Slashdot Mirror
European Commission Launches $12 Billion Chip Support Campaign
An anonymous reader writes "Neelie Kroes, European Commission vice president responsible for the digital economy, wants to use 5 billion euros of European Union tax payers' money, together with matching funds from the chip industry, to recreate European success in semiconductors similar to that of Airbus. Because of its strategic importance to wealth creation Kroes wants Europe to reverse its decline in chip manufacturing and move back up from 10 percent to 20 percent of global production."
Assuming that what comes out of it is able to be used by ANY EU based (i.e. PAYING taxes here) firm. I think another stipulation to using any of the research money or outcome of said research should be that the firm which is also based on EU, must also produce the resulting products inside the EU. Not spending my money to gain a competitive advantage and then turn around and outsource all production to China or Brazil.
Basically, if we are paying, we better get real benefits.
That works with airplanes, because the R&D time is much slower. It isn't going to work with high tech. They now have 10% market share? Guess what? If you start hemorrhaging market share in high tech, you are completely fucked. If you don't have designs 5 years into the future then you are 5 years behind. Semiconductors tech isn't something you learn in a university--emerging designs are probably kept more secret than the best kept military secrets. And anybody that can help you catch up has signed a non-disclosure agreement. If you don't have the latest knowledge base and researchers who are preparing for 5 and 10 years into the future, you are SOL.
There are only two ways to catch up in the high tech field if you fall behind: sabotage or espionage. If the EC wants to catch up, they need to spend the money there.
That's where the money is at in the future, anyone can produce the chips.
If keeping our chip production costs more than losing it, then overally this is a bad investment. You could argue that electronics manufacturing is a strategic sector, but in this case we should simply make it a rule to only accept European electronics for security sensitive apllications. That would create a market for domestic production, and keep it alive at a much lower price.
I know they don't do the fabrication, but how much EU tax payer money did ARM need? 50% of this will go to Brussels admin, 25% will go to local pork barrelling, and maybe 25% will end up in subsidising German engineering, which probably funds 50% of these Quangos to begin with.
If people are not allocating money to chip production it's because they can create more wealth DOING OTHER THINGS.
All he will do is in a wholly unimaginative way is force wealth allocation back to a less productive industry because he can't imagine there might be something else which is even better.
Excellent initiative.
IBM used to produce chips in Sindelfingen, Germany. They shut it down a long time ago. On the other hand, Mercedes Benz automobiles are still rolling off the Daimler assembly line in Sindelfingen. So it's not like it's the location or lack of skilled workers or anything like that.
So why is that . . . ? Of course, cars are not chips, despite the Slashdot penchant for car analogies. But it would be interesting to know why someone like IBM pulled out, before dumping a bunch of money on the problem . . .
And what about Siemens . . . ? Do they still make chips . . . ?
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
This is the kind of thing that results in trade wars.
don't forget Intel in Leixlip, Ireland - they seem to be doing ok
They would have much more success if they rather were to (among other things): - lower taxes substantially, - amend/abolish ridiculous labor laws which are killing startups, to allow to hire and fire personnel more freely, - stop throwing taxpayers' money at "projects" and rather lower taxes when they have too much money :),
- abolish VAT (probably the worst kind of tax in terms of negatively affecting economy).
Just give it to ARM and be done with it.
It could help fund ARM to considerably faster speeds and more capability to be useful for multi-tasking and other features.
Lots of them in places such as Grenoble valley ... (One of the IT historical grounds in the world)
There used to be there labs from IBM, Bull and all those behemots from IT pioneer ages ;-)
For instance ..... oh well ... guess what ? Network deployment was planted and financed by US tax payers .... it realy pays of IMHO (Disclamer : I am not an IRS "customer" :P)
My contract with the university is till the end of this year (also, hopefully will PhD-graduate before that). My research is in microfabrication, so not electronic chips, but close enough that my chances of employment have increased thanks to this 5G€.
