EU Weighs Deal With TSMC, Samsung for Semiconductor Foundry

The European Union is considering building an advanced semiconductor factory in Europe in an attempt to avoid relying on the U.S. and Asia for technology at the heart of some of its major industries. From a report: The EU is exploring how to produce semiconductors with features smaller than 10 nanometers, and eventually down to 2 nanometer chips, according to people familiar with the project. The aim is to curtail dependence on countries such as Taiwan for chips to power 5G wireless systems, connected cars, high-performance computing, and more. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. of South Korea, the two leaders making the most innovative processors in the sector, could be involved in the EU project, but nothing has been decided, a French Finance Ministry official said in a press briefing on Thursday, following the report from Bloomberg.

Re:Wait, is this socialism?

[dromgodis]

The free market doesn't want to pay for a local chip plant as long as they can get their chips cheaper from somewhere else for the next quarter. When the outside supply gets cut off, they will want it yesterday.

The free market appears incapable of such planning.

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[currently_awake]

Low labour costs don't affect where you built a chip fab because they use highly skilled (high price) workers. It's the location of the factories (shipping costs) that affect location choices.

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[guruevi]

For these things it's primarily regulation and taxes aka the cost of doing business in a location. As we saw with Foxconn in Wisconsin, when they revoked the tax breaks, they simply left millions of dollars to rot because the building itself is a cheap write off compared to the future taxes and regulation on the value it produces.

Basic economics really. Shipping costs isn't really a factor. You can ship an entire iPhone generation worth of chips in a few containers.

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[tlhIngan]

The free market doesn't want to pay for a local chip plant as long as they can get their chips cheaper from somewhere else for the next quarter. When the outside supply gets cut off, they will want it yesterday.

The free market appears incapable of such planning.

Exactly. This is especially since the investment required in a foundry is practically on the scale of a lunar expedition - hundreds of billions of dollars must be invested.

There will be infrastructure upgrades - power is a critical resource and acces

Re:

[K. S. Kyosuke]

No, it's not socialism unless the EU intends to own the factory. Any other questions?

Re:Wait, is this socialism?

[bazorg]

In Europe we're not completely terrified of scary words like "socialism". Some of the tax take gets funneled back to common goals that are not military. It's fascinating.

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[locopuyo]

Now: ALL HAIL SOCIALISM CAPITALISM IS SO DUMB LOL
10 years later when this failed to produce results and wasted billions of euros: CAPITALISM HAS FAILED US AGAIN

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[Anubis IV]

In Europe we're not completely terrified of scary words like "socialism". Some of the tax take gets funneled back to common goals that are not military. It's fascinating.

You need to understand that "socialism" is a bogeyman that's inextricably linked to "communism" in the American vernacular, and has associations for most Americans with all sorts of horrible things. Those German bad guys in WW2 that the lameness filter won't let me mention? Socialists, at least in name. The Soviet Union? Socialists. Cuba? Socialists. Vietnam and its war? An invasion by socialists. Cambodia and its killing fields? Socialists. Mao in China? Socialists. It was drilled into generations of Ameri

Re:

[The Wily Coyote]

America also socializes the cost of capitalism's failures, for example by bailing out businesses in the 2008 GFC.

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[alvinrod]

Businesses fail all the time regardless of what kind of economic system they operate in. Bailing out failed ones isn't capitalism, it's the government selling out its citizens.

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[The Wily Coyote]

Whether businesses fail isn't really the point. The point was the the US socialized the cost of it. Privatize the gains, socialize the costs ...

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[Malifescent]

This is how the EU and Europe in general works. There is little or no venture capital (and the VC's that do exist only invest in companies that already have customers and revenue, so it's just basically playing with ownership) available for start-ups and all investment is done by the governments, resulting in all sorts of political infighting and influence peddling.

Just because it worked with Airbus, doesn't mean it works for the tech sector, or any other sector for that matter. Airbus is the exception t

Re:

[RazorSharp]

The EU is artificially creating ideal conditions for a chip foundary to open up within its borders because the free market wouldn't otherwise. Maybe the EU should ask the US how well socialism played out when that socialist Scott Walker tried doing the same thing with Foxconn.

If the free market doesn't want a production plant inside your borders, then you are not deserving of one.

If you're looking for some pure free market where there are no externalities imposed by government policies, then there are no free markets nor has there ever been one.

Scott Walker bungled the Foxconn deal because he's stupid, not because of "socialism." If you're more concerned about the politics of announcing a deal than the substance of the deal itself, you're liable to agree to a pretty shitty deal.

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[crypticedge]

So the factory is going to be owned entirely by the workers? I didn't see that in the article.

Oh, you don't know what socialism is. Got it.

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[AmiMoJo]

Not really socialism, more national security. Chips are essential for both defence and for the economy so it's probably not a good idea to be too reliant on importing them. Similar to how many countries keep unprofitable steel industries going.

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[cheesybagel]

China's government at national and regional levels is investing in chip manufacturing plants to the point municipalities fund and own fabs even. SMIC operates several fabs which are owned by Chinese municipalities. The munipalities pay for and own the fab while SMIC operates it.

This is nothing new. Samsung already has a factory in Austin Texas. TSMC is building one in Arizona. Fabs are typically massively funded by governments wherever they get build. Just try reading about the GlobalFoundries fab in Malta,

TSMC is the Chromium of silicon

[xack]

With all the dangers that entails.

