I know that any time I talk about semiconductors, a significant percentage of my readership’s eyes glaze over, but this is Big Freaking News.
Intel shares rose 6% in premarket trading after Reuters reported that Taiwan Semiconductor Manufacturing, or TSMC, had approached US chip designers Nvidia, Advanced Micro Devices, and Broadcom about taking stakes in a joint venture that would operate the struggling chipmaker’s factories.
Four sources told Reuters that the Taiwanese chipmaking giant would run Intel’s foundry division under the new proposal, producing chips tailored to customer requirements but not owning more than 50%. The sources added that Qualcomm has also been approached about the venture.
TSMC is far and away the largest chip foundry (a company that builds chips for other companies, but doesn’t design its own chips) in the world, and the one with a clear technological lead over everyone else. TSMC has the third largest market cap of any semiconductor company.
Broadcom is the second-largest semiconductor company in the world by market cap, and they have their fingers in a lot of different pies: networking, wireless, storage, you name it. They’re generally considered a fabless chip designer, but the company is such a weird amalgamation of other companies (what we call Broadcom used to be Avago until they acquired Broadcom in 2016) that they might still have a lower end fab or two lurking somewhere in the company. They also use TSMC as a foundry, though I’m not sure how extensively. They’ve also recently made a big move into software, acquiring CA Associates and VMWare, among others.
Nvidia is a fabless chip designer (the sort of company that contracts with foundries to fab their chips) that went heavily into high end GPUs (the chips that render video for your PC, in Nvidia’s case geared toward high end games and other highly demanding tasks), then crypto-mining chips, and more recently into chips geared for AI applications, all very lucrative market segments, which has made Nvidia not only first among semiconductor market cap, but among the largest companies by market cap in the world (along with Apple and Microsoft). Nvidia has their chips fabricated by TSMC, as well as some by Samsung and GlobalFoundries, which was spun off from…
Advanced Micro Devices, which used to be an Integrated Device Manufacturer (or IDM, a company designs their own chips and builds them in their own fabs) creating Intel-compatible CPUs, but eventually spun off their fabrication plants as GlobalFoundries because they couldn’t keep up with Intel’s capital spending. AMD also has some of their highest end chips fabricated by TSMC. If AMD were to help take over Intel, it would be an extremely ironic ending to a longtime rivalry.
Qualcomm is a lot like Broadcom: A mostly fabless design house with its fingers in lots of different pies, and they’re about the sixth largest semiconductor company by market cap. Broadcom tried to acquire Qualcomm in 2017-18 and was blocked by the Trump45 administration.
Intel is an IDM, and for decades was the undisputed “chipzilla” of the semiconductor world. Intel’s CPUs were the dominant processor for the vast majority of the last 40 years and a huge ingredient for helping create the PC revolution. Intel used to be the technology process leader as well, but somewhere along the way they screwed up their sub-10nm process nodes, allowing TSMC to take the process technology crown. Indeed, they screwed up so badly that they’ve been forced to have TSMC fab some of its highest end chips. Despite having a vast number of fabs, Intel’s market cap has slipped down to 16th among semiconductor companies.
Back to the piece:
The sources noted that the Trump administration is exploring ways to revive Intel and strengthen US manufacturing under the ‘America First’ agenda. They added that TSMC’s joint venture pitch to chip designers took place before the company, alongside President Trump, announced plans last month to invest $100 billion in semiconductor manufacturing in the US, building on its existing $65 billion investment in its Phoenix, Arizona, factories.
Any deal between TSMC and Intel would be subjected to approval from the Trump administration.
If the Trump Administration’s goal is to increase available sub-10nm wafer starts (and it should be) and maintain American control of Intel’s fabs, then this proposal is a win-win. Intel’s fabs plus TSMC’s tech would create a foundry powerhouse. It wouldn’t happen overnight (nothing in semiconductors happens overnight), but probably in 12-24 months, depending on how quickly the new entity can acquire the necessary pieces of equipment to upgrade Intel’s fabs to thee new tech (I’m guessing that the availability of ASML steppers will, as usual, be the gating factor). And all this without the tens of billions in taxpayer subsidies for the CHIPS Act.
If this goes through, it would have mostly winners, with a few losers:
Winners
Every company that’s part of the deal. TSMC gets to radically expand production capacity without spending $20 billion+ to build a new fab. Nvidia, AMD, Broadcom and Qualcomm gain a lot more capacity for expanding production of their high end chips. Ditto for Apple (who’s not part of the deal, but who is TSMC’s biggest customer and a big demand driver for cutting edge fab capacity) and every other consumer of sub-10nm chips.
AMD additionally gets the egoboo of partially taking over its longtime hated rival and confirming it’s crown as the x86/x64 chip manufacturer of choice. Plus their then-risky decision to spin off GlobalFoundries looks like a genius move in hindsight.
The Trump Administration, which gets to take credit for vastly increasing American Foundry capacity at zero additional taxpayer expense and keeps Intel under American control.
Semiconductor equipment manufacturers like ASML, Applied Materials, LAM Research, Tokyo Electron and KLA (short term). It’s likely most or all of those companies (along with smaller players like Axcelis and Teradyne) will receive a bump in extra sales from leveling up Intel’s fabs to run TSMC’s process.
American chip startups: With so much high end capacity becoming available, existing and potential chip startups are going to look like more attractive investment capital opportunities.
ARM Holdings: ARM doesn’t make chips, they’re an IP design house that licenses their functional chip blocks to other chip designers. Just about every foundry and IDM is a licensee (yes, including Intel and TSMC), so unleashing more chip designs will almost certainly result in more royalties for ARM. (Nvidia tried to buy ARM in 2020, and regulators quashed that idea good and hard.)
Intel investors, who will either get a big lump-sum payment or shares in the new, probably far more profitable company (depending on how the buyout is structured).
Even Intel wins long-term by unleashing existing fab capacity to take on new business not tied to its faltering CPU manufacturing model. And actually, with TSMC’s process, Intel has a chance to recover in the CPU space as well.
Losers
Samsung: Along with TSMC and Intel, Samsung (which has both IDM and foundry components) has some of the best sub-10nm process tech in the world. They gain a whole lot of unleashed competition and stand on the outside looking in.
