Samsung plans $17B chip plant in Taylor, Texas

https://www.datacenterdynamics.com/en/news/samsung-plans-17-billion-chip-plant-in-taylor-texas/

by kungfudoi • 5 years ago

587 413 5 years ago

bnt• 5 years ago

So everyone is on the "Let's build a Fab in the USA" train, will that eventually bring down the chip production costs? (not an expert in the field, so asking naively)

justinzollars5• 5 years ago

No, it increases the security and continuity of our civilization when China invades Taiwan.

consumer451• 5 years ago

Well, there's a huge benefit of COVID.

The related chip shortage finally woke up the US gov on supply chains.

My question is why did it take this long? I have been worried about this for nearly a decade.

My next question is how many mask factories have we built in the US since we realized that was important?

amelius• 5 years ago

Samsung could build the plant in South Korea?

JohnJamesRambo• 5 years ago

This will cause WWIII so yes we will need chips in that scenario. Let’s hope that doesn’t happen.

CoastalCoder• 5 years ago

If China were to invade Taiwan, I'm guessing that all product flow from China/Taiwan to (most) other countries would stop.

If that happened, I'm curious what other manufacturing/product issues would impact other countries, and how long it would take them to adapt.

E.g., what tool manufacturing, raw materials mining, etc. are currently happening only in China and/or Taiwan?

And that's assuming that China didn't also sabotage industrial capabilities in other countries that depend on Chinese/Taiwanese manufacturing.

trasz8• 5 years ago

China has no reason to invade Taiwan, and plenty of reasons to avoid doing it. The whole thing is just another American wet dream.

FooBarWidget9• 5 years ago

The best way to keep China from invading Taiwan is by upholding the One China Policy. With that policy in place, China has plenty of reasons to avoid a war. Unfortunately the US and many other parties are increasingly tearing this policy down, not seldomly without fully understanding why that policy was invented in the first place.

lkbm4• 5 years ago

(Also not an expert.)

In general I wouldn't expect US manufacturing to do a lot to lower production costs. More capacity in general obviously helps, and I could definitely see the US doing a lot to subsidize domestic production, if that counts as bringing down the costs.

Maybe higher wages will lead to more automation.

fabfabfab4• 5 years ago

Expert here. Worked in a Fab (Automated Material Handling Systems or AMHS group).

You might be suprised how automated it already is [1]. Notice the OHTs (Overhead Hoist Transport)[2] running on a system of highways and superhighways on the ceiling. Each of these OHTs carry a box inside it called a FOUPs (Front Opening Unified Pods)[3] carrying upto 25 wafers. That can easily be worth $1M+ per box. They have standardized JEDEC interfaces so any process tool can accept a FOUP and get wafers out of it. The environment inside these FOUPs is ridiculously clean and each one costs $15k for what most people would think is a plastic box with a door in the front. FOUPs are used internally. If wafers are shipped, they're shipped in a similar box called FOSB or Front Opening Shipping Boxes [4]. These boxes are the reason automation happens with standardized "APIs". We don't need to know who made the process tool to hand them a box of wafers.

Another automation feature are the AGVs or Automated Guided Vehicles [5] that carry the same FOUPs and FOSBs [5]. They also can be equipped with a robot arm that takes a wafer out of the box and hands it over to the tool. The AGVs run on specialized roads inside the Fab and remains docked on the tool during processing.

Usually, there are hardly any humans around the tool. Material (wafer) is fed by AMHS systems, picked up by the same. Fab is probably one of the most automated manufacturing places out there. Way more than Automotive manfacturing.

If you're looking to do software engineering, I would highly encourage people to go work in semiconductor industry. It is just a fucking cool place and lot of room for improvement still.

[1] https://www.youtube.com/watch?v=MRlcZqqyBM8

[2] https://www.muratec.net/cfa/products/

[3] https://www.entegris.com/shop/en/USD/Products/Wafer-Handling...

[4] https://en.wikipedia.org/wiki/FOUP#/media/File:Front_opening...

[5] https://www.muratec-usa.com/machinery/clean-room/transport/A...

jason-phillips9• 5 years ago

Maybe higher wages will lead to more automation.

Samsung Austin Semiconductor has been fully automated since 2008-ish. One number I was quoted was that you only need 19 technicians on the floor to run the fab, compared to 500+ pre-automation.

echelon3• 5 years ago

Globalization led to an erosion of US wages and the hollowing out of our middle class.

If we buy local, it creates domestic jobs. Wages go up too.

We need to onshore more.

colinmhayes2• 5 years ago

Protectionism makes everyone worse off.

oneplane2• 5 years ago

That's so many assumptions you might as well put on a robe and special hat and become a fortune teller.

The effective erosion itself is a policy choice, there is this thing called 'minimum wage' which you can use to make sure that there is more than just 'warm bodies' as the lowest common denominator in job requirements, and as a result everything above that has to be 'upgraded' to a higher standard as well, otherwise people aren't willing to do the work (just like is happening now). The examples are all around you.

There is no onshoring of talent or natural resources since they are not 'constructed' the same way and importing those are against the current ideas/fears of immigration and relying on third parties for goods.

In other words: globalisation isn't a choice, it's a side-effect from the needs of humanity. Reverting to a more primitive state that decreases those needs could be a path, but I doubt anyone would choose that willingly.

Besides those things, there is this concept of ideals or principles which are almost as important and it doesn't require any extreme form of meddling either. If people really care about something (say, the well-being of other humans and therefore not really being happy with an authoritarian regime somewhere) then that can be incentive enough. And if it isn't then some protectionism won't be enough either.

mbesto• 5 years ago

If you think bringing manufacturing to the US is about jobs, then I have a bridge to sell you.

We need to onshore more.

Simple solutions to overly complex problems is not the answer.

First, manufacturing output has steadily increased since the 90s. https://fred.stlouisfed.org/series/INDPRO

Second, the number of manufacturing jobs have steadily declined since the 90s. https://fred.stlouisfed.org/series/MANEMP

How is this possible? Automation. These plants aren't creating US jobs and increasing wages, they're simply creating more wealth for corporations which they would have done anyway overseas. And since Samsung is a Korean company, the wealth is being created in Korea, not the US.

sleepysysadmin3• 5 years ago

This is about the war with china.

Europe: https://www.reuters.com/world/europe/tech-is-make-or-break-i...

Germany: https://www.infineon.com/cms/en/about-infineon/press/press-r...

Korea: https://fortune.com/2021/05/13/south-korea-chip-semiconducto...

Japan: https://www.aroged.com/2021/11/23/japan-has-allocated-5-2-bi...

Non-OP USA: https://9to5mac.com/2021/06/09/us-chip-production-52b/

Key players are expecting an all out war with China:

France: https://www.economist.com/europe/2021/03/31/the-french-armed...

Taiwan: https://thediplomat.com/2021/10/taiwan-says-it-is-preparing-...

Australia: https://au.news.yahoo.com/chilling-warning-of-australias-rol...

AUKUS: https://www.theguardian.com/politics/2021/sep/16/what-is-the...

