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President Obama Announces Semiconductor Industry Working Group To Review US Competitiveness (venturebeat.com)
The Obama administration has announced the formation of a working group to study issues affecting the US semiconductor industry, especially as they pertain to the nation's economic and security interests. From a report on VentureBeat:Chips are the heart of everything electronic, and they have become a $330 billion worldwide industry. U.S. companies have held the leading market share in the industry -- which puts the "silicon" in Silicon Valley -- for decades. The Semiconductor Working Group includes 11 experts on chips and the broader economy. John Neuffer, president of the Semiconductor Industry Association, the U.S. industry trade group, said in a statement: "SIA welcomes this timely announcement, given new challenges facing the U.S. semiconductor industry, including unprecedented government investment programs from some countries and the increasing technological complexity involved in achieving new innovation breakthroughs. These developments have implications not only for the economy and society, but also national security. In fact, SIA earlier recommended the Administration form a public-private advisory group to help guide government policy related to improving the competitiveness of the U.S. semiconductor industry.
Film at 11.
The US and close allies control more or less the entire semiconductor business. There's no worry of say, China or Russia, competing anywhere in the foreseeable future.
The biggest issue affecting US competitiveness is business taxes. That's why Qualcomm bought NXP instead of expanding organically or buying a US company. If Qualcomm brought their cash back to the US, the US government would steal (confiscate, loot, grab, appropriate, or otherwise take) billions of dollars of it. So companies like Qualcomm do what they can to avoid ever bringing money to the US. In this case Qualcomm bought an overseas company with overseas money instead, getting something of value in return for their money instead of wasting it on government.
If Obama or anyone in his party cared about US industries succeeding, they'd reform corporate taxes. But they won't do that unless they can find other pockets to pick.
Yes, but probably one of the issues on the table will be whether it would make sense for the Fed. government to subsidize the US industry, and if so, how that could best be done, and how would they monitor whether the plan was working.
As one who lives within a few miles of several working fabs, I can assure that high-value semiconductors are being made here.
The cheap stuff (and a good share of the high-value stuff) is being made where it should be - where it is cheaper.
Economics 101.
deleting the extra space after periods so i can stay relevant, yeah.
Better yet, tariff their goods if they don't follow decent pollution and labor laws.
Why should we let our jobs slip away via lopsided conditions whereby other countries keep their labor cheap, oppressed, and poisoned so that their goods are cheap enough to get our consumer money in order to buy a fat military to use against us and our allies?
We are double-kicking our own ass: jobs & military
(I would vote for Trump if he weren't stupid in many other areas outside of trade. Our trade deals DO suck.)
Table-ized A.I.
For example, the fact is that Pringles flavors have been horrible lately. Shrimp flavored Pringles? We need new ideas. The best idea in the last 10 years was to put ridges on Ruffles. But that isn't good enough in 2016 and beyond.
Addendum:
The mentioned tax loopholes affect organizations unevenly such that some companies may indeed go overseas to avoid the US tax system. But that's more about being uneven than having high taxes.
In general different countries will have different tax laws such that some portion of companies may find a better deal overseas even if the average tax difference is small or even better in the US.
As an analogy, the typical things I buy at the market may favor me going to Store B over Store A. But, that doesn't necessarily mean Store A has worse deals in general; but rather just for my particular preferences. I'm not everybody. The companies that leave for tax reasons are not every-co.
Focusing on just those that leave due to this factor is cherry-picking evidence. Some co's may move to the US from countries for similar reasons: for their particular domain or situation, it makes business sense at the given place and time.
This unevenness is unavoidable because every country will have different tax philosophies and laws. As long as it works out in aggregate, we are fine. Some come; some go.
Table-ized A.I.
Obama's jump start to making America great again should have been done long ago. Why wait until he only has ten weeks left as POTUS? Is he trying to build a better legacy? I have little faith in Obama understanding what it takes to kick-start anything that will not involve government control..
