Posts by ratonahat

German finance minister says nein to more Intel subsidy cash

“When an earthquake occurs all in process wafers are lost. Today that's like three months worth, and before long will be four months worth.”

That’s BS and pure fiction. All the important fab tools have vibration isolation system. Taiwan is also earthquake prone. That doesn’t stop TSMC to build factories in Taiwan. Are you going to argue that TSMC isn’t cost competitive with Intel because Intel makes chips in Arizona and Oregon while TSMC makes chips mostly in earthquake prone Taiwan?

Until CHIPS act, the US and European governments weren’t providing any direct subsidy. During this time asian countries like Taiwan, Japan, and Korea were providing massive subsidies. Even China is trying that now. All these asian countries now have built an ecosystem around semiconductor supply chain. Almost all the major chemical suppliers for semiconductor equipment (ASML is a major outlier) and chemicals are from Asian countries, especially Japan. Having the whole ecosystem in close proximity makes it cheaper to produce cutting edge chips in that region. Additionally, their massive subsidies makes it an even more no brainer.

That’s exactly why TSMC and Samsung doesn’t want to produce cutting edge fab tech in US and Europe. They only want to make old gen nodes here and even that is contingent upon matching massive subsidies.

I think Intel eventually would just stop going against the flow. It just doesn’t make sense to make advance semiconductors in Europe. With the rise of energy cost and unwillingness to match or exceed Asian rivals in terms of subsidies, I don’t see how Europe can be a competitive place for cutting edge fabs. I know it’s sad but it’s the reality.

Japan is paying massive subsidies

Japan just paid $4b to TSMC for their $6b investment. Basically they are matching almost half of the cost. Intel should invest in Japan or may be Korea instead. Both governments pay massive subsidies and there is no shortage of talents.

Intel angles for more subsidies to build German mega-fab

Why not build it in Asia

Asian governments (Japan, South Korea, Taiwan) are offering 40-50% subsidies. Also, the cost to build there is cheaper and has access to top talents. From a pure business standpoint, it boggles my mind that Intel is trying to go against the flow and build factories in EU and US. Why not just get the subsidies from Japan or Korea and build there? Asian companies like TSMC and Samsung were successful while the Global Foundries in New York gave up on leading edge node development.

By the way, China is providing even more subsidies (60-65%) but it is risky to build there due to sanctions. But Japan, South Korea, and Taiwan are our allies and so companies like Samsung, TSMC, and a hypothetical Asian Intel won't get sanctioned.

Intel may delay construction of German mega-fab to cut costs

Re: Germany should

TSMC already said they don’t want to build fabs in Europe since it is too expensive and there isn’t enough customers. Intel should instead build the fabs in Japan or Korea who are offering huge subsidies and are major markets. Both TSMC and Samsung are are enjoying huge subsidies in their Asian fabs. Cost of labor is also cheaper. Moreover, the Asian engineers are tend to be higher quality, which is one the reason TSMC and Samsung leapfrogged Intel.