There is a chance that what we are observing is different from the past demand spikes.
The way we work and learn has changed, and it doesn't look like a reversion to pre-telework habits will ever fully occur. Several companies (including Salesforce, Twitter, Square, and Spotify) have said that telework will be a significant part of their post-pandemic reality.
Meanwhile, electric vehicles are slowly but surely taking market share from internal combustion engines that use less than a third as much silicon.
It feels like demand creation to me, and that means we ought to treat the prior capex roadmap for the industry as insufficient.
Even in the absence of demand creation, fab concentration in Taiwan is increasingly a liability in a world where Chinese economic hegemony is growing. One way to mitigate future perturbations that may result from military conflict, natural disasters, or other interruptions in Taiwan's fabs would be to build greater capacity outside of Taiwan.
Only very small portion of the workforce is tech, a smaller portion is employed by startups/silicon valley companies, a even smaller portion is directly on payroll of these companies, rest of the roles such as content moderators, support staff work for IT consultanting majors.
there will be lasting change to to our lives and lives of people in our oribt. I don't think we appreciate that vast majority of the workforce (in transport, hospitality, retail, manufacturing) is not changing at all.
With Ethereum adopting proof of stake, Bitcoin will be left as the only driver for mining hardware. Even they will have to move to proof of stake some day, since it's not sustainable.
I believe that the bigest drivers for silicon demand will be IoT devices, including automobiles, especialy when they become more affordable in the 3rd world.
The pressure from SaaS and cloud is more predictable than the consume market, sonthe semi industry can plan ahead, IoT not so much. Just see how the auto industry was caught by surprise by the increased demand.
There is about zero chance of bitcoin moving to proof of stake. Something so fundamental about its SHA256(SHA256())) PoW structure just isn't going to get changed, unless there's a vulnerability in SHA256.
Cryto may end up being a huge downturn in demand if it ever gets legislated against (not that unlikely if it's share of energy usage continues to grow significantly)
The down cycle (to be exact, boom-and-bust cycle) is structurally inevitable in the semiconductor market.
For the supply-demand feedback loop to work smoothly, you want the supply to be incremental and quick-to-respond to demand changes. The semiconductor fab is anything but. There are many other reasons for this https://www.forbes.com/sites/jimhandy/2014/05/28/the-3-reaso... but I think the critical reason is that when there's a supply shortage, there's naturally a race among suppliers to build more capacity as soon as they can, so that they can sell more, but the inherent time delay (measured in years) in building up the extra supply combined with the fact that a single new fab gets bigger and more expensive lead to inevitable oversupply, which causes the price drop, which reduces the amount of money to invest for the next cycle, which leads to undersupply a few years later, and rinse/repeat.
The pandemic created one of the biggest demand spikes for semiconductor ever, and combined with the nationalistic stance on building own supply in each country, I suspect this spike will have a ripple effect for the next few years.
It is not entirely accurate to describe all semi are boom and burst cycle. But DRAM and NAND tends to follow that trend, although it finally manage to stabilise in the past decade mostly due to lack of competition ( or some calls it a cartel )
Such comments annoy me. I'm quite radical capitalist (European, though).
But any time someone points out flaws in capitalism, people respond with 'but socialism is worse' or 'planned markets are bad too'. A false dichotomy as clear as you get.
Capitalism has known flaws. That we should name, know and solve. A famous flaw is the pork cycle, which we see at work here.
Pointing out such flaws is good, because it allows us to improve, or at least prepare for. Countering such statements with 'but communism is worse' helps noone.
Yes, exactly! It's such a failure of imagination to think that the economic systems we've tried so far are the only ones available.
For me the biggest flaw in capitalism is that it tends to concentrate wealth over the long term, which in turn undermines the "wisdom of the crowd" principle market systems are based on by concentrating buying power in relatively few people.
We could fix this with much more aggressive progressive taxation and still have a system that is fundementally market based and looks nothing like a planned economy.
> For me the biggest flaw in capitalism is that it tends to concentrate wealth over the long term, which in turn undermines the "wisdom of the crowd" principle market systems are based on by concentrating buying power in relatively few people.
