Investing in local chip fabs is long overdue. These are incredibly important for geopolitical stability and should be distributed world-wide. We've centralized too many fabs in too few places in the search for low cost.
That was the main argument for global trade already in 1914. France was Germany's most important commercial partner, and vice-versa. All German rifles had stocks made from French walnut wood! All French locomotives had German-made tubing! This stupid mantra was repeated ad nauseam after 1991, too, with silly op-eds from Friedman and friends about how two countries with McDonald joints in both can't be at war and similar inanities. Surprise surprise, such wars happened many times since then (the latest being, of course, Russia vs Ukraine).
A connected world is not a guaranteed sufficient condition for peace. But that does not mean it's not a necessary condition for peace. One could argue that without economic interconnectivity, Europe could have fought WW1 much earlier, or would have had wars much more often.
While I ultimately believe you're correct (along with open borders and travel) I wish there were more rigorous proofs that this were the case.
I think about the line in West Wing: "Free trade is essential for human rights...the end of that sentence is 'we hope because nothing else has worked.' ...Chinese political prisoners are going to be sewing soccer balls with their teeth whether we sell them cheeseburgers or not, so let's sell them
cheeseburgers."
While war and human rights are different, they're also pretty correlated.
Human rights is more than just political rights or speech. Hundreds of millions of Chinese lifted out of poverty is a huge win for human rights. When you're poor, you're not free. Having grown up with dirty streets and beggars, you can't possibly imagine how big a deal it is for me to see my hometown transforming into a modern metropolis, and how my grandparents-in-law (in a different city, in a rural area) finaly have... Wait for it... A fscking toilet instead of a hole in the ground, as well as free health insurance. To me and millions of Chinese, these matters much more than being able to vote for the president.
A recent study by the Democracy Perception Index shows that Chinese feel that their country is democratic. But this is ludicrous, how can this be? It's because Chinese define democracy by whether they believe their government works for their interest and whether they yield good results, not by how their government is elected. It's not just propaganda; this result is consistent with earlier studies by Harvard and York University, as well as by my own experience on the ground.
The concept of 民主 is much more in line with the 19th century definition of democracy, when the concept was brought to China. It was only in the latter half of the 20th century that (in the west) democracy became synonymous with electorialism.
So, not commenting on any other countries. But in case of China, Chinese view democracy and human rights differently. I think we should let them.
Why the false dichotomy? Does political freedom automatically contradict with economic prosperity for some reason now? Born and raised in China, I fail to see how the last 10 years of erosion in freedom has yielded any better results economically.
Please don’t buy the government propaganda that legitimizes everything from stupid to evil as a price that has to be paid to raise people out of poverty.
Nowhere did I say that economic freedom and political freedom are mutually exclusive. What I do protest however is the idea that only political freedom can be considered a legitimate form of freedom. I am making the case that:
- economic freedom is an equally valid form of freedom.
- societies can make up their own minds on what sort of freedoms they value most.
As for "erosion of freedom in the last 10 years in China": this is the mainstream western narrative, but the Chinese people don't view it that way. By and large, they view China as way better off now than 10 years ago. All the data and on the ground talks show this. What else is there it argue about?
It sounds like you are like me, born and raised in China but having lived in the west for a long time. If you live in the west and all you hear is liberal thought and western ideas on political freedom, then after a while it seems like that is all there is that matters.
But I am saying no: what we think here don't matter at all, what the people there think is all that matters. We here can consider China's government illegitimate for whatever reason, but that doesn't make them illegitimate. The Chinese people have way more right to consider what sort of government is legitimate, for whatever reason they want, even reasons that we don't agree with.
> As for "erosion of freedom in the last 10 years in China ... the Chinese people don't view it that way
Really? My girlfriend and her friends would strongly disagree with that statement. From my understanding they grew up in a time when internet in China was a lot younger and they actually had an ability to discuss political discussions, or items that highlight the government in a negative manner.
Now everything that isn't the government's view is incredibly censored/filtered online. It might hard to not see the erosion of freedom when it's being prevented from being communicated online.
Fwiw I'm not disagreeing with your statement on economic freedom and I find the amount of people lifted out of poverty and the growth China has gone through in the last few decades to be incredible but it seems a bit disingenuous to say certain "freedoms" haven't been eroded in the last 10 years comparatively.
What I'm arguing is not whether freedom of speech in China has changed. What I'm arguing is that Chinese people, by and large, value different kinds of freedoms, assigning different priorities. It's like telling an average social media user about the erosion of the freedom to self-host and the erosion of Free Software values. The average user cares about very different things.
The data from decades of research is very clear on this. People like your girlfriend and her social circle, who value freedom of speech the most, are a minority in China. A decreasing minority even. By and large, people are happy with the direction of China. Even if various groups may disagree with specific parts of policy, overall satisfaction is quite high. Freedom of speech is considered a nice to have, not a must, and ranks below many other things such as freedom from poverty, freedom to get quality education, freedom from disease, freedom from anarchy, freedom of security, etc.
The "economic freedom" you describe is not freedom. A better description is "bread and circuses", after the way Roman emperors supposedly kept people happy. The West is familiar with societies like that, because it also describes most of our history. When the elites try to keep the people they depend on prosperous and happy, it's not freedom. It's just common sense for them.
Freedom is not about the freedom of the well-off and the majority. It's always about the freedom of the minorities, the oppressed, and the different. Only their opinions matter. You can only determine the degree of freedom in the society by asking those who don't fit in.
I know many people who come from small towns and rural areas. Places where everyone knows everyone, everyone is part of the community, and everyone helps those in need. Places that are toxic to people who are different. For many of those people, freedom started when they moved to a big city. A city where nobody cares what you are and what you do, where you can safely be yourself, and where you can find other people like you.
I'm sorry, having a toilet instead of a hole in the ground, having proper housing, not having a high chance of dying from poverty, having free healthcare, not having every other street in the city be a huge dumpster, etc. are not "bread and circuses". They are very real, very tangible improvements in quality of life. Your comment boils down again to the tendency to consider political freedom to be the only valid form of freedom.
The hard data from a decade of research is very clear about the fact that Chinese people are overall very satisfied about the direction of their country. No matter what rhetoric you employ, you argue purely from your own perspective and your values. That is fine — for your own country. The Chinese people should have a right to disagree with you on what they value in their own country.
> The Chinese people have way more right to consider what sort of government is legitimate
The Chinese people have no right whatsoever to consider what sort of government is legitimate. The CCP deliberately, systematically deprives of them of exactly that right. Hence the total censorship of thought and expression and the repression of any group that might remotely offer an alternative to the CCP, even non-political religions.
The CCP is like the Model T of political parties - "You can have any government you want, as long as it's the CCP."
i disagree, there's absolute nothing preventing an ordinary Chinese from taking a exam and become someone that actually has influence over domestic policies. Elections aren't the only ways a legitimate government can be formed.
The world has only gone downhill ever since medieval, centralised power structures disintegrated right? Are you following what you preach, and living in a non-democratic country?
You wouldn't be able to make any real policy changes unless you made it all the way up into to the 25-member Politburu (or maybe even its 7-member Standing Committee) [1]. All the other ~90 million CCP members are tasked with implementing the policies made there.
You might be able to become a social policy research professor or something, or where you study Communist/Marxist/Leninist/Maoist/Jinpingist/etc thought and try to develop new applications of it to the modern world. But you won't get to change anything from the Politburu, and could lose your career or worse if you try.
Correct that you have to climb up. But isn't it fine that the Chinese have a different philosophy on governance? They don't want just anyone to be able to make nationwide changes on a whim. They want leaders to prove themselves first by working for 30 years. This is meritocracy. They see the possibility of someone like Trump getting elected, as a huge risk. I think we should allow earth to have diversity in governance systems.
> It's because Chinese define democracy by whether they believe their government works for their interest and whether they yield good results, not by how their government is elected.
I'm going to be thinking about this sentence for the rest of my life
That sentence stuck out to me too. It makes me wonder if the nature of America's representative democracy lowers the threshold by which our elected officials actually have to do a good job / serve the will of the people.
They constantly fall short, even of the narrow interests of whatever their particular constituency is. But there's kind of a floor where we just throw up our hands and say "WELL THEY WERE VOTED IN"
Do our officials receive less psychic pressure? Does the Chinese government work harder to align the populous' desires with their actions?
Study: Congress literally doesn’t care what you think[0]
Their study took data from nearly 2000 public opinion surveys and compared it to the policies that ended up becoming law. In other words, they compared what the public wanted to what the government actually did. What they found was extremely unsettling: The opinions of 90% of Americans have essentially no impact at all.
I assume you are talking about a parliamentary system? Yes, I also prefer it. It is even better if there is a good mix of parties in power -- Germany, Netherlands, etc. It seems like 5-10 parties in parliament forces a good amount of compromise, which results in the most progress possible. I prefer what is loosely termed as a "weak prime minister" where the coalition is multi-party, over a "strong prime minister" where no coalition is required. (Please ignore the scenario of a _constant_ super majority, like Singapore's "People's Action Party".)
GP is probably referring to the electoral system itself: "first past the post" [1]. Essentially a winner take all style of voting which enforces a two-party system.
E.g. In such a system, if a state has 50 seats and a party manages to win 24 of them (while the second place only wins 23 seats), that first party gets all 50 seats of representation.
Dreadful. I don't understand the point of "first past the post" versus a (semi-)Presidential system. What is the _effective_ difference if the outcome is always two parties?
To be fair: My comment is mostly focused upon "Western" parliments, which includes two geographically non-Western places: Australia and New Zealand! If you look at the constant dominance of the Liberal Democratic Party (LDP) in Japan... look _very_ closely... you realise there are many competing factions within the party. So LDP _acts_ like multiple parties and forces the Prime Minister to compromise to get things done. Not perfect, but many outsiders fail to understand this about the Japanese (national) political system.
There’s also weirdness like the electoral college and presidents getting elected despite getting fewer votes than their competitors (see Bush Jr. and Trump).
Except they have no recourse when the party doesn't work for their best interest.
It has been repeated a lot in the past decade because overall things improved but recently the population of Shanghai was put under a terrible lockdown, the government didn't have their best interest at heart and what happened? Nothing, because they can't change anything and because the party doesn't care about their best interest. The party only cares about itself.
Making the populace happy is a lever amongst many they use to stay in power but when their interest and the people's interest doesn't align they have other, brutal means to enforce their policy.
Nothing happened in Shanghai? No, people complained and the government made changes in policy. People complained and they fired corrupt or incompetent officials who screwed things up.
Yes the Shanghai mess was gigantic. But even so, by and large, the Chinese people are supportive of lockdowns even if they protest against specific logistical problems, fuck ups and the overall strain placed on their lives. The Chinese government doesn't lock down because they are an evil oppressive regime, they lock down because the public is at large still very supportive of lockdowns as a measure (especially given the fact that vaccination rates in China are relatively low, and that Chinese people fear COVID much more than people in the west do). If they don't lock down and they let millions of people die through COVID, that's when you will see mass protests and riots.
That "they don't have recourse" is false, this is a stereotype. Protests are commonplace in China. There are literally thousands of protests every year, and often the government is responsive to such protests. Not every single protest is respected, but many are. The Chinese government performs a lot of polls and surveys to elicit feedback and to gauge satisfaction. There's a reason why hard data from a decade of research has shown that Chinese people increasingly believe that the government represent their interest well.
All this stereotyping of the party "only caring about itself" doesn't even make sense when you consider that the party consists of 95M people, or about 5% of the population. Everybody has some extended family member that's a party member. That's a big amount of representation.
I'd say most of the ideas about China come from some sort of reasoning on what a stereotypical authoritarian regime looks like, as opposed to actual facts on the ground. Is China actually authoritarian? From a western perspective, I guess so. But even so, what's underappreciated is that China is a very atypical "authoritarian" regime with a lot more grassroots representation and feedback than one might expect from a stereotypical authoritarian regime.
Making the populace happy being a lever to stay in power — sure, agreed. That's not a bad thing, that's how it's supposed to work in China — the party derives legitimacy from doing good work, and if they stop doing good work then all hell will break lose and the country will plunge into a civil war, as China has seen time and again in the past 2000 years. The government knows this, the people know this, thus the government knows it better do a good job, or else their heads will roll.
I don't totally disagree with you here. There's certainly something to be said about systems that make people happier than no system at all or the wrong system entirely, e.g. the soft power of surveillance being better than a total lack of enforcement of certain rules or heavy-handed and expensive policing efforts that don't work or make people any more free.
That being said, I think there are limits to this philosophy. It's pretty clear by now that not everyone in China is getting a fair shake, to the extent that perhaps it is time for other countries to evaluate their relationships with the output of those in China who are experiencing something that goes beyond the pale in terms of human rights violations i.e. the Uyghur population and the work that they are being "voluntold" for as well as the "re-education" they are experiencing.
I think that for as much sense as it makes for China to do whatever it does, it makes sense for Western countries to do something about the obvious misalignment of values between the two groups. The West not accepting / becoming dependent on economic conditions that result from violations of their views on human rights or democracy is a very reasonable action to take from an ethical and moral standpoint, just as an example.
There may be limits to that philosophy (or any philosophy for that matter). There are no doubt inequalities in China. I just don't think the Xinjiang issue is representative of the problem you're thinking of, because the issue is heavily politicized by western mainstream media and governments, leaving out or mispresenting important facts (as is usually the case with China reporting), and/or representing allegations as final and proven facts even in the absence of evidence.