Japan: https://hamlinemidwayhistory.org/japanese-aircraft-carriers-...

China is fully aware of the cold war: https://abcnews.go.com/Business/wireStory/chinas-leader-xi-w...

Let me blow your mind far more:

https://en.wikipedia.org/wiki/Pentagon_UFO_videos

These aren't hillbillies. This is US government technology recording and confirming UFOs.

https://www.cbsnews.com/news/pentagon-ufo-report-released-ma...

And nobody is talking about it? This is completely related to the war with china.

It's all an attempt to prevent war with China. Though that does mean a peasant revolt in china is coming.

ericmay• 5 years ago

This is about the war with china.
It's all an attempt to prevent war with China.

So the Chinese have UFOs and we have a war with China but we are moving chip production to all these countries you mentioned to prevent the ongoing war with China?

I’d like to give you the benefit of the doubt here though. I think if you were able to be a little more clear I’d at least understand what you intend to say, but I find your comments here a bit confusing.

And nobody is talking about it? This is completely related to the war with china.

Who isn’t talking about it? Assuming you’re talking about poor relations (“Cold War”) and/or loving chip production. It seems to me to be pretty common knowledge and is widely reported in global media sources and the Internet. Don’t the links you provide demonstrate that?

betwixthewires• 5 years ago

OK, a lot to unpack.

Lots of militaries prepared for conflict. OK.

What do the pentagon UFO releases have to do with war with China? You say it's completely related, would you elaborate?

And a peasant revolt in China? That's a big statement and I'd like to know more about your reasoning.

trasz8• 5 years ago

The easiest (and probably the only) way to prevent a war with China is to convince the US to not start it.

kragen6• 5 years ago

How does research on poorly understood atmospheric phenomena relate to war with China?

If there's danger of a peasant revolt, war with the US would be a pretty effective way to prevent it.

French Economist article archive: https://archive.md/fcTkA ("brigades, or a division" sure doesn't sound like WWII)

Grauniad AUKUS article archive: https://archive.md/LFsoo

dv_dt• 5 years ago

I don’t know if it will bring down production costs, but it may reduce logistical shortages and bring down chip prices.

Robotbeat5• 5 years ago

Well in principle Texas has lower (almost half) industrial energy costs than Taiwan, which could help reduce wafer production costs especially at the lower resolution nodes. As Moore’s Law slows, things like energy and raw material costs may matter more. And having wafer plants close to fab plants can help.

Rough order of magnitude, but for a lower cost wafer (think like 90nm or above, not 7nm), electricity and energy could be about 10% of the overall cost. As a lot of the capital cost of the automation and industrial equipment is the same wherever in the world you are, that might be an important factor.

Taiwan is an island that imports almost all of its energy. Texas is an energy rich state with lots of wind, solar, and especially natural gas that is exported to the world.

We talk about higher natural gas prices in the US with Texas seeing slightly above $4/MMBTU, but LNG prices in Asia are above $35/MMBTU at the moment, nearly an order of magnitude higher. The government of Taiwan is basically eating half the entire cost of LNG right now to keep costs low for businesses and consumers, but that’s not a sustainable strategy. (At the moment, industrial electricity is about 13¢/kWh in Taiwan even with the government subsidizing most of the LNG cost and 7-8¢/kWh in Texas.)

mrweasel• 5 years ago

I was wondering why Texas keep coming up when new US fabs a being talked about. From an outsider it just looks like the low energy cost comes from failing to properly manage and upgrade the Texas energy grid.

pie42000• 5 years ago

Why are people concerned about energy and material costs? Semiconductors are probably the highest margin manufactured goods on the planet, with materials and energy being the lowest cost input to the process. The only good that can compete is bottled water or movie theater popcorn.

This is 100% politically motivated.

gmadsen• 5 years ago

is there a labor demand for electronic assembly? we can barely get workers for decently tipped restaurants, and we now going to have 1000s lining up to twist a screw for 8 hours straight?

politician5• 5 years ago

It’ll reduce geopolitical strategic risk.

deelowe• 5 years ago

This is more about national security and business continuity than cost. Costs matter most when things are running smoothly. However, COVID has taught us a hard lesson. When SHTF, you better have a back up plan. Making money on IP alone while someone else handles all of the manufacturing and integration work looks great on a spreadsheet. Then some state actor cuts off the supply chain (or a virus) and your genius MBAs start to not look so smart after all.

With any luck, COVID (and tariffs) has transformed business for the future.

jaywalk3• 5 years ago

With any luck, COVID (and tarrifs) has transformed business for the future.

Until we're far enough removed from the situation, everything is comfortable again, and the MBAs start saying "you know, if we just offshored fabrication..."

optimalsolver3• 5 years ago

How is relying on a foreign company helping the situation?

cxr• 5 years ago

the "Let's build a Fab in the USA" train

We have fabs in the USA right now. To speak of Austin alone, Samsung's own S2 has been here since the late 90s, and there are a handful of others here, too.

rossdavidh• 5 years ago

So chip production does have a labor cost, but the equipment used is quite pricey, and so the relative cost of labor is less. Also, given how pricey the equipment and how demanding the cleanroom protocol (which, if not followed, reduces yield of saleable products), there are a lot of incentives to make sure you have long-term employees who are well trained and motivated to keep their job.

Also, Austin (and other parts of Texas) already have a fair number of chip fabs, and have for decades. I used to work in some of them. Samsung even has existing fab capacity in Texas. So it's not such a new thing.

lkbm4• 5 years ago

Previously posted here: https://news.ycombinator.com/item?id=29314269 (paywalled article)

newaccount2021• 5 years ago

within ten years, the I35 corridor will be the most intensive economic region in North America

markus_zhang4• 5 years ago

That's a reasonable point.

JavaBatman• 5 years ago

I am still amazed by the shortsightedness of how these critical and strategic goods are off-shore. No wonder why the supply chains are fragile and not robust. It should be illegal for strategic goods and components such as chips and semiconductors to be produced offshore. Yes, it will raise prices in the short and medium-term, but it will make the domestic economy and manufacturing sector more robust, resilient to supply shocks, and antifragile.

We need a true industrial policy and state capitalist system similar to what Japan, South Korea, Taiwan, and Singapore have.

csours• 5 years ago

How does making something illegal counteract economic forces? Hint: Look at Soviet Bloc economics. They imported high tech goods even after spending loads of money on trying to build them internally.

I would agree that onshoring more of the supply chain makes a lot of sense, but I think it must be an economically viable solution. I don't know exactly how to do that, but things like having a guaranteed market (like we do for food) might be part of the solution.

yaacov2• 5 years ago

You might enjoy reading about https://en.m.wikipedia.org/wiki/Export-oriented_industrializ...

ecf• 5 years ago

The blame for this is purely on the shoulders of business leaders coming out of MBA programs across the US.

