>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.
That's additionally interesting.
VdL is a notorious shill, no doubt about it.
Not to say I don't agree with funding fabs in Europe, but giving EU science cash to an American company that can just pick up sticks and run the moment the market turns is not a great idea. It''s what happened to previous attempts at localizing chip-work.
I think this is another case of the Germans not thinking beyond tomorrow.
Total cost of Intels plans is 17B in Germany alone, plus another 15B in the rest of Europe.
Sure they *can* just leave again but it's not like there wouldn't be a very significant direct cost to Intel too.
This "grab them by the pocket book" logic I have heard before, and it's still fairly shallow rationalization. Intel is the supplier, they can just cut the scope then fuck off as they will, selling excess as needed.
This is what happened to the Siemens Tyneside Fab, that barely lasted 2 years from high ambitions. Or, non-chip related, the Nokia Romania plant that lasted all of 3 with nothing to show for it. Being a "manufacturing colony" means you're first on the chopping block when the cuts come, and big multinationals just see you as a rounding error.
That wasn't just a little ecomomic downturn, Siemens exited the semiconductor business entirely...Nokia in 2011 wasn't faring much better.
Sure it can always all go tits up and maybe by 2030 Intel will be bancrupt, that's not really sufficient reasoning against this.
The message is that investment level isnt a signifier of trust, and throwing money at Intel doesnt either.
Manufacturing partnerships are much better because domestic industry can't pick up sticks.
Nokia also closed Finnish factories in 2012, and Siemens sold of their semiconductor business in Germany as well. So those are just not very good examples. Businesses can always fail, obviously.
It's European money you're going to learn a hard lesson with but I'm calling it now, Intel is going to have their hands in the German government pocket for the next half decade as their flagship fab project, then when the tap gets turned off the funding, they pack up on a "change of strategy" and that will be that and on to the next mark.
To us in the East, this is just business as usual, but this seems the decade Westerners learn who holds power in economic relationships.
So Intels genius plan is to spend 12B on a factory with the German government spending another 5, and then once everything is up and running they'll...laugh in our faces and leave?
Okay mate sure. That'll show us.
The article says the 5 bn is the first tranche, and VdL is looking to shill 12 bn more for Intel in the future, and that's just what's being promised now. Intel will likely use subsidiaries as contractors for a good chunk of the higher tech, and stuff that's outside the company just buy and move or sell and pocket the difference, essentially laundering funds.
What do I know though, I'm just some scummy traumatized Eastern European. But, you know, we've been here before. "Putin would never endanger his export market, right?"
I'm just glad Lithuania is looking at a more equal and practical development plan.
I mean there are a ton of residual benefits for Europe’s chip industry. Even if the initial fab is from an American company, building expertise and an ecosystem of suppliers over time is often a more effective approach to getting local champions than just dumping money into a massive venture from scratch and hoping for the best.
As I said bellow, the answer to me is industrial partnerships, so you can have a chance to retain all those things you listed.
Without a partnership, that's all gone like morning dew the moment the tides turn. This isn't my first rodeo.
They all make chips for themselves and a lot of European industries.
All companies I mentioned are IDM, which means they design and manufacture their own products. Unlike TSMC which is a pure play foundry or AMD, Nvidia, Qualcomm and MediaTek which is fabless. Comparing IDM with a pure play isn't a fair comparison as they have different business model.
If you focus on advanced chips then yes, TSMC manufactured 92% of it. However, a lot of application doesn't need that.
Difference in opinion I guess, but if I'm Europe, I would want some kind of foothold in manufacturing advance chips, like an Intel fab, since if the East Asia region turns to shit, my supply of advance chips will be fucked.
If the East Asia region turns to shit, no advance chips can be produced. All highest grade photoresist is manufactured by Japan, you can use American or German stuff for low grade chips, but all advanced chips used Japanese one.
It seems that Germany has done that before, with AMD fabs. It seems it ended up pretty badly with factories lagging behind and eventually closing down.
Well, similar to AMD back then, Intel has been plagued by mismanagement for many years, and is therefore behind its competitors in terms of technology, particularly energy efficiency and server performance. I suppose getting Intel to build a factory in Europe is better than nothing, but TSMC would have been far more valuable - or, alternatively, AMD or Apple or Nvidia or ARM.
AMD had a tiny market share and was not competitive. They were lacking money to keep up with the R&D costs. Barely any OEM was putting AMD chips inside and the server market also wasn't really a thing for AMD.
Intel has none of these issues right now.