> Human rights is more than just political rights or speech.
> When you're poor, you're not free.
I appreciate someone 'qualified' making this point. Whenever I tried to argue this in the past, I inherently got dismissed as being in a privileged European position not knowing what I am talking about, (even as an Eastern European), so thanks for your post.
> It's because Chinese define democracy by whether they believe their government works for their interest and whether they yield good results, not by how their government is elected.
And here is the crux of China's zero-covid policy. Follow the Western lead and run covid run its course? That would be millions of deaths even with Omicron being not as deadly, simply because Sinovax is nowhere near as effective as the mRNA vaccines are. It's too late (and politically unwise, given how CCP propaganda praised its selfmade vaccine) to mass-rollout mRNA vaccines, so the only option that prevents millions of deaths (and so, keeps the "social contract" of freedoms vs. wealth) is to brutally suppress Covid.
The interesting thing will be when the Chinese public deems the zero-covid policy "not good enough"...
The "Chinese vaccine don't work" talking point is a bad faith myth created by western mainstream media, which misrepresented this study by comparing single- or two-dose Sinovac with 3-dose Pfizer. This sort of misrepresentation is unfortunately common practice in mainstream western media.
What is true however is that Chinese population has less immunity against omicron due to lower vaccination rates, especially among the elderly. For one, the Chinese don't see vaccination as really necessary because lockdowns work. Second, the Chinese worry a lot more about vaccine side effects. Here in the Netherlands, vaccines are sold as "100% safe, everyone should get it", whereas in China doctors would recommend against getting a vaccine if you have another medical problem such as heart problems. My other grandparents in law choose not to get vaccinated because they have many other health problems due to old age.
Finally, the Chinese public is by and large very supportive of lockdowns despite the Shanghai mess. Rather than "don't lock down" they now just believe "lock down earlier, don't turn into the next Shanghai".
> This sort of misrepresentation is unfortunately common practice in mainstream western media.
Unlike mainstream Chinese media, which always represents facts objectively and doesn't use a headline generator to deflect attention whenever there's some trouble in the country.
I always see this amusing sentiment of "evil Western xyz doing things and stuff", meanwhile it's just something that happens all around the world, and usually even more so in other, less developed places. Maybe the main difference is that I don't get much media from, say, Zimbabwe, but I sure do from the US and even Canada, even if I don't particularly care about the happenings in either place.
Nowhere did I say anything about how Chinese media behaves. This is whataboutism. Even if Chinese media behaves badly that doesn't excuse mainstream western media from behaving badly. This is especially so because western outlets and commentators like to present themselves as morally superior because they have "democracy", "freedom of speech" etc. Well, then practice freedom of speech responsibly by representing things fairly!
Freedom of speech has absolutely nothing to do with representing things fairly. It's about being able to express ideas and thoughts without fears of censorship or retaliation. In fact, being able to misrepresent things is in itself a test of freedom of speech. People have been wailing about the moon landings being faked for decades without disappearing mysteriously. Don't think people in North Korea can afford to spread conspiracy theories about Kim Jong-Un, however.
The cry over whataboutism is funny when you're sharing a paper funded by the Chinese CDC, and taking that as gospel. I'm not excusing Western media anywhere, I'm simply saying "Western" is a pointless qualifier when the problems you are describing apply to media driven by profits and/or vested interests, which is almost every news source.
You are throwing "Western media" under the bus, but in contrast to what? Not Chinese media, which the discussion was about, so I'm curious what your reference point for good media is in this case, that happens to be better than "Western media". Keep in mind that quality levels differ, and if you only follow Murdoch rags, obviously you're not getting quality reporting of any sort.
> The "Chinese vaccine don't work" talking point is a bad faith myth created by western mainstream media, which misrepresented this study by comparing single- or two-dose Sinovac with 3-dose Pfizer. This sort of misrepresentation is unfortunately common practice in mainstream western media.
This isn’t true, and if you look at table 2 in the paper you link it is obvious. With equal dosing, SinoVac is less effective than Pfizer in basically all categories.
SinoVac doesn’t start to have _any_ protection against mild/moderate disease until 3 doses, and even then, it’s significantly worse than Pfizer. It’s hard to know how that relates to disease transmission, but it’s probably fair to guess that less protection against mild/moderate disease means increased viral loads and faster disease spread.
Yes with equal dose before the third dose it's less effective, but why would one compare the two vaccines based on number of dosis to get effective?
Back when there were fewer variants, the Janssen vaccine only required 1 dose; was Janssen "better" than mRNA, and did "mRNA vaccines not work very well"?
Here in the Netherlands, once Omikron arrived, the Dutch CDC advised everyone to get a booster (third dose). Nobody here counts on Pfizer having enough protection with just 2 doses. Why would anyone then compare 2-dose Pfizer with 2-dose Sinovac?
What matters is the eventual efficacy after sufficient boosters. Besides, we already live in a "booster subscription" reality. Here in the Netherlands, the elderly are encouraged to get a booster every 3 or 4 months. In light of all this, I'd say it's very disingenuous to compare based on number of dosis instead of eventual efficacy.
And you say "even [after 3 doses] it's significantly worse than Pfizer". Where in table 2 do you see that?
Severe/fatal disease:
- Three-dose BNT162B2: 99.2 for 60-69 yr, 99.5 for 70-79 yr, 95.7 for >= 80 yr
- Three-dose Coronavac: 98.5 for 60-69 yr, 96.7 for 70-79 yr, 98.6 for >= 80 yr
Mortality:
- Three-dose BNT162B2: 98.9 for 60-69 yr, 96.0 for >= 80 yr
- Three-dose Coronavac: 98.7 for 60-69 yr, 99.2 for >= 80 yr
I'm sorry, these numbers look nearly identical to me? They're all >= 96% for the elderly.
I think you're looking at the "mild/moderate" section. Yes the numbers there are lower for Sinovac. But so what? Protection against severe/fatal disease and mortality is the most important. That it's less effective at mild/moderate disease prevention doesn't make "Chinese vaccine don't work very well".
Heck if we go back in time before there were so many variants, various studies showed Sinovac as having roughly 70% protection against mild/moderate COVID (depending on country; efficacy is context-dependent). That 70% was then branded by western media as "Chinese vaccines are junk, they don't work at all, because our mRNA vaccines provide 90%+ protection against mild disease". And now Pfizer has only 70% protection against mild omikron but it's still represented as "mRNA vaccines are much superior, the Chinese are fscked until they get their hands on mRNA". Yes, what's wrong with that narrative?
For some reason, outside of the context of comparisons with China, everybody agrees that Pfizer works kinda "meh" against omikron; it's merely "good enough to get the job done". But when comparing with China, all sorts of people are suddenly inclined to represent mRNA as the holy grail that can end the pandemic, which the Chinese unfortunately don't have.
The paper says specifically that the data is for Omicron.
Not sure why you call it "security theater". The lockdowns in China work, even against Omicron, even if it has become way more difficult. Shenyang, Guilin, Shenzhen, Guangzhou all defeated omicron without the Shanghai mess.
As for why they don't push vaccines more, that I don't know. Possibly because they are more cautious about vaccine side effects than we are. As I said, doctors in China recommend against getting vaccinated if you have other health problems. The same elderly in the Netherlands would just get a recommendation to get vaccinated because "vaccines are very safe", as we are officially told here.
I think you've got it backwards. Lockdowns existed before vaccines did. So people in China tend to think "you don't need vaccines (and risk side effects) when lockdowns work".
A similar notion existed in Taiwan until they got overwhelmed by Omicron. Lockdowns worked and they were able to keep COVID out of the island, so people weren't interested in vaccines hence low vaccination rates.
Western societies view lockdowns as draconian human rights violations, and don't take COVID very seriously relative to "freedom", but not all societies look at things that way. Chinese people are very afraid of COVID, much more so than westerners, and see lockdowns as an inconvenient but absolutely neccessary measure. Chinese society values responsibility more than freedom.
I'm open to any system of government that systematically tries to pass John Rawls' veil of ignorance[0] test. In theory, it doesn't even have to be democratic. In practice though, I haven't yet seen any non-democracy get even close.
Yes, the Chinese state has made some remarkable positive material achievements for most Chinese. No, it does an absolutely shit job for many of them. Imagine being Uyghur, critical of Xi, religious, lgbti+, black or a combination of the above.
What would it take for a national government to get more passable results on the veil of ignorance test? Try the thought experiment!
> I'm open to any system of government that systematically tries to pass John Rawls' veil of ignorance[0] test. In theory, it doesn't even have to be democratic. In practice though, I haven't yet seen any non-democracy get even close.
What about somewhere like Singapore (nominally democratic, but with a single party in power for decades and widely seen as authoritarian)?
> Imagine being Uyghur, critical of Xi, religious, lgbti+, black or a combination of the above.
Those are very visible examples, but if you're applying the veil of ignorance test you have to weight by how many people they actually apply to. (I wouldn't be surprised if all of them put together represented a smaller proportion of the population than incarcerated Americans, say). Every government system has some fraction of the population that it "gives up on", that much is unavoidable.
> Those are very visible examples, but if you're applying the veil of ignorance test you have to weight by how many people they actually apply to. (I wouldn't be surprised if all of them put together represented a smaller proportion of the population than incarcerated Americans, say). Every government system has some fraction of the population that it "gives up on", that much is unavoidable.
I am deliberately applying an individual level test to the social level. This is not fuzzy utopian everything-should-be-perfect idealism though. Think of it as an extensive test suite to run against a government's policies.
> What about somewhere like Singapore (nominally democratic, but with a single party in power for decades and widely seen as authoritarian)?
> I am deliberately applying an individual level test to the social level. This is not fuzzy utopian everything-should-be-perfect idealism though. Think of it as an extensive test suite to run against a government's policies.
OK, but that doesn't answer the question. What's the pass/fail criterion for your test suite? For China to be such a particularly bad case, it seems like you must be focusing on those particular groups and weighting them more highly than in the actual veil of ignorance test (where one assumes an equal chance of being anyone), no?
This is interesting to read, I'm curious how this diverges/converges from the observation that:
In the West the words for referring to someone formally are words that used to refer to the nobility exclusively (Mister, Misses in English comes from 'Master, Mistress', Monsieur, Madamme in French, Señor, Señora in Spanish, derive from 'My Lord, My Lady' respectively).
So in the West, the cultural transformation was more than mere equality of political voice, but more, that 'we are all nobles', and (domestic?) political history in the West is the ever expanding circle of this inherent nobleness of all (arguably right down to trends in current American social issues).
'Rights' was something that, in the West, was first contested between the nobility and the King, then in the modern period between the wealthy merchant class and the nobility/royalty. James Madison, one of the American Revolution leaders, writes explicitly about how the masses are incapable of the requirements of absolute democracy. So there's definitely something to it when you point out that 'Democracy' in the West wasn't immediately interested in conferring a voice onto every Tom, Dick, and Harry (we'll just set aside the status of women and slaves)
You might be off about 'latter half of the 20th century' bringing electorialism to bear, rather the late 19th century/early 20th century was when, finally, the proletariat started demanding its rights, e.g. The Mexican Civil War that saw the establishment of collective farming lands, the struggle of labor and unions in America and Europe to secure worker's conditions backed by the threat of socialism (which, from Marx himself, is about endignity [ennoblement] of everyone's time), all of which, funny enough, have been desolving since the 90s (NAFTA eradicatd collective farming in Mexico).
Democracy in the West is more than a mere political configuration, its also the cultural precept (however divergent in interpretation), in stark contrast to what you're describing is the history of this idea in China, where, dare I say, the idea of ennoblement stops at a hard boundary unlike in the West.
P.S. I don't know a Chinese language so it may be that the words for formally addressing someone also share this genealogy of descending from terms formerly meant exclusively for nobility.
> Democracy in the West is more than a mere political configuration, its also the cultural precept (however divergent in interpretation)
This was a hard concept for my Thai wife to grasp at first. I described it this way.
In America, each person represents their own kingdom. The government exists to serve (and be subservient) and protect us to keep the peace. I always try to remind myself that government by the people, for the people means that the balance of power lies solely with the people.
This is all fine and good until the Chinese government is leading China down a path of aggression abroad or to a genocide such as in Xinjiang.
As a German believe me if I tell you that being under a totalitarian regime can backfire pretty quickly. It took Hitler only 6 years. Putin took longer but hundreds of thousands are dead for just this year alone.
Interconnectedness means that there's additional price everyone pays for (even a small) conflict erupting, and social ties that can disarm smaller conflicts before they get large.
On the other hand, the cost of significant armed conflict is already very, very high.
The market is unfalsifiable like a religion now. Free trade is captured by rent seekers who believe past success in one special context makes them the best person to handle any context. The memes are no longer based in historical religion, but the lack of critical challenge and blind allegiance to normal humans self aggrandizing story, being dictated at by they who live privileged lives far away is as traditional as it gets.
Coddling certain sensibilities and foisting nostalgia driven politics on the masses, tacit ageism towards youth through hand me down gossip and schooling of industrialist owners who need cheaper labor, are hardly hallmarks of a free society.
We moved manufacturing into rural areas a century ago seeking cheaper labor, then overseas for the same reason. Human agency is dictated by financiers empowered by political tradition. There’s no theory I know of that concludes they are absolutely making sound choices for anyone but themselves. The blind faith in grand schemes thing has got to go.