Indeed! Related, my pet-peeve, is that consolidation eventually leads to monopolisation: concentrating selling power to relatively few companies. The current growth model of most tech-companies hinges on the monopolisation almost entirely.
Free markets have organisations and systems in place to protect against that; which clearly shows that a free market -in its current state- cannot operate effectively without outside intervention. These orgs are only now moving against the 20-th century monopolies, and doing so too late and too little (IMHO).
But, another clear flaw in capitalism and free markets, patched with centralised, planned governments intervening in those markets.
> But any time someone points out flaws in capitalism,
I've become unsatisfied with all of the word salad concerning 'capitalism'. Large organizations tend to work in the same way, government potentially being the largest corporation of all. Communist countries had organizations largely indistinguishable from corporations although the elite might find different ways to pay itself. It's really all a matter of degree.
The eternal fight for resources and status (and hot chicks) gives you convergent evolution in social systems.
To be fair, toilet paper shortages in planned economies were definitely a thing. My grandmother stockpiled toilet paper way after the fall of communism, I never understood why as a kid. (Her habit would have come handy at the start of the pandemic though...)
Month long toilet paper outages were a reality of life in USSR.
Though, fresh pronts of "Pravda" never were. That "Pravda" was a very versatile material: from toilet paper, to packaging material, to building material as packing for cracks in walls, to an underlayer for wallpaper.
Let's replace that phrase with past economic systems. 'The same thing happens in nature too. Feudalism isn't the cause of everything you don't like'. or how about 'The same thing happens in nature too. Slavery isn't the cause of everything you don't like'. Yet we clearly made progress getting rid of feudalism and slavery.
It would make a lot of sense if the Koreans could fab for boycotted Chinese customers (HiSilicon etc.). Instead of trying to steal TSMC's business at Qualcomm, Apple, AMD etc.
@dirtyid: makes no sense for China to use the Korean fabs. They could simply hire more Taiwanese engineers, aka ex-TSMC'ers, who had been the main drivers behind the development of China's chip industry so far.
Given an ultimatum by whom? And is the ultimatum issuer OK with the other side of the coin? (That China will likely invade Taiwan the moment there's no global economic incentive not to?)
Global politics are always very messy and ultimatums don't help.
It is not like they are being kidnapped/brainwashed to work there aka Soviet Union style, or their genocidal war crimes are ignored like the US did with Nazi scientists.
Chinese companies are simply offering a good financial package to these people with valuable skill sets. TSMC can pay it's employees to retain they can certainly afford to.
Taiwan is not officially exporting talent to China.
No country wants their best people to leave, US and countries have used their wealth to attract the best from developing countries and benefited immensely, china is also using a similar strategy
That is a very western-centric view. Outside of the west and India, Huawei is still going strong. Support for China is quite high in the middle east and in Africa, where many people are skeptical of western narratives about China.
Furthermore, Huawei isn't the only Chinese party that needs advanced chips. Other Chinese phone makers such as Oppo and Xiaomi aren't banned. But they have become wary of US dependence and are seeking to decouple their semiconductor supply chain from the US. To them, while Korean suppliers are more risky than Chinese suppliers (which still need time to catch up), it's still less risky than TSMC.
This comment would have been more accurate a year or two ago.
But with the Belt and Road Initiative struggling to deliver on many of its infrastructure projects countries are increasingly reluctant to get back into bed with China. More so now that the world has seen what happens if you don't bow down to China's every demand i.e. Australian style economic blackout.
My point still stands that if I was a fab right now I would be far more attracted to the growth prospects of US/EU companies than Chinese ones.
I've seen this narrative along with CPEC failure, but is it?
Considering that US wants to join the infrastructure development game indicates it unlikely.
SK suppliers maintaly supply memory and displays to those Chinese makers and they are already produced locally in China. Samsung OLED mobile display may be the exception to this.
Strategically it wouldn't make sense. South Korea shouldn't do that because the US is their defense umbrella and helping China in such a manner would go against the spirit of that pact, de facto helping to undermine the containment system being placed on China by the West.
so true. Aside from SK's geopolitical alliance with the US, South Korea has so much to gain from the West's banishment of China than anyone else. The current situation between the West vs China is the best thing happened to South Korea since the Japan-US trade war that helped SK's semiconductor manufacturing industry get their foot in the door and eventually surpass all their Japanese rivals in the 80's and 90's.
