We all know that local governments keep throwing money at businesses or sectors to achieve new goals, save or develop new jobs and even create more with that money. But in semiconductors, everything is very different, as the costs are more and more extreme and the competition is more and more fierce.
Costs keep rising, pressure is stifling, competition doesn’t stop
The reality is that all of the big companies that dominate the industry today are receiving public funds in the form of money, land, facilities, or any other legal trick to pay less taxes and be more profitable.
And it is that the cost / benefit ratio must be very favorable if we want to continue on the crest of the wave. We’ve seen giants like Global Foundries bite the dust, Intel is in big trouble and Samsung can barely keep up, while TSMC doesn’t seem willing to slow down.
Customers request newer nodes, but there are two options: modify the current factories with the costs involved, or create new ones from scratch. Normally the ideal is to update existing processes, but this involves stopping production of still profitable lithographic processes, which is why it is often decided to create a new “Fab”.
The current cost of a modern Fab can easily go up to 20 billion, and while the benefits this will bring to the business are much higher, there are other key aspects that you need to consider.
R&D is the most expensive thing in any semiconductor foundry
As expected, the biggest expense in any next-gen lithographic process is done through R&D, but contrary to what one might think, not all expenses are in the innovation section, not at all.
There are very large expenses and in many areas within the node itself, such as basic science, materials science and a long etc … Those of you following us will know that inch is expected from transistors every year or year and a half, two years as a maximum if everything is delayed, suggesting that not only do we have to move forward, but that there are very short deadlines.
For this reason, from China to Taiwan, via the United States or the Netherlands and the EU, they put hot money in the coffers of major companies and even universities (incoming engineers) in order that the competitive position is at least maintained.
But it is more and more worth moving forward, so even if the money has no return for a state and it is not planned, it is synonymous with the fact that what we try is to invest to eliminate competition and establish leadership alone.
US, China and Taiwan marginalize EU without semiconductors
The United States of America plans to spend $ 12 billion on its new law called CHIPS, which aims to improve the competitiveness of its businesses or establish its dominant position, as the case may be.
China is doing something very similar with its program “Made in China 2025Where the minimum wage has received such a sum of money that if it weren’t for the American bans, we would currently speak of a rival for TSMC, but present in the immediate future.
The United States and Taiwan have signed a cooperation agreement to improve scientific cooperation for new materials for new semiconductors, where the game seems clear: to get ahead of Samsung and TSMC in a few years, enjoying the independence that they will grant both.
On the other hand, and although the EU has mobilized, there is no leading company in the semiconductor industry at present and we base all our efforts on maintaining ASML on the crest of the wave, which although it is a solo leader crushing the competition (if at all after EUV has it), we do not have any companies or foundries that make chips.
The fear of war and its weapons covers it all
Part of the money invested has a very clear purpose: weapons for the army. Any technological improvement in an army is a possible advantage in wartime and governments understood this over 30 years ago.
The semiconductor problem on American soil, for example, is of concern to the government, where the Department of Defense has gone so far as to say the following:
There are currently no commercially viable options that a state-of-the-art foundry located in the United States can provide to manufacture the guaranteed state-of-the-art custom integrated circuits and commercially available products (COTS) required for mission-critical systems. of the Department of Defense.
Clearer, water … A government invests not only to crush competition with its companies, it is not in vain that we are in an extreme capitalist system, but to obtain more advanced technology for its army and use his weapons as a deterrent in case the country of the turn does not enter the game you want.
Therefore and given the increasing costs, the movements of governments and their companies, it is clear that the investment will increase, because it is not a way to win the game, it is a way to protect the country and yours by beating the competition.