Intel‘s dreams of reclaiming their spot at the top of the heap, and suffering the indignity of being partially owned by AMD. How the mighty have fallen.
Every Chinese fab, which goes from “very far behind” to “even further behind.”
Semiconductor equipment manufacturers (long term): They better enjoy the out-of-band upgrade money from retrofitting Intel’s fabs, as it will likely mean a significant delay in anyone building a new cutting edge wafer fab for quite a while. And having two of their biggest customers team up is probably going to put them under a lot of downward pricing pressure.
GlobalFoundries (and other trailing edge foundries) might lose some business, but there’s very little overlap between Intel/TSMC cutting edge processes and GlobalFoundries trailing-edge fabs. Ditto UMC.
Are there anti-trust concerns with such a heavy accumulation of cutting edge process technology? Oh yeah. Big time. But almost all of those concerns were already there in some form or another thanks to the interconnected “cooperation” nature of the industry. All those companies going in with TSMC were already getting chips fabbed by TSMC. Samsung could try to claim that the deal would result in TSMC having a de-facto monopoly on sub-10nm foundry business, but it wouldn’t start with one, and that business isn’t the whole of foundry business (though it is the most profitable part), much less semiconductors as a whole.
Given that this would go a long way toward achieving Trump’s goal of increasing cutting edge fab capacity in America, I would imagine that the Trump47 administration could very well be persuaded to let this deal go through.
Slow Joe continues sliding down the slope of senility, Democrats continue freaking out over same, the media continues to be shocked that the media hid Biden’s decline, Democrats gear up to commit more voting fraud in November, tractors join the culture wars, Skydance eats Paramount, and postal rates are going up again. It’s the Friday LinkSwarm!
President Joe Biden struck a defiant tone during what was perhaps the most consequential press conference of his political career, insisting that he is the best candidate to take on Donald Trump in November, even as he stumbled through several answers.
Biden read prepared remarks off a teleprompter and answered questions from a pre-selected list of reporters Thursday night at NATO’s 75th anniversary summit, addressing a range of subjects including the history of NATO, Russia’s war against Ukraine, inflation, and Israel’s war against Hamas. The embattled president showed signs of his age throughout the event, as he coughed, whispered, stumbled over his words, and at time lost his stream of thought, at one point even referring to Vice President Kamala Harris as “Vice President Trump.”
“Look, I wouldn’t have picked Vice President Trump to be vice president did I think she was not qualified to be vice president,” Biden said, defending his choice of Harris as his running mate. At the end of the press conference, Biden told reporters to “listen to him,” in response to a question about the gaffe.
Parkinson’s disease specialist from Walter Reed Medical Center visited the White House at least nine times in the past year, according to journalist Alex Berenson of Unreported Truths, while the NY Post has reported that a cardiologist was present during one of the visits.
Dr. Kevin R Cannard traveled to the White House’s medical clinic each time, meeting with either President Joe Biden’s personal physician Dr. Kevin O’Connor, or a naval nurse who coordinates care for the president and other senior officials. O’Connor notably gave Biden a clean bill of health after his February annual physical.
The visits spanned July 28, 2023 with the latest being March 28 of this year. That said, Berenson notes that the most recent logs are from April 1, so it’s unknown if Cannard has visited more recently.
The question isn’t whether Joe Biden is suffering from cognitive declines, the questions is how many kinds of cognitive decline is Joe Biden suffering from?
“Biden’s Cognitive Collapse: Greatest Media Scandal We’ve Ever Seen. With Russia collusion, they were inventing things we couldn’t see and trying to convince us that they happened. With the Biden cognitive failures, they were trying to convince us that something we all saw didn’t happen and wasn’t happening.”
You saw the debate and the interview.
Joe is not well. He should not be president, it’s a national security risk. This is what the 25th Amendment is made for.
There have been many media scandals. Rathergate comes to mind. But most immediately, Russia collusion was the most aggressive and sustained media misinformation campaign lasting years. It operated on the level of using bits and pieces of information and disinformation to try to convince us that something we could not see (collusion) did in fact happen.
The media conduct towards Biden’s cognitive decline operated on a different level.
We saw it. We wrote about it. But for years, at least since the 2020 election cycle, the media did its best to convince you that you didn’t see what you saw. The media didn’t try to convince you that something that didn’t exist existed, it tried to convince you that something that existed didn’t exist.
If we accept the actions and outcomes that are visible from Democrats right now, their definition of “democracy” is apparently to dismiss the will of tens-of-millions of Democrat party voters, and instead install a candidate the DC insiders select.
Democrats and even Biden administration officials are being very open about their intent. They are dismissing Joe Biden and debating the installation of their chosen alternative; all while trying to jail their political opponent.
Can democrats see their version of “democracy” is identical to horrible Vladimir Putin?…
Additionally, having just returned from an extended visit to Russia, where I literally spent exhaustive time researching how the government views their role within the social compact – and its consequence upon the average population, the “we know better” outlook currently on display by Democrat influence operations in DC is stunningly similar.
Democrats are defending “The Motherland,” where “mother” is their retention of omnipotent power. Yes, Democrats are Putin.
“Biden Officials Gave Radio Stations Questions They Could Ask Biden During Interviews; They Complied.” Of course they did. (Hat tip: Ace of Spades HQ.)
Evidently donors aren’t interested backing a senile loser, as Biden campaign contributions have fallen off dramatically. “Contributions from large donors alone could be down by more than half this month and are lower across the spectrum, according to NBC News. ‘It’s already disastrous,’ a source close to the re-election effort told the outlet about the state of fundraising for the Biden campaign. ‘The money has absolutely shut off,’ another person close to the campaign said.” Now we get to see if Democrats will follow the will of actual voters who cast their ballots for Biden, or a donor class insisting he be kicked to the curb.
Democrats oppose a bill requiring American citizenship to vote. because of course they do. Getting illegal alien ballots in the system is one of the fraud vectors they need to stay in power. It’s amazing Republicans even need to specify that in a law.
