EU Official: Semiconductor Independence Is Impossible (tomshardware.com) 120
According to Margrethe Vestager, EU's Commissioner for Competition, it's unlikely that the EU will ever become completely independent from other countries as far as semiconductor supply is concerned. Tom's Hardware reports: Leading contract makers of semiconductors -- such as Intel, Samsung Foundry, and Taiwan Semiconductor Manufacturing Co. -- spend around $30 billion per year on capital expenditures and billions on developing new process technologies. Analysts believe that a country, or a group of countries, that wants to build a competitive semiconductor industry locally would need to spend over $150 billion over a period of five years on direct help, tax breaks, and incentives. However, the chances of success are extremely low.
The EU official believes that such investments are impossible to make, which is why the bloc will continue to rely on internal and external chip supply. "The numbers I hear of, sort of, the upfront investments to be fully self-sufficient, that makes it not doable," said Vestager in an interview with CNBC. "What is important is that there is a different level of production capacity in Europe."
It is noteworthy that Europe does not produce smartphones or PCs, two kinds of applications that need chips made using leading-edge fabrication technologies. Meanwhile, the EU produces cars, consumer electronics, and other things that do not need chips made using the latest nodes. Thus, the bloc wants to expand production of chips for these products to protect its economy. It also does not want supply chains to be disrupted by China or tensions with the U.S. and Germany. At present, about 10% of the global chip supply is produced in Europe, down from 40% in 1990. The current goal that the block has is to expand its global chip production market share to 20% by 2030, which is already a very ambitious goal as chip manufacturing is growing. Vestager admits that to accomplish this goal, the EU needs to support local makers of semiconductors. Unfortunately, Margrethe Vestager does not announce any particular plans at this time.
The EU official believes that such investments are impossible to make, which is why the bloc will continue to rely on internal and external chip supply. "The numbers I hear of, sort of, the upfront investments to be fully self-sufficient, that makes it not doable," said Vestager in an interview with CNBC. "What is important is that there is a different level of production capacity in Europe."
It is noteworthy that Europe does not produce smartphones or PCs, two kinds of applications that need chips made using leading-edge fabrication technologies. Meanwhile, the EU produces cars, consumer electronics, and other things that do not need chips made using the latest nodes. Thus, the bloc wants to expand production of chips for these products to protect its economy. It also does not want supply chains to be disrupted by China or tensions with the U.S. and Germany. At present, about 10% of the global chip supply is produced in Europe, down from 40% in 1990. The current goal that the block has is to expand its global chip production market share to 20% by 2030, which is already a very ambitious goal as chip manufacturing is growing. Vestager admits that to accomplish this goal, the EU needs to support local makers of semiconductors. Unfortunately, Margrethe Vestager does not announce any particular plans at this time.
"I can't do it" (Score:5, Insightful)
"That is why you failed."
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If USA and China can work towards semiconductor independence, why can't the EU? They are a large enough economic area with many countries involved.
Seems like they should just prioritize it as security for the bloc. I suppose they just assume NA and Australia will come save their asses and we probably will, but what happens if we have to many of our own problems?
Very shortsighted on the part of Brussels.
Re:"I can't do it" (Score:5, Insightful)
Neither China nor the USA are going to have full semiconductor independence. They are paying money to get a few fabs built in their respective countries.
It isn't even desireable to have semiconductor independence. The goal should be to not have dependence on states that might want to go to war with you in the next 50 years.
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That's a nice notion, but impractical in the foreseeable future. Foundies need to be built somewhere, and everywhere on land is within some country's borders. Furthermore, foundries require lots of stuff that countries provide: electricity, water, roads, ways to import raw materials and export finished product. In good ways and bad, stable countries provide legal frameworks for enforcing contracts (like purc
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Milton Friedman, economist, Republican, and advisor to Ronald Reagan was the father of the movement to shift business management away from being in the interest of stakeholders (managers, consumers, and labor) to being in the interest of shareholders alone. This meant that a company was to make as much money as possible in a shorter term time period. The philosophy launched the era of corporate raiders and the movement of manufacturing overseas. For the most part, established businesses could always make mo
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States that have strong trade relations with each other are dramatically less likely to go to war with each other. So you want to be independent of states *you* might want to go to war with in the next 50 years.
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States that have strong trade relations with each other are dramatically less likely to go to war with each other
That was the hope with world war 1. Deep trade networks war still happened.