Interconnectedness exposes your countrymen more to other countries cultures - it is much harder to war against a people who you can't paint as a demonic "other". I don't really think that the private industrial sourcing concerns have any real pressure to apply against war - those industries aren't the government and, even with modern supply chain minimalism, it'll take a while for one or two industry sectors to really cause widespread pain to an economy. Those personal connections across borders, though, those are the best defense against war.
There are ethnic rivalries today in France. I’ll spare you the list, but lowly are paying with their life for some, and girls with their intimacy. It’s systematic in most big cities, anyone who hasn’t been bullied isn’t really living the diversity (spare me the “I know a guy and he’s very nice” – you haven’t lived the real diversity, the unchosen one).
Sometimes, when it doesn’t touch you, you have some fancy theoretical poetry about it; the closer you are, the more you notice how the other is, indeed, wow, gruesome.
You can and should have both. It's a form of defense at depth.
The theory of comparative advantage (David Ricardo) means it's worth specializing. But the counter argument (local resiliency) is also important -- but it may mean less efficiency in the short run, as a kind of investment against risk.
All that is fine, but it opens up the opportunity for short-sighted decisions (basically a mercantilist view that exports = good and imports = bad) like tariffs to protect local mfrs (which removes incentives for them to be efficient).
In short, like everything in life, there's not a sharp decision.
Entering war in 1914, one of the French traditional soldier costume included bright red pants (that made them easy to spot and shoot into on the field). The dye came from Germany. And it was very cheap!
And in 1812 the UK was the US's biggest trading partner. And that created major tensions in the US, with New England almost threatening secession over it. But the war still happened.
The economic relationship between New England and the UK had historically been adversarial up to this point in time. New England was in direct competition with the UK, as both regions were industrial and educated. The monarchy did everything in their power to starve New England of the resources and tradesmen they needed to succeed. This is in contrast to the rest of the USA, which was supplying raw resources for industry.
Friedman launched what I call Friedmanism: The belief that vapid and banal observations are the best way to understand the world. His McDonald's observation launched a thousand opinion writers to imitate him
The economic sanctions against Russia really do seem to be creating quite a lot of internal pressure to stop the war in Ukraine which is not going so well.
Without those sanctions, it is quite conceivable that a troubled war effort would not be nearly so much of a problem, but because of the trade dependency Russia feels quite threatened by the consequences of war. Not enough to have prevented it in the first place, but they overreaced.
Its the same for Ukrainians since EU big powers want the end of war because of economies even if it means Ukraine giving away their territories. You could argue without globalism and a lot of trade that pressure wouldn't exist.
The McDonald's leaving thing was always totally absurd to me for this reason. There are real examples of economic dependence that could and do cause problems. The owners withdrawing ownership though is a pure benefit to Russia. Threemployees get paid by the customers and get supplies from suppliers and all of that is totally unaffected. The only thing that changes is they pay less money to American buisness owners, so if anything, pay might go up or prices might drop as less is skimmed off the top.
How is it a benefit? I somehow doubt that with the supply chains interrupted, the new owners will be anywhere as efficient at their business as their predecessors.
Your analysis is incomplete at this point. We do not know what will be the outcome of war. How long will sanctions and general isolation of Russia hold and what that might result in.
Perhaps it will(as it seems now, also) be seen as catastrophic mistake. Like Russia selling Alaska to US. My point is, it is way to early to tell and even if we knew the outcome: we have to have few events/outcomes like that for them to become an example of mistake to not make.
Generally countries can do whatever, despite all. It is more important we deter them and have tools to do that as broader "world" community. Otherwise we would have to forcefully own "other" countries to secure such peace.
I'd like to think, though, that today's economic connections are less replaceable than wooden stocks or steel tubes. Try replacing modern electronics with local resources when you're Russia, for example.
What evidence do you have to make this claim? A simple thought experiment proves the counter. Let's say there is a population on one island, and another population on another island, and these populations have no way of reaching each other or even knowing of each others existence. These not-connected populations are guaranteed not to go to war. However, give one of them the means of reaching the other population, and most assuredly the chance of war has gone up not down.
If you like ad absurdum arguments: if you connect the countries together so much, they eventually decide to become one country and the chance of war goes down, not up (excluding civil war)
Austria, World War II. Some people saw annexation, others saw reunification, others still saw a bunch of cowards surrendering without firing a single shot.
With all of these things, context matters. If memory serves, Austria being an independent state was one of the terms of the Treaty of Versailles, so if that had been the last act instead of the opening chapter, there still would have been hell to pay. Perhaps not on a par with Caesar crossing the Rubicon, but definitely starting something that requires a resolution.
I don't think they like ad absurdum arguments. But without systematic evidence, there is not way to determine if if such an argument is actually any less valid then the initial claim.
It is actually pretty easy to provide a proof of effectiveness for vaccines. The theory of peace through interconnected and colonies is more complicated. All we have are arguments, and these are not even that convincing. Every trade connection requires compromise, and risks one party feeling taken advantage off. Often rightfully so.
See, that's the problem with franchises. If every McDonald's was run directly by McDonald's HQ, then surely McDonald's would have pressured Putin not to attack Ukrainian cities with McDonald's restaurants in them.
If Taiwan didn't have the world's most advanced semiconducter industry, which China (and all other nations) rely on, China would have long ago attacked it.
So that's an easy example of how trade helps keeps peace.
I think the problem is, decision makers need to understand what interconnectedness means, and not just on an abstract level. If you make things, you're intimately familiar with just how many components come from China. You're deeply aware of the fact the machines you use are made in basically every country in the globe. That the materials you consume come from literally every corner of the planet.
People tend to think about globalization as a matter of buying discrete commodities from different places: bananas from panama. They don't understand that essentially all products today are amalgams from different factories scattered across the globe. That leads to crazy weird decisions like Brexit, silly trade wars, etc. People don't realize that cutting a country out of the system is less like not talking to somebody, and more like cutting out a big chunk of one of your organs.
This is also the problem with something like the Buy American Act. I recently heard about a case where pipes(?) had to be pulled back out of the ground because it was discovered that the steel for the bolts had come from China. All this creates enormous overhead and worsens inflation, not make it better.
I used to believe that but have started to serious doubt it. Some counter-arguments:
1. It's reasoning a'la "It's economically inefficient therefore it's less likely to happen". In my opinions, governments are absolute experts in implementing economically nonsensical policies, international conflicts included.
2. Any link between nations can be weaponized, i.e. imposing tariffs, banning imports/exports, and so on. The greater your dependency on me the more ways I have to harm you.
3. Such weaponization will naturally harm your own citizens but you, as a decision maker, will bear very little cost.
4. The easier it is for me to replace you with an alternative the more likely I am to use that against you -- this is classic BATNA. You don't like my export quota? So what, I've got more interest than I can handle and you can build your batteries without lithium if you don't like that.
Economics is relative. If you go to war and win, you are wealthier than the enemy who lost. If you are confident of victory, the "cost of war" thus matters less, because you get on top anyway.
Of course this only applies in a vaccuum. If there are any nations you don't attack and win, they can just build up their economy while you tank yours fighting and then swoop in to defeat you on the cusp of your victory.
Basic strategy in the game of Civilization. The rest of the world gangs up against a warmonger and unless they can promptly achieve world domination, ultimately self-destruct.
Interconnected yes, centralized somewhere out of your control? preferably no.
In this case, you don't want to be dependent on one geopolitically unstable island. If there is a war, it won't be the EU's decision to start/stop it. You'd want China to be dependent on EU and vice versa, to make it costly to start a war. But if China has nothing to loose by attacking Taiwan and the West would loose all advanced electronics... This is not going to bring any kind of stability. You might only be forced to buy those chips from China, giving the potential aggressor even more leverage (and money)
Given the recent news I think that there is no correlation. Russia and the EU are giving each other the finger and no amount of mutual trade changed Russia's long standing attitude of taking all they can get (of course all global powers do that.) Actually, no trade at all between Russia and the EU would have made that area of the world more stable: the EU won't have to scramble to replace energy providers and no sanction could harm Russia. There would still be a war but nothing else.
For generic trade, yes. But 2020-2022 taught us about what happens to supply chains in emergencies.
In March 2020, I made the following predictions:
1) National governments will do what it takes short to provide for their citizens, even if they have to print money to do so, and risk inflation. Check.
2) Supply chains will be shaken up, costs for most goods will go up. Check
3) National governments in Western countries will seek to have strategic industries moved back to domestic or friendly territories. Check.
4) International trust will detoriate, and international conflict will become more likely. Check.
5) As inflation goes up, central banks will try to raise interest rates, but too slowly and too little. Check.
6) At some point, interest rates will rise to a level that causes a severe recession, with rising unemployment, even though inflation still remains higher than the interest rate. As people take to the street, central banks are forced to lower the interest rate, and possibly resume QE. Still open.
7. As interest rates go down, inflation goes even higher than before step 5. It will remain like this for the best part of 10 years (with high volatility), before some countries are willing to take the Volcker medicine for real.
8. As the economic forest fire ends, debts are erased, retirees have lost their savings and the next super-cycle begins.
It’s also very good at securing international ossification, creating a stultifying society of sameness, with the same few billionaires, multinationals, and technocrats running the show, pushing societal and international stability in service of profits.
I don’t think the result is a net positive. It looks more like keeping a lid on justified dissatisfaction while preventing any upset of the status quo.
You have a little feedback loop here because if you optimize only at a global scale and ignore local scale, you could create unstable local scale systems which destablize the global system as well. Hence the many current failures of neoliberalism.
And of course, as you point out, if you only optimize on the local scale and ignore the global scale, you'll also create an unstable system. Hence the failures of extreme nationalism we've seen historically.
Both cases can lead to instability because of their relationship to one another (the global system is composed of localized systems). You need to look at balance across the entire picture, which means you can't just ignore your own country and its people but you also can't ignore the rest of the world, either. It's tough trying to create a good stable global system that isn't disenfranchizing some large segment of the population.
Up to a point. Like anything, there’s trade-offs that have to be considered. Globalization, at its maximum, would centralize the production of resources to places that are most efficient. As we’ve seen, this causes huge problems when the production and/or distribution systems go down. We finally got a taste of that and are paying the price for it. Some level of decentralization will be good, but hopefully we don’t overdo it and end up too far in the other direction.
I think the parent makes a better point in concrete terms. Geopolitically interconnected trade is all well and good in theory, but putting two superpowers at odds over the consolidation of oxygen right off the coast of one of them, with a long-standing grudge between them into the bargain has obvious implications for stability.
All of economics looks great on paper until basically any little happenstance quirk utterly breaks the whole thing.
> Geopolitically interconnected trade is all well and good in theory, but putting two superpowers at odds
one impression i get is that perhaps economists and leaders thought they could just leave everything to the market - interconnectedness economically through world-wide ("free" market) capitalism - and then they could politically hang up their hats so-to-speak (everything would take care of itself) because everyone would reach great prosperity
obviously, as we have seen in the past 40 years, both within and without there has been alot of economic turmoil (economic crisis) instead of pure prosperity and it turns out politicians couldn't outsource their jobs to the market
countries and regions need to politically strive for peace, cooperation and friendship, the market and trade isn't enough imo
A system that doesn't rely on perpetual tension in the search for ever expanding profit would be far better for stability. It's typically been the case that the ones who have the most influence in government know how to make huge profits from instability and conflict. Take a look at the companies making huge profits from the current instability.
Multiple single points of failure is an oxymoron. Either there is one point of failure and it's "single", or there are multiple and by definition no longer "single".
You are being pedantic. The expression "multiple points of failure" is commonly used to refer to a single system that can be disrupted in multiple ways. They are are clearly referring to multiple independent systems where each system has its own singular point of failure.
There's no contradiction in interconnected economies being both better for global stability and more volatile to global instability. On a populist level, these kinds of questions are always presented as either-or, when in reality it is a pretty delicate balancing act. No, we shouldn't be completely reliant on potentially adversarial states for our basic well-being, but intertwined economies change the cost-benefit-analysis of a lot of adversarial geopolitical actions, and that has led to a lot less war in the world.
The USSR and United States had zero trade and never went to war. And since the fall of the USSR the number of conflicts has not gone down. Ukraine and Russia were very interconnected, but that did not prevent the invasion.
If you’re talking about global supply chain disruption, isn’t that more about lack of robustness than it is about interconnectedness? I don’t see how preemptively reducing global trade in the years leading up to this pandemic would have helped, unless you just mean that we would have gotten used to doing without certain things earlier.
Nah, this is a bargain. Rather than chasing the technology for 50 years, they just waited until it's already mature (2nm may be the end of the road?) and spend a few billion after all the development has happened elsewhere. BTW Germany is already home to some fairly advanced non-EUV fabs with Global Foundries.
>However, it has been shown that access to quantum memory in principle allows computational algorithms that require arbitrarily small amount of energy/time per one elementary computation step.[6][7]
I don't think this is why fabs were centralized. I think this is because when you start to decrease node size, the fab costs go up astronomically so to keep the cost in check you need economies of scale and with the current manufacturing techniques you can achieve this by centralizing manufacturing.
The cutting edge of software that mostly uses these advanced process node sizes is not horribly inefficient. The new applications enabled by, for example, GPU-accelerated ML are not the same as running 400 chrome tabs on an M1.
The hot paths in most important high-end computing are mostly quite efficient.
