[adrian_b]

While that video from Asianometry contains interesting historical information, it does not include any evidence for their thesis that the GDR's mismanagement of their semiconductor industry was a greater contributor to the country's bankruptcy than their mismanagement of all the other branches of the economy.

If they would have directed some of the resources spent in attempts to modernize the semiconductor industry to any other economic activities, at least the same fraction of the resources that were wasted in the semiconductor industry would have been wasted elsewhere.

So there is no proof that this choice has been worse than others. On the contrary, even if in GDR their efforts did not result in the desired production capabilities, at least they taught many engineers and technicians, so that this made Dresden attractive after reunification as a place where to invest in this field, until in the present with this fab planned by TSMC.

[KingOfCoders]

Not sure, but the costs for chips a lot was probably in $ while other things were paid in (GDR) Mark, and $ was very scarce.

[Edit] Couldn't find a research paper on GDR chip production and costs in $ vs. Mark.

[adrian_b]

While they could not export towards Western countries, semiconductor devices formed a significant fraction of their exports to the Soviet Union and to the countries dominated by the Soviet Union, i.e. to the other members of the Comecon.

If the GDR had not used most of its resources for a greater development in the domains of semiconductor devices, precision mechanics and optics than most other members of Comecon, it is likely that they would not have been able to export much except food, which they did not have enough even for themselves, while needing to import a lot of resources that they did not have.

If Asianometry had made a video with the similar title "How Semiconductors Ruined Intel", that title would be closer to the truth, because during most of the last decade the performance of Intel in developing semiconductor manufacturing has been much worse than that of the GDR.

Hopefully the woes of Intel will end this year with the launch of the "Intel 4" process, but before that Intel has succeeded in 6-7 years to transform an advantage of 2-3 years in semiconductor manufacturing against all others into a handicap of 2-3 years compared to the top competitors.

By contrast, GDR has started with a handicap of at least 10 years against USA (the US semiconductor industry has been created in the middle of WW2, for the fabrication of radar diodes) and after some 35 years it still had about the same 10 years of handicap.

While GDR and the other communist countries have never been able to reduce the technological gap between them and USA, they also never had any such tremendous fall behind, like Intel, where it seems that the management methods and the internal cooperation between divisions have not been better than those that were rightly criticized for GDR.

Unfortunately bad management is not an exclusive feature of the "planned" communist economies, but it becomes more and more frequent in the present economies that have become dominated by quasi-monopolies everywhere.

[KingOfCoders]

(I have no clue about the stuff you say about Intel)

I again couldn't find a lot of data on the exports you've mentioned, but I do guess if it's CPUs it was mainly reverse engineered, illegally produced Z80 ("U880").

It looks like the GDR did reverse engineer a 80286 ("U80601") and started limited production in 1989, in very low numbers because of production problems (The West was using 486 at that point). So it is unclear how reverse engineering of CPUs would progress

  Z80 8.5k transistors
  286 134k transistors
  386 275k transistors (+ 120k for 387)
  486 >1200k transistors (the 486 had an FPU)

(As the GDR also illegally cloned DEC MicroVax systems, there is a "U80701" MicroVax clone with 130k transistors, same like the 286 clone. This doesn't seem to have gone into production)

The reason the GDR could not pull it off where manifold. First the Eastern block countries tried a different concept in IT in the 50s and 60s compared to the West, that proved not as practical. Second the GDR lost time by reverse engineering and spending money on smuggling CPUs and machines. Third the West had a huge network of companies building a supply chain for production of semiconductors. The GDR (or Eastern block) would have needed to bootstrap the whole supply chain by it's own. The Western supply chain in semiconductors was probably 1000x the value and people the GDR did or could spend.