You need a deeper analysis.
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States that have strong trade relations with each other are dramatically less likely to go to war with each other
That was the hope with world war 1. Deep trade networks war still happened.
You need a deeper analysis.
"less likely" != "impossible"
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Can you even name one war that was averted in history because of trade relations? I'm having trouble thinking of one. I can think of wars that happened despite strong trade relations, and already gave examples.
Re:"I can't do it" (Score:5, Insightful)
Can you even name one war that was averted in history because of trade relations? I'm having trouble thinking of one. I can think of wars that happened despite strong trade relations, and already gave examples.
Of course I can't. How the hell do you expect me to point out something that didn't happen? Go to an alternate universe without trade relations and point out there was a war there and not here?
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ok, you're ignorant. I'll bet you don't know many wars in history, period. Have you heard of WW2? It was a big war.
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I pointed out an example that proved you wrong. All you have is an argument from ignorance. Logic fail.
Read some history before talking your mouth off.
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That is an impossible request. That would require states going all the way to the brink of war, then realizing that strong trade with their opposition means they shouldn't. Instead what normally happens is the two opponents get at logger heads, then realize that things are better working together so d
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Instead what normally happens is the two opponents get at logger heads, then realize that things are better working together so disagreements get hashed out and treaties and agreements made.
Then name an example where that happened.
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The 1970's Franco/English conflict?
On a more serious note, we'll see how things turn out with the UK outside of the EU in the next 20 years.
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Can you even name one war that was averted in history because of trade relations?
The China - Australia war of 2020.
China stopped at trade sanctions, because they are utterly reliant on Australian iron or and to a lesser extent coal.
Plus you're an idiot phantomfive for asking people to prove a negative.
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The different sides in WWI (or II) didn't have particularly strong trade relations.
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Yeah, one of the reasons Japan entered WW2 was cos there was an oil embargo on Japan by US.
It's possible they may not have been involved in WW2 or involved on the side of AXIS powers if there was no sanction, but unfortunately we can't say for sure.
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There is no way to tell for sure what would have happened. That's why anecdotes aren't data. People have looked at this systematically, and there's a good correlation between the strength of trade relationships between countries and the likelihood they will go to war with each other. It's also fairly obvious to a basic sniff test: the OP clearly accepts that you don't want to go to war with your supplier, but it's also not wise to go to war with your good customers.
There's also been quite a bit of research
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The different sides in WWI didn't have particularly strong trade relations.
Nah bro, you're a liar.
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Lol. You sound crankier then usual. Everything okay?
Re:"I can't do it" (Score:5, Insightful)
The goal should be to not have dependence on states that might want to go to war with you in the next 50 years.
The goal should be to reduce or at least manage dependencies.
Just because a country isn't likely to go to war with you, doesn't mean they wont have other problems that might cut off or restrict your supply of goods you depend on. A change of government could cause a change in focus or create trade barriers, companies could go bust or relocate, a country could suffer from a major pandemic which shuts down their economy or kills large numbers of people.
A country might not go to war with you, but they might go to war with someone else (or even suffer a civil war) which could very easily disrupt supplies.
None of these scenarios are outside the realms of possibility.
Pandemics, protests and riots, military coups, civil and foreign war, collapse and takeover of government, rise of extreme political parties, countries joining or leaving a larger bloc, acts of terrorism... All of these things have happened around the world in the past few years.
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Natural disaster e.g. earthquake, tsunami, fire, flood, volcano(hopefully not many fabs are built near an active volcano)
Accidents e.g. nuclear plant meltdown possibly caused by one of above
It would be sensible for all large companies to spread their expensive fabs across several geographical areas to mitigate against any kind of localised disaster. This
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The goal should be to not have dependence on states that might want to go to war with you in the next 50 years.
You also don't want dependence on states that might be quickly conquered/disabled by states that might want to go to war with you in the next 50 years. If Taiwan, Korea, and Japan were in the Atlantic Ocean, or even still in the Pacific but on the eastern side off the coast of Mexico or something, there wouldn't be a semiconductor threat.
That would be like putting all our tech manufacturing during the Cold War in West Berlin or South Vietnam.
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The goal should be to not have dependence on states that might want to go to war with you in the next 50 years.
Given it's the EU, the goal should be to make those states interdependent on us so that war becomes impossible.
