Intel and AMD Ask for Government Incentives While Apple Supplier TSMC Expands to Meet Unprecedented Demand

[archer75]

I know, the fabs are very expensive. At least in my country, we get automatically a tax break for investments. Sometimes the government need to give a helping hand beyond that for new developments. Fabs are however not new. Considering the booming market and Intels near monopoly for decades, this is simply mismanagement. We have seen industries in the west being taken over by low cost countries many times in different sectors and this will continue as long as we have low cost countries. If Taiwan and South Korea is best to produce chips, let them and invent something new instead. That is what the highly educated countries and the culture in the west is best suited for.

People focus on the big names like Intel but there are a ton of fabs in the US you've never heard of. You have to have fabs here in part due to national security. Chips produced for the military have to be made here.

Also, because some companies have fabs in Taiwan and South Korea doesn't mean they make all their chips there. My company is a US company and we make chips for Samsung, despite the fact they own their own fabs. We make chips for Apple, TSMC isn't the only one making chips for them. There's a lot more in apple products than just the CPU that TSMC produces. TSMC owns a fab in Camas, WA(wafertech) for about 14+ years now so they also produce chips in the US. When I worked there in the early 2000's they made chips for Nvidia and ATI. Amongst many others.

Many world class chips are designed and produced in the US and used in products made in other countries. It goes both ways.

 

[steve1960]

How did you get that information?

My work on the Floating Point Peperoni has been a closely guarded secret for years.

I've hit a brick wall with the mushroom malfunction, but the developments that have some from it in security via the Sauce Security Sentinel have been worth it.

I think you have a defect density issue I suggest more cheese and cut back the mushrooms. You could also experiment with the (curing) baking temperature. How do you slice? Is it thermal laser or saw cut or do you just rip it apart with your fingers??

 

[svanstrom]

People focus on the big names like Intel but there are a ton of fabs in the US you've never heard of. You have to have fabs here in part due to national security. Chips produced for the military have to be made here.
Also, because some companies have fabs in Taiwan and South Korea doesn't mean they make all their chips there. My company is a US company and we make chips for Samsung, despite the fact they own their own fabs. We make chips for Apple, TSMC isn't the only one making chips for them. There's a lot more in apple products than just the CPU that TSMC produces. TSMC owns a fab in Camas, WA for about 14+ years now so they also produce chips in the US. Many world class chips are produced in the US and used in products made in other countries.

You should probably do a writeup about that in its own thread; I think many here would find that very interesting.

 

[steve1960]

People focus on the big names like Intel but there are a ton of fabs in the US you've never heard of. You have to have fabs here in part due to national security. Chips produced for the military have to be made here.

Also, because some companies have fabs in Taiwan and South Korea doesn't mean they make all their chips there. My company is a US company and we make chips for Samsung, despite the fact they own their own fabs. We make chips for Apple, TSMC isn't the only one making chips for them. There's a lot more in apple products than just the CPU that TSMC produces. TSMC owns a fab in Camas, WA for about 14+ years now so they also produce chips in the US. Many world class chips are produced in the US and used in products made in other countries.

I agree but its all niche stuff not huge volume. The big money is not in US Fabs although I am sure the US military pays through the nose (sorry tax payers!). TSMC uses USA fab's for convenience. Political, tax breaks maybe. If they had a choice they would not be there to be honest. I have been inside that fab in Camas, I have also been inside Fab 14 in Tainan. Its like night and day.

 

[laz232]

Indeed. The fundamental strength of the US economy is our Intellectual Property, not our manual labor.

This isn't 1950's, where people go to jobs at "factories" and earn a "wage".

We are an economy where people sit at home on their computer to come up with ideas, and the more people understand that the better off they will be.

America has the best university system in the world, and that is why our economy is so resilient when all the factory jobs are gone.

If a person in China can make something cheaper, LET THEM.

Intellectual property is only as valuable as your lawyers can enforce it - and they can only enforce it was much as they are backed by credible threats of violence via a military. Would you have your enemy be in charge of preparing your dinner?
China has, as part of it's 20 year plan - to be completely independent of Western CPUs, and, through its 1000 talents program, to have trained its next generation at the best universities.

The democratic end-goal as envisaged by Fukuyama is clearly fallen out of favour and we see a ramping of rhetoric. The question is whether the people's money (taxes) should subsidize free enterprise: socialise the risk (semi-conductor fabs) and privatise the profits (share-holders)

In that sense I do think there is a strategic interest in ensuring manufacturing capabilities remain outside of one geographic region - in terms of natural disasters, and to be able to call-out human rights abuses without economic repercussions.

 

[archer75]

I agree but its all niche stuff not huge volume. The big money is not in US Fabs although I am sure the US military pays through the nose (sorry tax payers!). TSMC uses USA fab's for convenience. Political, tax breaks maybe. If they had a choice they would not be there to be honest. I have been inside that fab in Camas, I have also been inside Fab 14 in Tainan. Its like night and day.