Samsung stopped their own CPU development a couple years ago.
I wonder how it costs in this chip warfare context. Maybe not a lot because the layer is different, but the moral level in the field might not as high as they hoped.
Samsung stopped custom CPU core development because their cores weren't very good and because ARMs got better and their R&D cost is shared amongst the industry.
Samsung still makes CPUs, they just use licensed ARM cores.
This is not just some pork-barrel politics of bribing a company to stay in a given country. S Korea will view this similarly to Taiwan - their chip fabs are existential to their country and state.
The USA is becoming more isolationist - it is nearly oil-independent, so it's signalling pulling out of the middle east (deals with Iran etc).
But it is not silicon-independent.
So S Korea and Taiwan are totally dependent on massive US troop deployments (25,000 !! US troops by the DMZ, a whole fleet patrolling the straits by Taiwan).
Ensuring chips flow in their country is a matter of national security - so the price is probably low.
Oil is a global commodity. Even if the US produced as much as it consumes, if something happened in the middle east, the global price would go up. Because when the price went up in Europe or Asia, American oil producers would sell to the highest bidder, which would force American consumers to bid higher.
The real path to "independence" is to stop consuming oil, i.e. the electrification of transportation and heating. Which is starting but nowhere near finished.
Because electricity generated from solar/wind/nuclear/hydro is not a global commodity. Nothing that happens in Iran is going to change the cost of power generated at Hoover Dam.
absolutely true. Since some people are questioning this in the comments: for those that want to do their own research, this is called 'The Law of One Price,' and it applies to other commodities where transportation and storage costs are low.
This has been well established in mainstream energy economics for ~50 years. Other disciplines seem to have trouble grokking the arguments. But ask any professional trader and they'll go with the economists on this one.
This rule works in any environment where traders trade freely. Historically this has lead to catastrophes such as the Irish potato famine where the price of locally produced food exceeded what locals could pay. Leading to a country that had millions starving while exporting enough food to feed the country.
For this and various other temporary phenomenon governments set limits on market economies to prevent outcomes pathologically opposed to the wellbeing of residents. These limits include export controls and subsidies on food and other basic necessities. It absolutely makes sense for a country not to suddenly shift its income to the benefit of external commodity holders due to a sudden price jump in the commodity due to supply chain issues. Not doing so could destroy “higher value” “finished product” industries by making them uncompetitive.
If a large supply chain issue hits a critical necessity you would absolutely expect countries to start triggering their hoarding policies making the issue worse. An economic zone not planning for such a disruption to occur in the future is equivalent to a bet that such disruptions will never occur.
> If a large supply chain issue hits a critical necessity you would absolutely expect countries to start triggering their hoarding policies making the issue worse.
The PPE shortage of 2020 demonstrated very clearly how quickly free-market economics gets thrown overboard in a serious crisis.
That is very theoretical. In practice, petroleum markets go to great pains to deal with transportation and storage. Look up "netback pricing" as a start.
Crude is not an identical commodity in the sense that is assumed by the Law Of One Price. There are some crude specifications that certain refineries prefer not to process, either due to sulfur or viscosity or other characteristics for which the refinery may be ill equipped.
Crude transportation takes time and money. Transportation prices rise in correlation to crude prices, but they matter if you are determining the relative marketability of different products sourced around the globe.
Arbitrage works worst when transactions are lossy, costly, delayed, and unique, as is the case in the petroleum market.
> Arbitrage works worst when transactions are lossy, costly, delayed, and unique, as is the case in the petroleum market.
If you compare the petroleum market to the markets where those things are actually major factors, like the market for artwork, petroleum is an idealized commodity market. The fact that the price of transportation isn't literally zero and there are different well-defined grades of the commodity doesn't meaningfully change that. Transaction costs are never literally zero.
And what matters is the relative transaction costs. You have to ship the oil from the well to the refinery, but if the transportation to go 1500 miles from Texas to a refinery in New Jersey and the cost to go the same distance in the other direction to a refinery in Mexico are the same, there is no relative difference in transportation costs.
> The US can, and absolutely will, restrict oil exports if prices start to skyrocket.
