[HN Gopher] GlobalFoundries wins $3.1B in CHIPS Act subsidies fo...
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GlobalFoundries wins $3.1B in CHIPS Act subsidies for NY, Vermont
Author : geox
Score : 150 points
Date : 2024-02-19 11:31 UTC (11 hours ago)
(HTM) web link (www.syracuse.com)
(TXT) w3m dump (www.syracuse.com)
| minroot wrote:
| man, the parking lot! couldn't they make it underground?
| vitro wrote:
| Or at least put solar panels on top of it. Provides electricity
| and shades cars. It should be a norm.
| sofixa wrote:
| It's the law in France over a certain size of parking lot,
| which is great.
| mschuster91 wrote:
| 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...
| geraldwhen wrote:
| 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.
| mschuster91 wrote:
| > 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...
| InvaderFizz wrote:
| 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.
| bee_rider wrote:
| 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.
| vel0city wrote:
| 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.
| raverbashing wrote:
| 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)
| selimthegrim wrote:
| You should see the Jones Farm parking lots.
| edgyquant wrote:
| 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.
| mschuster91 wrote:
| > 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.
| twoodfin wrote:
| 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.
| vel0city wrote:
| 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".
| ciabattabread wrote:
| 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...
| vel0city wrote:
| Look at Malta, NY on satellite view. Then tell me mass
| transit makes sense for that location. Tell me a few good bus
| routes that would actually make sense for people to take
| instead of driving their car.
|
| Not every spot on Earth is a dense urban area.
| infecto wrote:
| 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.
| ambrose2 wrote:
| 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).
| jprd wrote:
| 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.
| csomar wrote:
| > 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.
| ericmay wrote:
| 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.
| gosub100 wrote:
| 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?
| ericmay wrote:
| > 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.
| bee_rider wrote:
| > 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.
| gosub100 wrote:
| why is building a washer that keeps peoples clothing
| clean a 'bad job' and building tech components a 'good
| job'?
| bee_rider wrote:
| Because computer chips are cool and washing machines are
| boring.
| jdewerd wrote:
| 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.
| Dalewyn wrote:
| >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.
| bee_rider wrote:
| 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.
| Dalewyn wrote:
| 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.
| BeetleB wrote:
| > 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.
| Vt71fcAqt7 wrote:
| 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
| bee_rider wrote:
| 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.
| edgyquant wrote:
| 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.
| gosub100 wrote:
| "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".
| Nevermark wrote:
| 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.
| csomar wrote:
| 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.
| KoftaBob wrote:
| Why do you doubt they'll accomplish their goal of removing
| dependency on foreign chip makers?
| phone8675309 wrote:
| 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...
| bee_rider wrote:
| Chips and telecom are pretty different markets, right?
| GlobalFoundries needs a leg up, most of the big telecom
| companies are already abusive monopolies.
| csomar wrote:
| 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).
| edgyquant wrote:
| 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.
| jacobsimon wrote:
| 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)
| coredog64 wrote:
| 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.
| KoftaBob wrote:
| > 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.
| coredog64 wrote:
| 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.
| dragontamer wrote:
| > 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.
|
| --------------
|
| 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.
|
| -------------
|
| 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.
| vel0city wrote:
| > 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.
| dragontamer wrote:
| 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.
| politician wrote:
| 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.
| dragontamer wrote:
| 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.
|
| -----------
|
| 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.
| therealbilly wrote:
| 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.
| dragontamer wrote:
| 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.
| rusticpenn wrote:
| Global Foundries promised 7nm tech to IBM and dropped it
| after winning the contract.
|
| https://www.datacenterdynamics.com/en/news/ibm-sues-
| globalfo...
| chrinic839400 wrote:
| > 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.
| dukeyukey wrote:
| Europe does a lot of income transfer, but not much wealth
| transfer.
| myrmidon wrote:
| 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)?
| mschuster91 wrote:
| > 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.
| tuatoru wrote:
| As a New Zealander: please don't.
| user_7832 wrote:
| 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.
| myrmidon wrote:
| 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...
| delfinom wrote:
| 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.
| nyokodo wrote:
| > 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.
| earthwalker99 wrote:
| If only it were protectionism!
| myrmidon wrote:
| 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...
| graeme wrote:
| 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.
| zer00eyz wrote:
| 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.
| Dalewyn wrote:
| Intel is one of the recipients/beneficiaries.[1]
|
| [1]: https://www.intel.com/content/www/us/en/corporate/usa-
| chipma...
| edgyquant wrote:
| 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
| Dalewyn wrote:
| 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.
| konschubert wrote:
| This isn't about creating jobs. The US has more Jobs than
| people who're willing to work.