That strangely reminds me of one communist leader in the eastern block many years ago - he is giving a inaugural speech for a semi conductor plant, that goes something like this : "Congratulations comrades. With our scientific achievements this year we built a plant for semiconductors, next year we will build a plant for full". Little did he knew what a full conductor is not better than a semiconductor.
When I'm president, we're not going to have these weak "semi" conductors, we're going to have full conductors, and they will be terrific conductors, believe me. Conductors we can be proud of.
You are welcome on my lawn.
This could be translated as lame duck president prepares to dump taxpayer money on helping semiconductor oligarchs earn huge bonuses while laying off engineers that are US citizens and replacing them with "whatever" head shop maggots outsourced or on one of the many abused US work visas. Note that they are talking about labor and tax restructuring but there is no one representing US labor on PCAST.
Sorry, messed this sentence up...
China has already surpassed every country but the US, Taiwan, and Korea in semicondutors in both the fabless and foundry business
Better yet, tariff their goods if they don't follow decent pollution and labor laws.
... and then repeal those tariffs when consumers see prices soar for half the stuff we buy, millions of American jobs disappear because China retaliates with their own tariffs and their imports shift to Europe and Japan instead, and Chinese factory jobs move to Mexico instead of returning to America.
Protectionism is one of those solutions that is "simple, obvious, and wrong".
Except the high-value semiconductors can be made elsewhere where it is cheaper as well. You probably failed Econ101
High-end fabs can run a quarter to a half a billion dollars. Physical security is an important concern at that point. You don't build something that expensive somewhere politically unstable, nor nominally communist, if you can avoid it.
Socialism: a lie told by totalitarians and believed by fools.
Except the high-value semiconductors can be made elsewhere where it is cheaper as well.
For the high end, bleeding edge stuff, it is best to have the fab close to the designers, and close to the vendors for the latest steppers. So the high-value stuff is made in America, because America is the cheapest place to make it when all the costs are considered.
That's fear-mongering. China has much more to lose in a trade-war than we do such that they will likely work something out. Their economy is addicted to exports, we are not. Addicts don't readily give up their drug supply. (We are addicted to oil, but that's another story.)
They already have more tariffs than we do. We are behind the game.
Corporate propaganda. And don't give me the typical Smoot-Hawley story. Smoot-Hawley was a bad idea for us because we were a net exporter at the time, for one. Plus, we don't have to kick in the tariffs all at once. We gradually ramp them up to give everyone time to adjust. Smoot-Hawley did it wrong.
Table-ized A.I.
It's a trade off you see; as a renowned amateur sociologist/economist i'd wager that 90% of the social issues in the US are directly attributable to outsourcing industry.
You take away the low-skill manufacturing jobs that are/were the bedrock of a modern economy, and you're left with scads of really poor, desperate people with nothing to lose.
Look at the economic success stories of the 20th century.. China, Brazil, South Korea, hell even Poland to an extent -- they DID NOT improve their economic standing with that attitude. they build stuff in their country. they export stuff.
Why not ban all manufacturing in the US so that only distilled water may flow down our rivers, and all carbon dioxide will be eliminated from the air?
Re TFA, the semiconductor industry is one industry where the market has indeed worked thanks to one unique company - Intel. As is well known, I'm not a fan of the x86 architecture, but over 2 decades, Intel has achieved the volumes needed to make fabs that are generations ahead of anybody else - be it from Japan, Korea or Taiwan. If the semiconductor industry has stagnated, it's not b'cos of what it is in other sectors - the jobs being offshored everywhere else - but rather, the fact that it has come to a point where two new factors have kicked in:
- Existing semiconductor products have hit the sweet spot of price, performance and power consumption. As a result, they are being replaced far less frequently than ever before. Take Intel itself - how essential is it to replace your Broadwell based laptop w/ a new one using Kaby Lake?