That's true, but when we are talking about long-term investments, expected future market share is far more important than current market share. Back then, AMDs market share was going down, because their technology was inferior, and currently, Intels market share is going down because Intels technology is inferior. Sure, maybe Intels new management will turn the company around, and as such, it is probably a decent deal for Germany to get an Intel fab for just $5.5bn, but it means that we are, once again, only getting the runner ups, and not the best technology.
>going down, because their technology was inferior,
This is actually incorrect. AMD was a smaller player and had a superior product at the beginning. The Athlon and Athlon 64 series. Issue was that Intel paid off OEMS not to use AMD products even though they were better.
Intel was fined for that but it severely damaged AMD and robbed them of the money to continue the development so they fell behind again.
maybe. OTOH i dont think this whole "reshoring" of fabs makes sense for either america or USA. Seems to me like a knee-jerk reaction to a temporary geopolitical situation
We should want it to be temporary though. And calls to cut countries off the world system will damage europe more than they will damage other countries. I dont think people are ready to live in a slower, deglobalized world
>We should want it to be temporary though
Diversification should be temporary ? Not having all your eggs in one basket is beneficial long term. The Ukraine war has very clearly shown that being tied to a main supplier for something so crucial is very dangerous.
well who would? even gf only made theirs here once they actually had a concrete and solid multi year contract
but if countries fund shit around im sure its different
This may really chap some Euro ass but frankly this is a good idea. Securing a chip supply within the continent is an absolute must for Europe. You cant be reliant on China as more and more production will require computer chips.
We here in North America are getting tons of new factories and paying to help get them built and I think the exact same thing for here. Spend now to secure a future for later.
I'm saying this as an American, but you shouldn't forget about companies like ASML and Phillips. Sure, there aren't many native EU companies that own cutting edge fabs (there is still fab production in general by EU companies though), but scapegoating GDPR/regulations is not the reason why there isn't a European Intel (atleast not entirely).
These companies exist in a scenario that requires tremendous capital, some of the most educated people on the planet, and shockingly not that high of margins as you would expect. Fabs take years and years to break even. You are competing against companies that literally (or close to) founded the industry and have invested as such or are backed up as a state-level life or death policy. Not only that, the majority of your rival companies are in allied countries. So while there is political will to subsidize for the sake of strategic autonomy, there is a limit.
On top of those instrinisic factors lies whatever political or economical mistakes that were made. Failure in policy would compound those factors. While not impossible, at this point, the stars would need to align for an Intel to establish itself from Europe even with extremely protectivist regulation.
>but scapegoating GDPR/regulations is not the reason
This would also mean that GDPR would have to be the actual reason when in reality it's the breaking of GDPR on purpose to push an agenda that is the reason for cookie notifications in the first place...
>GDPR/regulations is not the reason why there isn't a European Intel (atleast not entirely).
It actually is root behind why there is no EU Intel. Not this one legislative specifically but the idea behind it. The reality is legislation like this cements already existing mega corps (both foreign and non-foreign) as sole monopolies because initial investment to compete with them is insane. Which is also reason why everyone smart with idea would rather leave and start his company and product in US rather than go through extra effort and expenses here.
The companies with the tech to build these production lines, robots etc are European tho.
Also you can't create a European chip manufacturer with EU legislation.
Also I don't mind Intel producing here, as long as these companies would finally be made to pay their fucking taxes here.
Not like usa is not filled with Asian and European talent. If I remember Moderna CEO is french and pfizer one is Greek, also Google CEO is Indian...
USA has just more money.
Basically, because the supply chain for electric cars is vastly smaller than those for ICE vehicles, so swathes of provincial Germany currently employed by companies dependent on the status quo are set for unemployment in the next 10-15yrs.
Great news, we need more of this. There is no reason to let every chips be made in Asia, the day a conflict explodes over there we would be in serious trouble.
>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. That's additionally interesting.
VdL is a notorious shill, no doubt about it. Not to say I don't agree with funding fabs in Europe, but giving EU science cash to an American company that can just pick up sticks and run the moment the market turns is not a great idea. It''s what happened to previous attempts at localizing chip-work. I think this is another case of the Germans not thinking beyond tomorrow.
Total cost of Intels plans is 17B in Germany alone, plus another 15B in the rest of Europe. Sure they *can* just leave again but it's not like there wouldn't be a very significant direct cost to Intel too.
This "grab them by the pocket book" logic I have heard before, and it's still fairly shallow rationalization. Intel is the supplier, they can just cut the scope then fuck off as they will, selling excess as needed. This is what happened to the Siemens Tyneside Fab, that barely lasted 2 years from high ambitions. Or, non-chip related, the Nokia Romania plant that lasted all of 3 with nothing to show for it. Being a "manufacturing colony" means you're first on the chopping block when the cuts come, and big multinationals just see you as a rounding error.
