for the sake of “reducing organizational bloat.”
I'm in favor of a stronger social safety net (and the taxes to pay for it).
Billions... Just imagine what they could do with trillions, eh Sam?
Apple and Microsoft seem to be doing pretty well
what a crock of shit! no. none of this money will be spent wisely. these companies are requiring the government to subsidize their profits without having to spend their own money. the promise of jobs is all fluff. billions to buffalo didnt send even one billion to buffalo and certainly didnt improve any lives in that region. as someone who lives here, I wish I could trust these people but the reality is that the state is so corrupt and US government is on the same level, where all the money will be forced out of the people and nothing will be delivered.
You are right when it comes to subsidies in general.
Recent moves and voices send a clear signal across the world - US is not a reliable security guarantee partner. CHIPS subsidies is a hedge against China taking over Taiwan. US is building onshore capacity to be able to renege on defense promises given to Taiwan at minimum cost. I would be very worried if I was in Taiwan. Im already worried as it is living in Europe and learning article 5 might just be a mere suggestion to US.
Recent moves and voices send a clear signal across the world - US is not a reliable security guarantee partner. CHIPS subsidies is a hedge against China taking over Taiwan. US is building onshore capacity to be able to renege on defense promises given to Taiwan at minimum cost. I would be very worried if I was in Taiwan. Im already worried as it is living in Europe and learning article 5 might just be a mere suggestion to US.
the 3.1 billion could be spent on Education, Libraries, Updating Infrastructure that is destroyed by harsh winters, investing in restoration of natural resources, helping the failing farmers, updating rail and lake/river deliveries. But no. we should def give it to people that will spend exactly 1% pretending to develop a factory and claim the rest for themselves because they encountered problems.
While I agree with the geo-political arguments, I'd prefer to see regulations that allow the freemarket to design a solution, rather than a government contract to choose the winner. (eg: cars with 100% US made chips, or no chips, receive a tax rebate at the final consumer purchase)
I also feel the need to comment that this is corporate welfarism and that is very much contrary to free markets or capitalism. IMO the government should not be choosing winers, but incentivizing everyone who generates a benefit. As an illustration (but not neccesarily the exact policy), what if the government awarded a benefit per TFLOP produced in the USA, or per chip created etc. (up to some maximum). Then a handful of competitors could all participate and benefit from the incentives. As it stands now its $3.1B harder to compete with GlobalFoundaries on the open market, meaning competitors and thus innovation and supply will actually be harmed.
We also see time and again that corporate subsidies are not sufficiently beneficial to constituents to be worth the money.
The best data i can find is on stadiums[1], but also some about when amazon was shopping itself around for incentives.[3]
[1]- https://reason.com/volokh/2023/12/16/virginia-should-refuse-... , https://reason.com/2013/12/21/why-stadium-subsidies-always-w...
[2]: https://subsidytracker.goodjobsfirst.org/parent/tesla-inc is a good resource for seeing how much companies have been subsidized
[3]: https://www.forbes.com/sites/teresaghilarducci/2019/02/27/sh...
I also feel the need to comment that this is corporate welfarism and that is very much contrary to free markets or capitalism. IMO the government should not be choosing winers, but incentivizing everyone who generates a benefit. As an illustration (but not neccesarily the exact policy), what if the government awarded a benefit per TFLOP produced in the USA, or per chip created etc. (up to some maximum). Then a handful of competitors could all participate and benefit from the incentives. As it stands now its $3.1B harder to compete with GlobalFoundaries on the open market, meaning competitors and thus innovation and supply will actually be harmed.
We also see time and again that corporate subsidies are not sufficiently beneficial to constituents to be worth the money.
The best data i can find is on stadiums[1], but also some about when amazon was shopping itself around for incentives.[3]
[1]- https://reason.com/volokh/2023/12/16/virginia-should-refuse-... , https://reason.com/2013/12/21/why-stadium-subsidies-always-w...
[2]: https://subsidytracker.goodjobsfirst.org/parent/tesla-inc is a good resource for seeing how much companies have been subsidized
[3]: https://www.forbes.com/sites/teresaghilarducci/2019/02/27/sh...
> while I agree with the geo-political arguments, I'd prefer to see regulations that allow the freemarket to design a solution, rather than a government contract to choose the winner.
I think the market did choose and the choice was "not in the us".
I think the market did choose and the choice was "not in the us".
A free market on capital intensive industries chooses for efficiency, and efficiency means having single large dominant players at each step in the chain. Free markets create monopolies.
Regulations are what prevent monopolies and we've forgotten about enforcement of those rules for decades. So we ended up with concentrated monopolies and single points of failures in these critical industries.