That would cost US oil producers billions of dollars -- more than the price increase would cost US consumers. Which would only happen if oil producers had dramatically less political influence than they do now, i.e. if we stopped producing so much oil. But then there would be no reason to do it.
> It wasn't even legal to export oil until 2015!
Crude oil. It was protectionism for US refineries, not the other thing. Which makes oil cost consumers more, because of the reduction in competition for refining.
On a temporary basis this is true as the market is restricted. On a long term time horizon you would simply expect consolidation of global refineries into a new, more powerful monopoly.
>> if something happened in the middle east, the global price would go up.
But if WW III starts with say China taking Taiwan and getting into stuff in the pacific, and Russia invading easter european countries, and maybe some other stuff... If the US were to fully engage in some kind of global conflict, they could ban oil exports and not have a supply problem.
This is the kind of thinking the military engages in to ensure their own supply chains won't be distrupted in a war. The ability to operate independently is important even if it's never used.
Your comment assumes free-market pricing, but crude oil exports from the USA used to be unlawful (the ban was lifted in 2015) and they could presumably become unlawful again. There is no legal reason why the US government could not extend such a ban to include refined petroleum.
Also, several oil-producing nations have off-market domestic pricing for refined petroleum that is favorable versus the international spot price. Such prices won't naturally change when, say, the Strait of Hormuz closes. The IMF has been trying to force free-market pricing, as was the cause of the Ecuador protests in 2019.
It is how it works though. Supply and Demand are real, price spikes are real, Oil shock caused major problems for the US in the 1970's. Strategic reserves exist, and the amount of Oil is finite.
So it translates into a strategic issue, and, there will be direct involvement by the US if things get bad.
The US I think will stay in S. Korea until the situation changes, it's better to have chips, but that's not necessary.
I agree, and while not clear was part of my orignal thoughts about oil independence - it's about both supply and demand. The electrification of our societies in the next decades will reshape a lot of the world.
That is a very American perspective on things. Hundreds of thousands of US troops are stationed in Germany, Japan, Korea here 75 years after the end of the second world war. Do you think we would like them to stay for another decade? Our politicians may not be in a position to say so, but we would really like our land to be free of foreign troops. As would any other nation.
> Hundreds of thousands of US troops are stationed in Germany, Japan, Korea here 75 years after the end of the second world war. Do you think we would like them to stay for another decade?
Yes, I believe those countries would prefer if we stayed. Japan and S. Korea are particularly close to China and prefer we’re around to tamp down Chinese aggression. Germany is hoping we don’t withdraw our troops: https://m.dw.com/en/germany-welcomes-bid-to-halt-us-troop-wi...
Edit: This may offend some Europeans, but I think the world is better off with the US having bases in Europe and as a NATO member. Internecine squabbles in Europe don’t have a good track record over the past 100 or so years. One might even say the bases should be located where the trouble seems to start.
> Japan and S. Korea are particularly close to China and prefer we’re around to tamp down Chinese aggression.
It's not that simple. American presence on the Korean peninsula makes reunification efforts overly complicated. By some estimates, reunification would grow the Korean economy to be the third largest in the world. It would also give Koreans access to Russian pipelines and a large border with China. When climate change opens up arctic trade routes and frozen arctic resources, Russia will be in the position to benefit the most (although Putin relies too heavily on his tsarist-Stalinist strain of conservatism to be able to exploit the economy as efficiently as liberals or perhaps Chinese communists might). As convenient as it is to have a powerful ally in the U.S., the U.S. is no longer in a position where it can dictate the behaviors of foreign nations as it once used to, especially regarding China. That's simply a reality that Koreans have had to come to terms with, despite Americans seeming to believe that things can just return to how they used to be half a century ago.
Korean unification is not impeded by the presence of US troops, but by the demands of the DPRK over the nature of what the unified state would look like; it seems unlikely that the current Regime would give up its power just like that.
Remember that US troops were stationed in Berlin/ West Germany prior to German unification (i'll admit its not the exact same situation since the East German economy was relatively much stronger pre-unification than the current DPRK economy).
If you're suggesting that we should just let the DPRK take over ROK... well, I don't think any of the ROK inhabitants would like that.
