European Commission Launches $12 Billion Chip Support Campaign 111
An anonymous reader writes "Neelie Kroes, European Commission vice president responsible for the digital economy, wants to use 5 billion euros of European Union tax payers' money, together with matching funds from the chip industry, to recreate European success in semiconductors similar to that of Airbus. Because of its strategic importance to wealth creation Kroes wants Europe to reverse its decline in chip manufacturing and move back up from 10 percent to 20 percent of global production."
I am willing to go along ... (Score:5, Insightful)
Assuming that what comes out of it is able to be used by ANY EU based (i.e. PAYING taxes here) firm. I think another stipulation to using any of the research money or outcome of said research should be that the firm which is also based on EU, must also produce the resulting products inside the EU. Not spending my money to gain a competitive advantage and then turn around and outsource all production to China or Brazil.
Basically, if we are paying, we better get real benefits.
Re: (Score:1)
Hi! Are you the guy who will release the 5 billion to the EC? I'm planning to start a new business, can you help me out? I just need a couple of hundred thousand euros. Pleeeeeeeaaase?
Re: (Score:2)
Hi back, jackass.
I know it is difficult for you to understand this, but in the EU, things are a little bit different than in the United States. While corporations do have a lot of power here, it is nothing like what you see across the ocean. We, the voters, tend to react more more actively to things which we disagree with. Not in every case of course, but on the whole, this is true.
So, in a way yes, I am that guy. I am tax paying, voting resident in the EU.
Re: (Score:3)
in the EU, things are a little bit different than in the United States. While corporations do have a lot of power here, it is nothing like what you see across the ocean
That must explain why in the EU insolvent banks were taken into receivership instead of bailing them out to the detriment of citizens (e.g. Ireland).
Re: (Score:2)
So you're that Nigerian prince who keeps sending me investment opportunities?
Re: (Score:3)
I always try to consider the scenario where instead of taxation funding it, that the government instead set up a government-managed corporation that issued and sold stock to fund the project, with a share of future profits going to shareholders.
Some would say that this obviously doesnt work because otherwise a private corporation would already be doing it for the same purposes as the government project, however private corporations like to
Re:I am willing to go along ... (Score:4, Insightful)
There might and will be benefits for society at large, people get jobs, knowledge is gained and other new ventures can develop.
Those benefits don't show up in the books of investment bankers but are still very real.
Re:I am willing to go along ... (Score:5, Insightful)
It's not as simple as that.
Improved infrastructure provides a moderate benefit to a great many individuals and businesses which can add up to a net profit for the country. This doesn't mean that it would have been a good investment for a private company to build the infrastructure, because it is not possible to capture all the value that the infrastructure creates. For example, a toll road operator doesn't get paid for the reduced pressure on surrounding roads, but the users of those roads still benefit.
Similarly, this EU investment may make a net profit for the EU but that doesn't mean a corporation would make a profit doing the same thing.
Or it may be a giant waste of money. But the fact it wouldn't work as a corporation tells us nothing either way.
Re:I am willing to go along ... (Score:5, Insightful)
This is a really dumb way of thinking about how the government spends money. A corporation does not need to make a profit: it needs to make a profit now. And not just now, but also high enough.
Governments are special in that they can finance things which bring in enormous profit in the very long run (fundamental research, very large infrastructure projects) or which have very large positive externalities (free roads). Without governments, you could not build dams: large ones become profitable after 50 years. No bank, no insurance company will accept such long-term risks: they may well not exist that long. Only countries can be reasonably certain of existing within such stretches of time.
TL;DR; it is an essential function of governments to fund long-term, high-risk projects.
Re: (Score:2)
Governments are special in that they can finance things which bring in enormous profit in the very long run (fundamental research, very large infrastructure projects) or which have very large positive externalities (free roads). Without governments, you could not build dams: large ones become profitable after 50 years.
Governments are also special in that they can finance things with your money, the collection of which is backed by threat of violence. They're special in that they control media (at minimum by granting licenses) and thus have an unparalleled ability to influence public opinion. They can thus not only tell you what you are permitted to think, but they can influence most people into thinking it. For example, they've convinced you that building dams is a good idea in spite of the environmental impact, instead
Re: (Score:2)
Interesting, you compound your misunderstanding of the structure of government as understood since the Enlightenment with a misunderstanding of energy infrastructure, as understood from the early 20th and of the formation of public opinion (mid-twentieth).
