back to article Chipmakers cut output, investment – but government bucks never go out of style

Chipmakers are cutting back on production capacity and investment as demand for semiconductors continues to fall away, with Micron and Kioxia the latest to announce adjustments in light of the worsening outlook. Micron reported worse than expected figures in its 2022 earnings reported today, and said in response that its capex …

  1. codejunky Silver badge

    Yup

    Prices matter. Glad the UK didnt decide to join in 'attracting' them here

    1. Anonymous Coward
      Anonymous Coward

      Re: Yup

      Tomorrow's prices also matter, and depend upon reliable supply. For example, the Russian gas story. Moreover, the very fact that the EU depended so overly on Russian gas was an invitation for Russia to expect that the EU would cave on Ukraine. Never turn your back on a vicious dog.

      There is a similar logic with semiconductor production, Taiwan and China. TSMC itself is moving, for the first time, to open foreign facilities using it's bleeding edge processes. Smart, because that makes it's facilities in Taiwan have less target value, as well as allowing the company some continuity should Taiwan be invaded or blockaded.

      In addition the "cheapest prices today" policy has led to hollowing of UK manufacturing, replaced by financial services, but that's not looking so good now.

      1. codejunky Silver badge

        Re: Yup

        @AC

        "Tomorrow's prices also matter, and depend upon reliable supply."

        The demand and supply being mismatched which is why the prices are falling (more supply). The EU and US offering money to attract manufacturers means we dont have to and still have pretty good supply. So I am still glad the UK didnt offer money for them to come here.

        "In addition the "cheapest prices today" policy has led to hollowing of UK manufacturing, replaced by financial services, but that's not looking so good now."

        Of course it looks good here. Our cars are cheaper and more reliable, our clothes are cheaper, the family budget actually has more disposable income and we still manage to have low unemployment and higher paying jobs.

        1. Yet Another Anonymous coward Silver badge

          Re: Yup

          So if you were an organisation with a long time horizon and the ability to make your own money - this might be a really good time to invest in building plants which wont come online for 2-3 years.

          Rather than waiting for the next crisis and hoping that pouring billions into it will allow a 9 million women to produce a baby in 1 day

          1. codejunky Silver badge

            Re: Yup

            @Yet Another Anonymous coward

            "So if you were an organisation with a long time horizon and the ability to make your own money - this might be a really good time to invest in building plants which wont come online for 2-3 years."

            That depends. If everyone else is then you will be going into a crowded market with suppressed prices. Instead look for the gap in the market you can exploit before 2-3 years or get into a new development that will set you apart in 2-3 years.

            In the UK's case, if the US and EU are coughing up taxpayer money to bring online more fabs, dont join in. The chips will be available and competing with Asia. Better to plan for the future with more global production.

            1. Anonymous Coward
              Anonymous Coward

              Re: Yup

              Any UK companies wanting allocation will be at the back of the line. This already happened. It's why other countries are making moves to secure supplies. But without a competent or even vaguely tech savvy government the UK is destined to slide further into technological decline. Cheered on by people without a damn clue. So sad.

      2. DS999 Silver badge

        Re: Yup

        TSMC itself is moving, for the first time, to open foreign facilities using it's bleeding edge processes

        Not really. The widely touted US fab they are building in Arizona will produce N5 ("5nm") chips when it opens in 2024. That's TSMC's leading edge today, but any day now their Taiwan fabs begin mass production of N3 chips, and a year after that US fab opens Taiwan will begin mass production of N2 chips. So their US fab will already be out of date on the day it opens, and two generations behind in 12-18 months.

        They will continue to reserve their bleeding edge for homegrown fabs exclusively.

        1. Anonymous Coward
          Anonymous Coward

          Re: Yup

          May 12 (Reuters) - Taiwan Semiconductor Manufacturing Co (2330.TW) is weighing plans to pump tens of billions of dollars more into cutting-edge chip factories in the U.S. state of Arizona than it had previously disclosed ... Reuters this month reported that the previously disclosed factory could be the first of up to six planned plants at the site. Now, company officials are debating whether the next plant should be a more advanced facility that can make chips with so-called 3-nanometer chipmaking technology compared to the slower, less-efficient 5-nanometer technology used for the first factory. The more advanced 3-nanometer plant could cost $23 billion to $25 billion, one person familiar with the matter told Reuters. Details of TSMC's plans for the additional factories at the Arizona site have not been previously reported. Officials have also sketched out plans for TSMC to make next-generation 2-nanometer and smaller chips as the Phoenix campus is built out over the next 10 to 15 years, the person said.

          Of course talk is cheap, and it might come to nothing, or if it does, then come much later.

          1. DS999 Silver badge

            Re: Yup

            If they break ground on an N3 fab today, it will open in 2027 when N2 is state of the art and whatever comes after N2 is months away from mass production.

  2. Rattus
    FAIL

    Output continues to be reduced due to decline in demand.... and yet I struggle to find most of the ICs on my production BoMs.

    On lead times > 1 year:

    - SMPS

    - FPGA

    - Differential logic

    - DigiPots

    - OpAmps

    - RF BJTs

    - DAC

    - ADC

    Hummm demand may be down for top end CPUs GPUs but the rest of the industry is STILL crying out for semiconductors.

    1. David Hicklin Bronze badge

      Hummm demand may be down for top end CPUs GPUs but the rest of the industry is STILL crying out for semiconductors.

      But many of these need the older processes whilst most of the new plants are aimed at the high margin cutting edge ones.

      Hopefully they will still keep on building them, after all these announcements are just for memory?

  3. martinusher Silver badge

    Chicken and Egg?

    I've been reading for quite some time now about the semiconductor shortage and how it affects the price and availability of stuff (especially cars, it seems). Now we're being told that there's too little demand so we cutting production -- and more ominously, investment. This typical kneejerk corporate reaction to demand cycles is how we're losing competitiveness right and left, especially as what they're also really saying is that they're going to cut headcount. This is going in the wrong direction but I suppose government largesse is designed to bolster stock price, not to keep key facilities and staff busy and paid during an economic cycle.

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