- Process shrinks are no longer synonymous w/ cost reductions the way they once were. Previously, when silicon was manufactured in the 1 to 0.1 micron range, every process shrink was actually a cost reduction due to the higher #die/wafer. However, as we approach atom level scales, this increased number is far offset by process complexity in shrinking, as well as the increased cost of packaging such small die. As a result, process shrinks are no longer a cost down
The attention being paid to semiconductors by the president would be better applied in getting things manufactured in the US again. One doesn't have to demand that no products from China, Laos, Philippines, Costa Rica, et al stop appearing on shelves in Nordstrom, JC Penney, Belk, et al. But the problem is that if one wants to buy something 'Made in USA', it's impossible to find that in most places, and when it can be found, it's usually orders of magnitude costlier than the imports. Given the unemployment and poverty levels all over the country, there is no reason why such products can't be at least at the same price range as the imports. That is where the focus ought to be
It's not just that.
Part of the U.S. economy's strength is its renewable nature. Norway and Qatar are rich because of oil; but the U.S. has information and services. Much of the U.S. economy runs on retail, shipping, and other domestic services: internal trade makes us self-sufficient, such that our ability to produce food, materials, and energy allows us to pay each other to provide retail, construction, and business services. We get wealthier by taking advantage of international trade; but we're not huge on exports of non-sustainable goods.
The U.S. has the world's largest fertile basin and can produce staple food and fiber (clothing) more-readily (i.e. with lower cost, namely lower human labor) than most nations; and our sewage system converts human waste into fertilizer pellets for farming, plus we use manure from dairy and chicken farms. We have an enormous shipping industry, our own automaker industry, and a massive healthcare and IT system (the Internet is a physical thing, run by data centers and cables; and it takes labor here to keep it running). Much of what we need and what we're good at making is made here.
Importantly, all of that stuff is service and renewable goods. Food is renewable: it's made of sun, air, and soil, extended with GMOs (knowledge and information created by labor) and chemical engineering. Chemical nitrogen fertilizer is made using nitrogen gas as a reducer, not a feed stock: ammonia is rendered from the air, and then natural gas is burned to react the oxygen and get carbon, leaving Hydrogen and CO2. In the future, we could use Audi's eDiesel process to use nuclear, solar, or geothermal energy to make methane for the same purpose. We're not shipping natural gas and nitrogen fertilizer; we're shipping food, and new knowledge will find new ways to make food.
Compare that to Norway and Qatar: they run on oil. When oil becomes scarce, its price will go up; at the same time, new knowledge will bring the cost of manufacturing solar panels down. The United States runs on energy, and buys (imports) oil from OPEC because it's cheaper than producing energy locally and, thus, allows the U.S. to use its labor force for other things, making the U.S. and all its citizens wealthier (more buying power). When that is no longer true--when oil is a costlier alternative than solar or nuclear--the U.S. energy industry will switch to nuclear or solar. It's notable that new nuclear plants are almost cheaper than natural gas, coal, and oil power plants today in terms of TCO: the up-front capital cost plus the fuel cost amortized over the life of the plant is practically on-par between nuclear and fossil fuels, and the fossil fuel plants can be the costlier of the two in many situations. This is a new development (nuclear has historically been much more expensive), so it hasn't just been public sentiment that's held nuclear back; it's been cost.
So imagine oil doesn't become scarce for 100 years yet; but nuclear power becomes cheaper than oil power in 10 years. Well, suddenly we don't need to buy Qatar's oil, or Norway's, or Canada's. These countries lose the United States as a customer, quickly; 20 years later, the U.S. is producing its own power from nuclear fuel mined in Texas and California, because it costs us less--meaning we don't have to work to make as much export goods to sell and leverage for the purchase of fuel, and instead use part of that work to make energy and the rest to make more goods (for us or for export to buy stuff we actually want that someone else makes cheaper).
In that scenario, the United States prospers, but the self-sufficient countries of OPEC falter in the loss of their oil market. They can try to slow the process by lowering oil prices, reducing their income from exports and selling their labor at a lower premium. They will become poor countries while the United States makes food and sells nuclear engineering services to Europe. China, meanwhile, will use its ultimately-renewable manufactur
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If by 'High-Value' you mean Intel, you are correct. Intel continues to lead in semiconductor production, but the business continues to move overseas at a steady pace.
