The U.S. Is Determined to Revolutionize Its Microchip Industry

[Meredith Poor + 895]

"While China continues to dominate the microchip space..." would be more accurately worded "While Taiwan and South Korea continue to dominate the microchip space...". China does make a lot of chips, but they tend to be older technologies. China has attempted time and time again to build state-of-the-art fabs, only for the money to get diverted or wasted. Often municipal or provincial governments use the CCP's urgency more as a tool for extracting money than for producing much of value. Huge fabs are built, but they aren't properly equipped, often because the equipment they need is under trade sanctions.

"...constructing semiconductors requires a mix of materials found around the globe, such as silicone, carbon, and graphite...". Silicone is something you buy at the local home improvement store to seal bathtubs. Silicon (without the e at the end) is the element used to make wafers. Commentators get this wrong all the time. Carbon and graphite have very little to do with chip production. Most of the elements involved besides silicon are oxygen, nitrogen, phosphorous, aluminum, indium, gallium, germanium, arsenic, and various rare earths. China does control rare earths production, however the US and other countries are ramping up rare earths processing facilities.

"Since the first computer chips were invented in the U.S. in the late 1960s...". This is a real nit-pick.... The 4004 and 8008 single chip computers when into production in 1970, but didn't appear in commercial quantities until 1971. Computers built in the 1960s (even the 'late' 1960's) were built out of lower level integrated circuits. The other chip that mattered was the 1 kilobit DRAM, which also went into production in 1970.

"The need for a stronger domestic microchips supply chain became evident following the shortages experienced in 2021, after the Covid-19 pandemic." While this is true as far as it goes, some of the problems had been building up for some time. COVID was simply when the tide went out, and everyone was discovered to be naked.

The US (Intel and Global Foundries), TMSC, and the South Koreans have constantly strived to push the state of the art. This means enormous, extremely dense chips. The car companies needed controllers for their engines, dashboards, and braking systems, which were older technologies and were more focused on cost than bleeding edge performance. As chip fabs were upgraded, these became increasingly a secondary concern to the semiconductor houses - they produced these 'as time and resources permitted'. When 'everyone' needed a camera and a laptop to 'work at home', advanced CPU and memory chip production took priority over 'the little stuff', and the car (and appliance and aircraft) companies were left stranded. A lot of the chip production capacity needed in the US and Europe is to make the older geometry chips used in washing machines and TV remotes.

A lot of these chips come from China, but when China is in lockdown nothing gets produced, or if it is produced, it doesn't make it to the loading dock. A lot of the chip delivery problems were related to ship availability, warehouse availability, truck drivers, and so forth.

"...suggested that achieving a self-sufficient U.S. microchip supply chain would require around $1 trillion in funding, raising both the price of chips and the products that use them." keep in mind that investment banking 'dry powder' (uncommitted cash) is presently at $2.5 trillion. The US has no problem investing $1 trillion in chip production. The reason why it doesn't get spent is there aren't enough chip production experts available to build and operate the infrastructure. Doubling US chip production capacity means doubling the number of condensed matter physics PhDs involved in the industry. Where are they going to come from?

Most chips these days are overkill for their intended purpose. The cheapest 'computer' chip available right now is priced at 1 cent in 10,000 unit quantities, and many others are only a few cents more. if prices went up 10%, most consumers wouldn't notice any difference.

[specinho + 467]

13 hours ago, Meredith Poor said:

"While China continues to dominate the microchip space..." would be more accurately worded "While Taiwan and South Korea continue to dominate the microchip space...". China does make a lot of chips, but they tend to be older technologies. China has attempted time and time again to build state-of-the-art fabs, only for the money to get diverted or wasted. Often municipal or provincial governments use the CCP's urgency more as a tool for extracting money than for producing much of value. Huge fabs are built, but they aren't properly equipped, often because the equipment they need is under trade sanctions.

"...constructing semiconductors requires a mix of materials found around the globe, such as silicone, carbon, and graphite...". Silicone is something you buy at the local home improvement store to seal bathtubs. Silicon (without the e at the end) is the element used to make wafers. Commentators get this wrong all the time. Carbon and graphite have very little to do with chip production. Most of the elements involved besides silicon are oxygen, nitrogen, phosphorous, aluminum, indium, gallium, germanium, arsenic, and various rare earths. China does control rare earths production, however the US and other countries are ramping up rare earths processing facilities.

"Since the first computer chips were invented in the U.S. in the late 1960s...". This is a real nit-pick.... The 4004 and 8008 single chip computers when into production in 1970, but didn't appear in commercial quantities until 1971. Computers built in the 1960s (even the 'late' 1960's) were built out of lower level integrated circuits. The other chip that mattered was the 1 kilobit DRAM, which also went into production in 1970.

"The need for a stronger domestic microchips supply chain became evident following the shortages experienced in 2021, after the Covid-19 pandemic." While this is true as far as it goes, some of the problems had been building up for some time. COVID was simply when the tide went out, and everyone was discovered to be naked.

