Aggiemundo said:
RED AG 98 said:
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...
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.
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.