> Korean unification is not impeded by the presence of US troops, but by the demands of the DPRK over the nature of what the unified state would look like.
The fact that the American military gets to decide what the Korean people want or what the reunification process will look like, is the single biggest factor hampering the peace process.
But as you know, that's not actually what's happening. If South Korea wanted they could kick the U.S. out and let North Korea come take over their government and be reunited. The U.S. would be very concerned about that, of course, but the American military is not really preventing this from happening. U.S. forces are in Korea for beneficial reasons to the U.S. and the West, but also at the behest of South Korea. Realistically, many people (from Trumpers to left-wingers) want U.S. forces out, albeit usually for different reasons, whereas the Korean government would prefer they stay in comparison.
Now, with that being said is American military presence an issue for North Korea? Yea definitely. But if the U.S. withdrew troops it's not like Korea would all of a sudden be reunited. There's a laundry list of issues that would need to be resolved. American military presence is just North Korea's go-to excuse because they seek to divide the South Korean and American alliance.
If North Korea wanted to, they could just open the borders, stop starving their people, and all that jazz. Why do they need to do all of that crap? Because 25,000 Americans are in South Korea? Yea ok.
There are actually evil people in the world that don't live in America. Many of them live in North Korea, happily starving people, raping women, and executing people for no good reason.
Europe would do much better by defending itself on its own terms rather than perpetually hiding behind the Stars and Stripes. Hopefully Trump made it clear how dangerous that is.
I don't know, seems a lot of wars start from USA after WW2. The US is an empire and those bases are there to protect the empire, not the countries they sit in.
I'm in Korea and I've yet to meet someone who actually wants the US troops out. I've met people vaguely annoyed with drunken US soldiers and stuff like that, but as far as annecdata goes, I think Korea wants US troops.
> I'm in Korea and I've yet to meet someone who actually wants the US troops out.
That's because voicing such opinions, particularly to foreign strangers, is so far outside the established Overton window that South Koreans have been jailed for voicing them while working in the wrong occupation [0].
Case in point: Just look at the history of the No Gun Ri massacre during the Korea war [1], to this day neither the US nor South Korean government have really fully acknowledged or taken responsibility for what happened there, and just like with similar massacres of that kind: For the longest time survivors were persecuted for speaking out about what happened [2]. Decades of that breeds a culture of silent compliance.
There's also that whole politeness aspect: If you are a American, then no Japanese, Korean, or many Asian people in general will have small talk with you by opening a can of worms like "Your soldiers are/did occupying/bomb my country!", that would just be considered a very inappropriate thing to do.
It is -just- because voicing those opinions is dangerous though? My understanding is that Chinese aggression is a major regional concern, even for average people.
So is the resurgence of fascism in Japan and Japan's re-armament. Those are big concerns in Korea, definitely bigger threat than North Korea, and probably a bigger threat than China.
They have overwhelmingly voted for a president on a platform of signing a peace treaty with North Korea. The US veto over South Korean foreign policy options, the presence of US troops (and, more importantly, their refusal to transfer OPCON over the Korean military despite decades of promises) has been a major impediment to exercising the democratic will of the South Korean body politic.
The problem is that Korea is a vassal state and there is no path to expelling occupying troops without conflict, which nobody wants.
If you ask more specific and nuanced questions which don't jump to such drastic solutions, then you are quite likely to get different responses. eg. "Should the Korean government command the Korean army?" or "Should Korean voters be able to decide on the relationship between ROK and DRPK?" / "What role should occupying powers (eg. Japan, China, US) play in that?" or "What should be done about US officials guilty of atrocities (eg. Gwangju massacre) and other human rights offences (there's quite a lot of them) in South Korea?"
As a Korean, I would very much like US troops to stay for another decade and more. I'm not sure why everyone's talking about Russia, but my worries are firmly fixated around China.
My read on Germany specifically is that it's less about Russian invasion worries and more about domestic economic politics. The bases are important economically to the towns/regions they're in, and closing them is unpopular in those areas, similar to how choosing when/if to close US bases in the US is controversial (https://www.everycrsreport.com/reports/R45705.html).
You are severely overestimating Russia's army and underestimating Europe's.
Russia isn't even in the same league of spending power and the Soviet army of the past was way stronger.