That was the basis on which the EU was created. It started with coal, France and Germany became dependent on each other so that another war was impossible. The ideal situation with semiconductors would be that everyone is so dependent on everyone else that they can't start a real or economic war with each other.
That's a realistic goal that could protect everyone, especially Taiwan.
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Given it's the EU, the goal should be to make those states interdependent on us so that war becomes impossible.
As I mentioned earlier, interdependence is no guarantee that war won't happen. People hoped that would prevent WW1 from happening, but it didn't.
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Exactly. There is exactly ONE company in the world that makes the EUV light source needed by ALL fabs today - it's in the EU. They make about 1 unit per year, and it costs around a billio
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Kill yourself today.
Hey now, be nice. In Soviet Russia...who kills who?
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>> "In Soviet Russia...who kills who?"
Nobody. Because it is in the past, not the present.
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https://en.wikipedia.org/wiki/... [wikipedia.org]
Not so distant past, seems to be a recurring issue in Russia.
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Nothing soviet there.
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Not funny.
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Because there isn't any meaningfully relevant know-how except for lens manufacturing for EUV in Netherlands. The rest of relevant technology is in US (design and some fabs), Japan (chemicals), Taiwan and South Korea (some design and fabs).
There would have been good argument for design while UK was still in the Union. Today, there is no argument left.
There's simply no base to really build on, much less build to the extent where you can compete with current market leaders. Hence the conclusion that there's no
Re: "I can't do it" (Score:1)
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I like how you use minimizing word "just" for a monumentally difficult, frankly effectively impossible endeavour.
Let's see if this works for anything else.
"Just make fusion power work to solve world's energy problems".
Holy shit, this works for everything.
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If USA and China can work towards semiconductor independence, why can't the EU?
The USA owns the IP. It makes no sense to be independent in IC manufacture when you don't have anything of your own to build. Full independence makes no sense for Europe, best to build the things your companies own the rights to build like larger nodes and leave the heavy investment to the people who actually own enough IP to pay for it.
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What she says is just does not have the 150 billion € in her pocket. Or actually she has but can't use it for that, it's one year worth of the entire EU budget (excluding exceptional pandemic relief measures).
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What she says is just does not have the 150 billion € in her pocket. Or actually she has but can't use it for that, it's one year worth of the entire EU budget (excluding exceptional pandemic relief measures).
I wonder how much money the EU plowed into Airbus for a long time over their earlier years, before they evolved to be serious competition for Boeing . . . ?
There were for sure folks back then who claimed, "The EU can't do it!"
Boeing was probably the loudest voice among the bunch.
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Airbus was formed by the merger of pre-existing aeronautical companies. They allowed Airbus to exist and grow as a monopoly. This would be "impossible" today due to the EU now strictly following anti-monopoly regulations.
In March 2019, the governments of Germany and of France supported the merger of Siemens and Alstom that would create a new world giant in trains/metros/tramways (the same way the French and German aeronautical industries merged into Airbus), and the commission blocked it in spite of the geo
Re:"I can't do it" (Score:5, Informative)
The EU supported Airbus because the US supported Boeing.
The US gave Boeing around 3x the maximum amount of support agreed in the EU-US Agreement of 1992. That agreement was supposed to stop an "arms race" of subsidies, but obviously didn't work.
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She has far more than that in the various forms of long term investment budgets. It's just that those budgets are already massively oversubscribed with other things that desperately need funds.
If this was deemed a realistic and critical goal, funds are there. Problem is, it's neither realistic nor really critical considering all other more critical problems pressing down on EU as a whole and its member states as each sovereign nation.
Re: "I can't do it" (Score:2)
It makes sense - and it's a strategic need go have a local production facility, even if it don't produce the bleeding edge performance chips it's even more important to produce volumes of more bread and butter chips that can be useful in many applications.
Just realize the price to pay if the Suez canal is closed for a long time or China invades Taiwan.
Re: "I can't do it" (Score:5, Insightful)
Building fabs for the type of chips used in consumer products, which are not leading edge, makes a great deal of sense to protect their domestic industries that require these chips in order to operate. Building fabs for mid-life (or even late-life) chips is much cheaper, as the processes are well proven, the equipment much cheaper (even existing plants may be for sale as the leaders move on), and the demand for the chips very well understood - so very low risk on the market side.
