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Sale of IBM's Chip-Making Business To GlobalFoundries To Get US Security Review 95

dcblogs writes IBM is an officially sanctioned trusted supplier to the U.S. Defense Dept., and the transfer of its semiconductor manufacturing to GlobalFoundries, a U.S.-based firm owned by investors in Abu Dhabi, will get U.S. scrutiny. Retired U.S. Army Brig. Gen. John Adams, who authored a report last year for an industry group about U.S. supply chain vulnerabilities and national security, said regulators will have to look closely. "I don't want cast aspersions unnecessarily on Abu Dubai — but they're not Canada," said Adams "I think that the news that we may be selling part of our supply chain for semiconductors to a foreign investor is actually bad news."
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Sale of IBM's Chip-Making Business To GlobalFoundries To Get US Security Review

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  • Abu Dubai???? (Score:3, Informative)

    by Anonymous Coward on Thursday October 23, 2014 @09:39AM (#48212197)

    You mean Abu Dhabi? Dice, fire Timothy at once!

    • by Anonymous Coward

      To be fair, that typo was in TFA.

    • by Rosyna ( 80334 )

      The quote was from the retired Brig. General himself. He got the two cities confused.

      And we all know neither Abu Dhabi nor Dubai are in Canada. I don't know why it was necessary to point that out.

      • Re:Abu Dubai???? (Score:4, Insightful)

        by ultranova ( 717540 ) on Thursday October 23, 2014 @11:52AM (#48213345)

        And we all know neither Abu Dhabi nor Dubai are in Canada. I don't know why it was necessary to point that out.

        He didn't say they aren't in Canada, he said they aren't Canada. Basically, he thinks Canada is unlikely to sabotage or spy on the US but someone in Middle-East might get ideas. Which is a valid concern and deserves consideration.

        • Which is a valid concern and deserves consideration.

          It deserves a hell of a lot more than just "consideration". I honestly believe "NO" is the only rational answer.

  • Look 'ma no chips!
  • by Anonymous Coward on Thursday October 23, 2014 @09:53AM (#48212313)

    How long are you going to keep pretending that you are doing anything other than sinking into irrelevance?

    If you don't make anything, and you have to buy it from the global market ... do you really still think you're innovating and pioneering?

    Or will you finally realize your corporations are destroying your economy, and leaving you as a bunch of whiny bitches sitting on the sidelines still thinking you're awesome?

    • by glrotate ( 300695 ) on Thursday October 23, 2014 @10:23AM (#48212515) Homepage

      This is just evidence that the US has progressed beyond high tech manufacturing - a 20th century legacy industry.

      The US is now fully connected and chooses to specialize in bleeding edge products like selfies.

      • by 0123456 ( 636235 )

        Making things is so 20th century. The future is advertising funny cat videos to each other.

    • by Glasswire ( 302197 ) <glasswire.gmail@com> on Thursday October 23, 2014 @10:24AM (#48212531) Homepage

      Nonsense, the biggest fabs of the biggest semiconductor company in the world, making the most advanced microprocessors are located in the US at Oregon and Arizona [wikipedia.org] sites. It's a little company called Intel.

      • Yes, Intel is a great American company. But are its fortunes rising or sinking? [yahoo.com] I see very minimal long-term growth (if at all) in that chart, which is scary given than the worldwide market for semiconductors is growing fast. Compare to Samsung [yahoo.com].

        Granted we are just comparing individual companies. Apple is an American company and has done amazingly well. But, personal opinion here, Apple's magic is not very substantive, and people are very fickle in what is considered cool. (Not that Apple's products

      • Intel is indeed great, technically better than anything else out there and will probably continue to be so. There are several other large companies from telecom to biotech who also have in-house fabs in the USA and they will do great things. But IBM was the last significant stateside fab house that would work on external government contracts and work for small outside users.

        The best we have now for small business electronics development or advanced academic work are training clean rooms like the various C

    • by ShanghaiBill ( 739463 ) on Thursday October 23, 2014 @10:43AM (#48212677)

      If you don't make anything, and you have to buy it from the global market ... do you really still think you're innovating and pioneering?