> The hot paths in most important high-end computing are mostly quite efficient.
it’s hard to determine the lower bound on a lot of these things. in scientific computing (e.g. physics sims) i still run across a lot of runtime branching that could easily be compiled out if we were using languages that had stronger type systems/templates. we use linear approximations for a lot of things, but it’s been shown that smarter interpolation can let you decrease your resolution without losing accuracy/stability. there’s an easy 2x or more perf gain every time you do that successfully. there’s also the boundary conditions: we always simulate more volume of space than we’re actually interested in so as to avoid certain types of distortion (reflections from the boundary of the simulation). over time we’ve learned tricks for reducing those reflections: we’ve applied a lot of general-purpose optimizations, but there’s evidence that we can go further if we encode more simulation-specific information at these boundaries. this whole area has just been slow, steady, compounded optimizations.
i don’t work in ML, but i find it very unlikely that (a) optimizing neural networks is a completely solved problem or (b) that you all know how to train them using the fewest iterations.
you make sweeping statements that just aren't obvious to me.
You seem to be arguing against "optimal", while quoting parent's "mostly quite efficient". The reality is that while everything is converging to a locally optimal point on the tradeoff curve, a _lot_ of software out there runs in the "hardware is my driving cost" locale. This makes companies squeeze epsilons out of their servers. There's also the "selling hardware is my profit centre", which end-users get to pay for.
> If push came to shove we might just consider making better software?
as you say, "a _lot_ of software out there runs in the 'hardware is my driving cost' locale." if something changed -- say, we lost access to high-end fabs -- then my argument is that we have room to focus higher on the stack to make this far less impactful than it would otherwise be. in most places, software is not "optimal", as you seem to agree. in very few places have we even calculated a bound of what optimal _is_. the HPC example was to highlight the latter part: we shift from something like a linear gradient descent to some different descent algorithm and it works better in practice. ML training techniques are always changing to get faster convergence. very, very few of these HPC areas have actual, well-defined performance bounds. it's just a tradeoff of "how much do we invest in algorithms" v.s. "how much do we invest in hardware". i read GP as suggesting otherwise, based on the content of the comment they were replying to.
i'm not even sure there's a disagreement between you and i. maybe not even between me and sneak. i kinda wonder if all of us here just have a different number in mind for what qualifies as "mostly quite efficient". i'm completely confident we have at least 2x perf gains sitting around in just about any computational area that's presently dominated by hardware costs (e.g. HPC, but not e.g. packet-switching/networking). 10x perf gains in many of them: not by micro-optimizing things like memory allocations, but by being inventive with algorithms. that kind of gain is meaningful to me in this area: enough that i wouldn't dismiss it as "mostly quite efficient" as a rebuttal against that original "if push came to show we might just consider making better software".
It's depressing how bloated and slow some software is despite running on way faster machines. The software engineering accomplished in the 90's was nothing short of astonishing.
Software is bloated and slow to make it faster to develop mostly.
Look at your average website with 85 megabytes of JavaScript and Bootstrap for the UI.
TreeShaking in theory can get rid of all that unneeded JS - and there should be something that can do it for CSS, too.
But most people aren't using it. And even if they did, there would still be a lot of bloat left over from using the libraries to make life a little bit easier.
Go to average midsize startup and the amount of this going on is multiplied exponentially by the number of developers.
There's not really a cure here.
There's not enough engineers that know how to do things absent these frameworks - that even if you do know - it's still not worth it because the people you'll be working with probably don't.
Right now, the raw material will come from China because that's where the resources are developed. But once a fab is in place, it makes sense to push more to develop local resources, or at least among more diverse allies.
It doesn't make sense to do that now, because you'd just be shipping local resources to a foreign fab, so that's still a bottleneck. But I think having a local fab is the tipping-point.
copper, silicon, gold, aluminum are sourced from many countries so they wouldn't need any raw materials from any particular country. Also the machines used to make the Fabs are sourced right next door in the Netherlands
"ASML has five manufacturing locations worldwide. Our lithography systems are assembled in cleanrooms in Veldhoven, the Netherlands, while some critical subsystems are made in different factories in San Diego, California, and Wilton, Connecticut, as well as other modules and systems in Linkou and Tainan, Taiwan."
And you can assume those factories depend on sub-assemblies from lower tier factories which are made in even more places.
ASML's core IP was developed and is owned by the US government, that's why they can't ship anything to China without the US's permission. ASML has some fancy stuff but is entirely dependent on the US at the end of the day
There is no alternative. Without EUV machines (produced solely by ASML), anything below 10nm is infeasible until we find a different way that works at scale.
That's really interesting, I had not heard those names in this space before. I would have expected Applied Materials. Maybe Nikon and Canon are suppliers of optics to the more industry specific companies?
Nikon actually supplied the machines for Intel through their 10nm debacle. Canon has completely retired into the low end market, but used to be massive. You're right that I forgot about Applied Materials.
I think historically it's been a challenge mostly related to precision optics, given that semi production is more or less like exposing photographic paper from a negative, through a lens using a light source.
With EUV the challenge is the crazy difficulty of generating the required light source at the right intensity and focusing it. At that wavelength things behave differently, to say the least.
Intel
FLIR
DeBeers
Westinghouse for nuclear stuff
Lots of specialty suppliers for aerospace where there is only one or two companies that do a particular thing.
It took decades for ASML to successfully develop EUV lithography. It was widely thought to be impractical prior to that. No one else was willing to even try.
ASML is not a leaf in the dependency tree of the global semiconductor fab supply chain. It does in turn rely on several other highly specialized partners to supply them with custom-developed components for lithography machines, well-known ones are for example Zeiss and Trumpf (both based in Germany). These partners probably duplicate a significant amount of knowledge necessary to build EUV machines, considering that their components were developed in tight partnership with ASML.
ASML is prohibited from shipping its newest machines to China by the Dutch government, because of heavy US pressure. I'm sure China would love ASML to be fully based there.
May have had something to do with these tweets [1] from Emily Haber @GermanAmbUSA German Ambassador to USA:
>> "The current geopolitical situation and its impact on supply chains has triggered a discussion about “technological sovereignty” in the US and Europe. For us, it means being able to help shape future technologies in line with our values. We see the USA as natural partners in this."
>> "It's one reason our Minister for Education and Research is visiting Washington. Welcome, Minister @starkwatzinger
. Your visit will deepen our cooperation as we face intense global challenges! 2/2"
Why is the local fab specifically important? They're still going to fly the wafers to Malaysia or wherever for packaging, right? And the tools and chemicals will all be made elsewhere, won't they? It's not as simple as having a steady supply of apples from your local orchard.
I'd imagine it won't replace the entire supply chain in one go (although I think quite a bit of semiconductor tooling is already manufactured in the EU), but I think it's a step on the path towards that. Which is probably a good thing considering how fragile it appears some of our hyper-efficient globalised supply chains can be
(1) German BASF is one of the manufactures for "semiconductor chemicals".
(2) More important: Getting parts from Malaysia (etc) is no issue as I don't think they plan to attack any neighboring countries in the next decade. Also, they did not start a trade boycott against Lithuania just over the name of an trade office.
If there is a conflict with China, maritime routes will become much less reliable than they are now, after 75+ years of peace and 30+ years of a unipolar international system.
Plus, I suspect that in a The West vs China war a country like Malaysia will think twice before choosing a side, and I'm afraid they won't choose the West by default.
Malaysia can still be a partner, however this is a big step that opens the door for replacing labor in distant countries with another EU neighbour. This is good for the entire EU.
Yep. Accelerate the global warming for inefficient waste on local fab and pollute the environment globally. For the national security, we could sacrifice all countries including ourself. Hillarius.
Doesn't feel to me like microchips are in such short supply that any more would significantly contribute to the economy. Am I just unaware of the crisis going on all around me?
That wasn't the parent's argument. But, incredibly enough, there really is a shortage in microchips that has lead, among other problems, to shutdown of whole production lines for cars.
It doesn't necessarily matter to have local fabs: at least in the current situation, the worldwide chip production is still a mostly free market with products being sold to the highest bidder independent of location (as long as it's not Russia). But the confidence of this state continuing is certainly lower than it was a few years ago.
> When China attacks Taiwan, the 1st world is fucked.
China would be shooting themselves in the foot by invading, because it would equally fuck them. I've read in may places that as soon as China invades, Taiwan will blow up all the fabs and supporting supply lines. So even if China takes control of Taiwan, the semiconductor industry will be a smoldering pile of nothingness.
This article[1] does a great job in describing why this would be the case. Even if China prevents the destruction of those fabs and factories, there would still be tons of obstacles.
We just have example of another country shooting itself in the foot and attacking Ukraine despite a wealth of widely known arguments against doing this. Unfortunately logic and common sense sometimes take back sit in politics.
Especially when it comes to despotic life-long leaders. After 2018, Xi no longer has to worry about the pretense of term limits. We can only hope the state of Russia after the Ukrainian conflict is a convincing enough lesson.
Invading Taiwan...the risks are substantial and the gain is legacy. Hardly a convincing for a nation, but potentially convincing for a man facing mortality.
> We can only hope the state of Russia after the Ukrainian conflict is a convincing enough lesson
We can also hope that the US refrains from creating another conflict to try to provoke China the same way they have been doing in Ukraine for the last 8 years. This "Pacific NATO" is the next thing. I am very pessimistic because the US is not going to allow China to overtake them in any way, and they have been behaving like that in their entire history.
I've heard the "TSMC self-destruct" story a lot, but I haven't found a source. All I can find are people repeating the claim. Is there a source anywhere?
It's been internet meme for few years when TSMC node lead was evident, and recently someone at US Army War College picked up on concept and wrote a paper suggesting TW should blow up their own fabs to deter PRC invasion when PRC had eyes on invading TW before semiconductors even existed. I guess TW media saw this as serious traction and pushed some articles basically saying "leave TSMC alone". The idea is flawed because preserving TSMC is the only barginning chip for TW, especially post war reconstruction. It's the difference between rebuilding from a advanced/developed economy to rebuilding from a agrarian one. Even with chip act and all the expansion on going, TW is projected to hold onto 90% of advanced node production for a while. It's not in TW/US interest to burn this. Nor PRC but direction of profits and reliant industry means it affects west more. Imagine being the TW leadership asking to be evacuated to US for protection after destroying supply chains of US companies worth trillions. Guessing in 5-10 years when PRC has semi sufficient domestic production, even if a few nodes behind, the meme will be PRC will preemptively destroy TSMC to make TW less desirable to protect.
>> China would be shooting themselves in the foot by invading, because it would equally fuck them. I've read in may places that as soon as China invades, Taiwan will blow up all the fabs and supporting supply lines. So even if China takes control of Taiwan, the semiconductor industry will be a smoldering pile of nothingness.
That sounds incredibly stupid. If China invading is shooting themselves in the foot, then Taiwan blowing up their (worlds most advanced) fabs would be suicide. Nobody ever won a conflict by doing that.
What makes Taiwan inherently better than somewhere else ? If it's just for historical and/or economical reason I don't see why Europe or the US couldn't build their own chemical plants.
You have to start somewhere, it took us decades to delocalise everything to Asia, it'll take decades to build these industries locally.
You have just asked why we can't "just move manufacturing out of China:"
There are no individual chemical plants, there are huge chemical complexes owned by many companies with own well guarded know hows. There may be 2-4 suppliers in a row producing some intermediary product used in making of only 1 output.
Just to make the semiconductor grade hyperpure propanol you need ultrapure catalysts, ultrapure sulphuric acid, ultrapure water, and ultrapure input hydrocarbon stock. Ah, forgot, you also needs an ultrapure tare manufacturer, because bottles you ship ultrapure materials are single use.
You need decades just to replicate this. Now you need to move 100+ of such material chains.
> If it's just for historical and/or economical reason
Simple answer, yes! Taiwan has quietly swallowed near an entirety of the wider precision manufacturing industry.
It been consistently swallowing very capital intensive industries producing exportable niche products one after another simply because nobody else been taking such hard, and risky ventures. Yes, their profitability is not high, but their "moat" is gigantic.
Taiwan been an industrial titan for 20+ years, and the US only finds out about it now.
> You need decades just to replicate this. Now you need to move 100+ of such material chains.
I think decades is a stretch. Keep in mind most of these chains sprung up in the last 3 decades organically in Taiwan and China (and many of them are still elsewhere-- e.g. BASF is still a titan.)
If it's a national priority, you can get some production going a lot faster than this.
> If it's a national priority, you can get some production going a lot faster than this.
Defeating CoVID was too a national priority. Did they manage to build a single new mask manufacturing line?
No, but they actually tried really hard. Dozens of companies were recruited for the effort, and they just gave up after realising that they can't even get a single part in the blowing machine to be made in the US.
> Defeating CoVID was too a national priority. Did they manage to build a single new mask manufacturing line?
I don't think this is a fair representation of what happened. US capacity existed and some additional came online, but then largely failed because of overseas product still coming in below their cost. Semiconductors after a shooting war with China would be a different picture: an imminent return to normalcy wouldn't be in everyone's economic calculations.
Your argument sounds like one for local investment in fabs. The point is that you develop industry (with subsidies) and the ancillary industries follow and then you (and the rest of the world) are not dependent on a single source.
Of course it's not enough to just pay Intel to open a fab you have to compete successfully with places like Taiwan and have a growing industry, otherwise that won't happen. That's the main risk here.
