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 ...

[glrotate]

This is just evidence that the US has progressed beyond high tech manufacturing - a 20th century legacy industry.

The US is now fully connected and chooses to specialize in bleeding edge products like selfies.

Re:Wake up America ...

[Glasswire]

Nonsense, the biggest fabs of the biggest semiconductor company in the world, making the most advanced microprocessors are located in the US at Oregon and Arizona sites. It's a little company called Intel.

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: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

Government again sells security to highest bidder

[gestalt_n_pepper]

That started with Reagan, who was happy to buy Saudi Oil rather than try and change the USA's energy picture. Sure. No security issue there.

So now we're selling our chip-making infrastructure. But what's one more attack vector? We're already dependent on chips made in China and software coded in India. I guess having our supplies cut off by Abu Dhabi couldn't be much worse.

It's all about moneyed interests. Countries are an illusion designed to keep the little people from revolting, which will continue to work until there's not enough affordable oil to keep cheap food, entertainment and drugs coming down the pipeline. After that, all bets are off.

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.