While Russia spends a lot of money on their army ( % wise), they don't have the resources to renew it. What's left is a lot of old gear and some renewed one.
As a counter perspective, Ukraine would have made it's naval fleet completely unusable, as it needs to pass that country for getting anywhere.
And Europe ( in the last 30 years) came within missile range of Moscow, since the fall of the USSR.
The propaganda of Russia is mostly power related, but they are certainly not as powerful as they seem. And the cards don't look that great too.
A lot of their resources depend on oil/gas purchases from Europe and Europe is investing in alternative sources, while Russia can't raise the prices for their citizens/neighboring countries.
And last but not least, as a belgian citizen, i appreciate US presence and have no desire for foreign troops to withdraw. We all share ( mostly) the same/similar culture and perception.
Russia buys most of their arms from their own industry so while their military budget in $ is far smaller than the US they get more bang for the buck (or in their case ruble). So while they nominally spend ~$60B per year when accounted for PPP (purchasing power parity) that looks more like equivalent of $150B (or $200). Things are obviously more complex than this but it's obvious that while they spend similar $ amount as UK or France they maintain significantly larger military.
> As a counter perspective, Ukraine would have made it's naval fleet completely unusable, as it needs to pass that country for getting anywhere.
They had open access to the Black Sea even without Crimea, I'm not sure how Ukraine could block them then or now?
You can't seriously believe Europe is defenseless without America. Germany, the UK and France are among the most powerful militaries in the world, with economies that trump Russia, and enough nuclear weapons to flatten it a hundred times over.
France was prepared, they just messed up the strategy. But they had the equipment, the manpower, the army was mobilized entirely after 1939, they had battle plans, etc.
Sure because Russia has a long history of attacking Western Europe unprovoked. Napoleon, WW1, UK US intervention in the Revolution, Polish Invasion and WW2 clearly had Russia as an Aggressor.
In all fairness OP was mentioning Western Europe. One could argue about the validity of ideologically partitioning Europe into an Eastern and Western part (I know I'm also guilty of that) but that's another discussion.
I'd say that was done fairly organically given the split between ethnicities and Orthodox vs. Catholic churches. Ukraine seems to straddle one of those boundaries.
I think you don't know your Russian history. That territory has usually been controlled by an aggressive, expansionist regime. How did you think it got to be the largest country on earth?
It's very strongly related to the geography of the region.
Well, not just water. Tibet is a high plateau overlooking the Chinese plains. It's an obvious entry point for a land invasion into the Chinese heartland. Xinjiang is a mountainous and desert region with a similar role.
I know why they're doing it, it's just cynical for the locals.
Similar story for Korea, if you're a great power, wouldn't you move the possible battle like a few hundreds of kilometers away from your capital? You would.
Because it's easy to think cynically when nothing is at stake, when you don't have skin in the game. I bet $1000 that China won't help North Korea to invade South Korea. Bet ends 2030. You in?
I would be, but there's one condition: the US pulls out of any military alliance/support for South Korea.
Chine will obviously not risk another Korean War, there's nothing for them to gain. If South Korea loses US support, yup, I'll take that bet in a heartbeat.
I would not speak for Japan. Most Japanese I've met and talked to think that on balance having the US troops there is MUCH better than the alternative. The only Japanese I'm aware of where a significant minority are against the US presence is in Okinawa where US bases occupy double digit percentages of the available land.
> The only Japanese I'm aware of where a significant minority are against the US presence is in Okinawa where US bases occupy double digit percentages of the available land.
"Only" makes it sound weird considering it's in major parts these Okinawan's that have to pay the burden for the massive US presence [0].
While for most mainland Japanese it's as simple as "It doesn't affect me personally, it's an advantage for the whole nation, why not?"
Okinawa isn't the only US military presence in Japan. It's not even where the US Navy has it's fleet stationed out of.
And not to diminish it, but the rate in your article is quite small considering the populations involved. I wouldn't be surprised if the assault rates by military personnel stationed in the US was much different.
" but we would really like our land to be free of foreign troops. "
You are probably not in the majority there.
Do you want the Russians grabbing larger of E. Europe and seeing how far they can go with it?
At the end of the cold war it seemed as though maybe NATO might be past it's usefulness, but after a resurgent Russia, it seems more like it's going to take another 70-100 years probably.