Ditto Michigan, where Democratic governor Gretchen Whitmer signing bills eliminating the board of canvasser’s investigative powers, instead requiring the board to refer allegations of fraud to county prosecutors. So they can make sure Soros-backed prosecutors can bury any fraud.
This is potentially huge: “Court Holds Federal Ban on Home-Distilling Exceeds Congress’ Enumerated Powers.”
Yesterday, in Hobby Distillers Association v. Alcohol and Tobacco Tax and Trade Bureau, a federal district court in Texas held that federal laws banning distilled spirits plants (aka “stills”) in homes or dwellings exceed the scope of Congress’ enumerated powers. Specifically, the court concluded that the prohibitions exceed the scope of the federal taxing power and the Interstate Commerce Clause, even as supplemented by the Necessary and Proper Clause. The court further entered a permanent injunction barring enforcement of these provisions against those plaintiffs found to have standing (one individual and members of the Hobby Distillers Association.) The plaintiffs were represented by attorneys at the Competitive Enterprise Institute, and background on the case (and the various filings) can be found on CEI’s website here.
Hobby Distillers Association has the potential to be a significant post-NFIB challenge to the expansive of use of federal power.
All sorts of federal regulatory shenanigans that depend on the Commerce Clause may be headed for the scrapheap of history… (Hat tip: Instapundit.)
Annals of evil: Porsche executive convicted for of throwing her newborn daughter out of a window to further her career. “Katarina Jovanovic, a Porsche executive in Germany, chose her career over family by throwing her newborn daughter out a 12-foot window to her death, and is now headed to jail for seven and a half years.” I wonder if German women’s prisons have shankings…
Sen. Ted Cruz (R-TX) has launched an investigation into whether the Biden administration used the “obscure Intergovernmental Personnel Act program” to fund the salaries of Big Tech employees as part of an executive order.
“To complete every action, agencies would have had to . . . bring on AI fellows by recruiting temporary — but influential — AI staff from external organizations through the Intergovernmental Personnel Act (IPA) program. Critics, however, have raised reasonable concerns that these influential AI fellows are shaping federal policy to benefit their organizations’ funders and not the American people,” explained Cruz.
“Moreover, as federal agencies request increased funding for AI hiring, it is important Congress understand the extent to which, and how, agencies have already acquired AI staff in response to the expansive and demanding AI Executive Order.”
In October 2023, Biden issued an executive order to establish “new standards for AI safety and security.” The order also aims to address “best practices” for authenticating content and calls on Congress to pass “bipartisan data privacy legislation.”
Six months after the issuance, the White House stated they had completed all the actions in the order.
In Cruz’s investigation announcement, he casts doubt on whether hiring “only 150 people into AI roles” was enough to be able to complete the required work. Cruz also highlighted a number of reported incidents where, through the Intergovernmental Personnel Act (IPA) program, Big Tech CEOs funded salaries of employees working in government agencies.
“In effect, large AI technology companies are influencing the Biden administration’s AI policy from the inside and advancing their own anti-competitive agenda to shape the future of the AI industry,” Cruz said.
Elon Musk announced on Thursday that social media platform X will sue ‘perpetrators and collaborators’ who have colluded to control online speech, as revealed on Wednesday by an interim staff report released by the House Judiciary Committee.
“Having seen the evidence unearthed today by Congress, 𝕏 has no choice but to file suit against the perpetrators and collaborators in the advertising boycott racket,” Musk wrote on his platform, adding “Hopefully, some states will consider criminal prosecution.”
The House report details a coordinated effort by the World Federation of Advertisers (WFA) and its Global Alliance for Responsible Media (GARM) initiative to demonetize and suppress disfavored content across the internet.
As we noted on Wednesday, the WFA is a global association representing over 150 of the world’s biggest brands and over 60 national advertiser associations which created GARM in 2019.
This alliance quickly amassed significant market power, representing roughly 90% of global advertising spend, which amounts to nearly one trillion dollars annually.
GARM’s Steer Team reads like a who’s who of corporate America, including heavyweights such as Unilever, Mars, Diageo, Procter & Gamble (P&G), GroupM, AB InBev, L’Oréal, Nestlé, IBM, Mastercard, and PepsiCo. These corporations not only wield immense economic influence but are now revealed to be leveraging this power to control online discourse under the guise of “brand safety.”
“In New York City, hotels that have converted into shelters for hordes of illegal aliens have been given over $1 billion in taxpayer money to keep them in business. As reported by Fox News, the average hotel room for an illegal costs $156 per night, with some costing over $300 per night. As such, the city government has already spent at least $1.98 billion on housing for illegals, with 80% of that amount going to hotels or inns that have been converted into shelters, rather than to shelters operated by the city. Overall, the city has spent at least $4.88 billion on the mass migration crisis.” (Hat tip: The Other McCain.)
Another loss for Biden’s tranny school mandate. “Carroll Independent School District (ISD) won a preliminary injunction against enforcement of the revised Title IX regulations issued by the Biden administration in April. The rules were set to go into effect on August 1. Federal Judge Reed O’Connor of the Northern District of Texas issued the preliminary injunction on Thursday, July 11, the same day the Amarillo federal court issued an injunction in the case brought by the State of Texas regarding Title IX.”
Bad news on the tractor front: John Deere is going full woke, with DEI idiocy out the wazoo and pushing tranny ideology on children. Plus they’re closing an American plant to move the jobs to Mexico.
Chicken Soup for the Soul, the company that owned Redbox and Crackle, is shutting down. (Hat tip: Dwight.)
It’s not just U.S. companies that have problems with unions: Samsung’s is threatening a general strike in their high speed memory fab at Pyeongtaek. Any machine that goes down on a fab line needs to re-qualified, which is a gigantic, time-consuming pain in the ass. A car factory can resume production in last than a day, but fab can take several weeks to months to get production.
Return of the zombie mortgage. People who thought their second mortgages were written off after the 2008 crisis but didn’t get it in writing are now suffering a rude awakening.
Attorney General Ken Paxton announced today the launch of a new major initiative to protect citizens’ sensitive data from unauthorized exploitation by tech companies and artificial intelligence.