It seems the only thing those places are teaching is how to join a company, strip it to the bone, hype up the short-term 5% growth, and get millions of dollars in raises.

yaacov2• 5 years ago

Blaming individuals doesn’t help, it’s a coordination problem. If any one MBA refuses to outsource they’ll just be outcompetes by someone who does. This is the sort of problem that requires a government to solve

oceanplexian• 5 years ago

The blame is clearly on the shoulders of politicians and those who keep voting for them. Most of the political class are pushing globalization, and thus align tax incentives towards outsourcing. Imagine if the politicians in charge practiced what they preach and refused to buy or import goods that were produced by countries who don’t meet US labor law or emissions standards. The problem would practically solve itself.

alecco• 5 years ago

To be fair, they are often just following orders: "Maximize shareholder value" with a quarter/year schedule.

vntx• 5 years ago

I don’t like those MBAs anymore than you but blaming this group is disingenuous and an oversimplification. Business schools train people to profit, and if that comes at the cost of secure supply chains and national security, who cares, it’s not their problem. Someone else mentioned that this is a coordination problem, and I think that’s more accurate. You need governments to help fund these capital intensive ventures and incentives like tax-breaks and the fear of supply chain destroying pandemics to urge them on.

m0zg9• 5 years ago

MBA programs do not produce "business leaders", except by accident. They produce business _administrators_, which is a different thing entirely, and often the opposite that of a leader. People often confuse management with leadership, and while a manager can be a leader, the two are rarely the same.

PKop3• 5 years ago

And people wonder why China structures their political system to subordinate the interests of multinational corporations to the longer term interests of the nation, its people and economy as a whole.

sct202• 5 years ago

Taiwan, South Korea, and Japan don't have complete semiconductor supply chains either. All the companies in those countries are dependent on suppliers all over the region and the world.

markus_zhang4• 5 years ago

When you start thinking about politics/geopolitics from an "interest group" perspective, instead of a national perspective, you will understand all these. "Nation" is just a concept that we put up together as a "framework". It means a lot for common people like us because we simply have nothing else to rely one, but not much for different interest groups (I'm talking about banking, military, lobbyists, industrial conglomerate, those big shots).

missedthecue3• 5 years ago

You don't make semiconductors out of thin air. They're made out of inputs that we have to buy from other countries. The United States cannot possibly produce its own sufficient supply of rare earths and silicon for instance, they must be extracted where they occur naturally.

dukeyukey• 5 years ago

My understanding is that the US definitely _could_ produce everything needed, it's just not financially viable or desirable to do so. With tax changes, automation and the rise in cost of labor in non-western countries, it might just become viable.

kragen6• 5 years ago

The US did produce its own sufficient supply of rare earths and silicon for decades, they occur everywhere, mainstream semiconductors don't contain any rare earths, and I suggest you at least skim a Wikipedia article on a relevant topic before writing your next HN comment.

AdamN• 5 years ago

No single country is capable of producing the newest chips end to end. Lithograph machines, raw materials, clean room builders, educated workforce, and the scale to do each of these economically are simply not available in one location.

By the time you could produce such a focus of the industry, it would already have moved on and require different inputs that are not in that country.

hparadiz• 5 years ago

I think that's what the person you're replying to is saying. The government should subsidize domestic production because it's a prestige issue for the nation. Sort of like having an aircraft carrier group but in the form of economic power.

kragen6• 5 years ago

I am still amazed by the shortsightedness of how these critical and strategic goods are off-shore.

You're not half as amazed as Xi is.

Yes, it will raise prices in the short and medium-term,

Right now we have cutting-edge fabs in Taiwan and Korea. If we were to follow your recommendation, we would also have them in PRC, USA, Japan, Germany, the UK, India, France, Italy, Canada, and Russia, at least. In fact, that's more or less how things used to be. The difficulty is that this would mean increasing world fab investment by a factor of 6, which would probably make them all unprofitable until chip prices also increased by a factor of 6. Permanently.

However, there is still one country that uses this policy: North Korea.

throw0101a3• 5 years ago

I am still amazed by the shortsightedness of how these critical and strategic goods are off-shore.

At what point do goods go from being non-critical/strategic to being critical/strategic? At what point did car companies have to worry about chips being "critical"? At what point did smartphones become "critical" to people's lives?

Things were not critical at all, and then when few people were looking, they moved across the spectrum to an area part that is considered critical by some measure.

ruined• 5 years ago

semiconductors have been critical since the day they were invented, because computers were already critical at that time. the first major manufacturers of semiconductors were defense contractors.

HWR_142• 5 years ago

This announcment by Samsung followed news that the onshoring semiconductor bill was moving through Congress (just saw it in the news today or yesterday). I doubt it's a coincidence,

So, I think, at least with regard to chips, your dream is coming true.

Ericson2314• 5 years ago

Well, we would actually have to rein in the oligarchs and puncture the asset bubbles to do that, and I think we have 0 stomach for either.

Our public transit woes also demonstrate how little US politics cares about details, and how much they stomp all over the independence of a civil service that would.

throw109203• 5 years ago

We need a true industrial policy and state capitalist system similar to what Japan, South Korea, Taiwan, and Singapore have.

You forgot China. If you institute strong controls over industry in a country the size (and culture) of America, you won't get Japan, you'll get China, and the corresponding anti-features of their system (such as authoritarianism in general, and companies acting as agents of the state in particular).

Very few people want that, and certainly not me.

There are far better ways to build robust manufacturing systems than complete government control.

foobarian• 5 years ago

There are some uncomfortable questions raised here. Why is it desirable to build "robust manufacturing systems?" Why was it desirable to overengineer appliances to last decades in the 50s, other than "the designers felt it was the proper way to do it" and there was no market pressure to steer them otherwise. How many resources were wasted on such appliances over those decades?

If the supply chains have very little slack and products are designed with minimal material inputs, sure there may be some availability hiccup here and there, but how bad is that really and by what metric. At the same time many more people get to have access to modern goods due to lower costs and less unneeded material, less is wasted due to inventory stockpiling, and we are overall more efficient.

kwillets2• 5 years ago

Samsung is considered the epitome of state capitalism, so there may be some confusion about that last sentence.

burnished• 5 years ago

Ok, this article quietly gets fucking wild halfway through.

> Samsung spent years evaluating where to build the new fab, courting multiple locations and pitting them against each other for better incentives. But the ultimate decision came down to Samsung Group's leader Jay Y. Lee, who was granted early parole in August expressly to speed up crucial business decisions like the Texas chip fab. Accounting for between 10 and 20 percent of the nation's GDP, Samsung is often given preferential treatment, with executives pardoned for crimes in the name of ensuring national economic growth.

In 2017, Lee was convicted of bribing a friend of then-President Park Geun-hye, and sentenced to five years in prison in Korea. His sentence was revised down to 30 months, of which he has served around 18 months.

The Samsung leader bribed Choi Soon-sil, a pseudo-Christian cult leader nicknamed "the Korean Rasputin," who may have helped decide government policy during the Park administration. Park denied she held shamanistic rituals at the presidential compound, but was removed from office following the scandal. She has since been sentenced to more than 30 years in prison.