      Yes. Innovation occurs during conception and design, not manufacturing. Apple makes hundreds of dollars for every iPhone sold, because they own the design. Foxconn makes ten bucks for manufacturing it.

      But this is a silly discussion, since manufacturing is NOT declining in America. America is the world's second biggest manufacturer, with nearly $2 trillion in annual output. What has declined, is not manufacturing, but manufacturing employment, due to automation, and offshoring of the most labor intensive sectors. Since 1975, manufacturing employment in America has declined by 30%, while manufacturing output has doubled.

      • by ErichTheRed ( 39327 ) on Thursday October 23, 2014 @11:00AM (#48212821)

        " What has declined, is not manufacturing, but manufacturing employment, due to automation, and offshoring of the most labor intensive sectors."

        And that's good?

        I know that the bright rosy future prediction is that everyone is going to jump on board the knowledge worker train and deliver high quality services and creative goods. I don't mean to sound like a jerk, but have you taken a look around at the _average_ person lately? That average person used to be employed in a factory making a living wage doing a repetitive task suitable for their ability level. The reality is that you can't just plug someone like that into, say, an IT or project management job. There is a continuum of IQ and skills, and a healthy economy needs to account for the low end and the high end. You can't just shunt off the low end to fast food, Walmart and unemployment without fixing some of the imbalance, or you will have French Revolution 2.0 on your hands.

        I think the future is a lot more bleak -- you're going to have over half the population running around with no income and no way to make a decent living, and the rich who don't want to do anything about it because they've earned their money in their mind.

        • The US will be a lot like Mexico City before too long (no, this is not a statement about immigration) -- rather that you'll have pockets of concentrated wealth; gated community/enclaves with armed guards at the perimeter to keep the rifraff out. =/

        • by ShanghaiBill ( 739463 ) on Thursday October 23, 2014 @11:46AM (#48213281)

          And that's good?

          Yes. Wealth is created by the production of goods and services, not by "keeping people busy". So if we can produce more, with less labor, that is a good thing.

          You can't just shunt off the low end to fast food, Walmart and unemployment without fixing some of the imbalance

          Then you fix the imbalance. In America, the bottom quintile already get 40% of their income from redistribution. Providing something like an earned income tax credit to top up the income of people in service jobs makes a lot more sense than keeping people in make-work manufacturing jobs, doing things that a machine can do better.

          • "make-work manufacturing jobs"

            Here's the problem with that statement -- most jobs are make-work jobs. I've been employed in IT for almost 20 years now, and have seen lots of shifts in corporate employment as well as manufacturing. I worked in a bank way back in the day where they had a dozen people employed scanning paper checks as they came in from branches. I worked in a life insurance company whose old-timers told me that they literally had a whole floor of people opening mail, processing premium payment

            • by 0123456 ( 636235 )

              None of those examples are obvious 'make-work' jobs. They're jobs that haven't been automated away, but they're jobs that need doing for the company to function.

              Make-work jobs are jobs which exist soley to employ people, like getting one guy to dig a hole and the other to fill it in. Or where any sane company could have automated the job away, but they refuse to do so just to keep people employed.

              • by DarkOx ( 621550 )

                There is was an old joke about digging a canal in South America.

                The local Dictator brimming with pride shows a visiting group of foreign dignitaries a gang of workers digging the new canal using pick axe and shovel.

                The American industrialist says: why are they using shovels surely you could get a loan against the future revenues to purchase heavy equipment get the project done sooner start collecting tolls right way.

                The Dictator replies: Ah but this employees more people.

                The visiting economist asks: Would i

            • There's *always* work to be done. Employing additional cleaners / landscapers to keep facilities looking tidy is one that immediately comes to mind, and one that cannot be easily automated. "Peace officers" (unarmed cops) in neighborhoods to help keep crime down and give people directions. Additional secretaries in offices. Additional window people at post offices and the DMV to help speed lines. I would very much like unemployment insurance to be replaced with (intended to be temporary) low-skill gove

              • by sjames ( 1099 )

                The problem is that such work quite often doesn't pay as well or offer as much opportunity for advancement. The result will push an ever increasing share of the population into the bottom quintile.