(In case Slashdot doesn't display it correctly, the last character is the Euro sign)
Because an Intel monopoly is the worst of all possible outcomes
"You don't know how good you had it when Mrs Thatcher was in charge."
The 3 million unemployed would beg to differ.
The internet was started by the Defense Department, and other government entities expanded it. Eventually it was commercialized, grew greatly, and the government portion of the hardware has become an insignificant portion or decommissioned. The internet's hardware today is almost all paid for by non-tax money.
Semiconductor manufacturing is older than the internet and has always been dominantly commercial. Putting government money into semi mfg today is not seed money, it's "industrial policy" (a part of fascism).
The cases are not similar enough to provide guidance.
Contribute to civilization: ari.aynrand.org/donate
IBM left lots of market, at the root of the problem is IBM's patents, they found it easier to make patents of things than the things themselves and just become a big parasitic patent troll. This is why they announce battery initiatives (their Battery 500), not to make batteries, but to make plausible sounding patents in the field of batteries.
IBM leaving a country doesn't mean anything, they've been pulling back from lots of real world projects and I doubt their fab work would continue without the supercomputer subsidy it gets.
I don't think these EU Subsidies work, I remember their Google competitor, the money went to Thomson who spent it on Thomson, and the little money that was available in private funding for search dried up, as nobody wanted to compete with the EU. It had the opposite effect of the intended effect. Thomson canned the project after the German end plugged the plug. They delivered nothing much.
IBM incidentally are the first in line for any EU money, because they know the processes to apply, have the people in place in Brussels and the contacts to set up the meetings and jump the hurdles. Often the people in the departments deciding on the bids are ex-IBM'ers or from the other big lobby groups. So these subsidies usually send money out to big lobbying companies, often American, not the actual EU development companies.
The biggest problem with these EU subsidies is they need to be cross border, to target an EU wide project. So only a few companies need apply, and those companies usually have the fake projects already set up ready to receive the money. So Kroes gives the nod and wink to semiconductors, Nokia, Philips, ST Micro etc. will already know about this due to the close lobbying, will already have the projects that can receive that money split across borders and ready for the subsidy.
The problem with semi-conductor manufacturing in the EU is that the EU has so many regulations, particularly with regard to perceived hazards involving chemicals, that it may be totally impossible to ever build a modern FAB anywhere there. Literally hundreds of chemical species are in their lists of banned substances it's amazing that anything can be made or grown there.
A lot of these chip manufacturers build commodity products that don't make much (if any) money. Most of the profit is concentrated at the top of the food chain with Intel, IBM, etc.
I created a "GmbH" (a limited liability corporation) at no time (1 visit to a notary) and very little cost (the "full" version, not the "1€" version) - and that is what you want for a "real" business. This kind of legal entity can be used for businesses worth hundreds of millions, I use it only for my freelancer business. Costs are accounting (fully outsourced), I have to publish a limited version of my yearly balance sheet, and some taxes. Even with accounting 100% outsourced I consider having this possibly quite "oversized" legal entity (for my business purposes) quite cheap, which is why I decided to get it.
So don't tell me creating businesses (in Germany at least) is "difficult" or "expensive" - you obviously don't know what you are talking about.
Coming from the US you would probably want to have a "Ltd" in the UK, because UK and US law are very similar (since US law is based on UK law, surprise). Since it's the EU you would then be able to do business in any EU country using that UK business. It is a simple operation (founding a UK "Ltd"). Advice can be found on lots of web pages.
I was at an EU company which built a worldwide massive business based on what was in-house developed silicon - a chip - as crystallization point. The semiconductor capability was consecutively sold and innovations of a similar kind did not happen as far as I know thereafter.
Any time a government has to pay to make something worth doing, it means it's bad for the economy. People have this naive idea that jobs are good for the economy (not true, jobs are the result of a strong economy, not the other way around) and that all trade benefits the economy. Nope. Intelligent trade, where both parties get something better than what they are trading away, benefits the economy. So if a company wants to hire someone, and that person is willing to work for what the company is willing to pay, then they both benefit, as does the economy. But when the company isn't willing to pay what people are willing to work for, and the government has to step in to pay to make it happen, that means the economy is taking a direct hit of the difference. In the long run, and for that matter the medium and short runs, too, this will be damaging to the economy and will cost more jobs and more money than it will bring in.