Resource extraction and refinement are much lower capital-cost infrastructure than a chip fab. If, God forbid, all the eggs in that one basket get smashed, it's far more feasible for that infrastructure to be developed elsewhere.
This is spot on and I feel a lot of the comments here miss this context. Germany has tried this before and it was a gigantic waste - they build a fab somewhere at massive cost, claim it as victory because it's "invested locally", zero ecosystem materializes around it, and ten years later the fab is obsolete and shuts down. It helps nobody except the chip company.
GloFo is still producing at maximum capacity (of course, like ~every fab right now), a small ecosystem has developed, and Intel is... oops, not quite moving to the same area - 230 km away is not commuting distance.
Fab operators are hedging against future geopolitical conflict with China and how that will impact Taiwan. Many will scoff at this, but Intel, Samsung and others are putting serious money on it. The people that can still make devices when Taiwan is blockaded by Chinese battle fleets will make bank.
If they're willing to build a lot of processors rather than add dangerous features to use one chip or core or whatever maybe they can make it multiples of ten years this time ;-)
Wenn sie bereit sind, viele Prozessoren zu bauen, anstatt gefährliche Funktionen hinzuzufügen, um einen Chip oder Kern oder was auch immer zu verwenden, können sie dieses Mal vielleicht ein Vielfaches von zehn Jahren schaffen ;-)
That's a silly and naive take. This investment will tremendously boost the semiconductor ecosystem in Germany. In the long run, this will do wonders when German companies want to or have to expand their capabilities, find more employees, design, package or assemble chips, buy wafers, equipment, supply chain, you name it.
It's about building an ecosystem, much like SV. People on HN of all places should know this.
There will be a huge knowledge transfer into Germany during this process. Fab's are fabulously intricate and difficult to run. $5.5 billion to teach your populace how to make chips? Worth it.
>> $5.5 billion to teach your populace how to make chips? Worth it.
Germany already has advance chip fabrication - see Global Foundries (formerly AMD fab). It's not EUV, but even Intel still needs to figure out how to make those chips.
Ideally, the EU would be trying to build its own semiconductor industry. I don't see that kind of foresight in any of our political leaders, much less mine in Germany. So the next best thing is to ensure that the current company we're reliant on builds local production.
Note that the act of giving subsidies to foreign companies automatically kills any case for investing in a truly local chip company, because you can't easily compete against that.
Competing with Intel is out of the question for any local chip company.
But semiconductors is much much much more than high end CPUs. There’s totally a huge opportunity for local chip companies to grow. And having company like Intel may help, as people who work there will get a lot of know how that they can take to smaller local companies to help them grow.
> Competing with Intel is out of the question for any local chip company.
Why? Intell lost the mobile, and is currently losing desktop/server. RISC-V is more promising each passing day. If India can do this, why can't Europe: https://news.ycombinator.com/item?id=31243674
India is hoping it can convince Intel and TSMC to set up fabs in the country as part of their multibillion-dollar manufacturing expansion blueprint.
Bloomberg reported Tuesday that India's government is making pitches to both companies, backed with a $10 billion subsidy plan that can be used to cover up to half of the cost of a new chipmaking plant. The plan also covers new plants for display manufacturers.
> If India can do this
Can do what exactly? AFAIK they haven't actually built anything yet. It's going to be years until they have anything competitive with current gen CPUs. And even if they build something useful there is no guarantee it won't end up like Russian Elbrus (way to expensive and 10 years behind Intel/ARM).
Intel never really had the mobile market and was seemingly never particularly interested in it. They are currently heavily pressured by AMD and ARM based cpus both in the consumer and server markets.
It took Apple, one of the most powerful company in history, about decade and half, multiple acquisitions and many billions of dollars to be able to compete with Intel.
By the time any incumbent in Germany would be ready, even assuming they start right now, that fab will be heavily outdated.
But there’s literally bazillion other semiconductors (and they are the main reason for the shortage, not high end CPUs) that you can competitively manufacture and increase supply chain locality for critical components.
Germany used to have a semiconductor industry like Intermetall (acquired by micronas acquired by TDK). The problem is that IMHO German automotive industry is not willing to pay a cent more than necessary.
They do only care about short term profit. They triggered the chip crisis in Germany by stopping there orders and then restocking. I am not sure if any government can fix this.
>Germany used to have a semiconductor industry like Intermetall (acquired by micronas acquired by TDK). The problem is that IMHO German automotive industry is not willing to pay a cent more than necessary.
How about the three fabs that Bosch has in Germany? Or Infineon, X-Fab, Globalfoundries, TI, Prema, Elmos (now Siltech), Vishay, Nexperia?
Silicon on hacker news pretty much always means latest and smallest logic node, because most commenters aren’t aware of semiconductor applications beyond computer parts and assume everything is about 7 5 3 nm because that’s what gets in the news.
Sorry for being imprecise: I ment a much larger specialized semiconductor industry, that did not survive the market pressure. True that Bosch, Osram and Siemens (now Infineon) have survived. But I think things like RAM production moved out of Germany. Global foundries (formally th AMD fab) is an example of a non-European company, although certainly there fabs and are no clones of US fabs. However, afaik the industry used to be much more diversified and innovative at a time. Actually there is still some interesting exception in the list: https://en.m.wikipedia.org/wiki/List_of_semiconductor_fabric...
"The X-FAB Silicon Foundries is a German group of semiconductor foundries, with headquarters in Erfurt (X-FAB Semiconductor Foundries AG is located in the south east industrial area between Melchendorf and Windischholzhausen). The group specializes in the fabrication of analog and mixed-signal integrated circuits for fabless semiconductor companies, as well as MEMS and solutions for high voltage applications."
I mean, the fab is physically in Germany. That's what matters for national security.
As an American, would I (hypothetically) rather have a Germany company building F-35s in the US than an American defense contractor building F-35s in Indonesia? I think the answer is obviously "yes".
The fab is in Germany. In a scenario where the US and Germany are at odds Germany is the one with a fab. I doubt it weakens Germany's position unless they sacrificed funding some German chip maker, but I don't think they have anything near as huge as Intel.
They are dependent on and subservient to the US and its geopolitical interests. We see this right now with Germany self-sabotaging it's own economy and industrial power by cutting off cheap Russian energy at the direction of US policy interests (Nord Stream 2 was agreed upon for years between Russia and Germany but thwarted at every turn, sanctioned etc by US).
It wasn't thwarted at every turn. Maybe we should have but we didn't, at least not at every turn.
We did warn then it was a bad idea. Other countries especially countries in Eastern EU warned them it was a bad idea. And lo and behold trying to bring peace through trade didn't work with Russia.
Unless Germany wants to exit the EU like the UK it does have to take the interests of other EU countries into account, many of them are much more anti Russia then America for obvious reasons. And even if Germany were to leave, not sanctioning Russia now would still be bad even if only considering German interests
US sanctioned Swiss and Russian suppliers constructing the pipeline, and debated in Congress and Whitehouse various policies to ban it's activation.
>it was a bad idea
It isn't a bad idea. It's a very good idea for Europe. Cheap plentiful energy supply from your neighbor and expanded economic relations would be a very good thing for making Europe economy strong.
Sanctioning Russia is hurting Europe severely. They have massive gas and oil needs supplied by Europe. The sanctions hurt German industry and this energy cannot be replaced by other sources anywhere near similar prices or volumes
It was a very bad idea. "We don't need nuclear power, we have Russian gas" is pretty hard to defend as an idea, really. Especially after Russia went pretty overt in its ambitions to re-establish the empire. And the invasion of Georgia was years before construction of Nord Stream 1 started and Nord Stream 2 went into planning. The annexation of Crimea years before the construction of Nord Stream 2 started.
Fun fact: the rabidly anti-Nuclear part of German politics is the Green party. Who are also the most pro-American and pro-War faction these days. It makes 0 sense.
I do think that the only pro war faction is not found in german politics but in russia. How are the greens in favour of russians war of aggression in ukraine?
>President of the European Council Donald Tusk said that Nord Stream 2 is not in the EU's interests.[19] Italian Prime Minister Matteo Renzi and Hungarian Prime Minister Viktor Orbán have questioned the different treatment of Nord Stream 2 and South Stream projects.[19][20] Some claim that the project violates the long-term declared strategy of the EU to diversify its gas supplies.[21] A letter, signed by the leaders of nine EU countries, was sent to the EC in March 2016, warning that the Nord Stream 2 project contradicts the European energy policy requirements that suppliers to the EU should not control the energy transmission assets, and that access to the energy infrastructure must be secured for non-consortium companies.[22][23]
Diversify the gas and oil supplies after you lock in a consistent steady supply, not before lol. Now European industrial capacity will crater. They need energy to fuel their economy. No nation ever became strong or a world power by consuming less energy, or paying more than their peers.
And, just because they want to diversify, doesn't mean the present geological and economic reality allows for it. Utopian policy in place of realpolitik is foolish. Same with ESG and insane green anti hydrocarbon, anti-nuclear policies.
It is only my claim that their interests are not completely aligned. US is much more energy independent and gepolitically secure across the ocean from whatever happens on the "world-island" [0].
Whereas Europe might directly suffer from instability and chaos, as well as loss of Russian energy supplies, the US would not and in relative terms becomes stronger if Europe is severed from Russian energy, and the continent is in conflict and chaos.
Europe having tight relations with Russia, economically especially energy-wise, is greatly beneficial to Europe and detrimental to US hegemony.
> Europe having tight relations with Russia, economically especially energy-wise, is greatly beneficial to Europe
You're once again excluding any calculations of Russia using the money to run around overthrowing democracies. "It's greatly beneficial if you ignore all the mass murder."
The whole reason why they're now cancelling NS2 is because of this. Germany likes cheap energy, sure, but they're less than enthused about the money paying for that cheap energy going into executing and raping civilians in Ukraine.
> The United States accounts for the vast majority of airstrikes (75–80%), with the remainder conducted by Australia, Canada, Denmark, France, Jordan, Belgium, the Netherlands, Saudi Arabia, Turkey, the United Arab Emirates, and the United Kingdom.
> Since at latest 2004, a significant goal of the group has been the foundation of a Sunni Islamic state. Specifically, ISIL has sought to establish itself as a caliphate, an Islamic state led by a group of religious authorities under a supreme leader – the caliph – who is believed to be the successor to Prophet Muhammad.
If you want to call wars mass murders, that’s your call. I support complete defeat of ISIS/ISIL to the last member. Seems like you have a rhetorical axe to grind, mass murders sounds like a dog whistle to the people with anti-US sentiments. Not an objective argument.
America was murdering people in the Middle East more than a decade before ISIS was formed. How is what America did in Fallujah any less evil than what Russia did in Mariupol?
> It is in EU's interest to keep trading with Russia
Russia's been blatantly assassinating people across Europe for years and would invade Poland in a second for personal pleasure even if it caused an economic loss for them again.
They haven't evolved past Mongol horde methods of living with their neighbors and are relying on everyone else always taking the "rational" result of appeasing them rather than fighting back. The correct response in this iterated game is to punish them and let their more productive people immigrate to you.
the US has been blatantly assassinating people across the Middle East and across the entire American continent
They haven't evolved past Far West horde methods of living with their neighbors, they are killing each other with firearms and countless death in schools
They let their people die, and their house burn because they have no money
They impose trade sanction to whoever doesn't want to knee and show their submission
They'll also impose their military base in your country [1]
Look at the evolution of Russia past 3 decades, and look how it has improved significantly, same can be said with China, they are barely in debt, what can be said about the USA? during that timeline
Ohhhh, yeah, the USA can trade with Saudi Arabia, no bid deal there ;)
But yeah they are good at seducing people, so the pill is easier to penetrate, i will give that to you
> the US has been blatantly assassinating people across the Middle East and across the entire American continent
Have you noticed that literally nobody cares about this? Even the people we killed don’t care. Even Greenwald, who started this line of argument, doesn’t really care - he just hates Obama, he dropped it the second the next guy did it even more. (And Biden has completely stopped doing it.) Even you don’t care, you’re just doing whataboutism.
That’s because the ME countries aren’t actually allies just because they’re next to each other. More importantly, we don’t lie about it when asked, and we don’t use wacky spy methods like poison and radioactive weapons.
No it's in Germanys interest to f*ck Russia up as much as they can financially (and in terms of weapon shipments ( in the hope it ends the war sooner. And diversify their energy.
Germany's intrest is for Ukraine to win as quick as possible
Before the war Germany at least had a reasonable sounding argument (peace through trade) but it's been proven totally wrong they need to admit they were wrong and move on
I don't give a fuck about tactics and crap, this isn't Starcraft.
My definition of winning is the same definition of winning war has had since the beginning of time: achieving one's political objectives.
Ukraine's political objectives are:
* To be in the strongest possible position at the peace table
* To get military and political support from the West against Russia during the conflict and after the conflict is over (EU membership, military protection from NATO if not NATO membership).
They are on track to achieve both.
Russia's political objective was clearly regime change, which miserably failed, and then control of Donbas, which they are struggling to achieve.
So, who's winning?
The only way Russia wins is if nonsense Russian talking points infest Western public opinion so much that we stop arming Ukraine.
It is amazing how propagandized people in the West are during this conflict. Of course this exists on all sides, but it boggles the mind to hear that Ukraine is "winning" this conflict. You know who else isn't winning and is hurt the longer it goes on? Europe, and Germany particularly!
Russia's currency is stronger than before the conflict, their trade surplus is larger, they are making more money from elevated energy prices, they have and will have more territory.
