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European Commission Launches $12 Billion Chip Support Campaign

Posted by timothy on from the there-would-be-this-thing-called-comparative-advantage dept.

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."

10 of 111 comments (clear)

  1. I am willing to go along ... by pablo_max · · Score: 5, Insightful

    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.

    1. Re:I am willing to go along ... by Rockoon · · Score: 2

      Ultimately this costs each EU citizen 10 euros each, on average.

      I always try to consider the scenario where instead of taxation funding it, that the government instead set up a government-managed corporation that issued and sold stock to fund the project, with a share of future profits going to shareholders.

      Some would say that this obviously doesnt work because otherwise a private corporation would already be doing it for the same purposes as the government project, however private corporations like to show actual profit and stuff.. and if it "obviously doesnt work" then its not obviously profitable.

      --
      "His name was James Damore."
    2. Re:I am willing to go along ... by Teun · · Score: 3, Insightful
      In the light of this proposal profit is more than direct return on investment.

      There might and will be benefits for society at large, people get jobs, knowledge is gained and other new ventures can develop.

      Those benefits don't show up in the books of investment bankers but are still very real.

      --
      "The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
    3. Re:I am willing to go along ... by Anonymous Coward · · Score: 5, Insightful

      It's not as simple as that.

      Improved infrastructure provides a moderate benefit to a great many individuals and businesses which can add up to a net profit for the country. This doesn't mean that it would have been a good investment for a private company to build the infrastructure, because it is not possible to capture all the value that the infrastructure creates. For example, a toll road operator doesn't get paid for the reduced pressure on surrounding roads, but the users of those roads still benefit.

      Similarly, this EU investment may make a net profit for the EU but that doesn't mean a corporation would make a profit doing the same thing.

      Or it may be a giant waste of money. But the fact it wouldn't work as a corporation tells us nothing either way.

    4. Re:I am willing to go along ... by SomeKDEUser · · Score: 4, Insightful

      This is a really dumb way of thinking about how the government spends money. A corporation does not need to make a profit: it needs to make a profit now. And not just now, but also high enough.

      Governments are special in that they can finance things which bring in enormous profit in the very long run (fundamental research, very large infrastructure projects) or which have very large positive externalities (free roads). Without governments, you could not build dams: large ones become profitable after 50 years. No bank, no insurance company will accept such long-term risks: they may well not exist that long. Only countries can be reasonably certain of existing within such stretches of time.

      TL;DR; it is an essential function of governments to fund long-term, high-risk projects.

    5. Re:I am willing to go along ... by Opportunist · · Score: 3, Insightful

      Private corporations are concerned with immediate success. They need to show something in their next quarter report or their stocks will fall. Things like investment in future endeavors is rare, and only risked if there's a chance to gain some sort of perpetual patent. But why bother with high investments in basic research when it's far more profitable to whip up some trivial patent of something even a dumb fuck in middle management could come up with?

      No, basic research, the research that actually does lead to groundbreaking results and exciting new technology is NEVER conducted by companies. Never. Remember the laser? You know, the thing that drives your DVD and BluRay drives? Think that was what the idea of Einstein when he whipped up the theoretic basis for it in 1917? Hell, even current patent laws don't allow you to milk it for a century. And no, this is NOT the suggestion that we should extend patents beyond the insanity copyright has already reached. But I ramble.

      A lot, and I really mean a LOT, of theoretic and practical research was necessary, from great minds like Ladenburg, Kastler, Basov and Maiman, and still it took the last one 'til the 1960s to produce a working laser, more than four decades after the theoretic foundation.

      You think any company on this planet would think in terms like this?

      You think any investor would invest in something that could take half a century to produce results you can market?

      Hell, it took 'til the 1980s to produce consumer grade lasers. And 'til the 1990s and even 2000s to make them cheap. Today, though, they're everywhere, from consumer electronics to cutting edge science, from micrometer distance measuring to touch-less cutting. And of course playing DVDs and BluRays.

      Think we'd have any of those things if we left innovation to the market?

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    6. Re:I am willing to go along ... by ebno-10db · · Score: 2

      in the EU, things are a little bit different than in the United States. While corporations do have a lot of power here, it is nothing like what you see across the ocean

      That must explain why in the EU insolvent banks were taken into receivership instead of bailing them out to the detriment of citizens (e.g. Ireland).

  2. Ask IBM why they left . . . ? by PolygamousRanchKid+ · · Score: 4, Interesting

    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!
    1. Re:Ask IBM why they left . . . ? by Nimatek · · Score: 3, Informative

      Infineon Technologies (http://en.wikipedia.org/wiki/Infineon_Technologies), a Siemens spin-off do. They actually even have more facilities than listed on the wiki page.

  3. Re:What about STMicroelectronics, NXP, LFoundry... by Bender_ · · Score: 2

    They are still there. As well as several Infineon Fabs in Germany (Dresden, Regensburg, Warstein) and Austria (Villach), a massive fab by Globalfoundries in Dresden and a large fab by Intel in Ireland.