As famously backward in modern electronics as Russia has been and is, it has its own CPU industry. The chips cannot compete on the world market, but they mandated for use in offices throughout Russia. CPUs surpassed the level of performance that businesses and most government operations actually require 20 years ago, more powerful chips since then really has not influenced office operations at all -- except to abstract into the cloud. But if you are running your own physical data centers, and desktop applications, then 20 year old tech provides what you need. So Russia protects its own business and governmental operations from outside interference. Selective production of targeted commodity chips could do a lot to make Europe's supply chain more robust.
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What you say is entirely t
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Unless it allows you to more reliably produce high margin products that include those chips.
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I entirely agree: not being able to finish and sell a $50,000 car for lack of a $1 chip is stupid. But the automaker's profit and the chip maker's are two different ledgers, so it is tough to reconcile and ensure a smooth supply is always available for the high-margin product. There are probably a few PhD theses in economics, or a Nobel, for lending some insight on the problem.
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There are some things you want to fail at since they don't make any sense in context. Think of it this way, why should Europe be 100% self sufficient in IC manufacture when the IP related to said manufacture is not owned by Europe. On the flip side supplying ICs of larger nodes makes sense since several prominent IC manufacturers are based in Europe.
It's the process, stupid (Score:3)
Of course it's not possible if you use the same kind of process they're using in Asia. They've perfected photolithography on Si, and perhaps a few similar processes. They've taken their profit and plowed it back in to that, to make it very sophisticated and impractical for you to duplicate, mostly because you'd have to be producing at their scale for it to make sense.
What you've already got is a lot of research talent. What we don't know is whether or not there's a new process that can compete at smaller scale, or perhaps even make the traditional Si wafer production line obsolete.
The Asians haven't invented such a process because THEY DON'T NEED IT.
Ladies and gentleman, start your test tubes, beakers, ovens and what-nots. For all we know, there might be some cheap emulsion that would make custom chip fab as easy as developing film pictures at home. If not, at the very least there are probably some ways to tweak processes so they scale down better.
For now, it's simply uneconomical so it might as well be impossible; but disruptive technology coming out of your labs could change all that.
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For all we know, there might be some cheap emulsion that would make custom chip fab as easy as developing film pictures at home. If not, at the very least there are probably some ways to tweak processes so they scale down better.
That would be amazing.
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there might be some cheap emulsion that would make custom chip fab as easy as developing film pictures at home
There might be. And if someone in the EU invents or discover it Asia will still end up dominating the process and the EU will still be dependent.
What is actually happening is the opposite; the vestigial things the EU has managed to remain somewhat competitive at are being displaced by new processes. Commercial space isn't coming from Europe, despite Ariane. Electrification of transport isn't coming from Europe, just some also-ran efforts from legacy manufacturers. Soon Airbus will be competing with CO
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The photolithography machines are made in the Netherlands. *Europe* mastered that process. Taiwan and Korea mastered making sure those machines are fed and spitting out chips every minute of every day.
And no, nobody is going to discover a magical mcguffin that makes cutting edge chips in your garage.
Re: It's the process, stupid (Score:2)
No one is totally independent (Score:2)
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EU does produce smartphones (Score:2)
Not impossible, but very damaging (Score:2)
The economies of scale will always win unless governments invest billions to essentially socialize chip production for national security reasons. In order to reduce the damage done by lower production amounts they would have to both subsidize the construction of factories that can never pay off their costs without massive price hikes and subsidize production. Moreover, this wouldn't be a one time deal. It would be a forever deal as new generations require new factories ad infinitum.
Instead of thinking in th
Was like this in the 80s (Score:3)
When I worked in Semiconductors in the 80s the chain was global. Equipment, silicon, chemicals, gases etc came from all over the world [although the equipment was mainly from the US and Japan] plus the wafer dies were then sent to Malaysia for slicing and packaging.
It's going to take bottomless pits of money if you want to isolate that chain to just the EU [with primarily German companies making the money out of it]
Taxes. (Score:1)
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A semiconductor fab complying to EU environmental standards would be crazy expensive and nowhere near competitive compared to other countries where waste is just dumped.
So what are they spending 150 billion on? (Score:3)
The EU Budget for 2021-2027 [europa.eu] includes around 150 billion dollars for "Single Market, Innovation and Digital".
Yet they claim they cannot spend a similar figure over a similar time to gain competence in a core area. What are they even doing now that they think is more successful? Because I don't see signs that any of the 150 billion they plan to spend will do anything.