Governments, not democratic ones, and even not most autocratic ones are not sustained (only) by the threat of violence. The situation in Syria is illustration of that: although it is not actually possible to overthrow Assad, as he is ready to go to any ext
Re: (Score:2)
Governments, not democratic ones, and even not most autocratic ones are not sustained (only) by the threat of violence.
That is a load of dingo's kidneys. They are sustained against those who would tear them down only by the threat of violence, which underwrites all their other threats. It's not an unassailable position, but it's still how they work.
Re: (Score:2)
Re: (Score:2)
Not every pursuit of man must be directly profitable... and demanding that they all be so, creates failure and market distortion.
Re:I am willing to go along ... (Score:4, Insightful)
Private corporations are concerned with immediate success. They need to show something in their next quarter report or their stocks will fall. Things like investment in future endeavors is rare, and only risked if there's a chance to gain some sort of perpetual patent. But why bother with high investments in basic research when it's far more profitable to whip up some trivial patent of something even a dumb fuck in middle management could come up with?
No, basic research, the research that actually does lead to groundbreaking results and exciting new technology is NEVER conducted by companies. Never. Remember the laser? You know, the thing that drives your DVD and BluRay drives? Think that was what the idea of Einstein when he whipped up the theoretic basis for it in 1917? Hell, even current patent laws don't allow you to milk it for a century. And no, this is NOT the suggestion that we should extend patents beyond the insanity copyright has already reached. But I ramble.
A lot, and I really mean a LOT, of theoretic and practical research was necessary, from great minds like Ladenburg, Kastler, Basov and Maiman, and still it took the last one 'til the 1960s to produce a working laser, more than four decades after the theoretic foundation.
You think any company on this planet would think in terms like this?
You think any investor would invest in something that could take half a century to produce results you can market?
Hell, it took 'til the 1980s to produce consumer grade lasers. And 'til the 1990s and even 2000s to make them cheap. Today, though, they're everywhere, from consumer electronics to cutting edge science, from micrometer distance measuring to touch-less cutting. And of course playing DVDs and BluRays.
Think we'd have any of those things if we left innovation to the market?
Re: (Score:2)
Because Quaero, which was born out of this exact same idea and thought process, also which cost in the 12 digits, was such the raving success that politicians said it would be.
Re: (Score:2)
I suspect that if the results of this effort were released with an appropriate hybrid Open-Source license, as well as providing both the Open-Source contributors & corporate funders /contributors with some sort of tax break, that more European people and firms would see more benefits, than if the results were locked up in some sort of Airbus-esque version of Intel. Comparing the business strategy that Intel pursued with Itanium to ARM's, I become more certain in this line of thinking.
Or to put it anoth
Re: (Score:2)
TFA mentioned Airbus. The investment on that had paid off many many times over despite the aircraft design not being public property.
This should be a conservative wet dream. The government wants a chip manufacturing industry but farms it out to the for-profit private sector.
Re: (Score:2)
ANY EU based firm.. which then funnels its profits elsewhere. Also to "produce" something in EU means what exactly? Assemble the final product? Solder the motherboards? A EU assembled phone with an EU produced CPU can't use Korean memory- and American graphics chips? The basic chemicals used must all come from Germany and be based on Norwegian oil? How far do you want to take this and to what effect?
Re: (Score:2)
Violation of "Free Trade" (Score:2)
What good does a "competitive advantage" do if the "profit advantage" is taken out of it?
Re: (Score:2)
Re: (Score:2)
They just need to find a lode of rare-earth elements somewhere in their borders.
Re: (Score:2)
Problem with rare-earth elements is not that they are rare, but that there are not really lodes (same for Indium [wikipedia.org] IIRC), so that it becomes cheap to get a bulk of ore but expensive to refine.
E.g. Neodymium [wikipedia.org] (I suspect it's needed for wind turbine magnets made of NdFeB, which we Europeans are going to need a lot more of very soon) was apparently mined from some kind of beach sand (Monazite) [wikipedia.org].
Planned economy rarely works (Score:2)
If keeping our chip production costs more than losing it, then overally this is a bad investment. You could argue that electronics manufacturing is a strategic sector, but in this case we should simply make it a rule to only accept European electronics for security sensitive apllications. That would create a market for domestic production, and keep it alive at a much lower price.
Not Comparable (Score:2)
The internet was started by the Defense Department, and other government entities expanded it. Eventually it was commercialized, grew greatly, and the government portion of the hardware has become an insignificant portion or decommissioned. The internet's hardware today is almost all paid for by non-tax money.