I wouldn't say niche stuff at all. If we shut down today there would be no more iphones. At least until they got another supplier up and running. We produce high volume for automotive and are a leading supplier of chips for sensors in vehicles. Dozens of our chips are found in each vehicle. Game consoles as well. Smart phones. Medical equipment. Imaging. And many other applications.

 

[Rigby]

Intel is not “too big to fail”. No company is. Let them. It’s called creative destruction in economic thought.

Despite Intel's problems with 10 and 7nm, the last few years have all been record years for them financially. They are far from failing.

 

[laz232]

People focus on the big names like Intel but there are a ton of fabs in the US you've never heard of. You have to have fabs here in part due to national security. Chips produced for the military have to be made here.

Also, because some companies have fabs in Taiwan and South Korea doesn't mean they make all their chips there. My company is a US company and we make chips for Samsung, despite the fact they own their own fabs. We make chips for Apple, TSMC isn't the only one making chips for them. There's a lot more in apple products than just the CPU that TSMC produces. TSMC owns a fab in Camas, WA(wafertech) for about 14+ years now so they also produce chips in the US. When I worked there in the early 2000's they made chips for Nvidia and ATI. Amongst many others.

Many world class chips are designed and produced in the US and used in products made in other countries. It goes both ways.

But that is a 0.3-0.1um flash chip fab by the looks of it - nowhere near modern CPUs.
For other readers: many MIC fabs are GaAs "boutique" fabs - nice for making a radar front-end. Not so useful for a CPU...

 

[laz232]

I wouldn't say niche stuff at all. If we shut down today there would be no more iphones. At least until they got another supplier up and running. We produce high volume for automotive and are a leading supplier of chips for sensors in vehicles. Dozens of our chips are found in each vehicle. Game consoles as well. Smart phones. Medical equipment. Imaging. And many other applications.

But what is the investment and time needed for getting a 0.35um BiCMOS fab up and running, compared to a 7nm IC fab (with the testing)?

 

[archer75]

But that is a 0.3-0.1um flash chip fab by the looks of it - nowhere near modern CPUs.
For other readers: many MIC fabs are GaAs "boutique" fabs - nice for making a radar front-end. Not so useful for a CPU...

Yes for CPU/GPUs you have to use certain fabs capable of 10nm, 7nm, 5nm, etc. and there aren't many of them. But even the older technology and larger dimensions are still widely used even in cutting edge devices. Hell, most of the fabs we own are 6" and there's still high demand for those chips. I have worked at fabs with decades old tools and they're cranking chips out and there's high demand for them too. Tools that are 30+ years old.

 

[laz232]

Despite Intel's problems with 10 and 7nm, the last few years have all been record years for them financially. They are far from failing.

It's funny: Intel Revenue US$77.87 billion (2020), Operating income US$23.68 billion (2020), but all the kids say: Intel is "failing" - buy Gamestop!
Long term I think that Intel still has value

 

[laz232]

Yes for CPUs you have to use certain fabs capable of 10nm, 7nm, 5nm, etc. and there aren't many of them. But even the older technology and larger dimensions are still widely used even in cutting edge devices. Hell, most of the fabs we own are 6" and there's still high demand for those chips.

I do most of my design with analog ICs, which I assume is mostly 0.35um - though much of the high speed stuff (mixed signal) seems to like using the 28nm TMSC process. I guess those are fairly "commodity". The problem is that if there was a real war - then loosing access to 10nm capabilities would be a huge economic issue.

 

[steve1960]

I wouldn't say niche stuff at all. If we shut down today there would be no more iphones. At least until they got another supplier up and running. We produce high volume for automotive and are a leading supplier of chips for sensors in vehicles. Dozens of our chips are found in each vehicle. Game consoles as well. Smart phones. Medical equipment. Imaging. And many other applications.

Automotive is soooo painful the costs of manufacturing are so high and the penalties for failure drastic. The company I worked for played in the automotive Bluetooth market for a while and it was like a train wreck! Automotive supply is something you really don't want to do the overheads are massive. However I concede their is a business in US Fabs but not on the scale of TSMC.

As for natural disasters we mitigated that by using TSMC and ASE locations across Taiwan. Qualifying multiple Fabs and assembly sites is no small task but it ensured the supply chain even if there was an earthquake in one region in Taiwan.

 

[steve1960]

Intel will probably always have a place in the future but they need to reinvent themselves. They are a dinosaur

 

[archer75]

Automotive is soooo painful the costs of manufacturing are so high and the penalties for failure drastic. The company I worked for played in the automotive Bluetooth market for a while and it was like a train wreck! Automotive supply is something you really don't want to do the overheads are massive. However I concede their is a business in US Fabs but not on the scale of TSMC.

As for natural disasters we mitigated that by using TSMC and ASE locations across Taiwan. Qualifying multiple Fabs and assembly sites is no small task but it ensured the supply chain even if there was an earthquake in one region in Taiwan.

Automotive is very profitable for us. The chips we make for them are relatively cheap to manufacture and have fewer lithography steps compared to our other technologies. They also order long term as they need a regular part supply. We're also one of the premiere supplies for sensors used in vehicles where it comes to lane detection, collision avoidance, self driving and so on. But every light, LED, etc, uses our chips for power management.
That said, automotive audits are tough. It's easily the most difficult certification to receive.