As an example NY State gave $1.37 billion in financial incentives to GlobalFoundries in order for them to locate a plant there. These included $665 million in capital. That was one plant. Semiconductor manufacturing plants typically double in price with each manufacturing node generation. The commission wants to fund 450mm plants which will be a helluva more expensive. All those billions will probably only be enough to fund 2-3 leading edge fabs.
Most of the money will likely go to GlobalFoundries and Siemens in Dresden and STMicro in Grenoble. My guess is the EU Commission will grant the funds to any corporation willing to erect a manufacturing plant in those places. It does not necessarily need to have their corporate headquarters in the EU.
The rest of the money will likely go to the Netherlands in order for ASML to create the next generation lithography tools.
Last time I checked Applied Materials was an American Company and had the whole fab business tied up globally... EU Pollies just Stoopid Social Slaves then OR paying back some of the billions they scamed from Intel and Microsoft ? ;)
bæ8Ã0sÃOE?5r©oÂÃ?âz:ÃÃAÃ?ÃOEÂ6fXÃ?]Â
Not that there aren't lots of problems with these so-called "free trade" agreements that really aren't... but this would definitely be a violation and would justify sanctions (such as tariffs) from treaty member nations.
What good does a "competitive advantage" do if the "profit advantage" is taken out of it?
The Web was invented at another European shared facility; CERN.
It varies across Europe, so I don't understand your general claim. Your "factual" description of the situation is not correct.
- My Northern European country has lower corporate taxes rates than the US in general.
- Hiring and firing is pretty easy, but not without reason.
- VAT is probably the most logical tax, it taxes spending and not income. It's pretty fair regardless of income levels, much more so than income taxes.
That's not the problem at all, and comes across as rather strange. I seriously doubt your credentials with regards to "perceived hazards". Even the Chinese are realizing that they can't continue polluting without consequences.
EU legislation, like RoHS, is now the global de facto standard. If you want to sell to Europe you have to follow it. So now they just manufacture to that [highest] standard regardless of the intended end destination for the product. I seriously doubt the environmental conditions are worse in Taiwan now.
Why don't they invest in *modern* technology? Instead of trying to over-re-engineer something from the last century's early latter half?
I am not sure that Airbus could be created with today's EU treaties. State were a lot involved, something that today's EU fight like hell. And the EU cannot act instead of member states because it does not have their financial strength.
Some would want to change that by having member states giving more money to the EU, but since the EU is totally antidemocratic and since EU leaders are not responsible at all before tax payers, I would prefer that problem to be fixed by reverting to the previous situation where member states were allowed as industrial investors. Airbus and Ariane demonstrated the approach works quite well.
This is another example of the European centrally planned economy. The bloody thing is guaranteed to fail.
Let's not forget Kroes used to be postal clerk. That is exactly the background one would expect from a eurocrat hell-bent on wasting 5bn of taxpayer money.
The USSR had tractors, the EUUSR will have the 21st century equivalent. Morons.
Sematech was originally an "US semiconductor only" equivalent of this. But as most US semiconductor operations were outsourced in the 1990s it became painfully obvious that the US no longer had the economic or technological viability to "go it alone and create US hegemony" in semiconductors ever again. At that point Sematech became an international consortium instead with TSMC, Samsung, NEC, etc. all becoming members because they had become the dominate powers in the industry by economic revenue and production volume. Europe is already the dark horse 3rd place behind the US in this context as it is. It's admirable in a narrow "nationalistic" sense but the economic world of technology is MINIMALLY multipolar where the West can NEVER have monopoly or hegemony ever again, but more REALISTICALLY Asia is now the dominant regional power. It's only delusional fools who are not "reality-based" and who've never actually investigated this on the ground who believe this kind of strategy could ever work.