The initiative was launched under the umbrella of the Attorney General Office Consumer Protection Division and established a team for “aggressive enforcement” of state privacy laws. It will also “ensure companies respect Texans’ privacy rights and safeguard their personal data.”
According to a press release from Paxton’s office, the data protection team is set to be one of the largest privacy law enforcement teams in the entire United States.
“Any entity abusing or exploiting Texans’ sensitive data will be met with the full force of the law,” said Paxton. “Companies that collect and sell data in an unauthorized manner, harm consumers financially, or use artificial intelligence irresponsibly present risks to our citizens that we take very seriously.
“As many companies seek more and more ways to exploit data they collect about consumers, I am doubling down to protect privacy rights,” he continued. “With companies able to collect, aggregate, and use sensitive data on an unprecedented scale, we are strengthening our enforcement of privacy laws to protect our citizens.”
Specifically, the new team will focus on enforcing the Data Privacy and Security Act, the Identify Theft Enforcement and Protection Act, the Data Broker Law, the Biometric Identifier Act, the Deceptive Trade Practices Act, and federal laws such as the Children’s Online Privacy Protection Act and the Health Insurance Portability and Accountability Act.
“Texas has been a national leader in advancing conservative technology policy, and this initiative is the perfect complement to legislative wins in recent sessions as it will ensure Texas has the expertise and firepower to enforce laws that protect consumers and hold Big Tech accountable,” said David Dunmoyer—the Texas Public Policy Foundation Better Tech for Tomorrow campaign director.
“Big Tech companies have gleefully flouted laws like the Children’s Online Privacy Protection Act for years, and in the absence of meaningful federal action, this initiative demonstrates Texas’ willingness to once again step into the breach and fight on behalf of Texans,” he continued. “This initiative will only further cement Texas’ national leadership in this space.”
This is the latest development in Texas’ efforts to crack down on data privacy infringement. In mid-summer of last year, Gov. Greg Abbott signed the Texas Data Privacy & Security Act into law.
The law applies to primarily businesses and entities who conduct business in the state of Texas or produce a product consumed by Texans, process or engage with the sale of personal data, and who are not considered “small businesses” unless the business has its hand in transactions of personal data.
That enforcement effort sounds both needed and deserved, but the question is how you enforce those laws when they cows have not only left the barn, but have been sucked down and sliced up into thousands of vast international data farms far beyond the regulatory reach of the state of Texas.
Big data lives and breathes on personal data that you’ve agreed to give up in variegated clauses scattered throughout the sprawling text swamps of terms and conditions for online sites you use for free.
Have a Facebook account? Congratulations! Every bit of information you’ve shared with Facebook (your friends network, your interests, the sports teams you follow, the foods you favor, etc.) is now available to every partner of Facebook. And everyone partners with Facebook. If they have your email address or your phone number, they have your data.
Ditto Google, with the additional proviso that Google has sucked up and cataloged pretty much every public database in the world, plus every single search query you’ve launched, ever, and every web page you’ve ever viewed through Chrome.
Ditto Microsoft, for LinkedIn (yes, Microsoft bought LinkedIn), Windows, Explorer, Edge, Bing, etc.
Ditto Twitter for everything you’ve ever tweeted or liked there.
Ditto Sony, whose PlayStation Network data got hacked.
Ditto Apple, though they seem to have better privacy protection provisions than most, mainly because they make their money off hardware. This doesn’t make them the good guys, just the least bad buys.
And don’t forget state, location and federal government entities, whose data security is probably several orders of magnitude worse than the tech giants.
Given that there’s so much personal data out there, so much legally acquired, how do you go about putting the genie back in the bottle? It’s a near impossible task, given that the tech giants not only hire armies of lawyers to defend themselves from lawsuits, but also lobbyists to write laws protecting them from said lawsuits.
One place to start: Joining in a lawsuit where Facebook’s parent company Meta actually used stolen data to train AI, namely using a giant database of pirated books without paying authors. Paxton’s office could join one of the lawsuits against Meta, or file a new one on behalf of Texas authors whose work was used without compensation.
Catching a tech giant with their pants down while actually breaking the law may give Paxton leverage to address other privacy concerns, and possibly the chance to do some eye-opening discovery…
Samsung’s Texas fabs are evidently going to be the beneficiary of CHIPS Act subsidies.
The U.S. Department of Commerce (DOC) has announced that $6.4 billion will be sent to a Texas Samsung facility to bolster the supply chain of semiconductors.
The multi-billion dollar investment is part of a larger $40 billion dollar federal funding agreement as part of the CHIPS and Science Act.
As a White House press release states, the investment aims to “cement central Texas’s role as a state-of-the-art semiconductor ecosystem, creating at least 21,500 jobs and leveraging up to $40 million in CHIPS funding to train and develop the local workforce.”
This investment would be used at both the research and development facilities in Taylor and the expansion of the fabrication factory in Austin.
The Taylor facility isn’t just an R&D site, it’s a full-blown state-of-the-art fab, and they could start running the line as early as July. The chips Samsung will be producing are planned to be on their 4 nanometer node.
The City of Austin has previously identified semiconductor production as part of its Opportunity Austin economic expansion plan where the city sees itself as a “top global destination for businesses and investment.”
“We’re not just expanding production facilities; we’re strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination,” said Kye Hyun Kyung, president and CEO of the Device Solutions (DS) Division at Samsung Electronics.
“To meet the expected surge in demand from U.S. customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help advance the security of the U.S. semiconductor supply chain.”
As I’ve written before, semiconductor subsidies are the wrong solution for the wrong problem (especially if the Biden Administration demands Samsung pledge fealty to social justice before sucking the taxpayers teat). But if you are going to subsidize someone, and your goal is more cutting edge American fabs, then Samsung isn’t the worst recipient. Their fab tech is either second third best (depending on whether intel has actually gotten their act together or not) in the world behind TSMC, and 4nm is good enough for just about every fab customer in the world, save Apple (who is TSMC’s alpha customer), Intel (yes, Intel gets some of their cutting edge chips fabbed at TSMC), AMD, and a few others. Technical details here, assuming the difference between FinFET and GAAFET doesn’t make your eyes glaze over.