Lee gave Choi money and horses in an effort to ensure a merger within different subsidiaries of Samsung would pass, helping him solidify control over the company after his ailing father passed.

His father, Lee Kun-hee (who was also convicted of bribing a president, and subsequently pardoned), suffered a heart attack in 2014, and was left incapacitated as a result. But he was left technically in charge until his death last year.

With Lee now the group leader, he must sign off on all large merger and investment decisions, including US chip expansion plans.

bradhe• 5 years ago

Man that just kept getting better and better.

miohtama• 5 years ago

This is why I watch Korean dramas on Netflix. Juicey.

elzbardico• 5 years ago

When I was a kid I was bullied by the kids calling me crazy, because of my overly imaginative approach to reality. Fast forward a lot of years later i look at reality and find out that the bullies had no clue at all. The real world is far more bizarre than any of the imaginary worlds I created in my mind during childhood

beervirus• 5 years ago

Truth is stranger than fiction. Fiction has to make sense.

vadansky• 5 years ago

I keep hearing about Park Geun-hye and all the crazy allegations, but it's always snippets like these or a reddit post, is there a good comprehensive resource that covers everything? Or should I wait for the eventual book to come out?

kjuulh• 5 years ago

If you want to read something wild: Rooftop sword master. It is a wild fictional comic based in south korea. I believe it may be a bit of a commentary to what you've written.

sixothree2• 5 years ago

with executives pardoned for crimes in the name of ensuring national economic growth.

Is that really so different from how things work here?

_jal• 5 years ago

Criming USian overlords typically don't have to suffer the indignity of a conviction.

quickthrowman• 5 years ago

Nope, it works like that here too. See Elon Musk and the SEC kid gloves treatment for an example of a similar situation in the US.

syngrog66• 5 years ago

Lee gave Choi money and horses in an effort to

note to the cryptokids: at least with using horses as currency you can pet them and ride them and race them for prizes!

jaywalk3• 5 years ago

BRB, buying an NFT horse

yongjik• 5 years ago

...which was also given the absurdly humorous name of "horse laundry" (말세탁), because, you know, it's just like money laundry, except with horses.

hermes83294• 5 years ago

That cult leader is a crazy story on its own. She killed a presidential nominee in a ritual

Definitely check it out

Oh and she used to be a popstar too

6gvONxR4sf7o• 5 years ago

She killed a presidential nominee in a ritual

Any source on that one?

markus_zhang4• 5 years ago

I bet some part of the US government has something to do with all these things. It's just we will never know until the change of tide.

Reference: Propaganda Due was not exposed until the end of the cold war.

abledon• 5 years ago

great find! But is it really that bizarre that someone who finds themselves thriving in an insanely high-stress and powerful position such as leader of Samsung, is involved in dishonest power games, as well as having an interest in Spiritual experiences? One can have everything available money can buy, but inward experiences can go largely unexplored.

javajosh• 5 years ago

The allegation is of a corrupted spiritual experience, hence the Rasputin reference. It's one thing to go on a meditation retreat; its another to go on retreat and have the guru follow you home to advise you on policy when they learn you're powerful.

Money corrupts spirituality, and it always has.

guai888• 5 years ago

‘Impossible':TSMC founder Morris Chang on US dreams for onshoring chip supply chain

https://www.taiwannews.com.tw/en/news/4327937

Morris Chang spent 25 years (1958–1983) at Texas Instruments.He knows US very well.

jvanderbot• 5 years ago

Well that sounds about right from the guy who moved it all to Taiwan. I hope the scene has changed a little in the last 40 years. The US is eager to have these businesses, and I can imagine a lot of incentives and regulatory reductions.

kragen6• 5 years ago

It has changed. That's what makes it impossible.

justapassenger2• 5 years ago

You have to take his words with a grain of salt. Without going into politics, it’s impossible to talk about TSMC without geopolitical context.

It’s essential to TSMC survival for their production to physically stay focused in Asia.

nathanm412• 5 years ago

It's essential to Taiwan's survival for production to physically stay focused in Taiwan. I don't know if the US would be as willing to defend Taiwan if our own recovery wasn't affected by the chip shortage.

ksec3• 5 years ago

Morris Chang has been exceptionally clear on this issues when he was still CEO of TSMC, even before the whole politics and TSMC becoming leading edge.

It is impossible with respect to current cost structure, without substantial government money, while getting the same margin. Of course it is entirely possible to throw money at the problem and succeed. Which is what Intel is trying to do right now with the help of US government.

drawkbox• 5 years ago

Once the chip shortage happened, partially due to geopolitical reasons, that changed everything. The West/US will never fully rely on a single point of failure again no matter how hard the HBS MBAs and Chicago thinking push it to trim and be "efficient". Some industries are too important for other industries and leverage on that over those areas is too risky and costly now.

I'd pay double right now for GPUs directly from the source, not from some sketchy third party.

Right now our EV/auto, space and even AR/XR industries as well as gaming and everything that requires chips, we are at the mercy of an external market that has a slant against the West. It will take some years to get out but we'll never not expect that in the future again. If costs go up costs go up, but availability should never be allowed to be used as leverage again, that is too risky and too costly long term.

Availability that is reliable is always more important than efficiency or cost, because right now lack of availability is costing lots of extra time that has the potential to lose entire industries, that is not acceptable in any way.

Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity backed near entire market leverage monopolies/duopolies/oligopolies that control necessary supply and you have trouble.

HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezed out and with that, an ability to change vectors quickly. It is the large company/startup agility difference with the added weight of physical/expensive manufacturing.

The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience [1]

Superefficient businesses create the potential for social disorder.
A superefficient dominant model elevates the risk of catastrophic failure.
*If a system is highly efficient, odds are that efficient players will game it.*

Hopefully that same mistake is not made in the future. It will take time to build up diversification of market leverage in terms of chips for availability. Hopefully we have learned our lesson about too much concentration, with that comes leverage and sometimes a "gaming" of the market.

This chip shortage, and all the supply chain problems during the pandemic as well, will hopefully introduce more wisdom and knowledge into business institutions that just because things are ok while being overly super efficient, that is almost a bigger risk than higher prices/costs. Competition is a leverage reducer. Margin is a softer ride even if the profit margins aren't as big.

[1] https://hbr.org/2019/01/the-high-price-of-efficiency

JumpCrisscross• 5 years ago

Biggest change since then are relative energy costs between Texas and Taiwan. (To say nothing of geopolitical stability.)

dnautics4• 5 years ago

quote is from oct 2021

tooltalk3• 5 years ago

The Taiwanese gov't was deeply involved in TSMC from its inception in the 80's to what it is today. I'm guessing it's in their best economic, geopolitical interest to keep things in Taiwan as much as possible.

fabfabfab4• 5 years ago

Having worked in Fab, the supply chain is already in the US+EU+Japan. About the only change in last 5 years or so is Intel's ability to compete in lithography process and get sufficient yield to stay competitive in pricing. Lithography is one of the 400 or so steps in Fab processing, but arguably the most critical and a bottle neck. TSMC does not have a lead in every single of these 400 steps, in fact quite the opposite.