Here are the revenues for top semiconductor manufacturers in 2015 (in $M):
Intel 51,400
Samsung 37,810
TSMC 24,975
SK Hynix 26,298
Micron 16,720
These companies probably account for about 70% of the total dollar value of semiconductors produced. Samsung's and TSMC's share rises year by year. Micron has significant manufacturing capacity overseas (Singapore).
It is not foolish to make sure that we don't let the industry slip away. China is pouring massive resources into semiconductors. So far the progress has been slow, but momentum is beginning to build.
As one whose jobs in the industry have been outsourced, repeatedly, I can assure you there are practically no semiconductors made here anymore. We are 'competitive' in name only.
Depends on how one defines semiconductor manufacturing, exactly. Intel still has fabs in NM and OR, and Global Semi has some in TX. There are also still some old fabs in the US. Now, the packaging is increasingly done abroad, and when you have a product, like a chip, manufactured, the 'Made in' label that you see applies to the packaging. So something fabbed in NM but packaged in, say, Malaysia will read 'Made in Malaysia'. That's the convention that is followed.
Beyond that, though, this offshoring had happened way back into the 90s. I used to work in the semiconductor industry - the first a fabless flash memory company called SST, and the latter was Spansion, which was the flash memory spinoff of AMD and Fujitsu's merged operation. In the case of SST, we would get die from different fab makers - TSMC, Seiko Epson, Samsung and later GSMC. Our packaging was done in places like Amkor in the Philippines, and testing was done in test houses in Taiwan. In Spansion, 2 of the Fabs were in Japan (Fujitsu's former fabs) and 1 was in the US (Fab 25, which Spansion got from AMD). Here too, the manufacturing and testing was done in Asia - Thailand, Malaysia, China...
So the semiconductor industry, depending on how you define things, has either been offshored right from the start, or has been here all along. Like I said in an earlier post on this page, the future of semiconductors has been hampered by the present crop being good enough, and market saturation being attained
Nominally communist, no, but Japan, Taiwan and Korea have the state of the art fabs that you are talking about. Nobody is assuming that the Red Guards will roll into Taiwan, or that North Korean troops will overrun Samsung's fabs. Or that Pyongyang will lob nukes into fabs in Japan
What happened to New Mexico? I thought that was where Intel had their fab
Actually, if you cut off people's livelihoods as such, unemployment soars in those areas and a lot of people go hungry. The same rules apply: they have limited income (limited people are buying, and the monetary systems everywhere have a specific amount of total income from which to spend in a given specific span of time), and all goods and services compete for that income, thus all workers providing said products compete for that income.
Trade isn't "letting our jobs slip away". The average labor cost of a Chinese good is $3.50/hr; U.S. minimum wage is $7.25/hr, or twice (2.07x) as much. International shipping in bulk is minor, such that the per-good cost of shipping, e.g., a pair of jeans from China to the port at the U.S. is about 3 cents; the cost of shipping domestically is actually higher per-pair, because boats are huge and efficient at carrying large loads. That means the major cost--around 85%--in the price tag of a pair of jeans (or any good from China) is labor, and they would nearly double in price if made in American factories using minimum-wage workers.
A doubling in price as such would have to draw from the same total income in a given year. People don't wake up with more money to spend, and businesses pay out of revenue: your paycheck isn't `new money[];`, but rather money from goods the company sold that you helped make.
That means people would be able to buy only half as many of these goods.
Now, involved in the price of each good is the cost of the marketing, the packaging, the shipping, the warehousing, the stocking, the retailing, the maintenance of retail centers (labor, materials--floor tiles don't make themselves, or ship themselves), the energy supply (electricity, natural gas), the utilities (water, communication). These costs aren't reduced per-good by moving their manufacture to America; yet the ability to purchase goods reduces.
In other words: if you sell half as many goods, your cashiers still run 980 scans per hour, and half your cashiers become unemployed. Your trucks still carry 24,000 pairs of jeans each; half your truckers become unemployed, as do the proportion of mechanics, vehicle manufacturers, and fuel producers associated with them. Half your inventory workers don't have trucks to unload or shelves to stock, and become unemployed. Retail centers close down like so many Circuit Cities and Best Buys, and the buildings rot; nobody gets paid to power them, to maintain them, to clean the floors, to fix the lights, or simply for rent. A bunch of accountants and lawyers go away, too.