                There would need to be a significant hike in the minimum wage to prevent turning that into a powderkeg of social unrest.

                • by 0123456 ( 636235 )

                  There would need to be a significant hike in the minimum wage to prevent turning that into a powderkeg of social unrest.

                  Uh, no. 'A significant hike in the minimum wage' would mean those jobs would be automated away, too.

                  • by sjames ( 1099 )

                    Excellent! The goal is to automate away anything that can be! Next step, cut hours and raise pay.

                • The result will push an ever increasing share of the population into the bottom quintile.

                  I hope this is a joke. Otherwise you should never even consider becoming a mathematician.

                  • by sjames ( 1099 )

                    Apparently, you missed that the quintile is annual wages, not population. Thus it is entirely possible to have half of the population in the bottom quintile of wages.

                    Plotted as a bell curve, the peak is skewed.

                    If you start with the working assumption that someone is making perfect sense, it is often possible tyo figure out where your disconnect is. If you are just looking to call them wrong, you care more likely to end up with egg on your face.

                    • Apparently, you missed that the quintile is annual wages, not population.

                      Wrong [wikipedia.org]. Households are divided into quintiles according to their gross income. Each quintile represents 20%, or one fifth, of all households. It is mathematically impossible for an "ever increasing share of the population" to be pushed into the bottom 20%, which is, by definition, limited to only 20%.

                    • by sjames ( 1099 )

                      Funny, it seems everyone else managed to understand what I was saying...

          • by ultranova ( 717540 ) on Thursday October 23, 2014 @12:45PM (#48213901)

            Wealth is created by the production of goods and services, not by "keeping people busy". So if we can produce more, with less labor, that is a good thing.

            It's good for those who get to fire workers and pocket their wages as profit, yes. It's bad for those workers who now have to make do with miserly unemployment benefits, and demonized for it by both their former employers and peers. It's bad for the remaining employees, who get worse pay and more crap due to fiercer competition for the remaining available jobs. And it's bad for everyone once there's enough people getting the short end of the stick that they'll just grab it and beat their masters to death with it.

            Then you fix the imbalance.

            You can't, because the culture won't allow that. Any attempt to either narrow the income gap or make it possible for the unemployed to live an independent middle-class life will be instantly declared "socialist", and rightly so. Automation is fundamentally incompatible with capitalism, or at least a version of capitalism where people are expected to "earn" their income by working. Just look at how much hate "welfare queens" get, despite that being the only alternative to busywork that doesn't result in social collapse.

            Basically, a post-industrial society will either unconditionally pay its citizens their upkeep with no strings attached, be a more or less horrible dystopia where that upkeep comes with submitting to arbitrary rules like taking drug tests or doing pointless busywork, or collapse in a violent uprising. And I think we all know which one Americans will never, ever, under any circumstances allow their neighbours, even if that means denying it to themselves.

            It's a pity, really. Once upon the time American Dream was a plot of land, since that's what it took to be independent. Then it became a pot of gold, because again that's what it takes to be free from having to bow to your local Count von Bastardessen to get food. And now, with everything getting automated, everyone could have their virtual plot of land - their share of the automated manufacturing resources, granted in the form of citizen pay - but that's not going to happen. But perhaps the developing countries will take note, and avoid the collapse ahead of us.

            • Automation is fundamentally incompatible with capitalism, or at least a version of capitalism where people are expected to "earn" their income by working.

              Automation is fundamentally incompatible with some magic fairy version of capitalism where no jobs are eliminated but everyone has a better standard of living. But for those of us living in the real world, there's no incompatibility. Automation improves efficiency and so reduces cost. Yes, it shifts jobs, and yes, that causes social problems, and no, I don't have a solution for that, and nor does anyone else. But writing nonsense about it doesn't change what is real.

              • "some magic fairy version of capitalism where no jobs are eliminated but everyone has a better standard of living."

                You mean the actual version of captialism that actually occurred in economic history, where everyone's standard of living has actually risen and more people are actually employed?

              • by sjames ( 1099 )

                So your solution is to declare that it's not worth finding a solution and waiting for the poor to burn your town?