DEI — the identity-obsessed dogma that goes by “diversity, equity, and inclusion” — has now trained Google’s new AI to refuse to draw white people. What’s even more alarming is that it’s also infected the supply chain that makes the chips powering everything from AI to missiles, endangering national security.
The Biden administration recently promised it will finally loosen the purse strings on $39 billion of CHIPS Act grants to encourage semiconductor fabrication in the U.S. But less than a week later, Intel announced that it’s putting the brakes on its Columbus factory. The Taiwan Semiconductor Manufacturing Company (TSMC) has pushed back production at its second Arizona foundry. The remaining major chipmaker, Samsung, just delayed its first Texas fab.
This is not the way companies typically respond to multi-billion-dollar subsidies. So what explains chipmakers’ apparent ingratitude? In large part, frustration with DEI requirements embedded in the CHIPS Act.
Commentators have noted that CHIPS and Science Act money has been sluggish. What they haven’t noticed is that it’s because the CHIPS Act is so loaded with DEI pork that it can’t move.
The law contains 19 sections aimed at helping minority groups, including one creating a Chief Diversity Officer at the National Science Foundation, and several prioritizing scientific cooperation with what it calls “minority-serving institutions.” A section called “Opportunity and Inclusion” instructs the Department of Commerce to work with minority-owned businesses and make sure chipmakers “increase the participation of economically disadvantaged individuals in the semiconductor workforce.”
The department interprets that as license to diversify. Its factsheet asserts that diversity is “critical to strengthening the U.S. semiconductor ecosystem,” adding, “Critically, this must include significant investments to create opportunities for Americans from historically underserved communities.”
The department does not call speed critical, even though the impetus for the CHIPS Act is that 90 percent of the world’s advanced microchips are made in Taiwan, which China is preparing to annex by 2027, maybe even 2025.
Handouts abound. There’s plenty for the left—requirements that chipmakers submit detailed plans to educate, employ, and train lots of women and people of color, as well as “justice-involved individuals,” more commonly known as ex-cons. There’s plenty for the right—veterans and members of rural communities find their way into the typical DEI definition of minorities. There’s even plenty for the planet: Arizona Democrats just bragged they’ve won $15 million in CHIPS funding for an ASU project fighting climate change.
That project is going better for Arizona than the actual chips part of the CHIPS Act. Because equity is so critical, the makers of humanity’s most complex technology must rely on local labor and apprentices from all those underrepresented groups, as TSMC discovered to its dismay.
Tired of delays at its first fab, the company flew in 500 employees from Taiwan. This angered local workers, since the implication was that they weren’t skilled enough. With CHIPS grants at risk, TSMC caved in December, agreeing to rely on those workers and invest more in training them. A month later, it postponed its second Arizona fab.
Now TSMC has revealed plans to build a second fab in Japan. Its first, which broke ground in 2021, is about to begin production. TSMC has learned that when the Japanese promise money, they actually give it, and they allow it to use competent workers. TSMC is also sampling Germany’s chip subsidies, as is Intel.
Intel is also building fabs in Poland and Israel, which means it would rather risk Russian aggression and Hamas rockets over dealing with America’s DEI regime. Samsung is pivoting toward making its South Korean homeland the semiconductor superpower after Taiwan falls.
To be fair, Intel has had fabs in Israel since since 1996, and Tower Semiconductor has had fabs in Israel since the 1980s. Poland, to the best of my knowledge, has never had a fab.
In short, the world’s best chipmakers are tired of being pawns in the CHIPS Act’s political games. They’ve quietly given up on America. Intel must know the coming grants are election-year stunts — mere statements of intent that will not be followed up. Even after due diligence and final agreements, the funds will only be released in dribs and drabs as recipients prove they’re jumping through the appropriate hoops.
So in the name of embedding the racist poison of social justice, the CHIPS Act, ostensibly designed to increase America’s share of cutting-edge semiconductor manufacturing, is actually driving new fab construction out of America.
I didn’t intend to do an all “China is Screwed” video roundup weekend, but the videos keep stacking up and I need to post some rather than producing a giant unwieldy post with hours of footage.
First up: Young people’s whose job prospects and futures are so dim that they’re actually living in concrete pipes.
Takeaways:
Certainly America has no shortage of transients living rough, but in contrast to ragged drug addicts, alcoholics and dangerous lunatics, the people living in these pipes look to be normal, healthy 20-something Chinese.
Just because you’re living in a concrete pipe doesn’t mean you can’t be a live-streamer. Like the under-the-bridge streamers seen in previous videos, you wonder how widespread this behavior is, or whether we’re just seeing the edge of the freak show.
“Despite the female hosts not being beautiful and the male hosts not handsome, it doesn’t affect viewership.” I do rather want to check their numbers, here.
“This is because it’s happening in the industrial city known as the world’s factory – Dongguan in Guangzhou.” It’s on the Pearl River Delta near Guangzhou and Hong Kong. “After more than thirty years of China’s reform and opening up, Dongguan, which has always been at the forefront of economic development, has recently seen a wave of business closures and foreign capital relocation.” See also: all those previousChina is screwed videos.
“When foreign capital withdraws, thousands of Chinese workers lose their jobs. Among these people, some have worked in factories for decades and are now middle-aged. It’s overwhelming to be suddenly faced with unemployment and consequential cost-of-living pressures, coupled with labor competition against millions of university graduates.” I’m sure that sucks, just like getting laid off here sucks. But in a capitalist economy, even a flawed one like we have, is always going to be more flexible about creating jobs that one ruled by a communist party’s aristocracy of pull.
“Those who are single simply adapt to homelessness, creating their own personal space amongst the concrete pipes.” Or, you could have, you know, lived modestly, saved money, and shared housing with other people. The fact they haven’t gone this route and are instead living in pipes suggests something in the Chinese economy is even more broken than we think.
Foreign companies like Microsoft and Nokia are now moving to Vietnam and India. “Japanese companies like Panasonic, Daikin, Sharp, and TDK are planning to move their manufacturing bases back to Japan. Well-known companies like Uniqlo, Nike, Funai Electric, Samsung, and others are also accelerating their withdrawal from China.”