Usually, when you create minor unemployment by technical progress, goods get cheaper. Technical progress includes reducing the barriers to trade so you can get at cheaper goods, e.g. if it takes half as much labor to grow pumpkins in the land over, but twice as much to grow potatoes, you each swap pumpkins for potatoes and not so many wages need paying, thus cheaper food. This reduction in cost leaves consumers with a fraction of their income unspent, and so they buy new things, which then creates new employment opportunities because someone has to manufacture, ship, and retail all those new goods.
(By the way: the hot-blast furnace allowed manufacturing 86,000 pounds of iron using the same labor as the previous process required to manufacture only 400 pounds, thus making railways feasible, dramatically lowering transportation costs. This had enormous impacts on trade. Look up the history of the wooden shipping pallet as well.)
In this case, you've found a way to create major unemployment by rolling back technical progress, reducing total consumer buying power: more must be spent on the same goods, so fewer goods are bought. The fractional cost per-good of shipping and retail isn't reduced, so those jobs are flatly lost. The factory jobs are hewn from a portion of what we lose--which would probably include Netflix, some healthcare, and other luxuries which we can no longer support. IT jobs and other high-level engineering
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I'd think that Japan would be ahead of China as well - I believe that Fujitsu, Hitachi, Mitsubishi et al are still in the semiconductor business
Eliminate the personal and corporate income taxes and implement the revenue-neutral "Fair Tax"(fairtax.org). Then, allow a one-time, tax-free repatriation of any offshore assets held by individuals or businesses. Next, restore a sane trade policy where foreign producers won't be allowed a competitive advantage in the U.S. market based entirely on labor and environmental arbitrage.
That would increase U.S. competitiveness in a huge way and begin a real economic recovery.
I'd think that Japan would be ahead of China as well - I believe that Fujitsu, Hitachi, Mitsubishi et al are still in the semiconductor business
The only significant output from Japan is Toshiba (NAND flash), Sony (image sensors), and Micron (DRAM).
The companies you named there only account for less than 1% of world wide chip sales. Interestingly, Japan's $ share is much larger than their volume share.
You're off by more than an order of magnitude on cost. You're looking at 8-10 billion for a new high-end fab.
What part of "shall not be infringed" is so hard to understand?
We want money! "public-private" + "competitivenes"+"security"=Pork!
putting the 'B' in LGBTQ+
There are others around here besides Intel, but they are specialty fabs, like RF power devices and specialized CPUs. Some are older facilities and amortized, others result of mergers and consolidations.
deleting the extra space after periods so i can stay relevant, yeah.
There is always a reason. You learned that in Economics 101, right?
deleting the extra space after periods so i can stay relevant, yeah.
No policy change will make everyone happy. That's not news.
along with the quakes, pollution, and explosions associated with it.
Table-ized A.I.
Maybe Dan declined.
For those not familiar with Dan: semiwiki.com
Omne ignotum pro magnifico.
Those so-called "other countries" are ancient and sophisticated cultures that were building elaborate temples and writing (albeit upside-down mostly) when our honky ancestors were swinging from trees.
Imposing our environmental standards on them is literally cultural rape in the actual ass.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
I know that's the theory, and simulations tend to bear it out; but real cows aint spherical, and the military issue is rarely factored in.
So far it looks like the benefits of open trade tend to trickle upward, and the simulation writers don't know why yet. Their models are missing something.
Japan is fairly protectionist, yet has one of the lowest unemployment rates in the world. You may argue they have "less stuff" because of that, but it's up to THEM whether jobs are more important than stuff or vice versa. Equations and simulations cannot tell citizens which trade-off to select, only the impact.
Table-ized A.I.