Europe / Germany through stupid sanctions, and talk of more, against Russian energy have inflated energy prices and now have to purchase energy in Rubles after they confiscated Russian Euro and USD foreign exchange reserves. Whereas before they could purchase all in their own currency and were in talks to expand gas supplies through Nord Stream 2, now they've cancelled that project and on the margins have to buy Rubles to buy energy.
Prediction: The pain will increase on Europe and they will realize their bread is buttered in the east, they will come to the conclusion that positive trade relations with Russia, compared to the US are more advantageous and eventually they will approve Nord Stream 2. They will do everything they can to regain the ability to buy all or most energy and commodities from Russia in Euros, meaning ending sanctions and not expanding them.
Good video describing the geopolitical dynamics of European / Russian trade relations after the war ends in Russian victory: [0]
Two months ago Russian forces controlled a greater fraction of the territory that they do now.
While wars are fundamentally unpredictable, most military experts agree that further Russian advances are extremely unlikely, and that the best result Russia can hope for is a stalemate along the front as it is right now.
Yes, Russians didn't manage to take Kiev or Kharkiv. But that doesn't change the fact that they are making progress in the east and the south. Wars have more than one front.
It is not possible for Ukraine to win, they are slowly but methodically getting their country destroyed. What does Germany lighting money on fire funding this destruction do for German interests?
How does this solve their energy needs? It doesn't, it along with sanctions makes energy more expensive. Where they used to be able to buy all energy in Euro's, now some of these purchases now require buying Rubles. Thus Ruble exchange rate is up and Russia's trade surplus is growing.
Germany's alliance with NATO expansion and US meddling in Ukraine along with following US lead to cancel Nord Stream 2 is crushing their economy. Self-sanctioning out of Russian cheap energy supplies will further destroy their industrial output.
>hope it ends the war sooner
hope. That's all they have. It will only impoverish them sooner. Diversification of energy is a worthy goal, but it insane to do this now by first cutting off their primary cheap energy supply. First, continue to buy as much cheap energy as Russia will sell them (instead of selling it to the East). Then, cancel ESG green insanity and pursue oil/gas investments and nuclear expansion wherever possible. But at the end of the day if your neighbor wants to have good trade relations with you, you shouldn't throw that away in service to your "ally" across the ocean.
This is backwards, its not possible for Russia to win since Russia is having much more trouble with getting recruits and training them then Ukraine is and can't easily manufacture replacements for lost hardware while equivalents are being provided to Ukraine. The longer the war goes the worse it goes for Russia. Yes Ukraine faces death and destruction but the mood in Ukraine is a determination to keep fighting and Russia is incapable of inflicting enough damage to change that.
Russia was the one meddling in Ukraine, not the US, to Russia's detriment. They are the ones who have set Ukraine against them with their actions. Their actions have led to Finland and Sweden
to apply to join NATO.
Based on Russia's actions its clear that Nord Stream 2 should never have been built
>But at the end of the day if your neighbor wants to have good trade relations with you, you shouldn't throw that away in service to your "ally" across the ocean.
Russia is not willing to have good trade relations with Germany. Decades of German politicians have bet on buying Russia's good or at least tolerable behavior through economic interdependence.
Russia made all of them into fools and proved their critics right.
This isn't about America. This is about the EU, about Poland and Czech Republic and Lithuania and Finland. And most of all this is about Germany. Russia is the one who threw it away and proved that Germany's interest was not to buy from Russia
> In recent weeks even Frank-Walter Steinmeier, the German president, a totemic figure of the Social Democrats and greatest German advocate of the trade “bridge” between east and west, has recanted. He admits he misread Russia’s intentions as he pursued the construction of a new undersea gas pipeline. “My adherence to Nord Stream 2 was clearly a mistake,” he told German media in April. “We held on to bridges that Russia no longer believed in, and that our partners warned us about.” This is an extraordinary admission for a man who acted as chief of staff to Gerhard Schröder, the Social Democratic chancellor from 1998 to 2005 and thereafter a lavishly rewarded, and much reviled, lobbyist for Vladimir Putin. Steinmeier was also foreign minister under Chancellor Merkel, and a great evangelist for Wandel durch Handel, the concept that trade and dialogue can bring about social and political change.
Maybe in the short term, but it's become clear from this conflict that Russia uses its economic exports as political leverage-- as does any nation.
The problem comes from what they've decided to use their exports as leverage for.
Economic interests don't have to perfectly align for one nation's relationship and favor to be preferable over another.
Economic interests don't exist in a space devoid of cultural, ideological, or emotional ones.
Reaching the conclusion that relationships should be normalized is only truly ideal if you're viewing it: A) in an economic only vacuum and B) from a lens of maximizing Russia's resource based leverage, because that's all they have.
Russia has been a hostile actor to germany and the rest of the EU for more than a decade. Russia financially supports radical political movements with the sole intention to harm/destroy the EU.
Russia has regularly ppl killed on european soil. Sometimes using chemical weapons that cause collateral damage.
Russia has an extensive propaganda and disinformation network running in europe.
Russia massively buys political influence by shopping for ex politicians, this way corrupting the political process.
Russia has a history of military conflicts with its neighbours, see occupation of Trnsnrista in moldowa, abchasia and south ossetia in georgia, the annihilation of chechnia, all the stuff in ukraine and helping belarusian dictator Lukachenko suppressing his people.
Looking at the levels of gas storage in europe by gazprom it is very obvious that its behaviour was not driven by good faith financial interests but as a weapon of the kremlin against europe.
And lets not forget the shooting down of MH17 where, not only did the russians deny any responsibility, they even clogged the public discourse with disinformation campaigns of tons of ridiculous and contradictory theories.
So, no it is not immensely in the interest of Germany to have good relations and continued trade with Russia as long as this regime is in power. Flood ukraine with heavy weapons till the russians are driven out. Then put up a new iron curtain till something substantial changes for the better.
wow, first time on HN ive seen both arguments and counterarguments this ridiculous. but wait, what am i saying, they are claims devoid of proof, references or even arguments.
We invaded germany in 1940s and we've been occupying it ever since. You know like how the soviet union invaded germany in the 1940s. But then they eventually left. We didn't. We are still there. Hopefully germany will become a free nation one day. We talk so much freedom and sovereignty and yet we deprive so many of freedom and sovereignty.
> they are claims devoid of proof, references or even arguments.
It's basic history. Do you need references for ww2 and the occupation of germany? You are only responding like this because it's the obvious truth which you don't want to confront.
Imagine if china or russia was occupying germany and forced them to subsidize chinese or russian companies.
The fab is still here. Ownership can change in the worst case. It would be nice to have a leading EU-owned chip maker, but we just don't have that yet. For the short term and the worst of cases, just having the thing matters a lot more than the profits staying here.
> It's about national security. A fab is necessary for national security
How does germany funding a foreign/non-german company's fab part of national security? What about expelling a foreign occupying force? If the germans cared about national security, shouldn't they be looking in that first?
If germany was funding a german company's fab, it would be national security. What germany is doing is paying tribute to a dominating foreign empire. No different than india sending their goods to britain during the colonial period.
What? It's only wrong for russia to occupy a foreign nation?
> Yes, I'm sure the Germans are eager to expel American troops right now.
If the germans were smart, they'd take this as an opportunity to liberate themselves. Besides what do they care? Trading one foreign master for another.
An ally doesn't firebomb a nation, murder thousands of innocent people and forcibly occupy it. Germany is a vassal.
> In fact, I believe “German” is the largest ancestry group in the US.
Who cares? We are not a german nation. We are an anglo nation. Germans don't have much political power in the US. If they did, we would have been allied with germany during ww2.
This idea that policy should be set based on a grossly oversimplified wrapping up of a huge surface area of agreements into the term "ally" and vague notions of ethnic similarity needs to die.
It gives the ruling class a mechanism to excuse war crimes of our supposed "allies" and drop bombs on supposed "enemies" for perceived minor infractions.
Also,
"Upcoming Dividends:
There are no future dividends presently declared for INTC as of Jun 7th, 2022. The declaration and payment of dividends are at the discretion of the Company."
I suppose one could argue that they shouldn't have done that in the quarters before now but they are where they are.
I think, declaring dividend is linked to their earnings report. For ex. last ER was on 4/28 and few days before that, they declared their dividend. So, its not given that there won't be any dividend in 2022 or so. Next earnings is in Jul, so we would get to know that sooner. As a side note, if any company declares dividend reduction or stops them altogether, I would expect the stock to drop like a rock. see AT&T in last year.
This sounds almost like a parody of an uninformed rant against capitalism.
Stock buybacks are a simple standard way to distribute company profit to it's owners (alternative options are dividends, retaining the profits in the balance sheet, or reinvesting them). This is decided by Intel's management and overseen by the board who represent the interest of the stock owners (who are widely dispersed and include lots of pension funds of commoners, not just billionaire fatcats).
The EU by way of the European Commission appears to have decided that it's of strategic interest to subsidize Intel fabs as a way to induce them to build in Europe, as opposed to Asia (which according to Intel is 30%-40% cheaper). The European middle class is not "bailing out" anyone here.
If you want to rant, a better starting point IMO is to
1) contemplate whether the European Commission is acting in the interest of the German/European citizen (and if not, how to fix this democratic deficit)
2) check if Intel's claims are truthful, and if so, why Asia is so much cheaper and whether that is worth doing something about that
In any case, I don't see what Intel's stock buybacks has to do with European taxation and inflation in this case.
Subsidies are always bad for the common citizen so no, it is not acting in the interest of German/European citizen. Subsidies are the product of flawed economical thinking even when "national interest" is used as a BS justification.
The "never spend on anything or get into debt" mindset is common, but it's odd to find it on the forum of a VC firm. Just because something is called "subsidies" doesn't mean you don't get things back in return.
Subsidies such as this are a net-loss for the average citizen of Germany and whatever country would have otherwise been host to this factory. It may well be in the interest of the German citizen, and it happening means that this is indeed the believed by people who studied the specifics.
A better example for wasteful subsidies may be the competition for their new HQ Amazon ran between US cities, only to place it where they wanted to go in the first place. There, as well as in the Intel case, a deal prohibiting competition by subsidy would be in everyone's interest.
A one time subsidy that likely pays out more over time than it cost is always a net negative? While obviously there are bad subsidies, I find it hard to believe that it is always the case.
Is it really necessary to establish the necessity of strategic domestic manufacturing capabilities in a post COVID world? We saw what happened when there was enormous need for masks, then later vaccines. The fact is that Germany as a nation that has so much of its economy linked to high tech manufacturing uniquely would benefit from securing a most domestic chip supply. The evidence for why it is necessary has already been laid bare in the past few years. The Chinese are already massively subsidizing their fabs. So is South Korea, Taiwan, and all the other major players. If you want fabs you must subsidize or die.
It's going to be a while before we are not depending on China. If you look at this 2020 Apple List of Suppliers: https://www.apple.com/supplier-responsibility/pdf/Apple-Supp... you can see the large variety of companies they they rely on for manufacturing.
Plugging this into Excel, you get the following distribution:
Country Count:
China 156
Japan 40
US 30
Taiwan 26
South Korea 23
Vietnam 21
Malaysia 15
Philippines 15
Thailand 15
Singapore 14
India 9
Germany 8
United Kingdom 4
Austria 3
Mexico 3
Belgium 2
Brazil 2
Czech Republic 2
France 2
Indonesia 2
Australia 1
Cambodia 1
Costa Rica 1
Finland 1
Ireland 1
Israel 1
Italy 1
Malta 1
Netherlands 1
Norway 1
China 156
Japan 40
US 30
Taiwan 26
South Korea 23
Vietnam 21
Malaysia 15
Philippines 15
Thailand 15
Singapore 14
India 9
Germany 8
United Kingdom 4
Austria 3
Mexico 3
Belgium 2
Brazil 2
Czech Republic 2
France 2
Indonesia 2
Australia 1
Cambodia 1
Costa Rica 1
Finland 1
Ireland 1
Israel 1
Italy 1
Malta 1
Netherlands 1
Norway 1
It is more complicated, all 9 companies in India are subsidiary on Chinese companies. Same is true for lot of companies in Vietnam, Malaysia. This gives diversification in case of a regional epidemic or natural disaster, but how will they behave in case of a geo-political crisis.
What is even funnier is that Intel has plenty money and is profitable and dividend paying even though nearly all of Intel's fabs are in the US (and thus suffering from the high cost level compared to Asia is a part justification for these subsidies).
Everyone is paying for chip fabs. This isn't new? Especially Intel and TSMC are in a position where they can require money for a fab.
Together with Infineon, NXP or ASML we could built up own production lines but these will also cost a lot of money. Because China is doing the same. Europe just missed to do the same, strategic investment into the economy. Free trade...China never believed in and we shouldn't neither.
> Honestly, this is good policy. We can't have our complete global supply chain held over our heads when China goes and does something crazy inevitably.
American/Italian and agreed.
Though I worry what will happen is they just spin up plants in the various totalitarian states of SE Asia in parallel.
(Eg: Vietnam is communist, Thailand is a kingdom, on the ground they are allegedly very similar, but I haven't been to either personally.)
I don't think such a person would live the full term.
Look how stressful it was for Trump after folks like myself declared we don't kill him or go to his casino, but go right ahead and keep him the hell away from me.
Intel is far from a monopoly in the foundry business and is frankly, the only realistic option outside of TSMC to make this happen.