Heck they could just peel away some of the 1.2 *trillion* dollars they plan to spend "Cohesion, Resilience and Values". Don't their values include not being subservient to everyone? Guess not.
Also there is a 419 trillion dollar allocation to the environment. If anyone really cared about the environment in totality, they would be pushing to move chip manufacturing out of China and into a far more heavily monitored western nations ASAP. But then CO2 alone has long ago pushed aside any notion that pollution is worth fighting.
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Because it's neither a realistic nor a critical goal.
Actually it is a critical goal, they appear to simply be too stupid to realize this.
Good luck being at the mercy of every other nation EU!
But I guess they are used to that, like with natural gas, so maybe they are into that sort of thing.
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Also there is a 419 trillion dollar allocation to the environment.
WTF?!! Citation please.
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WTF?!! Citation please.
If you follow the link I posted, it has everything I mentioned in there....
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You mean '3. Natural Resources and Environment' with 419.9 billion EUR?
This is billions, not trillions, and it is in EUR, which is approximately 1:1 with USD, not 1000:1.
Yes agree (Score:1)
Complete independence might well be beyond the possible (or the commissar's imagination), but having some capacity is a better bargaining chip than none.
I totally agree with this, while total independence may not be possible they could get a long way there and be way les repaint on other countries for entire chips than they are now...
But I guess doing absolutely nothing at all instead of at least trying is cool too.
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Most of the chip manufacturing is in Taiwan, not China.
"Cohesion, Resilience and Values" covers things like the Social Fund that helps deprived areas improve. It's one of the best aspects of the EU and probably does more than anything else to help the Single Market grow.
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The value you quote is not pocket money for side projects, this is the name they gave to the equivalent of "Department of Energy" in USA. This is a significant part of their budget, they obviously don't have margin to duplicate that by their own will. Until today, the EU (not the Member States) operated at zero debt, they, only getting now into debt due to the extraordinary COVID relief fund. The current budget won't change until Jan. 1 2028, so they would need an extraordinary summit of the 27 States for t
Re:So what are they spending 150 billion on? (Score:4, Insightful)
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Don't their values include not being subservient to everyone?
Bwa ha ha!!! Oh ... ah! Hee hee ... whew :)
Oh wait ... you were serious???
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Yet they claim they cannot spend a similar figure over a similar time to gain competence in a core area.
There's no amount of spending which could gain them complete independence in the silicon manufacture. They don't own the IP. They would need to flat out buy TSMC or Intel neither of which is feasible. They can however gain independence in the manufacturing of chips which are relevant for the products they produce and the tech industry which is based in Europe. A large part of this discussion is centered around the chip shortages affecting cars and other larger nodes, chips designed and produced by European
What about ASML? (Score:2)
They make the EUV (Extreme Ultraviolet) gear that everyone uses, in Europe... why couldn't they make a fab or two as well? There's no good reason for them not to have a native fab, even if it's low volume. They have CERN for crying out loud.
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The Edge (Score:2)
-- Charles Morse
Possible, but stupid (Score:1)
It's silly for every country to duplicate the manufacturing of each other. It means things will be more expensive because you require many times as many workers and facilities built. If instead, manufacturing was carried out in different places the amount and types of products we could have would be greater. It is called division of labor. With a 5% unemployment rate .. how are we going to have enough workers to build all the crap china makes for us currently such as cell phones, dishwashers, lamps .. PLU
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Certainly stupid, but not even possible I would argue. Certainly out of reach for EU - which is an organization, not a nation. To be able to mobilize (one could also say waste) the necessary resources for anything even approximating "strategic autonomy", one needs forces that transcend market logic and economic rationality: national interests, national cohesion and more than a dash of national pride. All of which does not exist to any meaningful degree in the EU as a whole.
A little defeatist (Score:2)
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It's not defeatist, it's realistic. I too will bake bread from scratch, but I will do it by buying flower, not by growing my own wheat. The point here is to ensure the EU can manufacture what it needs for EU companies with EU based IP, and not attempt to compete on advanced process nodes for the benefit of American, Taiwanese, or Korean companies who produce products using these nodes.
Speaking of independence, the USA and China won't be able to gain complete independence either. They do after all depend on
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Where the hell are Russian troops supposed to be if not IN RUSSIA. Who gives a s...t about what border they congregate on as long as they stay on their side. You don't see Mexico complaining about Ft. Huachucha in Arizona just 15 miles away from its border do you?