Paltry subsidies and no new regulations means nothing will actually change, other than a few billion dollars going from tax payers into some small number of wealthy people's pockets.
Regulations are what prevent monopolies and we've forgotten about enforcement of those rules for decades. So we ended up with concentrated monopolies and single points of failures in these critical industries.
Paltry subsidies and no new regulations means nothing will actually change, other than a few billion dollars going from tax payers into some small number of wealthy people's pockets.
> Free markets create monopolies.
I have never thought this to be the case, could you provide some backing to your claim?
I have never thought this to be the case, could you provide some backing to your claim?
It is described in many places, including in detail here: https://archive.org/details/cu31924096224799
Some other info here https://www.economicshelp.org/blog/21726/concepts/why-does-c...
In actuality though, this is almost religious. It doesn't matter than monopolies have always appeared in markets and been dealt with by regulation; believers in free markets will always argue that the actual cases weren't really monopolies or that they'd not have lasted. /Shrug
Some other info here https://www.economicshelp.org/blog/21726/concepts/why-does-c...
In actuality though, this is almost religious. It doesn't matter than monopolies have always appeared in markets and been dealt with by regulation; believers in free markets will always argue that the actual cases weren't really monopolies or that they'd not have lasted. /Shrug
Free markets do not create monopolies. Monopolies require government carve outs that make competition less likely or impossible.
You can't free-market your way in an industry that's heavily subsidized by other governments. Whatever local company you have will obviously lose to some other company that's getting the levies somewhere else to design a cheaper product which will win in the "market". So, you end up having two options:
a) Offer subsidies yourself b) Let other governments dictate the industry that you're crucially depended on
a) Offer subsidies yourself b) Let other governments dictate the industry that you're crucially depended on
> eg: cars with 100% US made chips,
Isn't this about being able to build military aircraft and guided missiles w/o any foreign dependencies, not cars?
Isn't this about being able to build military aircraft and guided missiles w/o any foreign dependencies, not cars?
>that is very much contrary to free markets or capitalism
Free markets and capitalism are related but not the same. The government using capital as an incentive for companies to increase output is an example of capitalism.
Free markets and capitalism are related but not the same. The government using capital as an incentive for companies to increase output is an example of capitalism.
Correct, but I'd claim that there is a "freemarket" ethos in the US, despite the lack of them. People here often say they want freemarkets and hold it as an ethical and idealized system. Their government behaves very much in contradiction to that though.
When exactly?
The bulk of USAs technological progress is Department of Defense investments. Such as ARPANET, computers, supercomputers, pressurized cabins for bombers (converted into passenger jet tech today), NASA projects and more.
USA was only free market in the 1800s. When the 'Robber Barons' turned out to be a bunch of assholes, we regulated away a lot of that bullshit they did.
The bulk of USAs technological progress is Department of Defense investments. Such as ARPANET, computers, supercomputers, pressurized cabins for bombers (converted into passenger jet tech today), NASA projects and more.
USA was only free market in the 1800s. When the 'Robber Barons' turned out to be a bunch of assholes, we regulated away a lot of that bullshit they did.
I'm not sure you can declare everything that ever received government funding as invented by the government. Jets are "just" pressurized cabins? Why ignore the Wright brothers in this story? Aren't jets really "just" fast planes? And ARPANET is "just" telegrams with computers. On that note, computers were not invented by the government, although they recieved a lot of funding from them.
I don't think oversimplifying this issue helps us discuss it seriously.
I don't think oversimplifying this issue helps us discuss it seriously.
I agree with your assessment of how the government looks, in actuality, here. The ethos i was describing was my own anecdata of what people claim to value. IE, they give at least lip service (maybe more actual effort as well) to wanting free markets, but their government does not actually do that
man, the parking lot! couldn't they make it underground?
Why? That would probably cost many multiples more than what exists above ground. I am guessing upstate New York and where this plant is located, is not incredibly dense.
I used to work there, and can confirm that there’s plenty of space there for more parking lot, there’s woods in all 4 directions and it sits on an old super fund site (former rocket fuel testing).
When I worked at Malta 5y ago, that parking lot was too small. If you didn't get in at an early hour, you were parking in the gravel lots that are off this picture to the right.
Combine that with the actual size of the Fab, hella lot of walking :)
As for solar panels, the Fab operates 24/7/364 (usually 1 downtime day a year). Which means even with the large amounts of snow that will build-up in the winter, there are always cars in the lot - clearing that is a big job and not sure how to do it with solar panels.
Combine that with the actual size of the Fab, hella lot of walking :)
As for solar panels, the Fab operates 24/7/364 (usually 1 downtime day a year). Which means even with the large amounts of snow that will build-up in the winter, there are always cars in the lot - clearing that is a big job and not sure how to do it with solar panels.