Like industry is also fleeing from elsewhere in China.
“The once bustling Bund in Shanghai is now overgrown with weeds due to lack of maintenance and tourism, presenting a scene of desolation. Everywhere in Shanghai’s luxury residential communities, there are messages about subleasing and selling at a loss. The elites, celebrities, and tycoons left Shanghai at the first chance they got after the lifting of the lockdown. The political uncertainty in China and the frequent changes in regulatory clauses by the authorities have made entrepreneurs miserable.” Communists making entrepreneurs miserable? This is my shocked face.
“Domestic entrepreneurs are reluctant to invest further, and foreign investors are hastening their departure.”
Various Chinese company specific layoffs and financial difficulties snipped.
“Wall Street leading figures, after enjoying three years of benefits from the broad opening of China’s financial market, are planning large-scale cuts to projects and staff in China…Goldman Sachs has lowered its five-year plan expectations, and Morgan Stanley has decided not to set up a securities dealer in China, reducing its derivative and futures business investment to $150 million. JPMorgan Chase & Co. began cutting its dedicated staff in China earlier this year.” There’s not a violin small enough.
In a capitalist economy, there would be some sort of middle ground between the empty ghost cities and people living in pipes near megalopolises. If you don’t regulate the economy so heavily as to make building housing impossible (I’m looking at you, California and NYC), then profit will drive developers to create housing to fill a market need. With China’s crazy misallocation of loans to unprofitable housing to satisfy regional government growth targets, supply has been so severed from demand that such market-making is impossible.
China is going to come out of it’s decades-long growth spurt with crumbling cities and people that mostly are still poor.
More moving trucks left from California than any other state in 2022 for the third year in a row, while more Americans are flocking to Republican-led states like Texas and Florida, a new study published on Jan. 3 has found.
The study was conducted by the moving truck rental company, U-Haul, and found that Texas, Florida, and the Carolinas were the preferred destinations for one-way moving trucks in 2022, with those states ranking as the top growth states on the annual U-Haul Growth Index.
U-Haul’s Growth Index is compiled according to the net gain of one-way U-Haul trucks arriving in a state or city, versus those departing from that state or city each calendar year across the U.S. and Canada and is a strong indicator of what kind of job states and cities are attracting and maintaining residents, according to the company.
Texas is the top destination for U-Haul trucks for the second consecutive year and the fifth time since 2016, according to the study. That is followed by Florida, which has been a top-three growth state for seven years in a row. South Carolina, North Carolina, Virginia, Tennessee, Arizona, Georgia, Ohio, and Idaho also saw strong growth rates in 2022, the study found.
I think I’ve posted a variation on this story just about every year I’ve published this blog…
From July 2021 to July 2022, 300,000 more people moved out of the state than moved in. New York had the largest population loss—in both percentage and absolute terms—experienced by any state during that period.
Sadly, this was both predictable and preventable.
In March 2021, a study of New York found that its already staggeringly high tax burden had worsened due to an increase in the top marginal tax rate to almost 15% for those in New York City. The study projected that the flood of people leaving would only accelerate—and it did.
Even before that study, the Empire State lost so many people that it cost New York a seat in Congress after the 2020 census. This exodus is a direct response to New York’s obscenely high taxes.
Just how bad is it? Compared with other states, New Yorkers:
Pay the highest total tax burden and highest share of personal income (14%) in taxes.
Endure the second-worst overall business-tax climate.
Face the highest individual income-tax rate and income-tax collections per capita.
Pay the second-highest state and local corporate income tax collections per capita.
Have the fourth-highest property taxes and local sales-tax rate (on average).
Pay the highest cigarette taxes and ninth-highest gasoline taxes.
Remember how I’ve noted that semiconductor memory manufacturers make money hand-over-fist in boom times and barely break even during busts? “Samsung Profits Plunge 69% As Global Chip Demand In ‘Full-Fledged Ice Age.'”
Turnabout is fair play: “U. Houston Prof Tells Students to Report Teachers Berating ‘White People or Christians to DEI Office.'”
Denver Mayor Michael Hancock takes pride in virtue signaling his city as a refuge for illegal aliens. Guess what?
The House on Thursday passed the bipartisan Chips and Science Act, which aims to increase domestic production of computer chips to allow the U.S. to become more competitive against China in the global technology market.
The bill passed the House in a 243-187 vote one day after passing the Senate in a 64-33 vote. The legislation now heads to the desk of President Joe Biden.
Biden called the passage of the bill on Thursday “exactly what we need to be doing to grow our economy right now.”
“Today, the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper,” Biden said. “It will lower the costs of every day goods. And, it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.”
Twenty-four Republicans voted to pass the measure, despite Republican leadership making a last minute push to discourage GOP lawmakers from supporting the bill. GOP leaders sought to keep the bill from passing after news broke on Wednesday that Senator Joe Manchin (D., W. Va.) had reached a deal with Democratic leaders on a nearly half-a-trillion dollar spending package targeting energy and climate, health care, and increased taxes on the wealthy.
Snip.
The measure includes $39 billion to “build, expand, or modernize domestic facilities and equipment” for semiconductors, $2 billion to specifically manufacture semiconductors and $11 billion for Department of Commerce research and development.
“Research and development” is no doubt going to be a rich conduit of graft to Democratic Party cronies having nothing to do with semiconductors.
For reference, $29 billion is probably just enough to build two state-of-the-art 300mm chip fabrication plants.
As I’ve argued before, the reasoning behind the bill is specious and it won’t result in a single new chip being fabbed in the next two years.
The most recent stats I can find show that the United States has some 47% of the semiconductor market. We (and Taiwan, and South Korea) are kicking China’s ass in semiconductors.
The chips China make are generally either: A.) Cheap, or B.) intended for their internal market. No one sends cutting edge chips to be fabbed in China because they don’t have the tech to do it and everyone know they’ll steal your designs and crank out knock-offs on the sly whenever possible. China’s semiconductor industry is mostly smoke and mirrors all the way down.
Semiconductor subsidies have all the hallmarks of a classic Washington boondoggle: The wrong action at the wrong time for the wrong problem.