 

[steve1960]

During a supply chain issue (allocation) many years ago I had to run the gauntlet as head of supply chain visiting South Korea. A supplier to the US automotive industry. Every Bluetooth chip we supplied late meant a car didn't leave the production line. They hauled me over the coals mercilessly but I got them out of it. They took me out to dinner to thank me for saving them and plied me with Soju all night. I realized the next morning that the hangover I had was not a thank you it was punishment

 

[subi257]

Sure. But that doesn’t mean that doing so is moral, ethical, or sustainable. Just more reason why American capitalism needs serious regulation and reform.

I will agree on the Ethical and sustainable parts. It works that "they" want more competition, but if you get too good than it becomes a problem. Apple small products, iPad, iPhone, watch, etc didn't start out as huge products. I remember having a Mitsubishi DiamondTel cell phone and it was really cool, then I got a Qualcom "digital" phone and it was really amazing...them I added a Palm Pilot and a Dell X5 PDA and then a Palm Treo. That was just before the first iPhone, Then I switched to the 2nd gen iPhone. The point is that Apple made very cool products and push the envelope...but still they always just worked. So they worked hard, innovated and grew...now people are complaining that they are too big. So, where is the tipping point of being great, innovating but not getting too big?

 

[Rigby]

Intel will probably always have a place in the future but they need to reinvent themselves. They are a dinosaur

True, but there are reasons why they have survived for so long. They are currently in the process of reinventing themselves, primarily by diversifying from general purpose CPUs to what they call "xPU", i.e. a range of architectures for different types of workloads.

 

[steve1960]

Yes automotive like military tend to stick with a product and don't change. That will bring its own challenges in the future. Once your product ages and the fab / assembly houses push back on supplying it you will not be able to go to the customer and ask for changes. Even if you think you are in the sweet spot right now trouble is just around the corner.

 

[PBG4 Dude]

During a supply chain issue (allocation) many years ago I had to run the gauntlet as head of supply chain visiting South Korea. A supplier to the US automotive industry. Every Bluetooth chip we supplied late meant a car didn't leave the production line. They hauled me over the coals mercilessly but I got them out of it. They took me out to dinner to thank me for saving them and plied me with Soju all night. I realized the next morning that the hangover I had was not a thank you it was punishment

OMG, I made the mistake of drinking 2 40s of H’ite beer the first day I was in Seoul. The next day I wanted to saw my head off. Never had such a screaming hangover from so little booze.

Stuck with Guinness after that LOL.

 

[archer75]

Yes automotive like military tend to stick with a product and don't change. That will bring its own challenges in the future. Once your product ages and the fab / assembly houses push back on supplying it you will not be able to go to the customer and ask for changes. Even if you think you are in the sweet spot right now trouble is just around the corner.

We are very well diversified. That's only part of our business but we are capable of supporting it long term. Since we own many fabs we do qualify other fabs (and receive certification) to run those processes as well so we can adjust as needed. We're in the process(and have been) of shuffling our technologies around amongst fabs.

 

[steve1960]

I will agree on the Ethical and sustainable parts. It works that "they" want more competition, but if you get too good than it becomes a problem. Apple small products, iPad, iPhone, watch, etc didn't start out as huge products. I remember having a Mitsubishi DiamondTel cell phone and it was really cool, then I got a Qualcom "digital" phone and it was really amazing...them I added a Palm Pilot and a Dell X5 PDA and then a Palm Treo. That was just before the first iPhone, Then I switched to the 2nd gen iPhone. The point is that Apple made very cool products and push the envelope...but still they always just worked. So they worked hard, innovated and grew...now people are complaining that they are too big. So, where is the tipping point of being great, innovating but not getting too big?

Is the problem that Apple ties you into an entire ecosystem? Microsoft is just Microsoft but Apple sucks you in to a way of life that ties you to them. I admit it happened to me. There is nothing in our house that isn't Apple. Phones, iPads, laptops, TV. Maybe it is not that Apple has become too successful per se it is that they are controlling your life and some people are afraid of the consequences in the future?

 

[steve1960]

We are very well diversified. That's only part of our business but we are capable of supporting it long term. Since we own many fabs we do qualify other fabs (and receive certification) to run those processes as well so we can adjust as needed. We're in the process(and have been) of shuffling our technologies around amongst fabs.

Seems like you have it well sorted and a good business plan going forward. I wish you every success.

 

[jz0309]

This is ludicrous ...
Samsung announced plans for a new fab in Austin - asking for $1B in incentives
TSMC has announced plans for a new fab in Phoenix - asking for $1B in incentives
Intel in the past has received multiple Billions of incentives in AZ, NM,OR when they built new fabs

They ALL have received incentives when they build their assembly/test sites primarily in Asia

And everyone in the semiconductor business know that it is very cyclical, we're at the bottom and the government (so us) is asked to put money in so that in a few years when the cycle turns again, these companies have less financial liability/risk

And they will happily continue to be proud of 50% or so margin ...

pathetic

 

[Marx55]

Intel and AMD should move to ARM. Full stop.