Semiconductor manufacturing is older than the internet and has always been dominantly commercial. Putting government money into semi mfg today is not seed money, it's "industrial policy" (a part of fas
Re: (Score:1)
"Are agricultural subsidies part of fascism also..." Yes, fascism, socialism, communism, take your pick. They are part of those systems.
Re: (Score:2)
The semiconductor industry is a bit different. No fab is ever build without massive government subsidies. Just google about globalfoundries in new york.
Re: (Score:2)
South Korea and Samsung would probably disagree with you.
ARM? (Score:1)
I know they don't do the fabrication, but how much EU tax payer money did ARM need? 50% of this will go to Brussels admin, 25% will go to local pork barrelling, and maybe 25% will end up in subsidising German engineering, which probably funds 50% of these Quangos to begin with.
Re: (Score:2)
wealth is going elsewhere for a reason (Score:1)
If people are not allocating money to chip production it's because they can create more wealth DOING OTHER THINGS.
All he will do is in a wholly unimaginative way is force wealth allocation back to a less productive industry because he can't imagine there might be something else which is even better.
Re: (Score:2)
Ask IBM why they left . . . ? (Score:5, Interesting)
IBM used to produce chips in Sindelfingen, Germany. They shut it down a long time ago. On the other hand, Mercedes Benz automobiles are still rolling off the Daimler assembly line in Sindelfingen. So it's not like it's the location or lack of skilled workers or anything like that.
So why is that . . . ? Of course, cars are not chips, despite the Slashdot penchant for car analogies. But it would be interesting to know why someone like IBM pulled out, before dumping a bunch of money on the problem . . .
And what about Siemens . . . ? Do they still make chips . . . ?
Re:Ask IBM why they left . . . ? (Score:4, Informative)
What about STMicroelectronics, NXP, LFoundry... (Score:1)
Lots of them in places such as Grenoble valley ... (One of the IT historical grounds in the world)
There used to be there labs from IBM, Bull and all those behemots from IT pioneer ages ;-)
Re: (Score:3)
They are still there. As well as several Infineon Fabs in Germany (Dresden, Regensburg, Warstein) and Austria (Villach), a massive fab by Globalfoundries in Dresden and a large fab by Intel in Ireland.
Re: (Score:2)
I am pretty sure IBM did not leave due to any reason directly related to the location. Semiconductor fabs can have a relatively short lifetime, depending on the technology. The IBM fab had been in operation for decades, if I am not mistaken.
If you want a leading edge fab, it is quite possible that some technology changes (e.g. wafer size conversion) make it uneconomical to upgrade an existing fab. In that case you need to build a new shell. Locations for new fabs are often significantly influenced by incent
Re: (Score:2)
I am pretty sure IBM did not leave due to any reason directly related to the location. Semiconductor fabs can have a relatively short lifetime, depending on the technology. The IBM fab had been in operation for decades, if I am not mistaken.
If you want a leading edge fab, it is quite possible that some technology changes (e.g. wafer size conversion) make it uneconomical to upgrade an existing fab. In that case you need to build a new shell. Locations for new fabs are often significantly influenced by incentive payments from the local government. For example the new globalfoundries fab in new york state got billions of incentive payments. IBM most likely decided to discontinue the site after moving the products to a more modern fab that was build somewhere where they got more money...
The German, French, and Irish foundries Are losing on feature size. X-Fab is limited to around 180nm features, and the most recent French STMicroelectronics plant can barely do 32nm for relatively small die sizes. Most design houses these days are fabless, and the feature size is a determining factor on cooling requirements and power consumption. Frankly, Intel makes better chips, and they are pretty much willing to fab for anyone these days, If you don't care because you're doing a slower ARM design,
Re: (Score:2)
One of the reasons the high-end luxury car brands have lower quality scores is because their owners have higher expectations, and complain more about minor problems. If there's a squeak or rattle in your new $100k Mercedes, you take it back to the dealership for warranty repairs. If there's a squeak in your $15k Ford, you just live with it. So Mercedes looks bad because it has an incident of a warranty repair, whereas Ford doesn't.
Also, Mercedes is not a luxury brand in Europe, only in the USA.
Re: (Score:1)
Yeah and then NCR grew irrelevant while SGI went bankrupt.
