Sale of IBM's Chip-Making Business To GlobalFoundries To Get US Security Review

dcblogs writes IBM is an officially sanctioned trusted supplier to the U.S. Defense Dept., and the transfer of its semiconductor manufacturing to GlobalFoundries, a U.S.-based firm owned by investors in Abu Dhabi, will get U.S. scrutiny. Retired U.S. Army Brig. Gen. John Adams, who authored a report last year for an industry group about U.S. supply chain vulnerabilities and national security, said regulators will have to look closely. "I don't want cast aspersions unnecessarily on Abu Dubai — but they're not Canada," said Adams "I think that the news that we may be selling part of our supply chain for semiconductors to a foreign investor is actually bad news."

Comments

Wake up America ...

[Anonymous Coward]

How long are you going to keep pretending that you are doing anything other than sinking into irrelevance?

If you don't make anything, and you have to buy it from the global market ... do you really still think you're innovating and pioneering?

Or will you finally realize your corporations are destroying your economy, and leaving you as a bunch of whiny bitches sitting on the sidelines still thinking you're awesome?

Re:Wake up America ...

[ShanghaiBill]

If you don't make anything, and you have to buy it from the global market ... do you really still think you're innovating and pioneering?

Yes. Innovation occurs during conception and design, not manufacturing. Apple makes hundreds of dollars for every iPhone sold, because they own the design. Foxconn makes ten bucks for manufacturing it.

But this is a silly discussion, since manufacturing is NOT declining in America. America is the world's second biggest manufacturer, with nearly $2 trillion in annual output. What has declined, is not manufacturing, but manufacturing employment, due to automation, and offshoring of the most labor intensive sectors. Since 1975, manufacturing employment in America has declined by 30%, while manufacturing output has doubled.

Re:Wake up America ...

[ErichTheRed]

" What has declined, is not manufacturing, but manufacturing employment, due to automation, and offshoring of the most labor intensive sectors."

And that's good?

I know that the bright rosy future prediction is that everyone is going to jump on board the knowledge worker train and deliver high quality services and creative goods. I don't mean to sound like a jerk, but have you taken a look around at the _average_ person lately? That average person used to be employed in a factory making a living wage doing a repetitive task suitable for their ability level. The reality is that you can't just plug someone like that into, say, an IT or project management job. There is a continuum of IQ and skills, and a healthy economy needs to account for the low end and the high end. You can't just shunt off the low end to fast food, Walmart and unemployment without fixing some of the imbalance, or you will have French Revolution 2.0 on your hands.

I think the future is a lot more bleak -- you're going to have over half the population running around with no income and no way to make a decent living, and the rich who don't want to do anything about it because they've earned their money in their mind.

Re:Wake up America ...

[ShanghaiBill]

And that's good?

Yes. Wealth is created by the production of goods and services, not by "keeping people busy". So if we can produce more, with less labor, that is a good thing.

You can't just shunt off the low end to fast food, Walmart and unemployment without fixing some of the imbalance

Then you fix the imbalance. In America, the bottom quintile already get 40% of their income from redistribution. Providing something like an earned income tax credit to top up the income of people in service jobs makes a lot more sense than keeping people in make-work manufacturing jobs, doing things that a machine can do better.

Re:Wake up America ...

[ultranova]

Wealth is created by the production of goods and services, not by "keeping people busy". So if we can produce more, with less labor, that is a good thing.

It's good for those who get to fire workers and pocket their wages as profit, yes. It's bad for those workers who now have to make do with miserly unemployment benefits, and demonized for it by both their former employers and peers. It's bad for the remaining employees, who get worse pay and more crap due to fiercer competition for the remaining available jobs. And it's bad for everyone once there's enough people getting the short end of the stick that they'll just grab it and beat their masters to death with it.

Then you fix the imbalance.

You can't, because the culture won't allow that. Any attempt to either narrow the income gap or make it possible for the unemployed to live an independent middle-class life will be instantly declared "socialist", and rightly so. Automation is fundamentally incompatible with capitalism, or at least a version of capitalism where people are expected to "earn" their income by working. Just look at how much hate "welfare queens" get, despite that being the only alternative to busywork that doesn't result in social collapse.

Basically, a post-industrial society will either unconditionally pay its citizens their upkeep with no strings attached, be a more or less horrible dystopia where that upkeep comes with submitting to arbitrary rules like taking drug tests or doing pointless busywork, or collapse in a violent uprising. And I think we all know which one Americans will never, ever, under any circumstances allow their neighbours, even if that means denying it to themselves.

It's a pity, really. Once upon the time American Dream was a plot of land, since that's what it took to be independent. Then it became a pot of gold, because again that's what it takes to be free from having to bow to your local Count von Bastardessen to get food. And now, with everything getting automated, everyone could have their virtual plot of land - their share of the automated manufacturing resources, granted in the form of citizen pay - but that's not going to happen. But perhaps the developing countries will take note, and avoid the collapse ahead of us.

Re:For better or for worse

[tomhath]

no private company would want to work with government, because the government would want to get the maximum benefit for the least price

That is no different from selling to any other customer

Wrong criterion

[Tenebrousedge]

No, the government's job is infrastructure, and other things that can be described as natural monopolies. If the start-up costs for a business are in the tens- to hundreds-of-billions, there isn't going to be much in the way of competition no matter what the industry is. If it's actually vital that said industry exists, it makes sense to nationalize it.

However, if competition is possible, it should be encouraged. There's no reason to nationalize SecureWidgetCo if a dozen people could take their place tomorrow, even if they only sell to the government.

It's clear that if the US Government wants to be sure of its chip supply, it needs to be in business for itself. The ultimate reason is not however that it's inherently inefficient for the government to enter into contracts with private companies, but that large scale microchip fabrication is so expensive that no (private, US) company is willing to do it.

P.S. With respect, if your response to this is that natural monopolies do not exist, please save yourself the trouble of responding.

Re:Abu Dubai????

[ultranova]

And we all know neither Abu Dhabi nor Dubai are in Canada. I don't know why it was necessary to point that out.

He didn't say they aren't in Canada, he said they aren't Canada. Basically, he thinks Canada is unlikely to sabotage or spy on the US but someone in Middle-East might get ideas. Which is a valid concern and deserves consideration.