Europe finalizes €43B Chips Act it hopes will help free it from foreign fabs The European Union has finalized a €43 billion bid to bolster domestic semiconductor production. In a Tuesday statement, the European Commission said it has reached a provisional agreement on the terms of the European Chips Act, which seeks to double the EU's market share in semiconductor development, manufacturing, and …
Just as well we are part of... no wait...
So how _does_ the UK come up with a reasonable strategy to ensure OUR chip supplies don't rely on the Far East and are less vulnerable to geopolitical machinations over which we have little, or no, influence?
I think I may have it - make sure we don't actually manufacture anything here, a policy espoused by all governments since the late 1970s... I am sure there is a flaw in that somewhere but I can't see what it might be...
/s in case anyone didn't pick up on it
No political party of any substance is standing with restoring manufacturing of essential products as a proposed policy.
So it probably isn’t a voter priority. Don’t know how it is possible to change that.
Maybe people know more about it than we do and it isn’t that important.
Dunno. It’s a mystery to me.
Whilst I suspect we agree on many points, we need to ditch the myth that we don't manufacture anything in the UK: on the contrary, we are one of the worlds top 10 manufacturers.
Most people know very few people who work in manufacturing, but that's because of technological progress (it requires far fewer people), same as the reason why the industrial units around every town have 3-phase power and not smokestacks.
To put this into context :
The UK's 9th position as the worlds manufacturing is 1.8%.
Some what difficult to find, but using exports, Electronics is 8.1%, and Electrical Equipment is 3.1% (Food and Drink is 7.2%).
This means the Electronic and Electrical manufacturing exports from the UK are essentially (8.1% + 3.1% = 11.2% of 1.8% = 0.2016% of the worlds manufacturing output.
To put that 1.8% of world manufacturing into context, the UK is 1% of the world's population and 0.2% of the world's land mass. And 9th in the top ten is still 9th out of more than 200.
That doesn't mean we couldn't or shouldn't do better, I believe we could and should: but we still need to ditch the myth that we don't manufacture anything in the UK.
This post has been deleted by its author
@HarryBl
Not quite, but a good number 3 with 18% aircraft engine market share.
https://www.aerotime.aero/articles/32417-who-are-the-world-s-largest-aircraft-engine-manufacturers
Has RR as number 3 with a 18% share of the market like also.
https://www.t4.ai/industry/aircraft-engine-market-share
The leading manufacturer in the Aircraft Engine Industry was CFM International with 39% market share in 2019, followed by Pratt & Whitney with 26% Aircraft Engine market share, Rolls-Royce with 18% aircraft engine market share, General Electric with 16% market share, and International Aero Engines with 1% share.
CFM International market share was 39% of the Aircraft Engine market in 2019. CFM International is a joint venture formed in 1976 between GE Aviation and Safran, a French manufacturer. CFM International's aircraft engine market share is led by its series of best-selling LEAP engines. The LEAP engine series is replacing the formerly industry-leading CFM-56 turbofan aircraft engines. Pratt & Whitney market share was 17.5% of the aircraft engine market share in 2019. Pratt & Whitney is an American aerospace manufacturer founded in 1925. It is a subsidiary of Aerospace & Defense giant, Raytheon. Pratt & Whitney collaborated with Rolls-Royce, Fiat Avio, Japanese Aero Engine Corporation and MTU Aero Engines to form International Aero Corporation, which produces the V2500 turbofan engine. Pratt & Whitney also collaborates with GE on the Engine Alliance to produce the GP 7200 turbofan engine for the Airbus A380 aircraft. Rolls-Royce's market share was 18% of the Aircraft Engine market in 2019.
Yes, the list seems to be this:
1. China – 28.7% Global Manufacturing Output
2. United States – 16.8%
3. Japan – 7.5%
4. Germany – 5.3%
5. India – 3.1%
6. South Korea – 3%
7. Italy – 2.1%
8. France – 1.9%
9. United Kingdom – 1.8%
10. Indonesia – 1.6%
But the list reflects the global manufacturing output in 2019.