> Which means even with the large amounts of snow that will build-up in the winter, there are always cars in the lot - clearing that is a big job and not sure how to do it with solar panels.
I'm not sure how much sense it'll make in this specific case, but in general, interestingly, with a high albedo (e.g. snow covered or white for some other reason) ground surface, vertically mounted bifacial panels produce very close to equator facing panels with the appropriate tilt. The value of that generation might actually be greater, as it obviously spreads out the profile towards the evening peaks.
For the regular horizontal/tilted ground mounts, NY is quite far north, so you're looking at a mount angle of 43° or so to optimise overall power production, and you can go about 15° more tilt and only lose maybe 1 or 2% of summer production, but increase production in winter when the sun is angled lower. If you go for like 55° to 58° tilt, there's probably not going to be very much snow accumulating on the panels themselves.
I'm not sure how much sense it'll make in this specific case, but in general, interestingly, with a high albedo (e.g. snow covered or white for some other reason) ground surface, vertically mounted bifacial panels produce very close to equator facing panels with the appropriate tilt. The value of that generation might actually be greater, as it obviously spreads out the profile towards the evening peaks.
For the regular horizontal/tilted ground mounts, NY is quite far north, so you're looking at a mount angle of 43° or so to optimise overall power production, and you can go about 15° more tilt and only lose maybe 1 or 2% of summer production, but increase production in winter when the sun is angled lower. If you go for like 55° to 58° tilt, there's probably not going to be very much snow accumulating on the panels themselves.
Intel in Germany is even worse. The parking lot is larger than the plant [1]!
For fucks sake, large commercial (both office and industry) zones should only be permitted when the developers show a viable mass transit solution for their employees. Even if it's just buses, that's still better than thousands of cars.
[1] https://www.mdr.de/nachrichten/sachsen-anhalt/magdeburg/magd...
For fucks sake, large commercial (both office and industry) zones should only be permitted when the developers show a viable mass transit solution for their employees. Even if it's just buses, that's still better than thousands of cars.
[1] https://www.mdr.de/nachrichten/sachsen-anhalt/magdeburg/magd...
Most office complexes have parking lots larger than buildings. People are smaller than cars, commute one person to car, and buildings are often multi story where parking is not.
Hence campuses that are 85% parking lot.
Hence campuses that are 85% parking lot.
> Hence campuses that are 85% parking lot.
Yeah and that is nuts. We lose ridiculous amounts of valuable land for barely any productive use - every day Germany loses 39 ha for buildings and 8 ha for transportation infrastructure [1], which means streets and parking lots.
Loss of land is an externality that doesn't get priced in anywhere.
[1] https://www.umweltbundesamt.de/themen/boden-flaeche/bodenbel...
Yeah and that is nuts. We lose ridiculous amounts of valuable land for barely any productive use - every day Germany loses 39 ha for buildings and 8 ha for transportation infrastructure [1], which means streets and parking lots.
Loss of land is an externality that doesn't get priced in anywhere.
[1] https://www.umweltbundesamt.de/themen/boden-flaeche/bodenbel...
Loss of land does get priced in as prices rise with a lower supply and higher demand. It just takes a while to really feel it.
I mean, they have to buy the land for the parking lot, so it does get priced in.
But we should also have a Land Value Tax to push people toward using it more productively.
But we should also have a Land Value Tax to push people toward using it more productively.
The Land Value Tax on that site would still have been incredibly low and probably still justify paving a parking lot. It is a toxic superfund site way out in the boonies. You're not going to develop some kind of dense mixed use town center in that space anytime soon.
There probably is mass transit access to the Magdeburg plant (or the state can guarantee an expansion there)
I'm thinking that "excess parking" is usually due to wanting to secure a site with enough expansion potential but also putting it to use in the most cheap way possible (like, you won't verticalize the parking until needed and that would require more planning, permits, etc)
I'm thinking that "excess parking" is usually due to wanting to secure a site with enough expansion potential but also putting it to use in the most cheap way possible (like, you won't verticalize the parking until needed and that would require more planning, permits, etc)
No we definitely should not enforce a ridiculous regulation like that. Again people like you miss the entire point by thinking everything should exist only in big cities where public transportation makes sense. We need to bring these factories back to small towns and regulations like you’re proposing completely kill that.
> We need to bring these factories back to small towns and regulations like you’re proposing completely kill that.
For an Amazon parcel sorter or a wholesaler distribution facility, sure, there are enough towns with desperate populations that can be exploited (and Amazon in particular is infamous for using that leverage).
But a company like Intel that needs highly educated staff? They won't go to some random village hours away from civilization.
For an Amazon parcel sorter or a wholesaler distribution facility, sure, there are enough towns with desperate populations that can be exploited (and Amazon in particular is infamous for using that leverage).