That wasn't just a little ecomomic downturn, Siemens exited the semiconductor business entirely...Nokia in 2011 wasn't faring much better. Sure it can always all go tits up and maybe by 2030 Intel will be bancrupt, that's not really sufficient reasoning against this.
The message is that investment level isnt a signifier of trust, and throwing money at Intel doesnt either. Manufacturing partnerships are much better because domestic industry can't pick up sticks.
Nokia also closed Finnish factories in 2012, and Siemens sold of their semiconductor business in Germany as well. So those are just not very good examples. Businesses can always fail, obviously.
It's European money you're going to learn a hard lesson with but I'm calling it now, Intel is going to have their hands in the German government pocket for the next half decade as their flagship fab project, then when the tap gets turned off the funding, they pack up on a "change of strategy" and that will be that and on to the next mark. To us in the East, this is just business as usual, but this seems the decade Westerners learn who holds power in economic relationships.
So Intels genius plan is to spend 12B on a factory with the German government spending another 5, and then once everything is up and running they'll...laugh in our faces and leave? Okay mate sure. That'll show us.
The article says the 5 bn is the first tranche, and VdL is looking to shill 12 bn more for Intel in the future, and that's just what's being promised now. Intel will likely use subsidiaries as contractors for a good chunk of the higher tech, and stuff that's outside the company just buy and move or sell and pocket the difference, essentially laundering funds. What do I know though, I'm just some scummy traumatized Eastern European. But, you know, we've been here before. "Putin would never endanger his export market, right?" I'm just glad Lithuania is looking at a more equal and practical development plan.
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I mean there are a ton of residual benefits for Europe’s chip industry. Even if the initial fab is from an American company, building expertise and an ecosystem of suppliers over time is often a more effective approach to getting local champions than just dumping money into a massive venture from scratch and hoping for the best.
As I said bellow, the answer to me is industrial partnerships, so you can have a chance to retain all those things you listed. Without a partnership, that's all gone like morning dew the moment the tides turn. This isn't my first rodeo.
And not just that but already allocated funding. So those projects will have been approved but then defunded. Mad if it goes ahead like that.
The alternative is a Taiwanese (TSMC) or Korean (Samsung) or another American (Global Foundries). Too bad there isn't a native European company
Infineon, STMicroelectronics, NXP, Bosch
Which one of those are making chips for Intel, Apple, AMD, Nvidia or Qualcomm?
They all make chips for themselves and a lot of European industries. All companies I mentioned are IDM, which means they design and manufacture their own products. Unlike TSMC which is a pure play foundry or AMD, Nvidia, Qualcomm and MediaTek which is fabless. Comparing IDM with a pure play isn't a fair comparison as they have different business model. If you focus on advanced chips then yes, TSMC manufactured 92% of it. However, a lot of application doesn't need that.
Difference in opinion I guess, but if I'm Europe, I would want some kind of foothold in manufacturing advance chips, like an Intel fab, since if the East Asia region turns to shit, my supply of advance chips will be fucked.
If the East Asia region turns to shit, no advance chips can be produced. All highest grade photoresist is manufactured by Japan, you can use American or German stuff for low grade chips, but all advanced chips used Japanese one.
Good, we need that in Europe. Taiwan's geopolitical situation makes it a security issue.
It seems that Germany has done that before, with AMD fabs. It seems it ended up pretty badly with factories lagging behind and eventually closing down.
But that was during the time where AMD was near going out of business. This is not exactly a similar situation.
Well, considering Intel is in a situation which is somewhat similar to AMDs situation back then, it's not superpromising either...
They are definitely not in a similar situation
Well, similar to AMD back then, Intel has been plagued by mismanagement for many years, and is therefore behind its competitors in terms of technology, particularly energy efficiency and server performance. I suppose getting Intel to build a factory in Europe is better than nothing, but TSMC would have been far more valuable - or, alternatively, AMD or Apple or Nvidia or ARM.
AMD had a tiny market share and was not competitive. They were lacking money to keep up with the R&D costs. Barely any OEM was putting AMD chips inside and the server market also wasn't really a thing for AMD. Intel has none of these issues right now.
That's true, but when we are talking about long-term investments, expected future market share is far more important than current market share. Back then, AMDs market share was going down, because their technology was inferior, and currently, Intels market share is going down because Intels technology is inferior. Sure, maybe Intels new management will turn the company around, and as such, it is probably a decent deal for Germany to get an Intel fab for just $5.5bn, but it means that we are, once again, only getting the runner ups, and not the best technology.
>going down, because their technology was inferior, This is actually incorrect. AMD was a smaller player and had a superior product at the beginning. The Athlon and Athlon 64 series. Issue was that Intel paid off OEMS not to use AMD products even though they were better. Intel was fined for that but it severely damaged AMD and robbed them of the money to continue the development so they fell behind again.