Being number 4 in Europe perhaps might surprise some people.
I agree we do still manufacture in the UK but the volume has gone down, the number of (especially smaller) companies has gone down and the variety has gone down.
I spent the last part of my career in recruitment specialising in senior roles in manufacturing. Even before the credit crunch there was a move towards China which took a lot from the inustry, the credit crunch saw literally thousands of smaller firms vanish.
@42656e4d203239
"So how _does_ the UK come up with a reasonable strategy to ensure OUR chip supplies don't rely on the Far East and are less vulnerable to geopolitical machinations over which we have little, or no, influence?"
The UK seems to be using a good strategy. If everyone else is chucking money at providing the same thing then there is no need to compete in that well supplied market. Instead we can do other things and buy from the places that are supplying those goods. Otherwise we could all stand in a farm and pick crops to barely survive but specialisation and division of labour allows us to have modern society
So how _does_ the UK come up with a reasonable strategy to ensure OUR chip supplies don't rely on the Far East and are less vulnerable to geopolitical machinations over which we have little, or no, influence?
Easy! Well, ish..
You are the government. So you can write to every business that lists manufacturing as one of it's actitvities. The power of the Treasury/ONS/DTI compels you!
Ask "What components are you buying, or anticipating buying?"
And ask "What components have you been struggling to buy?"
And ideally by component, include assemblies or modules, because those contain components, some or all of which could be manufactured here.
Then crunch and sort that into a priority list. At which point it might become apparent that the chips that are in short supply might be those other lil 'chips' stuck onto circuit boards that might be resistors, inductors, capacitors etc. And without those components, those actual IC's aren't going to be happy. And those may be easier and cheaper to produce here, other than our higher cost base for stuff like energy, labor, regulations etc etc. And competitors in lower cost base economies are already churning out reels full by the billions.
I'm still not convinced 'chips' are going to work given that market is already wrapped up in IPR by the big players, who aren't going to build multi-billion dollar fab plants to the UK, unless they're massively subsidised. But the alternative is I guess to fund R&D into competing with Intel, AMD, Samsung, Qualcomm etc etc by designing UK or EuroChips that manufacturers are going to buy, and won't end up taking decades of Texan court time resolving patent litigation.
They were offered a subsidy of about 6.8 billion Euro, but with costs rising they are now looking for about 10 billion. That's the bit which may or may not be the deal-breaker.
So the 43 billion pot will certainly help, but once it's spread between the sites and companies, it possibly won't go as far as would be needed to hit the targets for the project.
The Magdeburg project was estimated to cost about 17 billion overall, to put things in further context. Although that was a while ago, so aforesaid rising costs will probably have pushed that towards or indeed over 20 billion by now.
The company's also not doing so well lately which won't be helping matters either...
Subsidies like that are usually not worth it, except perhaps for the headlines and the next elections. Germany splurged billions on attracting manufacturers in "Silicon Saxony" and other white elephants. The companies hoover up the subsidies and fuck off.
What Europe could do with more help is technology transfers from the many excellent research universities and institutions. Better contracts for post-graduate researchers would also be an idea. That money would go a lot further than any of the planned "catapults" to quote Andrew Orlowski.
Let's not forget that that vulnerability was of our own doing, with every "industry captain" hell-bent on having everything made in poor countries instead of building industry in Europe.
Between COVID and China, it looks like some sense has been knocked into a few decision-making heads.
Oh, of course there's the fact that, in order to sell product, you have to have it available - which is a tad more difficult when your production line is a continent away, out of your control, and has suddenly developed a severe case of notavailabilitis.
It would seem that, just like The CloudTM, it appears that local control is once again in favor. And the wheel turns . . .
..and next turn of the wheel we'll have a few years stability and people will forget how hard things were and say we over-reacted and should go back to doing everything abroad...... Just as some are saying that the banking controls put in place after the last big crash can be removed now....
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