Discussion CHIPS and Science Act bill passes. Up to $200b over the next 10yrs

Nov 26, 2005
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A bill known as, CHIP and Science Act aka Creating Helpful Incentives to Produce Semiconductors for America Act authorizes the injection of up to $200b into the U.S. industry over the next 10yrs.

Really good article on ARStechnica.

 
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Nov 26, 2005
14,942
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A quote from the article "After investing $30 billion, China is still on the hook for another $20 billion as investigations begin, and their technology still lags behind Taiwan's." Some 10yrs is stated, and they want to invade Taiwan? Presumably to take TSMC under their own control but I read in another article that TSMC CEO said it would be impossible due to how it operates on a global market.
 

DrMrLordX

Lifer
Apr 27, 2000
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A quote from the article "After investing $30 billion, China is still on the hook for another $20 billion as investigations begin, and their technology still lags behind Taiwan's." Some 10yrs is stated, and they want to invade Taiwan? Presumably to take TSMC under their own control but I read in another article that TSMC CEO said it would be impossible due to how it operates on a global market.
How nice for China to have such opportunity for graft and corruption. Clearly the CHIPS act will help the United States catch up in that department.
 

KompuKare

Senior member
Jul 28, 2009
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How nice for China to have such opportunity for graft and corruption. Clearly the CHIPS act will help the United States catch up in that department.
While graft and corruption is worse in some countries than others, I always find the various reports (like from Transparency International) a bit suspicious. Or rather what those reports mostly ignore is the way that graft has developed in developed countries: revolving doors, membership of boards, etc. for those politicians etc. whose did things while in office. Far less obvious than notes slipped into an envelop and so on, but still a sizeable percentange of the economy.
 

maddie

Diamond Member
Jul 18, 2010
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While graft and corruption is worse in some countries than others, I always find the various reports (like from Transparency International) a bit suspicious. Or rather what those reports mostly ignore is the way that graft has developed in developed countries: revolving doors, membership of boards, etc. for those politicians etc. whose did things while in office. Far less obvious than notes slipped into an envelop and so on, but still a sizeable percentange of the economy.
+ Book deals, movie deals, etc, etc.
 
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VirtualLarry

No Lifer
Aug 25, 2001
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Only 20 years later... the price tag for moving production lines offshore - to reduce costs, of course! - now comes with a $50 billion bill.
I didn't know that TSMC and Samsung's fabs were built by American chip companies off-shoring so that they could save a buck! Thanks for informing me.

In other news, Intel's fabs are all mostly state-side. Wonder why?
 

DrMrLordX

Lifer
Apr 27, 2000
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I hope the car makers figure out their chip constraints.

My gut says it has nothing to do with capacity, but more about keeping fewer automobiles available for use on the road.
It has more to do with their reluctance to switch to modern fabs/nodes and port old designs (or replace and revalidate them). Not all automakers have this attitude. Toyota and Denso are moving forward with Sony and TSMC, for example. Toyota's chip problem - if there still is one - should be mostly solved in two years (or so).
 
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Doug S

Golden Member
Feb 8, 2020
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I hope the car makers figure out their chip constraints.

My gut says it has nothing to do with capacity, but more about keeping fewer automobiles available for use on the road.

For each individual automaker that might make sense (ignoring legal consequences) but only if they can raise prices enough to make up the lost profit. That is, if you normally would have sold 1 million cars with a $4000 average profit over a given time period, if you are limited to selling 500K cars you need more than an $8000 profit to reach the point where it pays off.

If you look at major automakers' profits they are a little more profitable than they were before the pandemic, but not by much (GM/Ford small 5-15% gain for last 12 months versus 2019, Toyota a bit of a decline) So if this is some big scam so they can make more money, it isn't working out that well.

Collusion only works if the incentives to stick with it are greater than the incentives to cheat. The small gain in profit (let alone Toyota's drop in profit) provides little incentive to stick with it. On the other hand the incentive to cheat and resume full production, thus selling many more cars and making far higher profits while everyone else is still limiting production, is simply too overwhelming for collusion between automakers to be a reasonable hypothesis.

This type of "supply shock" economy is not one the world has seen for a long time. The best parallels are post war economic slowdowns in the US & Europe after WW I and in the US post WW II (but not in Europe because so much infrastructure was destroyed) Employment remained high (as it is today) while supply could not match demand (again like today) because the factories couldn't convert from making tanks and bombs to making cars and refrigerators overnight - and there was a lot of pent up demand for all consumer products in the US after WW II but it took a long time to catch up.

It isn't the same thing today but it is a similar situation. Companies were caught flat footed making things people didn't want (cars in December 1941 and April 2020) and responded ways that limited their ability to go "back to normal" very quickly (converting the factory to one making planes in 1942, canceling orders for parts in May 2020)
 
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MadRat

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Oct 14, 1999
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Doug S,

You may be right. As insulation to a problem going on several years now, it would have been nice for the act to target this problem as a strategy to prevent manipulation of the car market. The Cox family probably doesn't mind, but getting my wife's GMC fixed after someone hit her vehicle's rear end made me aware its not really a COVID problem. Its almost comical how much suppliers are trying to squeeze customers for even the parts that are not in short supply. Its a human issue, not a manufacturing issue with the parts in our case. Absolutely comical.
 
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