"quakes, pollution, and explosions associated with it" These things are better than dealing with the lovely countries who make up OPEC.
timberland Homme et, dans le même registre, chaussures et combinaisons du film Michel Vaillant produit par Luc Besson, qui est sorti cet automne sur les écrans suisses.Puma talonne désormais la marque Reebook sur le marché planétaire de la chaussure de sport, loin derrière Nike, lourd de 9 milliards de francs et Adidas 5 milliards. Un succès dû à un effet de mode très bien orchestré, mais aussi un capital de sympathie unique. Après l'équipe de football du Cameroun, Puma soutient l'équipe jamaïcaine d'athlétisme. Pas de sportifs connus, mais des affiches, des concerts gratuits et une nouvelle chaussure de ville aux couleurs du drapeau jamaïcain, la H Street, bien partie pour courir longtemps. Aujourd'hui, les dirigeants de OBH justifient l'opération en expliquant, comme l'avait fait Ernst Thomke, que le groupe pourra mieux se concentrer sur ses technologies propres alors que Bally, gagnant en autonomie, continuera ses activités dans le secteur des chaussures et accessoires de mode.
Rather than choose between shit vs puke, move away from oil.
Table-ized A.I.
I know that's the theory, and simulations tend to bear it out; but real cows aint spherical, and the military issue is rarely factored in.
Actually, what I stated is based on an analysis of history, not model theory. It's part of why things get cheaper over time.
Japan is fairly protectionist, yet has one of the lowest unemployment rates in the world.
They do, at 3.20%. That's quite-low; anything under 2% is critical, and under 4% is usually not stably-maintained. Their labor force participation rate is 60.4%, comparable to the United States labor force participation rate of 62.9%; both of these are considerably-high, which can mean many things. A high LFPR can indicate more single-adult households (and thus less poverty) or it can indicate more dual-income households from poverty situations (and thus more poverty); both of these situations can occur even if the total wealth is higher.
The number of employed/labor-force/population/employed-per-population in the United States has recovered since its low point in January, 2010. In millions, 2010: 129.8/153.5/309.3/41.97%; 2011: 130.9/153.3/311.7/42.00%; 2012: 133.3/154.4/314.1/42.44%; 2013: 135.3/155.7/316.5/42.75%; 2014: 137.6/155.3/318.9/43.15%; 2015: 140.6/157.0/320.1/43.92%. That means the labor force participation rate has gone down while the number employed, the number employed out of the whole population, and employment rate have all gone up. Those LPR/employed-per-population/employment-rate numbers are 2010: 64.8%/41.97%/9.8%; 2011: 64.2%/42.0%/9.2%; 2012: 63.7%/42.44%/8.3%; 2013: 63.6%/42.44/8.0%; 2014: 62.9%/43.15%/6.6%; 2015: 62.9%/43.92%/5.7%.
Those numbers mean the number of jobs have grown faster than population. If we were to assume the same 64.2% labor force participation rate as 2010, the 2015 unemployment rate would be 5.87%; using the peak 67% labor force participation rate, it would be 6.07%. Our peak unemployment rate was 9.8%.
You may argue they have "less stuff" because of that, but it's up to THEM whether jobs are more important than stuff or vice versa.
As of January 2015, the United States has grown by 10.8 million jobs; 2.3 million of these are a result of population growth, and 8.5 million are a result of productivity increase. Free trade has been a large part of that; the other part has been lay-offs as we obsolete your job with better processes (e.g. automation).. My above post, describing the loss of millions of jobs if we "brought jobs back to America", illustrates the free trade component.
So you can go ahead and argue to 8.5 million people that they should be jobless so you don't have to worry about getting laid off some time. You can also argue to 320 million Americans that they should be poor so you can have slightly-better job security. Tell the American People that you want America to decay into a third-world country because you're afraid that one day someone might find a way to do your job without you. I'm sure you can find some bullshit argument they'll buy, and a knife they'll use to slit their own throats at your command.
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Once the fabrication has been successfully produced, a cheap lab (cheap in labor), can ramp up and make the expensive stuff and a very very competitive price.
American chips are too expensive. That is not to say they are superb in quality to match their price, but only that the volume manufactured of said chips is not high enough to allow a lower cost per unit.
Leslie Satenstein Montreal Quebec Canada