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.
>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 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.