samurai_science said:

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The chip fabs wont last, its a waste of money. You still have to operate the fabs, and they are expensive to run here.

Also FAB capacity is ramping all over the world, so they will be even less profitable, this over capacity has happened before.

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The difference this time is that our customers are requiring western locations to secure their supply chains going forward so this isn't a profit-based decision at the moment. Maybe geopolitical things cool off in the next decade but the pain of the shortage is something that's going to stick around for quite some time. Personally I think for the US it will be forever as we realized this is a national security issue.

Basically every RFQ we've received the last 2 years mandates multiple non China (Taiwan) locations. Korea, Europe and the US are ramping but because fabs need skilled labor they aren't going to be built in many locations outside of those, certainly not in the lowest cost countries.

Martin Q. Blank said:

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They just closed the Samsung facility outside of Austin because they couldn't produce the needed yields. Something like 90% of chips failed QA/QC.

https://wccftech.com/samsung-withdraws-personnel-from-taylor-texas-plant-due-to-low-2nm-gaa-yield/amp/

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The framing is that article is very sensational. They delayed delivery of some tooling (and furloughed some people) because bringup of the 2nm process has been slow. This happens with nearly every fab bringup on a new node... they haven't abandoned the site at all.

TSM has been a solid stock pick for both my son and me.

RED AG 98 said:

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Martin Q. Blank said:

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They just closed the Samsung facility outside of Austin because they couldn't produce the needed yields. Something like 90% of chips failed QA/QC.

https://wccftech.com/samsung-withdraws-personnel-from-taylor-texas-plant-due-to-low-2nm-gaa-yield/amp/

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The framing is that article is very sensational. They delayed delivery of some tooling (and furloughed some people) because bringup of the 2nm process has been slow. This happens with nearly every fab bringup on a new node... they haven't abandoned the site at all.

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I wish someone would have told me the site was closed before I drove 45 minutes to get here for work this morning.

fantastic!

All well and good, but what geometries are the fab lines going to be producing and where is package and test? If package and test remains in Malaysia like it is for most of the world today we haven't done anything for security. If all of these new fabs are bleeding edge 2-4nm geometry processes we're only going to be able to make memory and very high end processors which remain useless without the surrounding chips made on >90nm processes.

This all smells more like money laundering and political kickbacks to me rather than truly protecting our national interests.

Aggiemundo said:

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All well and good, but what geometries are the fab lines going to be producing and where is package and test? If package and test remains in Malaysia like it is for most of the world today we haven't done anything for security. If all of these new fabs are bleeding edge 2-4nm geometry processes we're only going to be able to make memory and very high end processors which remain useless without the surrounding chips made on >90nm processes.

This all smells more like money laundering and political kickbacks to me rather than truly protecting our national interests.

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Strong disagree with the statement in bold. I'm a free-market capitalist at heart, but this is very much national security, akin to securing food and energy production.

There's lots of 16, 28 and 40+ nm capacity in the US already. One typically doesn't build old geometries in a new fab...

The point about test and assy is a great one, however unless China also tries to stake a claim on Malaysia we're ok for the time being. The key players are expanding to Viet Nam, Mexico, and other geographies because of the geopolitical tension. I expect major expansion into other low-cost areas around the globe.

Agreed on the larger geometries not being where cutting edge new fabs are going to focus, but that's where the allocation occurred in 21-23 and I'd argue it's where the next one (in early 2026 by my estimation) and the one after that will also occur. It's great we can still make cell phones and servers with these small geometries but we won't be making cars or motor control for anything which is going to be key to the expanding automation market.

Yes, I love the concept of increasing our ability to manufacture semiconductors and that skill set growth is a net positive. However I've lost all trust in the system doing things out of altruism so I'll stand by my admittedly bombastic closing statement. It's a message board not a board room so I can let my raw emotion out ;-)

TacosaurusRex said:

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RED AG 98 said:

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Martin Q. Blank said:

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They just closed the Samsung facility outside of Austin because they couldn't produce the needed yields. Something like 90% of chips failed QA/QC.

https://wccftech.com/samsung-withdraws-personnel-from-taylor-texas-plant-due-to-low-2nm-gaa-yield/amp/

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The framing is that article is very sensational. They delayed delivery of some tooling (and furloughed some people) because bringup of the 2nm process has been slow. This happens with nearly every fab bringup on a new node... they haven't abandoned the site at all.