Also, the 'rest of the world' is a more chaotic place, and it bodes well for Europeans to be playing well with American forces.
North Africa is a hot-spot and Europe (except UK/France in very limited form) doesn't have the ability to project power, even in the Libya intervention, it was backed by US AWACS, drones, and organization. It was kind of a folly, but there's no doubt that those interventions could be much more necessary in the future.
Politicians know this and there's no real popular urgency for the Americans to leave.
Both Norway and Sweden, the later a non-NATO country, are going more coordination with the Americans, not less.
Great work in the Libya guys - 10 years later country is still at war, 10s of thousands dead (and counting), people are worse in every possible way than during Gadaffi rule... Can't wait to see more similar interventions in the future.
These comments always confuse me, because the US troops in Germany, Japan and Korea are there entirely at the pleasure of the local government.
If Germany ordered US troops out, they would leave. Even Iraq, barely a functioning country, did this, and the US left. But Germany, Japan and South Korea have not asked.
And you might say, "well, the US is functionally bribing them with the economic boost of stationing troops there". And... OK? That's the tradeoff. Germany is a wealthy country, and the populace can vote and make choices themselves.
> Fracking is immensely damaging to the ecosystem.
Not really. Energy is a dirty business, and also one filled with politics and propoganda. Fracking, much like nuclear, was targeted mostly for political, not technical reasons. It's damaging, but less so than coal and not all that much more than vanilla drilling and pipelines in general.
Most solar is now produced in China, at 71%+ as of 2019 (and only grown since then I imagine). If we’re talking national security, that is a concern too.
Did anybody do the math of whether it's more cost effective to pay for all that military to ensure you get cheap silicon made in countries with cheaper labor that in the US rather than just subsidizing the production of semiconductors domestically?
The picture of silicon industry that you paint is very far from reality. Neither Taiwan nor South Korea are third world countries and baking top chips isn't the same as sewing cotton T-shirts or gathering strawberries under the scorching sun. Instead of "cheaper labor", you need top talent and very high quality equipment. That top talent collects very good salaries.
If chip production was just a matter of money, both China and the U.S. would rule the roost. The real bottleneck is talented and loyal engineers.
Semiconductor engineers salaries in Taiwan could've been as low as $26k-$28k USD back in 2007-2009. Multi-year long PhD "interships" can be unpaid, or completely minimally so.
A chance for an average semi process engineer graduate to survive to doing real RnD was close to 80-100 to 1.
I wonder what the situation looks like today. Probably better, because losing senior engineers in a situation when the field has shrunk to Samsung, TSMC and Intel, would be a huge pain.
The mainland is taking advantage of this to get skilled engineers, as mainland Chinese tech salaries are closer to those in the US. So much so that Taiwan has banned recruiting for mainland jobs: https://asia.nikkei.com/Business/Tech/Semiconductors/Taiwan-...
- How much military spending is really what other Western countries would call welfare - not only do you pay the US recruits, they get pensions, they and their families get healthcare etc etc.
- The payback of being the worlds only superpower has been enormous anyway. This is probably a marginal cost.
- It's not entirely clear that building a fab is like dropping a supermarket into place. Whilst in operation they are lights out I sincerely doubt they can be easily replicated - at the very least you will need to just kidnap the whole middle management layer of TSMC and move them to Texas. Which is more or less the current negotiations:-)
In short, yeah the US (and EU) should spend a fortune to build out their own internal chip capacity. Just as we should have done it for oil or electric batteries or ... but we just don't. China however has. Something democracy is good at. Somethings it ain't.
There are more people sitting in offices there than on the floor.
I fact there is a huge oversupply of semiconductor engineers globally because of fabs becoming less, and less labour intensive.
Companies take a big effort to reduce the number of people on the floor futher, but now not so much for labour cost readon, but security. The chance of somebody who shouldn't really be on the floor acidentally pressing the wrong button, and sending $10M worth of wafers down the drain is the risk they don't want to take.
1. Labour-wise probably 3-4 times the Taiwan, but labour cost of fabs is microscopic in comparison to everything else.
Taiwan does not have dramatically lower taxes than US, but there is something particular to how working capital is accounted which will make for a double digit difference in the in TW vs. US.