Second, the shortage wasn’t the result of a “chip shortage,” it was the result of “a lack of available foundry wafer starts.” Automakers cancelled their orders for display drivers when it looked like Flu Manchu lockdowns were going to depress the economy for a while, and were caught off-guard by the V-shaped recovery under Trump, and got sent to the back of the line to get their product fabbed after they changed their mind. Remember, just about all foundries are running flat-out 24/7/365, pausing only to switch to different chips for different customers. There’s no slack in the system, and those wafer starts are already spoken for (and possibly paid for) by other customers well in advance. Just as nine woman can’t give birth to a fully grown baby in one month, you can’t just “make chips quicker” in an existing fab.
Third, remember that cutting edge semiconductor fabs are hideously expensive. Moore’s second law states that the cost of a new, cutting edge semiconductor plant doubles every four years. Samsung’s planned fab in Taylor, Texas is going to cost $17 billion.
Fourth, nothing about these subsidies will address the real problem with American semiconductors, which is that the overwhelming majority of cutting edge chip designs have to flow through TSMC fabs in Taiwan. What will solve that problem is TSMC opening a state-of-the art fab in Arizona in 2024. No amount of U.S. taxpayer money will make that already-under-construction fab start producing chips any quicker.
Could these subsidies boost American semiconductor manufacturing 2-3 years from now? Possibly. Knowing the cycling nature of the industry and the tendency of government subsidies to backfire, new/upgraded fab lines might come online just as the industry is experiencing a glut.
But the real key to restoring America to the cutting edge of semiconductor manufacturing is the already-in-progress inshoring of cutting edge foreign owned fabs from Samsung and TSMC, and having American semiconductor manufacturers like Intel and GlobalFoundries master sub-10nm chip fabrication processes, something they have heretofore been unable to do. (Intel is closer, having been on the cutting edge until they lost their way, while GlobalFoundries stopped all development on their 7nm node because they couldn’t find a way to make the investment pay off.)
Throwing buckets of budget-busting borrowed taxpayer money around isn’t going to make any of those things happen any faster.
Greetings, and welcome to Friday the 13th LinkSwarm! Inflation keeps soaring, diesel and baby formula shortages wrack the nation, and too many creepy transexual pedophiles pop up in the news.
The East Coast of the U.S. is reporting its lowest seasonal diesel inventory on record. And some trucking companies appear spooked.
The East Coast typically stores around 62 million barrels of diesel during the month of May, according to Department of Energy data. But as of last Friday, that region of the U.S. is reporting under 52 million barrels.
The sharp increase of diesel prices has been a major stressor in America’s $800 billion trucking industry since the beginning of 2022. According to DOE figures, the price per gallon of diesel has reached record highs — a whopping $5.62 per gallon. It’s even higher on the East Coast at $5.90, up 63% from the beginning of this year.
When relief is coming isn’t yet clear, and experts say higher prices are the only way to attract more diesel into the Northeast.
There is a clear dividing line between American households with newborns and those without, and you can see it in which people have been talking about, and worrying about, a nationwide infant formula shortage for months and which people just heard about the problem recently. Target, Walmart, CVS, and Walgreens are all limiting how much infant and toddler formula customers can purchase per visit. So how did the U.S. — the wealthiest, most advanced, and most prosperous nation on the planet — end up in a situation where so many parents are worrying about feeding their youngest children?
Most reporting on the infant-formula shortage points the finger at Abbott Laboratories, which instituted a February recall of powder formulas, including Similac, Alimentum, and EleCare, manufactured in its Sturgis, Mich., facility. The recall — which the company emphasizes was voluntary — came after four consumer complaints of Cronobacter sakazakii (a.k.a. Salmonella Newport) in infants who had consumed powdered formula manufactured in the Sturgis plant. Cronobacter germs can cause sepsis, a dangerous blood infection, or meningitis, which swells the protective linings surrounding the brain and spinal cord. Those infected with Salmonella bacteria develop diarrhea, fever, and abdominal cramps twelve to 72 hours after infection, and infants are more severely affected than adults.
Abbott Laboratories emphasized that no product it distributed to consumers has tested positive for the presence of either of these bacteria, but that during testing in the Sturgis facility, the company found evidence of Cronobacter sakazakii in areas of the plant where products would not come in contact with it. As a precaution, it recalled all formula manufactured in this facility with an expiration of April 1, 2022, or later. No Abbott liquid formulas are included in the recall, nor are powder formulas or nutrition products manufactured at other Abbott facilities.
Here, it’s worth noting that the supply chain for infant formula was strained well before Abbott’s recall. According to the data-research firm Datasembly, the percentage of stores nationwide at which formula was out of stock surpassed double digits way back in July 2021, and by January 2022, it had hit 23 percent.
According to Datasembly, infant formula is now out-of-stock in 40 percent of stores nationwide. Moreover, in Iowa, South Dakota, North Dakota, Missouri, Texas, and Tennessee, more than half of baby formula was completely sold out during the week starting April 24. In another 26 states, between 40 and 50 percent of infant-formula supplies were sold out.
Unspeakable depravity: “Trans porn company owners sentenced for forcing 7-year-old girl into sexual exploitation…One of these members, Marina Volz, a biological male who identifies as a woman, has been sentenced to 25 years in prison for forcing ‘her’ 7-year-old daughter to participate in sexual acts.”
Speaking of Democrats supporting child rapists: “Woke L.A. DA George Gascon’s Pet Transgender Child Rapist Is Now Facing a Murder Charge….child rapist, “Hannah” Tubbs, who gamed the system and magically became a ‘woman’ so he could serve his sentence in a female juvenile prison and do easier time with a chance of getting out early.”
Still more elite institutions parading their transexual pro-pedophilia positions: “Child sex abuse center hires professor who faced backlash over pedophile comments…[Allyn Walker], an academic who resigned from a Virginia university after saying it wasn’t necessarily immoral for adults to be sexually attracted to kids has been hired by a Johns Hopkins University center aimed at preventing child sexual abuse.”
The NBA: Pulls All-Star Game out of Charlotte because it thinks a North Carolina bathroom bill discriminated against transsexuals. Also the NBA: To stage a game in the United Arab Emirates, where homosexuality is punishable by death.