Anytime someone says "impossible", I would take that opinion with a grain of salt.

SECProto• 5 years ago

Anytime someone says "impossible", I would take that opinion with a grain of salt.

Or to quote Arthur C Clarke:

When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.

throw0101a3• 5 years ago

Lithography is one of the 400 or so steps in Fab processing, but arguably the most critical and a bottle neck.

In their ongoing series on supply chains, the Odd Lots podcast had episodes on both TSMC and ASML:

* https://podcasts.apple.com/us/podcast/the-story-of-how-tsmc-...

* https://podcasts.apple.com/us/podcast/asml-the-obscure-power...

tooltalk3• 5 years ago

According to US Semiconductor Association's recent State of the Industry Report, Taiwan's share in the manufacturing equipment part of the supply chain is almost nil and entirely depends on suppliers in the US, Japan and EU.

  Manufacturing Equipment (12%):
  US: 40%
  Japan: 32%
  EU: 18%
  S Korea: 4%
  Taiwan: <1%

  Wafer Fabrication (19%):
  Taiwan: 20%
  S Korea: 19%
  Japan: 17%
  China: 16%
  US: 12%
  EU: 9%

I guess Apple's decision to leave Samsung's Austin fab back in early 2010's to TSMC in Taiwan had an outsized role in TSMC's lead in tech and rise in revenue -- Apple accounts for 25% of TSMC sales.

[1] https://www.semiconductors.org/wp-content/uploads/2021/09/20...:

dnautics4• 5 years ago

key phrase:

a full chip supply chain in the country

(emphasis mine)

TSMC is, after all, ALSO building a fab in the country, so it's not like TSMC doesn't believe in onshoring chips to the US. The fabs are {high capital expense/high recurring expense/high skilled labor} operations so the US is very competitive due to the labor value-add. Not every part of the full supply chain is like that.

To serve (aka reduce risk to) US supply chain interests in the short term, you also don't need access to the full stack domestically. You could potentially send a lot of activites that need low-skilled-labor to, say, Mexico, which is a much lower supply chain risk that Asia (aka thailand, vietnam, china). National security onshoring, which possibly has less tolerance for even outsourcing to Mexico, is likely a different story and more aligns with Morris' statement.

luis8• 5 years ago

This was mentioned in the last meeting held by Biden with the North America group. The Mexican president said that the imports from China should be reduced as much as possible in order to stop China becoming more powerful that it already is. Mexico at least in the mid/near future is a safe bet in terms of supply chain risk.

41b696ef11132• 5 years ago

I also think people get focused on having a state-of-the-art production. Lots of value in having a domestic facility that can make last N-tier generation chips (10, 14, 22, 32, etc) are all capable of providing significant value.

HWR_142• 5 years ago

Person who runs billion dollar business says competitors will fail, encourages people to continue to rely on him. News at 11.

ineedasername3• 5 years ago

dreams for onshoring chip supply chain

Depends on what the dream is. Bulk onshoring? Probably not while the geopolitical situation stays on the status quo.

But I don't think that's the attempt we're seeing here anyway. I think what we're seeing is the foundations built for the capability to bootstrap more robust manufacturing in the West if/when China decides that Taiwan really should stop claiming independence, and perhaps at the same time exerts its local power over that entire region of the world and thus South Korea as well.

otrahuevada3• 5 years ago

it makes perfect sense to have a factory right on your most critical client, even leaving the typically american grandiose fantasies of apocalyptic destruction aside.

It even nets them a cool 3 billion dollars to do so, which I'm fairly sure is very welcome given Samsung's history of reinvesting this kinds of money for political gain.

I do wonder why this isn't more common though, pretty much every gigantic company already has an administrative arm in the US, it sounds like it'd make sense to move at least some of their production side there too.

bell-cot2• 5 years ago

When it is an incredibly expensive factory, requiring an incredible level of technical expertise to operate, and air freight from anywhere on earth to your biggest client is scarcely a rounding error in the price of the finished products - then NO, it makes no sense to put the factory next to the client.

otrahuevada3• 5 years ago

On one hand, I misspoke. The US is not their biggest market, just a strategically _very_ important foothold in the continent, making and breaking financial decisions that impact every other country.

On the other, do you happen to have sources for all that? Specifically,

- That the cost of this plant is going to be in any way excessive/odd compared to, say, TSMC's plant basically next door

- That the level of technical expertise required is inordinately hard to train in the US

- That the air freight from (also, why air freight specifically?) prices to and from there are a constant, easily disregardable thing and will continue to be so

Would help a lot to ground the conversation in reality a little bit more.

eigen• 5 years ago

Are they doing package and test at this fab or do they need to ship parts out to somewhere else, likely another country, before the client can use them?

otrahuevada3• 5 years ago

Article doesn't say? I sure hope they do, if not in place, at least relatively locally, as that would point towards a bigger, more interesting commitment.

jason-phillips9• 5 years ago

I worked at Samsung Austin Semiconductor for ten years as a software engineer. AMA.

I very much love the people I worked with at SAS. It was one of the best experiences of my life and I'm very happy to see them expand like this.

Wayne at Louie Mueller's BBQ had better add a few more pits, they're about to get a lot busier!

gjsman-1000• 5 years ago

How do you get into chipmaking, really? Is it a Physics degree, or is it a Computer Science degree with just lots of on-the-job training?

dreplogle• 5 years ago

At least on the hardware side of things, it's an Electrical or Computer Engineering degree, usually with at least a Masters

jason-phillips9• 5 years ago

It depends on what you want to do.

If you want to work on one of the processes in the fab (metrology, chemical vapor deposition, photolithography, etc) then an engineering degree (especially chemical engineering) may be your best bet.

If you want to design the chip architecture, then computer engineering is the degree path you want. Samsung has their own chip design subsidiary in Austin too, over on Highway 360 in west Austin, if I remember correctly, called SARC.

Austin Community College has associate degree programs designed for technicians.

I was a software engineer responsible for many of the internally-facing enterprise systems, as well as the intranet. I worked with all of these engineering departments on many different projects, so I had exposure to and visibility into many functional areas and processes of a truly global, high-tech manufacturing concern. In one of the random ways the universe has rolled the dice in my favor, one day a recruiter called me and asked, "Would you like to work for Samsung?"

jason-phillips9• 5 years ago

I should add, if this is a path you're seriously considering, I will get you in touch with people at SAS, either in HR or in the engineering departments who can offer guidance. Samsung Austin Semiconductor has community engagement programs as well as career days for Austin-area high school students.

Samsung also recruits directly from Texas universities. I remember many Longhorn and Aggie engineers being hired straight from school every year. I don't know what your school situation is like, but I can also get you information about how that pipeline works.

duped• 5 years ago

Undergrad in electrical engineering at a school that teaches coursework in VLSI and computer architectures. There are a few that have professors and course studies at the undergrad and graduate level in semiconductors, integration with partnerships with industry. Off the top of my head, UIUC, UC Irvine, UC Berkeley, NC State, UF, UT Austin, Cal Tech. I'm sure there are many more.