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I wish someone would have told me the site was closed before I drove 45 minutes to get here for work this morning.

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Yet another internet "fact" debunked! People always think they are so smart and know everything just repeating the drivel and half truths posted all over the internet. But people forget that actual journalism is dead.

Our very way of life was threatened by some stupid virus from a lab in China that the US almost certainly helped fund. This is as much self-preservation as it is altruism.

But yes, the past few years has completely eroded trust. I sincerely hope the COVID origins and cover-up are fully investigated and outed in the new administration and those responsible are punished accordingly...

C@LAg said:

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BadMoonRisin said:

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There's a pretty good book about this called Chip War.

I just started it

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if you just started it, how do you know it is "pretty good"

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Snark aside, everybody on this board should read it. Chip War is for semiconductors what Daniel Yergin's books are for oil and energy. The world makes a little more sense after you read it.

And then read Soft War, which is the analog for BTC

RED AG 98 said:

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Our very way of life was threatened by some stupid virus from a lab in China that the US almost certainly helped fund. This is as much self-preservation as it is altruism.

But yes, the past few years has completely eroded trust. I sincerely hope the COVID origins and cover-up are fully investigated and outed in the new administration and those responsible are punished accordingly...

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Absolutely it's theoretically about "self preservation", but again, if all we can manufacture are high density memory and insanely fast processors we have done nothing to improve the national security of the country because they'll be worthless without the surrounding circuitry which is still manufactured in China.

Those high end chips have great margin so they're good for stock prices and I'd argue given that, that these companies would have built the fabs anyways to protect their IP from China and due to customer demand to not design in Chinese produced chips. If this CHIPS act was about national security it would be subsidizing our ability to make the older technologies on our soil as that CAN'T be profitable without government help (see China who subsidizes the hell outta this stuff) but the people writing the legislation and doling out the money don't understand the technology or that a fab is not a fab is not a fab.

Aggiemundo said:

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RED AG 98 said:

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Our very way of life was threatened by some stupid virus from a lab in China that the US almost certainly helped fund. This is as much self-preservation as it is altruism.

But yes, the past few years has completely eroded trust. I sincerely hope the COVID origins and cover-up are fully investigated and outed in the new administration and those responsible are punished accordingly...

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Absolutely it's theoretically about "self preservation", but again, if all we can manufacture are high density memory and insanely fast processors we have done nothing to improve the national security of the country because they'll be worthless without the surrounding circuitry which is still manufactured in China.

Those high end chips have great margin so they're good for stock prices and I'd argue given that, that these companies would have built the fabs anyways to protect their IP from China and due to customer demand to not design in Chinese produced chips. If this CHIPS act was about national security it would be subsidizing our ability to make the older technologies on our soil as that CAN'T be profitable without government help (see China who subsidizes the hell outta this stuff) but the people writing the legislation and doling out the money don't understand the technology or that a fab is not a fab is not a fab.

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But this isn't the case at all. There is a good amount of 16, 22, 28, 40 and 90 nm production in the west already. The US and EU Chips Acts are bolstering this capacity a bit as well. Where we had mostly fallen behind was on the most advanced nodes such and 5, 3 and smaller. This was mostly an economies of scale issue, it takes a enormous amount of capital to build and then you need some products to fill it to capacity to be viable.

Again, strong disagree that these folks would have built fabs anyway. We've shut down 10+ and moved mostly to foundry. That era is gone; it's simply too cost prohibitive. You would argue that AAPL, QLCM and NVDA could potentially join INTC here, but it doesn't fit their business model at all. They are moving aggressively to the next node and intentionally don't have the ability to fill the previous fab. Makes absolutely zero sense for them to be in this game.

And again, regarding margins, I will disagree. Some high end processors have good margin, but most (by volume) are targeted at mobile and do not. We do better with n-2,3, or 4 nodes because the COG are significantly lower. We have stuff in 65 and 90 today with far better margin than anything 5nm or below, because as you say a fab is not a fab is not a fab. There are many factors here. I'm cautiously optimistic because some of the people I know directly that are involved are extremely bright, including our CEO, CTO and my GM.