The US (Intel and Global Foundries), TMSC, and the South Koreans have constantly strived to push the state of the art. This means enormous, extremely dense chips. The car companies needed controllers for their engines, dashboards, and braking systems, which were older technologies and were more focused on cost than bleeding edge performance. As chip fabs were upgraded, these became increasingly a secondary concern to the semiconductor houses - they produced these 'as time and resources permitted'. When 'everyone' needed a camera and a laptop to 'work at home', advanced CPU and memory chip production took priority over 'the little stuff', and the car (and appliance and aircraft) companies were left stranded. A lot of the chip production capacity needed in the US and Europe is to make the older geometry chips used in washing machines and TV remotes.

A lot of these chips come from China, but when China is in lockdown nothing gets produced, or if it is produced, it doesn't make it to the loading dock. A lot of the chip delivery problems were related to ship availability, warehouse availability, truck drivers, and so forth.

"...suggested that achieving a self-sufficient U.S. microchip supply chain would require around $1 trillion in funding, raising both the price of chips and the products that use them." keep in mind that investment banking 'dry powder' (uncommitted cash) is presently at $2.5 trillion. The US has no problem investing $1 trillion in chip production. The reason why it doesn't get spent is there aren't enough chip production experts available to build and operate the infrastructure. Doubling US chip production capacity means doubling the number of condensed matter physics PhDs involved in the industry. Where are they going to come from?

Most chips these days are overkill for their intended purpose. The cheapest 'computer' chip available right now is priced at 1 cent in 10,000 unit quantities, and many others are only a few cents more. if prices went up 10%, most consumers wouldn't notice any difference.

This might not be accurate...

Japan has been dominating electronic arena since 80s due to its stringent processes that produce very high quality of products, sustainable or lasting innovation at affordable prices. 

Excellent quality that lasts, has enabled Japan to grow quietly into economy power house despite its small size, lacking of most natural resources except kelps, seaweeds, and seafood.

No country, disregard volume of sales, can match up with the quality and price offered by Japan. They trust no one to produce their chips and parts required by their own products. Therefore, Japan used to have only assembly factories outside of Japan.

Shall this world needs to reduce amount of e-waste, saving resources, maintaining high quality of electronic products that last but still making handsome profits,  pioneers of Japan are people to learn from.

Some advanced european countries too, sustaining quality of their own creation by not outsourcing the production. 

US used to be as good ( locally produced heavy machinery might still be excellent). Globalization that encourages outsourcing due to low labour costs and technology transfer might have jeopardized the quality of those outsourced production lines. Human capital is not equally capable by race, by country and such. US might need not additional investment to recreate what used to be there. US probably needs to just find out how they did it and do it again.

Taiwan, China, Korea might still be far to catch up with what had been achieved despite volume of sales and variety produced. In order to have higher turn over rate, they produce products at lower quality. They do not encourage repair but have to change new ones to earn more. This mentality created a lot of unnecessary e- waste, wasted much natural resources, and created much environmental damage and immoral business dealings. Saving the earth may start from changing their attitude, attitude of the few rich in this part of the world that known by you. Or punish their sales and wealth to let them share  responsibility of protecting the environment.

 

[Rob Plant + 2,756]

10 hours ago, specinho said:

This might not be accurate...

Japan has been dominating electronic arena since 80s due to its stringent processes that produce very high quality of products, sustainable or lasting innovation at affordable prices. 

Nope

Japan are in the race with semiconductors but Taiwan leads the way, and in particular this company.

Taiwan Semiconductor Manufacturing Company Limited (tsmc.com)

[Meredith Poor + 895]

10 hours ago, specinho said:

No country, disregard volume of sales, can match up with the quality and price offered by Japan.

https://www.youtube.com/watch?v=SB8qIO6Ti_M

https://www.youtube.com/watch?v=e7sH1dGsxpo

These two stories show how Japan lost the photolithography market and then the IC market. Japan screws up all the time. The above examples are some of the worst.

Edited May 28 by Meredith Poor
Fix spelling error

[specinho + 467]

13 hours ago, Rob Plant said:

Nope

Japan are in the race with semiconductors but Taiwan leads the way, and in particular this company.

Taiwan Semiconductor Manufacturing Company Limited (tsmc.com)

Owing to the fast pace economic growth, there has been a category used to describe Japan, Taiwan, Korea, Singapore during the 80s i.e. four baby dragons of Asia.

Chips and wafer production in Singapore must have been initiated by US companies e.g. Hewlett-Packard etc. Heard they are good and humane companies with many benefits. Japan came in later. Slightly inhumane and stingy in comparison. 

Japan might be built by alliance Germany or europe.

Not too sure who invested in Taiwan and Korea to make them a success. Very likely USA.

This might have been the reason why these four countries, with similar characteristics, have particular good ties with USA. 

Therefore, it could have been USA led the way...... Caught up by these four countries.

 

Edited May 29 by specinho