They’ve learnt from the banking sector
This is very, very naughty.
In the first few years of the coming DRAM business cycle, DRAM prices will fall as they always do, and Micron shareholders will make out like bandits.But in 5-8 years time…..they will have signed the next cycle of lower fixed-price contracts, and there will be a “totally unpredictable shock” (like there was for the banks in 2008) as DRAM supply struggles to keep up with demand. Possibly related to Taiwan/China geopolitical, but there’s always something. And Micron will be unable to supply at the price contracted, that’s how contracts work, you can’t just raise prices to avoid delivering demand. Then Micron lose money hand over fist, stare bankruptcy in the face. And out will come those leeetle begging hands and pleading eyes “please US government, you must save US industry, imagine how bad it would be for economy if we failed and US industry had no access to US memory chips”. And then the cheque book will come out, and hundreds of billions will be siphoned from US taxpayer to shareholders, over the full DRAM business cycle.
This is how the game works now. Let that be a lesson to those in the EU, who want to “invest” tens of billions into subsidies for the capital-intensive semi industry. You’re writing a blank cheque medium-term for at least hundreds of billions transfer of taxpayer money to semiconductor firm shareholders. It just becomes impossible to say No.
Biting the hand that feeds IT