                • My solution is to not make up nonsensical claims in the first place.

                  It's not much of a solution, but it's mine.

                  • by sjames ( 1099 )

                    So you're claiming that automation can not and will not EVER take over enough of the work that we no longer need everyone working 40 hour weeks?

            • by burbilog ( 92795 )

              Basically, a post-industrial society will either unconditionally pay its citizens their upkeep with no strings attached, be a more or less horrible dystopia where that upkeep comes with submitting to arbitrary rules like taking drug tests or doing pointless busywork, or collapse in a violent uprising. And I think we all know which one Americans will never, ever, under any circumstances allow their neighbours, even if that means denying it to themselves.

              Yes, and horse corpses and horseshit are going to fill

              • Some years ago most of the population spent its time working in the field. Now agriculture employs about 3% of population. So, do these 97% of other guys starve or what?

                Why do you think communist revolutions happened? And why did their agitators use such rhetoric as "you have nothing to lose but your chains"?

                We'll need human jobs anyway until develop AI (and that's not going to happen in any foreseeable future).

                "AI" is a nebulous term. A modern computer processor contains over 1 billion transistors; do yo

          • by Matheus ( 586080 ) on Thursday October 23, 2014 @01:28PM (#48214281) Homepage

            This.

            Honestly I'm a big fan of the Star Trek future however possible that may be. If through automation / etc the needs of *all can be produced by an extreme few why do we need to continue the philosophy that everyone must earn money to survive. I'm not for pure socialism but I have no problem with the safety net being high enough that everyone can do "good" on "nothing" not just eek by. Choosing to live on that minimum is a choice that is perfectly valid for all and not even to be shunned. That leaves those who want to follow their interests the freedom to do so without having to worry about where the shelter over their head or the food on their next plate is coming from.

            There are all sorts of logistical issues to work out for that dream to be a reality (not the least of which is making sure enough people work for their own benefit to keep the engine running) and our level of automation isn't quite there yet to support it but that's the future I want to live in.

            • by sjames ( 1099 )

              A real attraction to that future is the probability that a fair number of people will take advantage of the ability to devote their time to pursuits that don't have to pay off in the short term and as a result create great advances for our society. There's probably a lot of great ideas out there that will never come to anything because people have to wear themselves out meeting basic needs.

          • by Jawnn ( 445279 )

            And that's good?

            Yes. Wealth is created by the production of goods and services, not by "keeping people busy". So if we can produce more, with less labor, that is a good thing.

            No. Not if your economy was built on a large and healthy middle class. Oh, by "wealth" you were referring to the one percent. Then yes, you're absolutely right.

        • by Anonymous Coward

          Here's a question for you, food for thought.

          Should Normal People be allowed to participate in the technological revolution, if they are unable to understand how the devices operate? Isn't their mere presence and being allowed to use such devices fundamentally destructive to society?

          And on the same token, if the geeks can automate everything, shouldn't they just not sell their produce to the normals and call it a day? Live like kings but otherwise, who cares?

          More to the point, our economic woes are due to

        • So, you are telling me that all those engineers, programmers and research scientists I have known, and many others I have read about and corresponded with, who have had their jobs offshored, don't exist? You really have an imaginary mindset. Things are far bleaker than you can imagine, bubba!

          Take a close look at the GDP, then come back and dare tell me we have an economy any longer in Amerika!
    • It'll have to start with teaching the business school drones a different sort of logic. Right now designing products to suit the western taste makers and having someone else do all the dirty dangerous work that creates pollution, do it for cheap, resell the product and just collect the money in the U.S. is working quite well. This way we can make products by the millions and not have to listen to OSHA, the unions or the enviro-hippies. I don't think America is sinking into irrelevance, America will be just

  • by bluefoxlucid ( 723572 ) on Thursday October 23, 2014 @09:53AM (#48212315) Journal
    "We're selling part of our supply chain"? Who is "we"? Is the Government owning IBM now?
    • Well, it sorta-does. They have first dibs on over a third of earnings, which I suspect is far more than the single biggest shareholder gets. Doesn't come with all the bells and whistles like voting in board members, mind you...
  • The united states is currently shitlisting, per ITAR, 27 of the following contries:
    Afghanistan, Belarus, Central African Republic, Cuba, Cyprus, Eritrea, Fiji, Iran, Iraq, Cote d'Ivoire, Lebanon, Libya, North Korea, Syria, Vietnam, Myanmar, China, Haiti, Liberia, Rwanda, Somalia, Sri Lanka, Republic of the Sudan (Northern Sudan), Yemen, Zimbabwe, Venezuela, Democratic Republic of the Congo.