But a company like Intel that needs highly educated staff? They won't go to some random village hours away from civilization.
This regulation being proposed would not just effect fabs. I’m originally from southern Illinois, a place with a total of 300k people spread out over a large area. Most towns are <10k and the biggest is 40k. In this area there are a /ton/ of factories making everything from car parts and tires to books to bombs and artillery shells. Most of these factories are outside of towns and there is zero public transportation.
With this in mind do you see the problem with only allowing factories to be built in places accessible to public transportation? The people making such proposals are seriously out of touch with half of the country.
With this in mind do you see the problem with only allowing factories to be built in places accessible to public transportation? The people making such proposals are seriously out of touch with half of the country.
People who work at a wholesaler distribution facility don’t want the same lifestyle comforts as the highly educated? That’s a strange claim. I know lots of highly educated folks who love rural life, and blue collar workers who enjoy urban amenities.
Hours away from civilization? This example fab is 7mi from downtown Saratoga Springs, an absolutely delightful small town.
It is also <30mi from Albany and ~20mi from Troy.
Loads of small towns aren't hours away from "civilization".
It is also <30mi from Albany and ~20mi from Troy.
Loads of small towns aren't hours away from "civilization".
Amazon builds warehouses where their customers are. That’s why they have a lot of warehouses in Red Hook, Brooklyn [1] - an industrial neighborhood located off of a major highway within NYC.
[1] https://www.consumerreports.org/corporate-accountability/ama...
[1] https://www.consumerreports.org/corporate-accountability/ama...
You should see the Jones Farm parking lots.
Please stop the wasteful spending.
Concentrate semi development geographically to realize synergies and economies of scale. Building redundant and competitive production thousands of miles apart in the Northeast/Great lakes, Texas, and the west Coast is not the best idea when you are resource and labor constrained.
Concentrate semi development geographically to realize synergies and economies of scale. Building redundant and competitive production thousands of miles apart in the Northeast/Great lakes, Texas, and the west Coast is not the best idea when you are resource and labor constrained.
Wasteful? What is a better national investment than the semiconductor industry?
Look into the history of TSMC. It became what it is because of direct government investment. I'm sure to some people it seemed like a gamble at the time.
This amount of money is basically trivial on the national level and the upside is tremendous.
Look into the history of TSMC. It became what it is because of direct government investment. I'm sure to some people it seemed like a gamble at the time.
This amount of money is basically trivial on the national level and the upside is tremendous.
With climate change getting more and more severe, I can't imagine a higher risk strategy (for anything) than geographic concentration. Talk about putting all your eggs in one basket.
> Building redundant and competitive production
You do realize these fabs already exist? There is no redundant or competitive production currently.
You do realize these fabs already exist? There is no redundant or competitive production currently.
>Schumer said the deal includes a commitment from GlobalFoundries to continue to provide a $1,000-per-employee annual subsidy for childcare and to extend the benefit to construction workers who build the new plant.
So pacing inflation on the cost of childcare? What a joke. Childcare in Vermont is ranging between $15,000-$25,000 per year among families I know. That subsidy covers less than a month.
As the largest private employer in Vermont I think they can do more than that. It’s not like they pay well. I see on their advertisements that night shift operators are paid 21.93 hourly with a shift differential. So day shift makes even less. Looks like shifts are 7 to 7 am and pm night and day.
What a schedule. It’s one thing if you’re a nurse making at least low six figures. But this? Grueling manual labor in those suits for twelve hours a day for a sub livable wage in Vermont and New York.
https://livingwage.mit.edu/states/50
So pacing inflation on the cost of childcare? What a joke. Childcare in Vermont is ranging between $15,000-$25,000 per year among families I know. That subsidy covers less than a month.
As the largest private employer in Vermont I think they can do more than that. It’s not like they pay well. I see on their advertisements that night shift operators are paid 21.93 hourly with a shift differential. So day shift makes even less. Looks like shifts are 7 to 7 am and pm night and day.
What a schedule. It’s one thing if you’re a nurse making at least low six figures. But this? Grueling manual labor in those suits for twelve hours a day for a sub livable wage in Vermont and New York.
https://livingwage.mit.edu/states/50
I worked the overnight there when IBM still owned it, it was 4/4-3/3 on/off with 12 hours shifts, 8 overtime per paycheck
It was really, really nice having 4 days off. It's a super easy job, basically babysitting machines, more reading the Internet than anything else
It was really, really nice having 4 days off. It's a super easy job, basically babysitting machines, more reading the Internet than anything else
Or maybe they can mind their business, not concern themselves with how employees spend their salary, and pay the same to workers with and without children.
Sheesh.