|
| This is about creating strategic independence.
| edgyquant wrote:
| 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.
| dev_tty01 wrote:
| 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._
| patmorgan23 wrote:
| 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.
| formerly_proven wrote:
| The value of a job for the state is limited to ... federal
| income tax? That's certainly a view to hold.
| myrmidon wrote:
| 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...
| zitterbewegung wrote:
| 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).
| melling wrote:
| 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_...
| mattmcknight wrote:
| 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.
| dubcanada wrote:
| 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?
| dukeyukey wrote:
| I imagine that $2 million also includes land purchases,
| materials, and equipment on top of salaries.
| Shrezzing wrote:
| 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-...
| lulznews wrote:
| It's a money dump no question about it. America simply can't do
| these things.
| BeetleB wrote:
| 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_.
| tqi wrote:
| 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...
| woah wrote:
| Don't you think they have to pay for the machines?
| patmorgan23 wrote:
| 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.
| imgabe wrote:
| 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.
| dangus wrote:
| 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.
| 802er wrote:
| >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
| verdverm wrote:
| 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
| fallingknife wrote:
| 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.
| rasz wrote:
| The 'we give up R&D' GlobalFoundries?
| https://www.anandtech.com/show/13277/globalfoundries-stops-a...
| seventytwo wrote:
| If it's not TSMC, it's bad?
| jeanlucas wrote:
| 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.
| icegreentea2 wrote:
| 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.
| seventytwo wrote:
| A geo-strategic win for securing the semiconductor supply chain,
| and the top parent comments in here are complaints about the
| parking lot and how much tax money it's going to take.
|
| Sheesh.
| Always42 wrote:
| ^it's crazy to me usa hasn't brought chip mfg in sooner, but
| easy to say in hindsight
| seventytwo wrote:
| 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...
| WarOnPrivacy wrote:
| > 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.
| pm90 wrote:
| 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.
| edgyquant wrote:
| 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.
| Workaccount2 wrote:
| 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.
| twoodfin wrote:
| 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...
| edgyquant wrote:
| 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.
| latency-guy2 wrote:
| > 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.
| twoodfin wrote:
| 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
| edgyquant wrote:
| 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.
| DinoCoder99 wrote:
| 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.
| Workaccount2 wrote:
| 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.
| DinoCoder99 wrote:
| 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.
| alephnerd wrote:
| 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
| pxeger1 wrote:
| > 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.
| stn8188 wrote:
| This is talking about pre-diced wafer diameter.
|
| https://en.m.wikipedia.org/wiki/Wafer_(electronics)
| dubcanada wrote:
| I suspect they mean wafer size, 300mm is a common wafer size.
| Alpha3031 wrote:
| > 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...
| bee_rider wrote:
| Certainly not the transistor size unless they've invented some
| new Gate All Around Ingot technology, hahaha.
| Kirby64 wrote:
| 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).
| dragontamer wrote:
| 300mm is the new wafer standard.
|
| 200mm was the standard a few years ago.
| georgeburdell wrote:
| I was in the industry for a decade and never saw 200mm
| dragontamer wrote:
| 200mm was also called 8-inch wafers.
| georgeburdell wrote:
| 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
| capital_guy wrote:
| 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...
| nos4A2 wrote:
| 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.
| viscountchocula wrote:
| Isn't their layoff a tacit admission that they should have
| grown more slowly, though?
| epistasis wrote:
| 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.
| gizmo wrote:
| 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.
| capital_guy wrote:
| 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."
| gizmo wrote:
| I'm in favor of a stronger social safety net (and the taxes
| to pay for it).
| maerF0x0 wrote:
| 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...
| DinoCoder99 wrote:
| > 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".
| Vt71fcAqt7 wrote:
| >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.
| maerF0x0 wrote:
| 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.
| dragontamer wrote:
| 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.
| maerF0x0 wrote:
| 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
| Vt71fcAqt7 wrote:
| 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.
| onlyrealcuzzo wrote:
| > 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?
| jgeada wrote:
| 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.
| maerF0x0 wrote:
| > Free markets create monopolies.
|
| I have never thought this to be the case, could you provide
| some backing to your claim?
| jgeada wrote:
| 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
| tastyfreeze wrote:
| Free markets do not create monopolies. Monopolies require
| government carve outs that make competition less likely or
| impossible.
| kredd wrote:
| 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
| _giorgio_ wrote:
| Billions... Just imagine what they could do with trillions, eh
| Sam?
| downrightmike wrote:
| Apple and Microsoft seem to be doing pretty well
| beezle wrote:
| 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."
| thoughtstheseus wrote:
| 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.
| dangus wrote:
| 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.
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