And the US does the same thing in terms of tax breaks for German automotive companies building manufacturing plants.
Which again, makes sense, because you want to make sure you have manufacturing across continents in case Russia invades Germany and blows up all of the auto plants (for example).
You probably shouldn't be downvoted for that. Russia of the present, and for at least the next few decades, is entirely incapable of getting anywhere near staging an invasion of Germany. Russia and it's hyper incompetent military can't even make it a quarter of the way through Ukraine.
The best Russia could do is bomb Germany from a distance, which could pose a small threat to valuable infrastructure like fabs.
Frankly, with NATO around they don’t Have to invade Germany to get Germany involved in a war - if they invade any NATO member, Germany will get involved, which means Germany is a target for retributive strikes.
The ASML machines Intel uses use EUV tech wich ASML acquired through their acquisition of Cymer, California and use licensed tech from Sandia Labs, also a US lab, meaning the US has full veto rights over to whom ASML gets to sell their EUV machines (spoiler alert, not to China).
> meaning the US has full veto rights over to whom ASML gets to sell their EUV machines (spoiler alert, not to China).
That's false. For USA to be able to block exports of the technology, more than 25% (if I remember correctly) of parts has to be of US origin. When the EUV program started, the share of US technology was much higher, but as the program progressed, it was diluted.
USA could still block sale of EUV machines, by refusing export/licensing of critical components, but they'd have to change their laws first.
Fact is that ASML voluntarily chose to block exports to China. In part because they want to keep good relations with USA. It's the US that funded the EUV program in the beginning after all. But I'm sure ASML was tired of China copying their stuff too, so it probably wasn't hard to convince them.
You don't need to create an Intel competitor from scratch. For example the same money can be better invested in Infineon, ASML, Bosch or a number of local companies that work on chips. Or it could be put into RISC-V work.
I don’t get your point. What you describes sounds exactly like the goal of such a subsidy. With new Intel factories in Europe that means more demand for ASML and other European companies, given that they already collaborate. With the addition that you can now train Europeans and develop the industry locally.
Americans feel your pain, given the subsidies German automakers have received to build plants in our country over the decades.
Mercedes got $260m in Alabama in the early 1990s, BMW got $150m in South Carolina in the early 1990s, Volkswagen got $570m in the late 2000s in Tennessee. That's close to $1.6 billion inflation adjusted from just three examples of it.
The US economy is six times the size of Germany's economy, so those are massive subsidies in relation.
I don't know about Infineon, but Bosch would boat anchor that money and then you'd just be out $5.5B. No way Bosch is going to be a world class fab provider.
Having an established player that trains and employs workers creates a pool of experienced workers in the area. Those are exactly the kinds of people to get a local competitor started.
I have to wonder if deglobalization and expensive onshoring is as much of herd mentality as glocalization and offshoring have been. Sure, if the no college white males of the US get their demographic last hurrah and elect a populist isolationist who pulls America out of NATO, then, yeah, it's bad times for a rational set of international interdependencies.
Or, if the Taiwan and Korean foundries are the best on the planet, everyone should contribute to the international stability it takes to maintain access to those resources. Almost every part of the tech industry benefits from global low-friction trade.
Brexit regret is a solid majority opinion in the UK. The US recently lowered trade barriers to solar panels from China. Hopefully sanity prevails. While it is possible to overdo the offshoring and JIT inventories, increased trade volume makes everyone more prosperous.
Brexit regret is always a solid majority in the minds of the diehards, who claimed the day after the 2016 referendum (seriously) that a) millions of Leave voters already regretted their votes, so b) a do-over was the only right and proper thing to do.
Sounds like a bargain given the local skill base support and industrial autonomy.
The most economical solution is to hand virtually all industrial expertise and capacity to China, who not coincidentally massively subsidizes its industrial base. China's government puts its thumb on the scale. Not doing the same is unilateral disarmament.
I'm with you on all but this. Cleaning up the environment is a very expensive, time consuming process. There's still about 20 superfund sites in Santa Clara County due to its heyday of tech manufacturing.
Our local community has been fighting for the cleanup of a 60 year old disaster. That they agreed to clean up 20 years ago. But they've barely started.
Germany hasn't been doing any of that except immigration, and it has fared exceptionally well over the last decades. Taiwan's chip industry is the result of massive subsidies that got it started.
And watch as your fledgling local business dies due to hundreds of billions of subsidies for foreign fabs. South Korea alone is subsidizing Semiconductors with $450Bn [1]. If you want local fabs, you need to spend money. Or you get to watch your automotive assembly lines stop because of chip shortages.
Why Magdeburg? I have a really hard time to find an argument that puts the city in an advantageous position relative to other competitor places (like Dresden, Munich agglomeration, Rhein/Main area, Hamburg agglomeration).
Already prepared grand space for industrial use with energy, water and public transport; 100% carbon neutral wind energy and very soon also water-neutrality were a few of the reasons given.
Why not? Cheap, Uni Magdeburg is pretty good in STEM, water (yes that is an issue!), close enough to Berlin and Wolfsburg (Volkswagen), good transportation.
Cheap place to build, cheap place to live, cheap labour, pretty good infrastructure. All of the cities you mentioned are very expensive to built in, but also to live in.
If the government pays subsidies they will combine it with strengthening economically weaker areas. No one needs more high quality jobs in the overcrowded and overly expensive Munich area.
For those old (or well-read enough in history) enough to have a sense of just how dominant Germany once was, world-wide, in science, technology, chemistry, optics, etc. etc....this news feels kinda like a tombstone of German identity.
Lol, Germany was never anywhere close to being a leader in chip manufacturing (and why should it in a global market). Arguably, even East Germany had a better chip industry than West Germany in the 70s and 80s, but that was still 5..10 years behind the state of the art.
Why can't everyone get a help from the German government to start a business? I want to grow cucumbers, so it would be nice for Germany to pay to help me start a cucumber growing business.
I mean germany/the EU does pay subsidies to (cucumber)-farmers [0], there is literally billions each year flowing into keeping farmers somewhat afloat.
The trick that he's missing is that first you hire a lawyer to figure out all the subsidies you can get and then you see whether the business is viable!
Okay, in that case you are eligible for a variety of loans, up to 40% of the costs of establishing the business, granted you are willing to establish it in the more rural eastern regions [0], additionally there is a wide variety of relatively lenient credits available for founding companies [1].
This could be a good chance for some universities with Chip Lab/Fab facilities across the world to start manufacturing even at small scale is important for every country self-sufficiency.
Imagine you got given subsidies to live somewhere. I'm not talking about your wages - I'm talking about something extra. Well that is a direct equivalent here.
How any governance structure can think this is ok boggles the mind.
Is it not clear how we already live in a fascist state - where government + corporations are working together at the people's expense?
So what's your plan when China makes good on their promise of trying to take Taiwan and either seize or inadvertently destroy TSMC's 54% share of global chip market[1]? German automotive industry would grind to a halt as they run out of chips. Better yet, if America comes to the aid of Taiwan, China would likely strike US bases in Japan and Korea, threatening even more of the global chip supply.
Serious question - How do you propose governments encourage companies to do what they want? Yes it’s a subsidy but it also seems like the government in this case is essentially buying a service. I guess Germany would hire people to build this factory directly rather than paying a foreign company to do it? Which I imagine would be more expensive if it’s even possible to do.
Do you think there are better ways to do this within capitalism or are you proposing we dismantle capitalism?
Do you think governments are trying to encourage companies to do what they want?
Or are companies telling companies what they want?
Why do we have a situation where companies have so much and are given so much, and the people have so little. But pay for government largesse.
If you ask me, Intel and all those companies should never have grown so large. But, if you have to spend that money, why not use it to create a genuine home grown solution? Where is the German Intel? Wouldn't a German Intel provide the resilience you really want?
I think Germany is using the $5 billion dollars to encourage intel to build there plant in Germany rather than somewhere else, but I think your ideas sound great too. can Germany grow an intel for $5 billion? It seems to me it’s like hiring a contractor. I could learn plumbing but it would be a lot more expensive than hiring someone.
I don’t disagree with you that companies are given so much and have so much. I just wonder if it’s idealistic to think it’s easy to just “create your own intel”. Maybe not it’s not like Intel is without competitors. But just like the Plumber example, even if it’s not about the money, do they want to spend the time on developing a skill that may not be one of their core competencies? It’s not that I don’t get where you’re coming from ideologically, I’m just not sure where you’re coming from practically. But I’m no expert, maybe they should try!
Companies pay governments to do business there? I mean this sounds great, I would love my grocery store to pay me to shop there. How do we make this happen? It seems to me sometimes like waiting for these kind of things to happen is cutting off your nose to spite your face.
I think one of the lessons the EU has learnt from the last 10 years is you cannot rely on international trade. Trump and now Putin mean the EU needs domestic weapons, chips, energy and a few other things...
Once again EU taxpayer money bankrolling US tech dominance. When will we ever learn to build up our domestic tech industry?
And before the chip hipsters crawl all over my back to prove we ackshually have a powerful domestic semi industry, please name me another EU company, other than ASML (a company 90% of people here never heard of before the chip shortage), that has the same margins, dominance and ability to shape the market, as much as the US based Intel, Quallcomm, AMD, Nvidia, Apple. I'll wait.
The thing is, other than ASML, most of our domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition, therefore bring home relatively little money, compared to their US counterparts which have monopolized high margin sectors (general compute, AI, graphics, etc) and rake in the big bucks.
Don't get me wrong, it's great we have our own semi industry, and we make great chips to boot, but I wish we could do more high margin products, as Chinese companies are hot on our heels with massive support from their government.
Remember the failed attempt from the merger of ST-Ericsson to take on QUALCOMM's ARM Snapdragon SoCs and modems in the mobile space 10 years ago? I was talking to a former Dutch manager who had a stint there and his reply dropped my jaw: "Yeah, that merger was never meant to ship any chips that can beat Quallcomm, it was just a vehicle designed to suck up as money as possible and funnel it into the right pockets, while some managers pad their resumes so they can move up at other companies later."
Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US. German citizens can invest in Intel.
And, in the event of a US/German war, that plant is and will remain German, not American.
I think there's an excellent case for distinguishing that from companies from China, where non-Chinese citizens have a great risk of confiscation of their assets by investing, Chinese companies are subject to a lot of other rules even when operating outside China, etc.
The difference is that patents for inventions made for Intel by Intel employees go to the US, whether or not that employee is an US person. Those inventions, if made by Germans, could instead help the German - or European - tech sector. That's kind of brain drain without actually leaving your country and sustainably hurts European competitiveness.
That just kicks the question down the road. It's not like patents don't share the exact same argument. There are US and German patents that only apply in their own countries. What difference does it make where the multinational that owns them receives mail.
Unless you think Intel will refuse to do business with a European company vs a US one.
> Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US.
Of course it matters. The profit goes in the direction of headquarters, tax is paid in the country of headquarters, and the government of the country of headquarters has much bigger influence to the company.
The French semi giant, ST, is financially incorporated in the Netherlands (STMicroelectronics N.V.), as is the French giant Airbus (Airbus Group N.V.).
There seems to be a pattern here. It's almost as if companies don't want to pay taxes, regardless if it's their home country.
> as is the French giant Airbus (Airbus Group N.V.).
Airbus are not a French giant. They're the result of a merger of Spanish, French, German and British aircraft companies. The HQ of Airbus civil aircraft is in France, but for Military aircraft it's in Spain, for helicopters it's in Germany. Wings are made in the UK. There are factories all over those places ( which presents unique challenges in terms of logistics, there's a lot of material out there on how they handle shipping various parts to the correct factory for final assembly, it's fascinating).
The Netherlands is a nice neutral location ( of course with a good tax regime and simple corporate structures) to have the registration.
Following the merger between Peugeot and Fiat-Chrysler the new company (Stellantis) is also headquartered in the Netherlands, though I believe that Fiat-Chrysler already was.
That's a recurring issue for France because they are not business-friendly. It's not even a question of being a tax-heaven (the Netherlands are not) but simply to make everything unduly complex and costly. We've also seen that following Brexit: Banks would move from London to Paris! Err, no they didn't move or moved to Amsterdam...
> but simply to make everything unduly complex and costly
I disagree with that characterisation, doing business in France is not that complex. Amsterdam has a giant advantage though - the English language is widely spoken and accepted, which really isn't the case in Paris. If an international organisation is looking to move from London, Amsterdam makes much more sense than Paris, even if we disregard the taxes side of things.
It's complex and costly enough enough that France keeps losing out. It's ridiculous, really, because there is no good reason for this. It's a mix of lack of self-awareness and ideology.
France is not an isolated case, though. Many countries are like that, sadly.
> It's a mix of lack of self-awareness and ideology
Respectfully disagree. The current president, who was just reelected, literally won his first campaign on "i'll improve things for business, make it easier, enable startups, optimise government expenditures". And he enacted many business-oriented reforms that have enabled quite a startup boom ( for the French and EU standards, of course it's nowhere close to the US due to a myriad of factors like available financing). There's awareness of the challenges, and what ideology would that be?
They always win campaigns by promising a lot of things and then rarely deliver. He is no exception, overall the 'reforms' have been minimal and the 'old recipes' (I.e. hand government subsidies as soon as people complain) have not changed.