Graduate degrees in physics and EE focused on semiconductor physics and manufacturing are also useful. I've known a few post grad/doctoral folks from nuclear engineering and optics that have careers in the field.

Aromasin• 5 years ago

This is just my experience working at another Big 5 manufacturer, but the easiest route was entry from another engineering role (if you didn't know anyone on the team there already). They never had any undergraduate roles available as the pipeline generally came through at MSc or PhD level.

I started in application engineering with an EEE degree, built a name for myself there over a couple of years, and made my intentions known once I built a good repertoire with my manager and mentors that I wanted to transition into chip design. They helped me network with the right people, and the chip design team took me on. Some of the skills I learnt at university, most of it I learnt on the job.

Networking > Qualifications to be honest. On the team we had Physicists, Electronics Engies, Comp Scientists, ML Engies, Mathematicians, Chemists and so on. Provided you can get a foot in the door and convince them you've got some skills that would be of use, then you're good.

dylan6045• 5 years ago

I very much love the people I worked with at SAS.

What color is the boat house at Hereford?

jason-phillips9• 5 years ago

update hereford.buildings set color="blue" where building_name="boathouse" or 1=1;

I reckon it's blue.

throwaway2010252• 5 years ago

Good to see a fellow (former) Samsung employee. What company did you move to? As I've also primarily worked on in-house software only, I'm finding myself less and less competitive in the era of venture capitals and IT services. Did you find a solution?

jason-phillips9• 5 years ago

What company did you move to?

After working for Dell and some small start-ups for a while, I now help the federal government in various ways. I started working remotely full time in 2017 and live in the Hill Country. This is me.

https://www.linkedin.com/in/jason-phillips-2505a0187/

As I've also primarily worked on in-house software only, I'm finding myself less and less competitive... Did you find a solution?

Yes, I had to solve this myself. Study, study, do side projects and then study some more. You have to become an expert in something on your own time. Whether that's full-stack software engineering, DevOps/SRE or whatever, spend six to twelve months studying and creating side projects. Create an AWS account for the free tier and get after it. When you apply, make sure to demo and speak to your side projects. In 2015-2016, I learned React, Angular, Nodejs, studied Kyle Simpson's "You Don't Know JS" series, Docker, AWS, and Python. That, combined with my enterprise full-stack development experience, was good enough back then.

I think it's easy for the grass to look greener somewhere else from where you're sitting, but I can tell you Samsung took really good care of me and was actually better run than most companies for whom I worked afterwards. Feel free to reach out if you have any questions.

wyldfire• 5 years ago

Louie Mueller was really great. Never been to Franklin's but I can't imagine it's too much better.

Indeed, they will likely be busier.

jason-phillips9• 5 years ago

Ohh emm gee, when I worked at SAS I dragged my coworkers to every BBQ joint in Austin. I think our favorite became Valentina's Tex Mex BBQ when it was still on West 6th.

Franklin's is a religious experience, imo. I went there several times with some SAS co-workers back in ~2013 when Aaron was still the cutter. Great times.

diveanon2• 5 years ago

Seems strange to build a chip plant in a place that can’t even provide power to its citizens in winter.

theduder99• 5 years ago

I guess they know something you don't huh.

diveanon2• 5 years ago

No, seems like we are all pretty aware of the kickbacks and bribery.

AaronNewcomer• 5 years ago

It made news because of how rare it is. Happens often elsewhere. California about burnt down because of their power grid. Snowy states get bad blizzards and often lose power, etc.

josaka• 5 years ago

After the TX grid failure last winter, it's probably not a coincidence that Samsung's new facility will be near ERCOT's operation center in Taylor, which manages the TX grid, and will likely be the last load to shed when the grid's stressed. Used to work in the Austin fab, and the amount of money lost per minute in a power failure is mind boggling. The tax breaks Taylor offered ($314m) are not that different from what Samsung was reported to have lost due to the grid failure ($270m).

0_____0• 5 years ago

tangentially related bit of trivium... when i was house hunting a looked at a house across from a fire station, and upon doing research about what it's like to live across from one, found that a.) they tend not to blast sirens upon exiting the station, in contrast to living near a hospital with an ED, and b.) the power grid segments that fire stations are on have priority and are less likely to lose power during blackouts.

shortstuffsushi2• 5 years ago

I wonder if the siren thing varies from location to location, a good friend of mine lived right next to one and it seemed you couldn't go 15 minutes without being drown out by them heading out.

emodendroket• 5 years ago

I used to live a mile or two away from a hospital and getting the lights back on before everyone else was nice.

m0zg9• 5 years ago

the power grid segments that fire stations are on have priority and are less likely to lose power during blackouts

So do large grocery stores, for obvious reasons.

ChrisMarshallNY• 5 years ago

I lived in an area that lost power every time there was a stiff breeze. This was back in the 1990s, when we still used telephone modems. I blew up 3 of them. 2, even with surge protectors.

But power came back quickly, because I was on the same trunk as the fire station.

bell-cot2• 5 years ago

This...but did Samsung quietly negotiate a "any further energy supply f*ck-ups are 100% on YOUR dime" deal with the State of Texas, or what? By several accounts, the TX grid got darn close to collapse last winter - at which point "ERCOT Op Center is next door, and we get top priority" would not get you a single erg.

88840-8855• 5 years ago

What finance guy will ever approve this? I doubt that the service agreement would ever be approved with that clause.

Kaytaro• 5 years ago

I was surprised the power outage affected Samsung because in DFW the outage only affected residential areas. I didn't see a single commercial/industrial space without power including fully lit empty parking lots.

throw0101a3• 5 years ago

erg

For anyone wondering, this is a unit of energy (100 nJ):

* https://en.wikipedia.org/wiki/Erg

tyingq2• 5 years ago

FWIW, the problem wasn't a generalized grid management problem. It was a failure to properly winterize gas plants for rare freezing events. The Texas grid itself is in reasonable shape as far as I know.

jkestner• 5 years ago

The going deal is, if there’s a power failure, we’ll let you recoup your costs from the taxpayers even as you profiteer. The governor can be bought for a very affordable $1 million. Certainly the incentives are aligned to solve this problem! https://www.texasobserver.org/after-kelcy-warrens-energy-tra...

awsthro009452• 5 years ago

I really doubt proximity to the ERCOT center has anything to do with it. The new facility isn't close enough at all to the ERCOT center to be on the same grid segment. And with a new facility like this that is in the middle of a field outside of town, the new fab will be built on its own grid segment anyway, completely separate from the rest of Taylor and the ERCOT center.

Taylor was chosen because that area (northeast of Austin, just south of Taylor) is one of the last areas near Austin that has abundant amounts of wide open fields ready to be developed. They also got a good deal on the water usage, and of course the tax breaks from Williamson County.

seltzered_• 5 years ago

Do you have any thoughts on how water availability will be in the years/decades to come and how a fab would impact it and the communities depending on it?