IBM don't make stuff (Score:1)
IBM left lots of market, at the root of the problem is IBM's patents, they found it easier to make patents of things than the things themselves and just become a big parasitic patent troll. This is why they announce battery initiatives (their Battery 500), not to make batteries, but to make plausible sounding patents in the field of batteries.
IBM leaving a country doesn't mean anything, they've been pulling back from lots of real world projects and I doubt their fab work would continue without the supercomp
Re: (Score:1)
IBM used to manufacture disk drives but they sold that off a long time ago.
Intel (Score:1)
don't forget Intel in Leixlip, Ireland - they seem to be doing ok
Re: (Score:2)
amend/abolish ridiculous labor laws which are killing startups
I'm just curious; what kind of labor laws do they have which are killing startups? Over here in the US, hiring isn't that hard when you only have a few employees, and even asl long as as it's under 40 I hear the labor laws aren't too hard to keep up with. Over 40, however, it starts getting really complicated, at least that's what a small company I used to work for told me.
Re: (Score:2)
Like what? I'm just curious. For instance, suppose I have a small family (mom-n-pop) business here in the USA (that sells on the internet, rather than being tied to a specific locale), and decide I want to move to Europe. What would I be in for?
You would probably go to the UK (Score:2)
Coming from the US you would probably want to have a "Ltd" in the UK, because UK and US law are very similar (since US law is based on UK law, surprise). Since it's the EU you would then be able to do business in any EU country using that UK business. It is a simple operation (founding a UK "Ltd"). Advice can be found on lots of web pages.
Creating a corporation is EASY (Germany) (Score:2)
I created a "GmbH" (a limited liability corporation) at no time (1 visit to a notary) and very little cost (the "full" version, not the "1€" version) - and that is what you want for a "real" business. This kind of legal entity can be used for businesses worth hundreds of millions, I use it only for my freelancer business. Costs are accounting (fully outsourced), I have to publish a limited version of my yearly balance sheet, and some taxes. Even with accounting 100% outsourced I consider having this po
Re: (Score:2)
Re: (Score:1)
how is VAT worse than sales tax?
Re: (Score:2)
VAT is probably the most logical tax, it taxes spending and not income
Only if you want to stifle the economy. If on the other hand you want to encourage economic activity you make spending easier. Income which isn't spent doesn't benefit the economy.
You've got it pretty much backwards.
It's pretty fair regardless of income levels, much more so than income taxes.
VAT is effectively a highly regressive tax because even though it applies to everyone the poor to middle-class people spend a much higher proportion of their income on consumer goods, subject to VAT.
Re: (Score:2)
Good idea (Score:2)
Re: (Score:2)
Literally hundreds of chemical species are in their lists of banned substances it's amazing that anything can be made or grown there.
That shouldn't be a problem for growing things; you just wouldn't use any pesticides or artificial fertilizers. Farmers got along just fine hundreds of years ago before all these substances were invented. Considering how much food the EU produces (and exports), they don't seem to be having a problem there.
But yes, for modern manufacturing, having a lot of banned toxic substa
Re: (Score:2)
You do realize that there's a huge gulf between the fact that some chemicals are regulated and the inability to make a chip and that you've done exactly nothing to cross that chasm. Yet you still think it's probably true.
Just observing a bug in your thinking.
Profits? (Score:1)
A lot of these chip manufacturers build commodity products that don't make much (if any) money. Most of the profit is concentrated at the top of the food chain with Intel, IBM, etc.
Case in point (Score:1)
5 billion euros is a pittance in this sector (Score:1)
As an example NY State gave $1.37 billion in financial incentives to GlobalFoundries in order for them to locate a plant there. These included $665 million in capital. That was one plant. Semiconductor manufacturing plants typically double in price with each manufacturing node generation. The commission wants to fund 450mm plants which will be a helluva more expensive. All those billions will probably only be enough to fund 2-3 leading edge fabs.
Most of the money will likely go to GlobalFoundries and Siemen
Re: (Score:1)
s/450mm/400mm/
Only one winner (Score:1)
Re: (Score:1)
Shut up Slave - just getting by
check out the obama video
Airbus (Score:2)
I am not sure that Airbus could be created with today's EU treaties. State were a lot involved, something that today's EU fight like hell. And the EU cannot act instead of member states because it does not have their financial strength.
Some would want to change that by having member states giving more money to the EU, but since the EU is totally antidemocratic and since EU leaders are not responsible at all before tax payers, I would prefer that problem to be fixed by reverting to the previous situation whe