Ideology, well just with my comments here many would label me 'liberal', which in France is borderline derogatory for some people with the meaning of 'free market capitalist bent on exploiting the working-class', simply for stating that there may be no need for millions of civil servants, myriads of taxes, and red tape for everything... the far left dominates the left at the moment, after all.
Self-awareness because many people in France do not even realise this or how simple things could be. For instance, the 'attestation' people needed to fill in to leave their homes during Covid lockdowns. From abroad it looked like pointless red tape madness, while in France someone obviously seriously thought that was a good idea and they were very serious about it.
The taxes issue is why the EU added a bunch of VAT taxes. Intel pays less taxes (excluding VAT and property taxes) than the amount of this subsidy anyway.
I agree that China impacts its companies beyond its borders, but the US government does not. The US government has enough trouble regulating the US operations of US companies,
Unless you bribe someone. They seem to actually care about that.
And what is wrong with Europe propping up a US company? You shifted the goal post from your original comment ("When will we ever learn to build up our domestic tech industry?"). I showed you that the US is doing exactly that, and now you jump to some other argument.
It’s all interconnected, Intel fabs are worthless without ASML, you can think of Intel as almost like a general contractor at this point pulling capabilities from everywhere.
If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that?
Many of these mega-companies are publicly listed. Norway alone owns a significant amount of stock in some of these companies. I'm not sure we have a problem. But I'm not gonna complain about trying to change this and get giant high-margin tech company going here in Europe. I'm just not sure how to do it.
>If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that?
No, but do you really have a choice? When you're selling tech products, you're competing on the international market, against everyone, including USA and China. If you work 35h/week and you get outmatched by a team who worked 60h/week, the end user will not care, they go for the best one, and the others loose. That's how international competition works.
And if they can deliver a better product at a cheaper price, they get the customers. The customers don't care if the devs who worked on that product are from US, China, or Europe and if they worked 35h/week or 60+.
That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance. That's why EU has not developed the iPhone and why Nokia, Ericsson, Sagem, Alcatel are gone from the mobile space.
> That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance.
Not sure market cap is really the metric here (and only 2 of the top 10 are currently fashion related, the rest is pharma, semiconductor, food, ecommerce, banking, etc.), since those can be easily inflated to completely unreasonable levels and are more an indicator of marketing success than anything else.
Maybe take a look at the export statistics and you'll find machines and chemicals taking up a very large fraction.
However much more interesting is how much of the global economy depends on certain companies: Siemens automation (larger market share than the next two competitors combined). Chemicals - BASF is currently the largest chemical producer in the world (with also the largest chemical production complex in the world being located in Germany). Semiconductors - Without ASML, Zeiss and Trumpf (nevermind all the chemical companies) you will have a hard time producing the chips in your iPhone or any modern desktop/laptop.
No matter how much I am not a fan, but SAP might also be of relevance in a few companies..
Also Nokia and Ericsson are not gone from the mobile space, they just focus more on the backend stuff. So while your phone might no longer be from them, there is a decent chance that your phone will be talking to a Nokia or Ericsson device over the air (especially since Huawei hit a bit of a snag in the US and parts of the EU).
Ideally, this brings a great deal of domain-specific knowledge to the EU and then the workers of this Intel plant are able to go create their own EU plants with their new knowledge.
Whether or not that extremely ideal scenario actually happens remains to be seen.
> domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition
Then maybe they should compete? (though those are not small companies - and with most products that are not as popular with Intel but are popular in other areas)
I think they missed the ARM boat, possibly. But they should go and ask for a slice of that money.
There isn't any. That's because EU taxes and regulations make running a large-scale business less attractive - and because there really is no market for another big-chip manufacturer; if you want to break into that segment (even if it was a 'fair' market), the only way to compete is on the price, and that China can do better.
FTA: Whether or not additional funds are available from the EU is not known.
This is just Germany paying Intel to make unreasonable business decision reasonable.
These things usually happen for strategic reasons. For example, it could be possible that from purely business perspective it's the best to produce all the food in Africa, Russia or China but this leaves EU vulnerable to stuff going on in these places or conflicts with them, therefore you have common agriculture policy and food import-export controls.
The decision makers probably decided that completely relying on foreign IC supply is a risk they cannot afford, therefore they will pay to make it fixed. I wouldn't be surprised if EU also chips in.
If Intel’s new EU fabs operate under the TSMC foundry model, is that not a good thing for the EU? Let’s say I’m a smaller company in France looking to get a chip made on a bleeding edge node. I don’t have existing contacts in Taiwan. Surely I just go next door to Intel, right? If Global Foundries couldn’t pull off the leap to 7nm even with ASML next door, who do you suggest is capable of doing so other than Intel, Samsung, and TSMC, and is EU based?
I have some confidence that the EU would set favourable terms for given the level of investment.
It would maybe make more sense if it was a foundry offering their services to numerous fabless companies. Having an advanced one in the EU would be beneficial regardless of where the headquarters of the foundry is. But this one is just going to produce Intel chips as I understand, so basically it's just workplaces, and not a huge lot of them compared to the investment made.
there was a strong chip industry in saxony decades ago, but they became way too expensive when china came. they are slowly starting to built back there, but progress is slow.
You are refering to Robotron, which mostly is known for their Z80s knockoffs (which often were less buggy than the originals.) Given that they did not create chips of their new design, I would not describe them as having been 'strong', though.
> It has been suggested that already-allocated funds from the €95.5-billion Horizon Europe budget could be re-purposed. EC president Ursula Von der Leyen has said that, in addition, she’ll find €12 billion from public/private sources.
The rich get richer and stay rich. It's hard not to get cynical about the fact that the whole of Europe is working so that a couple of countries ensure their continuing wealth.
German investment again going to foreign companies, the very opposite of strategic sovereignty. The Trump era should be enough evidence that there are no friends in geo-politics, just temporary alliances of convenience.
Also hardly anomalous. Trumpism didn't vanish just because Trump lost the election, rather it's become mainstream within the political establishment. Every four years now the world has to wonder whether the coin is going to land again on sane or crazy.
Well, if you have any alternative than gas pipes please let us know. Germany is already pushing for green techs. And, gas coming from another part of the continent is always more expensive than neighboring countries? Yes, they shouldn't have dismantled Nuclear Power. But after an incident in Japan, many people were nuclear phobic so can't blame politicians alone?
That being said, I do agree that paying 5.5bn of taxpayers money to foreign tech is silly. Such money can be easily used in investing local companies which will provide more employement and ROI to Germany.
Stupid move by Germany, giving even more money to the US corporations. In fact, the EU as a whole is presently doing just that, those Next Generation EU funds will, for a great part, find their place in the coffers of the big US tech companies.
It goes like this: EU gives billions of dollars to EU national governments but with many strings attached -> an important part of those strings is related to digitisation -> the EU national governments redirect the money they received from Brussels to digitisation implementations -> US tech companies get even more wealthy, as there's almost no local European competitor that can compete when it comes to the cloud, hardware and even software (just think of all the EU funds that will go almost directly to paying Oracle licenses).
Similar thing happens with re-directing EU money into China's coffers, as most of the EV batteries are now produced in China and there's a big push at the EU level for us, EU, citizens, to purchase EVs.
It's not very well stupid though if there isn't a great viable alternative, is it?
The issue with there being no good local competitors is a more fundamental one-- it's extremely difficult to spin up a viable tech business in the EU, period. In part, this boils down to regulatory issues including tech companies needing to abide by a myriad of complex regulations but also things like fairly costly labor regulations.
I wouldn't be surprised if Germany would also find value in an ASML facility, but as I understand it, ASML doesn't make fabs. They make the tools technology used in fabs. They're different parts of the supply chains.
Even if they were both in the same business, it's not like ordering whichever brand you want from Amazon. If ASML wants to build something in Germany, they will, and Germany can incentivize that, but it's still up to them. Germany can't just tell them to do it anyway.
It's too late for Intel. x86 doesn't have a future, ARM64 SoC architectures like Apple's M1 (TSMC) are the future of computing. Just as fast (and often faster in many benchmarks) with only 20-25% the power consumption and heat. Even Microsoft is preparing for the shift to ARM, at Build 2⁰22 they announced project Voltera, an ARM Windows 11 PC loaded with Visual Studio 2022 and .NET 7 all for ARM to give devs a head start for the coming ARM Microsoft systems. Microsoft will partner with Qualcomm and have their own custom SoC like the M1. Intel is toast (because their CPUs are too hot). This is going to be a massive shift in the PC industry.
> Microsoft will partner with Qualcomm and have their own custom SoC like the M1
Microsoft partnered with Qualcomm 6 years ago and there have been a number of terrible systems released. You probably haven't heard of them because of how bad they are. If there's any progress for Windows+ARM, it's really from Qualcomm's exclusive agreement expiring. They're hyping the Nuvia team right now, but Qualcomm's track record is ridiculously bad, and there's a bit more work involved here than incanting "ARM".
But Intel is investing in ARM/RISC-V and x86 will be with us a bit longer (probably even 10+years).
I would be more concerned about AMD then I'm about Intel tbh.
The Xilinx devices above are also FPGAs with ARM cores (a natural evolution from FPGAs with soft cores, MicroBlaze in the case of Xilinx and Nios in the case of Altera).
The form factor might change. We might go from a large box to a docking station for a tablet or laptop, but the mouse + keyboard + monitor(s) is never going away.
Been thinking for a while - I need some serious BGA rework equipment and some training because I'd rather die in a ditch than not be able to replace any components in my computer :D
At that point, might as well start my dream recycling business where we desolder, test everything and sell them as parts. They do it in China at scale, why not Europe... Main question is, would there be enough buyers? Small repair shops are also dying...
A more interdependent world is a friendlier and more secure world. When countries are completely independent of each other they will be able to more easily shrug off economic consequences of their aggression.
Economic ties also foster greater cultural exchange and understanding, so the less of those there are the insular and navel-gazing the inhabitants of such countries will tend to be, which will also increase the likelihood of conflict as people tend to fear those who they aren't in close contact with and don't understand.
As bad as the world is today, it'll get much worse as countries isolate.
I think that argument has been lost. Russia still invaded Ukraine and China still took Hong Kong backwards. America has invaded many countries. Taiwan is under threat. Interconnectedness doesn’t seem to matter a great deal when you have either a ruthless dictator in power or a country has a strong military advantage.
> A more interdependent world is a friendlier and more secure world.
No, it's not. Wars between major trading partners aren't historically uncommon at all.
> When countries are completely independent of each other they will be able to more easily shrug off economic consequences of their aggression.
When countries (particularly those toward opposite ends of the extraction -> intermediate goods -> finished goods -> finance & services spectrum) are integrated with trade, it produces durable inequalities through ricardian specialization and strong resentments that are either subjugating through imperial domination, mollified through political union and welfare policies, or expressed in war. Sometimes the latter even after the former through political union.
That has been the prevailing thought since before WWI, but multiple World Wars and Russia's invasion of Ukraine this year have proven otherwise.
Do you know who was the biggest trading partner of Nazi Germany on the eve of Operation Barbarossa? You guessed it, the Soviet Union. It was responsible for the vast majority of imports of critical resources like various metals, oil, grain, etc. It didn't stop Hitler.
Do you know who were the main buyers of Russian gas, and via which country that gas arrives to them? You guessed it, EU, and the main pipelines pass through Ukraine.
On paper, yes, you're absolutely right. But you're assuming rationality where it's far from certain. Same as in the 1930s, we have a bunch of empty populists everywhere who are anything but rational, intent on blaming everything bad on "bad guys of today", be it the EU, migrants, Soros, the Jews, Nazis, have your pick. With those types of people, you can't assume rationality of actions. Brexit wasn't a rational decision, to give but one example. Poland infringing on press and human freedoms against the will of the EU, while receiving billions of aid from the EU, isn't rational.
The difficult thing about even very good prevention is that the absence of events is difficult to prove.
Is interconnection perfect? obviously not. Does interconnection prevent more conflicts vs fully independent nations? Likely yes.
I think what we are seeing is societies and governments forgetting how bad wars are for stability, on a backdrop of slowing or reversing quality of life for many modern nations.
Your mistake is believing that financial interdependence is what prevents conflict instead of, say, shared values, political interdependence, cultural exchange, etc. Things that aren't money bind countries together far, far, far stronger than a stack of money ever could. That's the biggest reason why trying to bind Russia financially failed, and why it's been failing with China for the past 20 years. Ideology is such a powerful tool that I don't understand how people still think money is so important.
I don't think financial interdependence is exclusively what prevents conflict. Shared values and cultural exchanges develop when you spend more time interacting, and financial connections are one excuse to spend more time interacting.
I actually wish more nations provided for a youth international travel trip as part of a high school post grad type public benefit. I think it would do a lot for long term peace in the world. It would be better if money weren't the primary driver for so much.
> financial connections are one excuse to spend more time interacting.
And it's not sufficient. Most people will buy products imported from China without ever interacting with Chinese people (or their culture) and Chinese will export products to the rest of the world without ever interacting with foreign cultures and their ideas and viewpoints. Tell me how a gas pipeline between Russia and Germany helped build ties between the citizens of either country, aside from the politicians who got rich off of it and turned into apologists.
That's true, but the other side of the coin is that richer/more developed countries take all the specialists and raw materials from poorer countries, set up low level factories for the remaining idiots, control the IP and sell them finished products.
Leaving them in a perpetual "developing" state, unless they smarten up, which is really hard without all the smart people that left, and even harder because the people in power are more than happy to keep things as they are because they get paid for it.
