Comment by alephnerd 4 days ago
Packaging isn't done by TSMC.
Packaging is extremely low value and commodified, so companies prefer to contract it out to OSATs like Amkor.
Same reason why most companies became fabless - margins are much more competitive this way compared to owning your own fab.
No, its a global product silicon chips, america ships em to 100+ countries and will lose its edge if it doesnt stay at the top.
Margins are crucial for this, the driving factor that made US lose its industrial base, is red-tape, red-tape, red-tape, red-tape, political interference, militant unionism (unions are good and fine, militant unions are not), and foolish gov laws which did not make sure that labour standards are consistent for all products in american market, to make sure slave-labour or extremely shoddy labour standard based countries do not erode away great american jobs and its industrial base.
Margins are fine, and good. Unfair competition, rules and red-tape for domestic manufacturers but none for foreign companies, is what killed it.
It’s cheaper for a chinese company to ship to american households than it is for a local american company to an american household… , this is purely because of crazy gov regulations.
Government regulations (like not polluting the water or forcing your workers into 40 hours a week of unpaid overtime) may be part of it. But China has been known to "dump" commodities into foreign markets to destroy those markets
Here's one random article I quacked, and this issue has been going on for years it ain't new: https://edition.cnn.com/2024/03/28/business/china-goods-expo...
China has also devalued its currency to facilitate this dumping spree
Another random quack (more on the how than history, but the impacts are detailed) https://gbtimes.com/how-does-china-devalue-their-currency/
So the narrative that "the US is choking itself with silly regulations and can't compete as a result" is a pure fiction afaict.
> So the narrative that "the US is choking itself with silly regulations and can't compete as a result" is a pure fiction afaict.
No its not fiction, you just said China did this, China did that… Well USA is a country too, why cant it shape policies to advantage the US industrial base ? It can, it chooses not to, out of apathy for the masses.
> not polluting the water or forcing your workers into 40 hours a week of unpaid overtime
Has nothing to do with that, USA has the largest tech ecosystem with silicon valley being at the top, its a huge software ecosystem base, and from end to end, from the beginning to the end, united states governments have carefully co-ordinated to make sure America stays at the top in Software, and it has done so successfully by making one of the most robust and risk-taking investment ecosystem on planet earth.
It could do the same for Manufacturing, polluting water or slave labour taunts are just the boogeyman, the problem is it taking 10 yrs to get enough permits or land allocation for building anything serious industrial, ill-conceived regulations, etc.
People keep mentioning Water Pollution or 40 hour slave labours, yet no one ever mentions the after-math of america’s de-industrialization, the countless rural towns and families in rust-belt who were decimated and completely broken in this process. They resort to drugs just to keep themselves alive, and even that now kills them with overdose with stuff like fetanyl.
Domestic manufacturing stuff does not need slave labour, it needs fair level playing field, which begins with not letting goods made with slave labour or as you said goods made by skirting corners like polluting local water. Americans can perfectly figure out how to scale and optimize things without resorting to slave labour. But they need atleast a level playing field to even be able to survive initially.
The difference is that only recently with the CHIPS Act did the US gov't put money to support strategic industries at large scale.
The US in its history after the 60's would invent a lot of core industrial tech, but then we'd let Japan, Germany, etc. actually commercialize because we didn't want to pick winners.
We invented CNC machining, SMT / pick-n-place for PCBs, industrial robot arms, etc., and these were all American dominated, but foreign countries supported homegrown companies long-term, and those American companies went bust.
Aren’t Intel and Samsung doing packaging research in the US?
The research capacity for almost everything semiconductors related was almost always in the US, but before the CHIPS act, there wasn't much of an incentive to invest in expanding that capacity here (aside from Texas and Arizona, who had very strong semiconductor public-private programs), because the margins are just too dang low to attract any private investment domestically.
The semiconductor industry is multifaceted, and it's very difficult to be competitive in every single segment of it.
For example, Taiwan does great at fabrication, but is horrid at chip design. Israel and India are major chip design hubs but are horrid at fabrication. Malaysia is THE packaging and testing hub, but weak at fabrication and nonexistent in design.
Indeed, Apple* seem to be one of the only companies with the long term vision to integrate vertically and improve industry as a result. The short term pennies-on-the-dollar of outsourcing is just brain-dead and non-innovative.
*this is an observation from someone who has never bought a new apple product due to their increasingly closed eco-system
odd that you're not an Applehead but still think they're somehow "improving" the industry.
perhaps you mean "they provide competition among peers like Samsung and Sony, without which the industry would go slower, perhaps with worse products"?
ah, just noticed that you qualified "bought a new Apple..."
Well... farming exists....
I'm not sure I agree microchips are as critical as stable food supply, but I'd be willing to entertain the idea they're close enough to be treated specially.
This margin-oriented mindset is arguably one of the driving factors that makes the US lose its industrial base.