My understanding is when you cross east past round rock towards Hutto/Taylor, the water aquifer being used changes to use water piped over from Carrizo-Wilcox aquifer.

msisk6• 5 years ago

The ERCOT campus has their own generation capability along with sitting between two distribution grids. Same with their DR site in Bastrop. In the case of a black start condition (grid totally down), ERCOT would need to come up first to coordinate the grid restoration.

Taylor is an ideal place for a large manufacturing operation since it's close to major highways and railroads, not too far from Austin, and land is very cheap.

geoffcline• 5 years ago

land is very cheap

*was

I'm between Taylor and Austin (Bagdad Rd, Leander). 1 acre lots along this strip have gone from ~$115k a year ago, to some recent sales at ~325k.

5faulker• 5 years ago

As more and more companies start to invest in Texas there is more demand in tigetening the grid to avoid future catastrophes.

wonderwonder6• 5 years ago

They are setting up fairly close to Tesla. Wonder if they are working on a deal for Tesla to provide battery backup. Interestingly enough Austin, TX appears to be rapidly approaching SF status as a tech hub and may soon surpass them. Its an interesting thing to watch and really gives insight into how politics and taxes affect business and growth.

nodicksplease2• 5 years ago

care to share any sources? or did you just make this up?

picardo• 5 years ago

What are some interesting startups in Austin area?

killjoywashere• 5 years ago

Interestingly enough Austin, TX appears to be rapidly approaching SF status as a tech hub and may soon surpass them.

Uh, maybe it's time to take a drive through Austin, but that was a pretty sleepy little college town 10 years ago. Most of my family lives in the central Texas region (San Antonio, San Carlos, College Station), and I presently live in Mountain View. I have a hard time believing SF-scale infrastructure was built that fast.

As an example, here's the UT wind tunnel: http://research.ae.utexas.edu/floimlab/Mach5.php

Here's the Moffett wind tunnel complex: https://www.nasa.gov/centers/ames/multimedia/images/2005/nfa...

kodah• 5 years ago

I don't know about SV status but I think it's getting there. Other tech hubs still extract graduates out of the state at an alarming rate and last I checked compensation wasn't close to SV (even with normalization for cost of living). It'll take a good bit of time to undo SV but the ball is rolling.

throwaway95118• 5 years ago

I'm a big fan of Tesla and Mr. Musk - but does anyone know of any non-vaporware large scale industrial facilities that use Tesla battery walls as power backup? Do Tesla manufacturing plants do this?

tfehring• 5 years ago

The Bay Area had something like 20x as much VC investment as Austin as of 2017 [0]. This article [1] indicates that the trend is probably in Austin's favor, as I'd expect, but it also shows that Austin isn't even in the top 10 nationally (unless they lump it in with San Antonio?) by deal count as of 2020.

[0] https://pitchbook.com/news/articles/the-bay-area-beyond-rank...

[1] https://www.cnbc.com/2021/01/14/silicon-valleys-share-of-ven...

bob1029• 5 years ago

Wonder if they are working on a deal for Tesla to provide battery backup.

Running an entire leading edge semiconductor plant on battery backup is a crazy proposition in my view. Especially, for intentions of surviving another Texas winter situation without any disruption to operations. Approximately 24 hours of full-coverage battery backup would have been required to bridge the rolling blackouts.

Last I checked (about a decade ago), the SAS A2/S2 lines accounted for ~13% of the electrical load for the entire city of Austin. Just look at the amount of power one EUV light source requires today. These lines will have potentially dozens moving forward. Then consider that all of the photo area accounts for a tiny fraction of total power consumption in one of these plants.

If it were even remotely feasible for the Samsung semiconductor lines to operate on standby generator power, they would have installed these units already and no losses would have been incurred.

They might as well be smelting aluminum behind those walls. Any backup generator power or UPS devices are designed for life safety and stopping the line without causing 10+ figure losses. You cannot run one of these facilities on in-house power. Another commenter proposed a nuclear reactor installation. This is actually not a terrible idea once you understand the scale. Putting 10-15 semiconductor lines around a nuke plant makes perfect sense to me.

zrm• 5 years ago

Doesn't it cost less than that amount of money to have on-site backup power?

johnchristopher3• 5 years ago

Isn't Samsung big enough to simply ask permissions to build their own nuclear reactor at that point ? Or wind turbine farms or whatever ?

dboreham• 5 years ago

Reactors and wind farms still need a grid.

hutzlibu2• 5 years ago

A new nuclear plant cost billions and takes years to get permission and construction to complete. I assume they rather want to make chips, soon.

vesche• 5 years ago

I doubt it. The land is just cheap and widely available over there. Also, they know workers will be attracted to being a short commute from Round Rock. The storm that caused the grid failure is a very rare occurrence ("100-year storm").

bradknowles5• 5 years ago

Which means that it will probably happen this year, too. And every year after this, thanks to the global catastrophic weather changes.

geoduck14• 5 years ago

If you are that big of a deal, wouldn't you have your own power plant with reserve power? My university had 2 power plants. Surely it isn't that hard

cplusplusfellow• 5 years ago

It has nothing to do with ERCOT presence, despite the social karma of referring to the “grid disaster.”

There have been literally hundreds of other grid disasters in New York, Chicago, the entire state of California, and yet no one would be surprised if the plant showed up there. Why?

tiffanyh• 5 years ago

Location close to ERCOT is not the reason.

Samsung for years has had a major facility outside of Austin.

Samsung Austin Semiconductor https://goo.gl/maps/nX9BFxHoVMCVKBLL7

And ERCOT is also based outside of Austin.

Austin is also the state capital, centrally located & home of one of the nations largest universities (UT), who has a strong engineering & CS program graduating thousands of students per year.

So it shouldn’t be a surprise that major companies have a significant presence in or around Austin.

comboy• 5 years ago

Why not use generators like most data centers in case of power failure? Is energy usage that much higher?

rllearneratwork3• 5 years ago

with Tesla, SpaceX, Samsung and other tech investing this heavy in Texas, when/will it surpass CA as a tech powerhouse of the future?

optimalsolver3• 5 years ago

When their power grid isn't held together with blu tack.

jeffbee• 5 years ago

I don't know but if you were waiting for a signal, Samsung built another, larger, and more valuable fab in Austin a decade ago. And if you are judging by fab capacity the question you should have asked is when Texas will overtake Arizona. There really are very few semi fabs in California.

dntrkv• 5 years ago

https://www.statista.com/statistics/424167/venture-capital-i...

As far as VC money goes, Texas has a ways to go.

adam_arthur• 5 years ago

Beyond specific companies, Texas has more favorable business climate and tax rates.

Housing alone is such a huge knock against CA for new companies. Even paying somebody 500k there leaves them feeling middle class when trying to raise a family.

Perhaps a bit of an exaggeration, but in Texas they build like crazy to support population inflows. If you drive through Austin you'll see every third or fourth house is getting torn down to be rebuilt into 2-3 houses on the same plot.

Fundamentally this just gives you a lot more runway to grow.