Third is supplies. Even before the semi moving to Asia, US fabs had to import a big portion of their supplies.
2. > Why did the US outsourced the semiconductor fabrication in the first place
Why did US outsource almost everything, even when it makes no sense?
It simply tough, tedious, problematic doing business in the US.
I wrote about it many times before here.
You mind your own business, very much literally. Few month down the line some trouble comes: lawsuit, taxmen, utilities, creditors, SEC, city hall, suppliers, random activists, labour union... pick any.
What are their home countries? Sorry I could do my own research, but since you made a comment that implied you had a piece of information at hand, I feel I may just get it easier this way.
Exyte (Germany) was a big one. I myself haven't been up to date with news in the industry for around 10 years since I abandoned all attempts to enter the industry.
As for 2), it is less about outsourcing and more about gradual loss of competitiveness. The scientific and technological development between 2000 and 2020 led to a lot of corporations, not just in the U.S., falling out of the race because they could not keep up the pace. Nowadays, only Samsung and TSMC are left, with Intel lagging behind, but still not completely out.
Similar consolidations have happened in the past and in other industrial fields. This time, two of the three surviving champions are simply not American.
This is an interesting take, I'd be curious how it applies to other industries. Is outsourcing an artifact of loss of technical/execution competence required to be competitive?
In general its a dirty process. There are a lot of toxic chemicals involved. People might get sick. Margins aren't as good as software and its very capital intensive so investors would rather invest in software. Lots of booms and bust in the semiconductor industry.
As the US gets more than "cheap labor" for its troop deployments.
Very large parts of it is protecting democracy. Whether you believe that's worth protecting is a different question, but it's left over from cold war & proxy wars against Russia in both Vietnam and Korea.
This is still once way the US exerts its presence against China. Maybe futile, but it is more than just "cheap labor".
Honestly curious about why so many downvotes. It's a honest question. Perhaps you all know the answer and think it's a stupid question not worth answering it. If so please ignore it (other people have answered).
With that in mind I feel it is time for the US to take a much more aggressive stance in defending Taiwan. They should simply figure out a way for it to be an autonomous territory of the US. Hong Kong as well, since China is not following the requirements of the agreement forged some 20 years ago - we might as well consider those bill and void and forge an agreement with the HK government to bring them into the US fold formally. This would mean security for those territories and mutual economic prosperity.
that literally means war. I'm in Taiwan currently though I'm not Taiwanase or of chinese descent. Taiwan is a mono-ethnic country, where a good % of the population believe it or not identify with the mainland.
Culturally their are similar, speak the same language. Mainland is Taiwan's biggest trading partner. & before the Japs was Chinese territory. and China has an iron will to bring Taiwan into the fold. What would the US gain again from making Taiwan it's territory - war and more debt.
Chip fabs can easily be built in the US on a 3 year timeline. Whereas that same 3 year timeline, maybe the PRC would've taken Taiwan.
I think the free world owes Taiwan that degree of protection of their sovereignty. It wouldn’t likely result in war - China wouldn’t risk that, since it is as much a burden to them as it would be to the US. This is just a big game of chicken, and on one side is the US and all its allies (NATO) after all. The US would gain a foothold in the region politically and militarily, and can rest assured that the capacity for semiconductor manufacturing, a specialized capability, doesn’t fall into the hands of mainland China.
>>I think the free world owes Taiwan that degree of protection of their sovereignty.
The rest of the free world would likely need to take the first step of officially recognizing Taiwan as a sovereign country[1] before deciding to officially commit to protecting Taiwan.
God damn that is one huge cookie consent pop up. I browse with cell phone and was unable to find what to click to make it dissapear. So I’m now here reading comments to figure out what the artcile said.
"Please don't complain about website formatting, back-button breakage, and similar annoyances. They're too common to be interesting. Exception: when the author is present. Then friendly feedback might be helpful."
Make sure you have the "annoyances" filter lists enabled in the uBlock settings. Or really - make sure you have every filter list enabled except for the languages you don't use in the languages section.
Alternative title: South Korea decides to offer tax breaks for something that was going to happen anyway given the crypto frenzy and auto industry own goal.