    ITAR means military goods and services are categorically banned. whats hillarious about this is many of these coun
  • If the government has any objections then the government should buy it.

  • by ErichTheRed ( 39327 ) on Thursday October 23, 2014 @10:52AM (#48212757)

    One of the things I have in the cobwebs of my brain is that IBM does or did manufacture mainframes and POWER systems that were assembled entirely in the US and had a known trail for all the non-US components. This was for government/military customers who required the security of at least on-shore assembly. Now that a foreign company is going to be controlling IBM's fabs, maybe that's why the deal is getting scrutiny.

    I hope we don't end up in another world war situation where our supply chains get cut off, but you never know sometimes. Imagine what kind of trouble we would be in if all of a sudden we cut off all trade with China. In order to not cause disruption, we would basically have to restart manufacturing of everything in the country overnight. Actually, that might not be a bad idea since we hardly make anything here anymore. The other good reason would be that it would finally make the average citizen feel the pinch of a wartime economy. WW2 was the last time full-scale rationing of consumer goods was required, as well as the nationalization of industrial capacity. Vietnam was the last time a mandatory military draft was needed. Since then, all the conflicts have been kind of shrugged off by the average person since it didn't affect them.

    I know, global economy and all that, but I do see things getting a little messy when automation takes away the majority of jobs in this country, and limits the growth potential for all developing countries.

    • hahaha, the way the next world war will be fought, semiconductor supply chain issues will be the least of the survivors worries

    • But the foundries will still be in the USA; only the ownership is changing. They aren't making Essex Junction a part of Abu Dhabi.

      The main complaint seems to be this: "GlobalFoundries, a U.S.-based firm owned by investors in Abu Dhabi". But: IBM itself is a US-based firm owned by investors in many different countries, including Abu Dhabi, Iraq, Iran, Syria, and many others. Does that make IBM less trustworthy?

  • by gestalt_n_pepper ( 991155 ) on Thursday October 23, 2014 @11:17AM (#48212963)

    That started with Reagan, who was happy to buy Saudi Oil rather than try and change the USA's energy picture. Sure. No security issue there.

    So now we're selling our chip-making infrastructure. But what's one more attack vector? We're already dependent on chips made in China and software coded in India. I guess having our supplies cut off by Abu Dhabi couldn't be much worse.

    It's all about moneyed interests. Countries are an illusion designed to keep the little people from revolting, which will continue to work until there's not enough affordable oil to keep cheap food, entertainment and drugs coming down the pipeline. After that, all bets are off.

    • Countries are an illusion designed to keep the little people from revolting

      One of the most insightful things I've ever read on here...

  • And I mean serious regulation, and I'll tell you why.

    While it's efficacy has been hampered by conservative budget cutting, the FDA is the only thing protecting a consumer population from tainted food, ineffective or dangerous drugs, etc. That population can not effectively make judgements about the products offered for sale in those markets, so said markets are, by definition, not free. Most consumers, the military included, don't have the resources to ensure that this or that tech product is "safe and eff

  • "I don't want cast aspersions unnecessarily on Abu Dubai — but they're not Canada," said Adams

    I think you're okay... They'll both assume you must be talking about the other one.

  • by WindBourne ( 631190 ) on Friday October 24, 2014 @06:58AM (#48219483) Journal
    And split into 3 vertically parallel companies. Then push these companies for new ideas and innovations. Seriously, for this to work, we need to restore competition which requires multiple companies. Likewise, we to do a COTS approach with them. One item in desperate need is new networking equipment that was not manufactured in China.

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