I don't know why anybody would start a company in SF these days, aside from VC being local and sometimes requiring it.

I have no doubt Texas will overtake CA in terms of economic output, but will take decades just due to previous inertia. Also remote work may be the true winner in the end.

I do think CA is still the place you want to be if money is no object though. Unfortunately that doesn't apply for most people. There may actually be a change in political winds that blow things back the other way though, just viewing this from today's lens.

muzz3• 5 years ago

And plenty of subsidies: "with a $27 million grant from the state of Texas. Larger tax breaks and incentives are expected for the facility."

micromacrofoot3• 5 years ago

Can they get similar talent with draconian social policies like abortion bans? If I suggested moving to Texas my wife would (rightfully) tell me to go fuck myself.

There's been a lot of talk about Texas "turning blue" over the past few years and I wonder if these companies either moving their operations or building new plants there could be the tipping point.

rllearneratwork3• 5 years ago

"Can they get similar talent with draconian social policies like abortion bans? If I suggested moving to Texas my wife would (rightfully) tell me to go fuck myself."

- I am very much against TX's policy on this. However, how many people are affected by this policy Vs how many kids will be denied Algebra in CA now?

It is never 100% all good or bad policies in any place. It is always a mix. Rational people chose what's best for them and their loved ones overall.

WarOnPrivacy2• 5 years ago

I imaging taking on a TX job would feel a lot like collaborating with an invader.

I mean, I get that some folks are into that but still.

finiteseries• 5 years ago

Ask your European colleagues how their decision to move somewhere with draconian social policies went.

extheat• 5 years ago

There's no way the abortion ban will survive in its current form once it gets to SCOTUS. Even the Texas state legislature knows that. So it's just a matter of time before it gets watered down.

paxys2• 5 years ago

Trillion dollars companies setting up shop after getting billions in tax breaks is the opposite of how a tech ecosystem should develop. Look at the amount of VC dollars that come to Silicon Valley vs Texas.

cozzyd• 5 years ago

It needs more good universities first.

rllearneratwork3• 5 years ago

the University of California system (where I got my Ph.D.) just got rid of standardized test without proposing anything better.The admission is now even more unfair and subjective. First time in a decade I am not donating to my Alma mater. Neither do many others from my class.

Also California recently tried to pass a horrendous Prop 16 to enable outright race and gender discrimination in admission process. Luckily it didn't pass, but the politicians who supported it (Newsom, Harris) are still here to do damage.

cronix2• 5 years ago

This is a great first step. The more fabs that are built here, the more supply chains that feed them will follow. Supply chains tend to follow the manufacturers where feasible. This will eventually improve things even more for the other high tech companies in the state as they do move supply chains closer to production. Texas has been making some pretty substantial long term investments in the last few years. If you don't plant trees today, you won't have shade to sit beneath 20 years from now. The best time to start is often yesterday. These things take time and a great deal of capital and I'm glad to see some places are moving forward.

goatherders• 5 years ago

Good to see the clown-car that is Texas state government embrace foreign investment from a company run by criminals when it suites them. I'm a Texan and my house if full of Samsung products, but the Gov and Lt Gov are, as always, hypocrites.

tills13• 5 years ago

Texas is nothing if not hypocritical and reactionary.

fovc• 5 years ago

Why do big investments get tax breaks but not smaller ones? Is there a rationale other than ~~corruption~~ political power having great economies of scale?

RandallBrown• 5 years ago

I think that small businesses already get tax breaks compared to big businesses.

In a lot of cases I'm sure their profits are small enough they don't pay any taxes at all.

radium3d• 5 years ago

Nice, so they can be powered by Tesla's megapack / solar and ship chips directly to Tesla Terafactory via Boring tunnel! Cybertruck manufacturing is looking green

dylan6045• 5 years ago

I wonder if FoxCon is seeing other fabs commiting to US development like this and wonder if they should too rather than just the con job they pulled? Would the current trends influence them to go ahead and start moving forward on the deal they made?

peter_retief• 5 years ago

Texas is the new choice for multinationals, they seem to be doing something right or is it that some states are a mess?

shmatt2• 5 years ago

the only mix of well educated locals without relocating people, and wide areas of empty land

summerlight• 5 years ago

I think it's the latter. Over the last decade, CA (especially northern) has demonstrated a spectacular failure on meeting housing demands. TX is the second largest economy so it's a quite natural to become the new candidate, especially in the context that NY has been suffering from a similar housing issue.

sangnoir• 5 years ago

> Samsung spent years evaluating where to build the new fab, courting multiple locations and pitting them against each other for better incentives

Perhaps other states are not willing to top the gobs of money Texas offered to Samsung. The Amazon HQ2, race-to-the-bottom strategy is alive and well

sweetbitter• 5 years ago

Great, but how could it be verified that the NSA is not adding a backdoor to every one of these processors? Could anyone explain how easy it would be for them to compromise it in this manner?

frellus• 5 years ago

Let's be clear why this is happening though, and where the credit is due: Trump's push for on-shore manufacturing, Gov. Abbot, and the attractiveness of Texas for a plant and FDI. $17B and 2,000 jobs and, even more importantly, one less dependency put in China.

Democrats would probably want to do years of environmental reviews. That's why you won't see anyone putting manufacturing in California anytime soon.

paxys2• 5 years ago

California has a wide lead (over 10% share in the US) in the industrial sector, so this narrative is false. More factories are still set up in California today than Texas.

eximius• 5 years ago

Nobody is against on-shore manufacturing and the infrastructure bill will probably assist in the construction of this, not to mention gov private business subsidies being a massive point of hypocrisy for the GOP.

esalman• 5 years ago

Texas is the size of 4 Bangladesh's. Why do they have build everything in the vicinity of Austin?

dhritzkiv• 5 years ago

Middle of nowhere Texas is not connected to services, utilities, amenities. The area in the vicinity of Austin is.

catillac• 5 years ago

Most of Texas is very remote and hard to attract talent or investment to. Certainly cheaper to put the plant in Uvalde or something, but harder to recruit hard tech talent there.

plussed_reader• 5 years ago

Hope it doesn't turn out to be another Wisfoxcon in Abbott's Texas.

vemacs• 5 years ago

Nobody mentions the pollution this brings to Texas? Cause it's a lot and Samsung should pay billions to to Texas for the mess they are making and not get public money for destroying it's valuable drinking water.

VLM• 5 years ago

Does anyone ever build anything in the big east/west coast cities anymore? Or even the east/west coast states anymore?

StanislavPetrov• 5 years ago

With the high taxes, needless and burdensome regulations, cost of labor, and crumbling infrastructure, why would you?

muzz3• 5 years ago

Recently these plants were being built in places like Malaysia. Coastal parts of the US became far to expensive for this kind of manufacturing many decades ago.

muzz3• 5 years ago

"with a $27 million grant from the state of Texas. Larger tax breaks and incentives are expected for the facility."

Every time a company expands in Texas there seems to be a tax break involved

Samsung plans $17B chip plant in Taylor, Texas

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