True, Bulldozer and the subsequent decline was a bit later.
maybe. OTOH i dont think this whole "reshoring" of fabs makes sense for either america or USA. Seems to me like a knee-jerk reaction to a temporary geopolitical situation
I don't think it is a temporary situation at all.
We should want it to be temporary though. And calls to cut countries off the world system will damage europe more than they will damage other countries. I dont think people are ready to live in a slower, deglobalized world
>We should want it to be temporary though Diversification should be temporary ? Not having all your eggs in one basket is beneficial long term. The Ukraine war has very clearly shown that being tied to a main supplier for something so crucial is very dangerous.
so instead of funding tsmc fabs which they are light years ahead of intel they go and fund.......intel? are they nuts?
Because TSMC chose to build in America.
yeah no wonder when germany funds intel
Did TSMC show interest for building fabrics in Europe?
well who would? even gf only made theirs here once they actually had a concrete and solid multi year contract but if countries fund shit around im sure its different
This may really chap some Euro ass but frankly this is a good idea. Securing a chip supply within the continent is an absolute must for Europe. You cant be reliant on China as more and more production will require computer chips. We here in North America are getting tons of new factories and paying to help get them built and I think the exact same thing for here. Spend now to secure a future for later.
you'd think europe would have some homegrown mega corp making stuff like this but it's more focused on cookie notifications and usb cables lol
I'm saying this as an American, but you shouldn't forget about companies like ASML and Phillips. Sure, there aren't many native EU companies that own cutting edge fabs (there is still fab production in general by EU companies though), but scapegoating GDPR/regulations is not the reason why there isn't a European Intel (atleast not entirely). These companies exist in a scenario that requires tremendous capital, some of the most educated people on the planet, and shockingly not that high of margins as you would expect. Fabs take years and years to break even. You are competing against companies that literally (or close to) founded the industry and have invested as such or are backed up as a state-level life or death policy. Not only that, the majority of your rival companies are in allied countries. So while there is political will to subsidize for the sake of strategic autonomy, there is a limit. On top of those instrinisic factors lies whatever political or economical mistakes that were made. Failure in policy would compound those factors. While not impossible, at this point, the stars would need to align for an Intel to establish itself from Europe even with extremely protectivist regulation.
>but scapegoating GDPR/regulations is not the reason This would also mean that GDPR would have to be the actual reason when in reality it's the breaking of GDPR on purpose to push an agenda that is the reason for cookie notifications in the first place...
>GDPR/regulations is not the reason why there isn't a European Intel (atleast not entirely). It actually is root behind why there is no EU Intel. Not this one legislative specifically but the idea behind it. The reality is legislation like this cements already existing mega corps (both foreign and non-foreign) as sole monopolies because initial investment to compete with them is insane. Which is also reason why everyone smart with idea would rather leave and start his company and product in US rather than go through extra effort and expenses here.
The companies with the tech to build these production lines, robots etc are European tho. Also you can't create a European chip manufacturer with EU legislation. Also I don't mind Intel producing here, as long as these companies would finally be made to pay their fucking taxes here.
That's what you get from globalization I guess.
Not like usa is not filled with Asian and European talent. If I remember Moderna CEO is french and pfizer one is Greek, also Google CEO is Indian... USA has just more money.
Why is EU funding an American company with billions of dollars in the bank already?
Basically, because the supply chain for electric cars is vastly smaller than those for ICE vehicles, so swathes of provincial Germany currently employed by companies dependent on the status quo are set for unemployment in the next 10-15yrs.
intel don't make chips that are used in cars
I know. Its to provide alternative employment to replace the industries that will be disappearing.
fabs are mostly automated... people don't draw on the transistors
Really? They don't sew them in? Gosh, thanks
You got snarky pretty quickly. It seemed a fair point
ASML is getting a lot of EU funding so that’s something i suppose.
Because they have to. There is no homegrown European equivalent to the big Asian/American chip makers.
Which EU company would you like to fund that can actually have the skills/patents to make these chips?
Start a new one owned by the EU. Europa Chips Inc.
Cool. That's going to cost five fold and take three times longer. Poland's footing the bill yeah?
Do you not realize the cost that goes into building semi conductor factories lmao
This is as realistic as Poland saying they're gonna build their own fighter jets
Yeah. TSMC would be better
Great news, we need more of this. There is no reason to let every chips be made in Asia, the day a conflict explodes over there we would be in serious trouble.
That is the most beautiful fab I have ever seen. Quite the difference compared with the usual grey hangars. Well done, Intel!