Wait, someone still relies on the U.S.?

[Fly Swatter]

Thanks for making us feel wanted for once.

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[ath1901]

Yeah, Europe depend on two fragile and threatened democracies. Being wanted might be an exaggeration. It's more like being dependent on a drug addict to take care of your kids. It might work for now but you'd be desperate for a safer long term solution.

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[thegarbz]

Sort of. There's a bit of a bloomberg fantasy in there. The reality is while the USA is a major semiconductor producer, for the technology so is Europe. Both sides of the Atlantic have the capabilities to produce down to 22nm. It's the advanced fabs that we're missing.

That said the industry is insanely localised. Having a fab that can produce device X doesn't mean device X will be produced there. E.g. If I buy a Microchip product, it's coming from the USA. The fact that foundries in Europe could make it doe

Re:

[Handpaper]

If it goes ahead, it's more likely to be built in Ireland, which has :

Corporation tax of 12.5%*
A growing tech sector
An English-speaking population
Access to the UK's tech workforce via the Common Travel Area

*Germany's is 29.8%, Frances's is 34.4%. The only EU country with a lower rate is Hungary, at 9%

Re:

[K. S. Kyosuke]

I think you forgot also "an existing fab workforce" [wikipedia.org].

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[Malifescent]

This just goes to show that you have no idea how the EU works.

Believe me, it will be a French or German jobs program and the other EU member nations are going to pay for it.

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[fred6666]

with the UK gone, Germany and France are the top 2 net contributors to the EU, so it's more like the other way around. France and Germany pays for programs in the rest of the EU (with Poland being the biggest receiver)
https://www.statista.com/chart... [statista.com]

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[RazorSharp]

I assume that part of the deal is tax abatement. That doesn't disqualify Ireland—as you point out, there's a growing tech sector—but I suspect the tax issue will be irrelevant.

Re:

[RazorSharp]

It'll probably be some French-German consortium with half the plant in Germany and the other half in France.

The other 25 EU nations can pride themselves with the fact that they paid for it and that Germany and France get all the spoils.

The EU is a socialist nationalist invention by France and Germany and these two nations are conspiring to get the maximum out of this so-called union by letting the rest pay for it.

A rising tide lifts all boats.

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[account_deleted]

Comment removed based on user account deletion

Europeans starting a new national company?

[guardiangod]

Name a company from the EU from the last 50 years, that's not Airbus, that is successful in taking the lead of its respective field.

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[ShanghaiBill]

Name a company from the EU from the last 50 years, that's not Airbus, that is successful in taking the lead of its respective field.

ASML [wikipedia.org], a Dutch company, is the leader in photolithography equipment.

TSMC, Samsung, and Intel all use ASML steppers. Overall, ASML has 2/3rds of the world market.

Because of ASML, the Netherlands has an existing workforce skilled in photolithography and will be a leading contender for the new fab.

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[guardiangod]

To clarify, I mean a leading company as the result of a European Union national strategy. ASML's success stems more from Netherland's own doing, than what EU's governance had done.

In addition, lithography is only 1 part of the silicon production. Different countries dominate different part of the production process-

https://asia.nikkei.com/Busine... [nikkei.com]

Finally, a large part of ASML's R&D is based in the US (from buying US company Cymer 9 years ago.)

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[fazig]

You're moving the goalposts.
Most of those ventures are handled on a national basis, because the EU usually does not concern itself with something like that.
Even your example of Airbus is not an EU venture, but just a venture that resides within the EU.

I'll add Infineon Technologies in Germany to the list. And you'll find some other dumb reason for why that doesn't count.

Re:

[AmiMoJo]

Also ARM was European, and Nokia still is although they aren't market leaders anymore.

Siemens is another good example. Dyson used to be European.

Re:

[fred6666]

What do you consider a company "from the EU"? With its headquarters in the EU? Corporations are global now.

SAP comes to my mind. It was founded 49 years ago, so should be in your list. ASML, Spotify as well.

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[The Wily Coyote]

Royal Dutch Shell.

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[Plammox]

Maersk: Largest container shipping line and vessel operator in the world since 1996.

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[thegarbz]

Let me guess, you think Uber invented the home delivery as a service concept and Microsoft invented Skype.

When you get your head out of the sand maybe look to the many hundreds of companies that Americans have bought from European startups and then sold you the lies on "American innovation".

What will really blow your mind is Musk's former baby, the all American Paypal getting dumped by ebay, who used to own the damn company in exchange for a european payment processing service.

Please get a clue.

Re:

[TeknoHog]

The name "Uber" itself is clearly a bastardization of European/German "über", by people who want to be über-something but cannot bother to learn its spelling or pronunciation. (Cf. "Häagen-Dazs", which is supposed to sound European and therefore cool, but doesn't make any sense to Europeans.)

Fun fact: The "My" in MySQL is a female name coined by Finnish writer Tove Jansson for a character of small stature, after the SI prefix for small things ("my" is our spelling for the Greek letter "mu"

USA, too

[Meneth]

https://hardware.slashdot.org/... [slashdot.org]

Good, we clearly need more fabs.

[sabbede]

And by "we", I mean there's a global shortage, so more fabs are needed. Along with the ones they are already building in Arizona and Texas, this should provide awesome coverage across the globe. Plus, the further from China the better.