“EV Automaker Hailed As The ‘Next Tesla’ Is Hemorrhaging Cash And Investors…Start-up electric vehicle (EV) maker Rivian Automotive’s stock [fell] 18.72% to $23.40 per share on Monday, a whopping 87% decline from its November peak of $179.47 a share.” (Hat tip: Stephen Green at Instapundit.)
Writer who checks all the proper boxes sells a first novel that turns out to be plagiarized. So she publishes an apology. Which turns out to also be plagiarized. The frogurt is also cursed. (Hat tip: Dwight.)
They’re making a sequel to This Is Spinal Tap, perhaps the funniest movie ever made, featuring the original principles. My enthusiasm is tempered by the fact that chances are extremely high it will suck.
As the COVID-19 pandemic exacerbates supply chain backlogs and global computer chip shortages
Correction: It wasn’t the pandemic itself, it was government lockdowns and other overeactions that did that.
Democratic leaders in Congress as well as President Joe Biden want Congress to fast track a $250 billion bill to develop American independence from China and other competitors in chip manufacturing.
The Capital Region – home to SUNY Polytechnic Institute, the only publicly owned 300-millimeter semiconductor research and development center in the U.S. – stands to reap significant benefits from the enactment of Senate Majority Leader Charles E. Schumer’s multi-billion dollar bill, which he envisions as a direct investment in his home state’s economy.
“Sen. Schumer wrote this legislation with upstate New York always at the forefront of his mind,” Schumer’s spokeswoman Allison Biasotti said. “We are already seeing the excitement in major employer expansions and thousands of jobs on the horizon from GlobalFoundries’ planned expansion (in Malta) and (his) push for Albany Nanotech to be a hub for the National Semiconductor Technology Center.”
A focal point of the bill, which the New York Democrat co-sponsored with Sen. Todd Young, R-Ind., is a historic $52 billion investment in stateside semiconductor research and development to address a global chip shortage plaguing the automotive industry.
Lawmakers began to focus more on the low domestic production of semiconductors when the COVID-19 pandemic cut off supplies from overseas. Without access to chips, several automakers shut down their production lines, and manufacturers of essential medical devices and consumer electronics struggled to meet increasing demand.
Roughly 12 percent of the world’s semiconductors are manufactured in the United States, down from 37 percent in 1990, according to the Semiconductor Industry Association.
Either these stats are false or misleading (probably the latter). The most recent stats I can find show that the United States has some 47% of the semiconductor market. It’s possible that the 12% refers to the entire worldwide number of individual chips produced, including discrete components (transistors, resistors, etc.). Those are indeed semiconductors, but they’re produced on old amortized fabs (inside the industry these are referred to as “jelly bean factories”) and sell for pennies a piece (or less). If you’re already in that industry, those old fabs make small, steady profits every year, but nobody jumps into that business with new fabs.
The chips China make are generally either: A.) Cheap, or B.) intended for their internal market. No one sends cutting edge chips to be fabbed in China because they don’t have the tech to do it and everyone know they’ll steal your designs and crank out knock-offs on the sly whenever possible. China’s semiconductor industry is mostly smoke and mirrors all the way down.
Semiconductor subsidies have all the hallmarks of a classic Washington boondoggle: The wrong action at the wrong time for the wrong problem.
Second, the shortage wasn’t the result of a “chip shortage,” it was the result of “a lack of available foundry wafer starts.” Automakers cancelled their orders for display drivers when it looked like Flu Manchu lockdowns were going to depress the economy for a while, and were caught off-guard by the V-shaped recovery under Trump, and got sent to the back of the line to get their product fabbed after they changed their mind. Remember, just about all foundries are running flat-out 24/7/365, pausing only to switch to different chips for different customers. There’s no slack in the system, and those wafer starts are already spoken for (and possibly paid for) by other customers well in advance. Just as nine woman can’t give birth to a fully grown baby in one month, you can’t just “make chips quicker” in an existing fab.
Third, remember that cutting edge semiconductor fabs are hideously expensive. Moore’s second law states that the cost of a new, cutting edge semiconductor plant doubles every four years. Samsung’s planned fab in Taylor, Texas is going to cost $17 billion.
Fourth, if you go to a random semiconductor company and go “Here’s 20 billion! Go build a state-of-the-art 5nm wafer fabrication plant!”, then:
A.) You’re looking at a very minimum of 2-3 years before the first production wafer comes off the line. You can’t just take an existing building and turn it into a fab, it has to be specially built from the ground up with exacting standards for cleanroom air filtering, concrete slab level uniformity, etc. And 2-3 years is probably the lead time to get an ASML EUV stepper.
B.) Unless you’re TSMC, Samsung or (maybe) Intel, the answer is probably “Uh, we’ll try, but no promises,” because those three companies are the only ones that actually having wafer fabs running 10nm or smaller process nodes. GlobalFoundries, mentioned in the article, has Fab 8 in Malta, NY, running 14nm, which is not horribly far off the state-of-the art, but not good enough to fab the really cutting-edge chips demanded of companies like Apple, NVIDIA, etc. Tiny problem: In 2018, GlobalFoundries stopped all work on 7nm development.
The contract maker of semiconductors decided to cease development of bleeding edge manufacturing technologies and stop all work on its 7LP (7 nm) fabrication processes, which will not be used for any client. Instead, the company will focus on specialized process technologies for clients in emerging high-growth markets. These technologies will initially be based on the company’s 14LPP/12LP platform and will include RF, embedded memory, and low power features.
So it was too hard a game for them to play, but with a big heap of taxpayer subsidies, I’m sure they’d be willing to give it another go.
Of course, you don’t need a cutting edge fab to build display drivers. Bosch just opened a $1.2 billion, 65nm fab in Dresden to do just that. But you don’t need subsidies to build trailing edge fabs.
$250 billion in taxpayer subsidies wouldn’t get you a single additional wafer start this year, and probably would accomplish little more than channeling money to politically connected firms and sticky pockets in a state (New York) that no one wants to build fabs in any more because of high costs, high taxes and union rule requirements.
