Quite a post kg5q! I especially liked “we need more VPs and MBAs thrown at the problem!”
I worked at a fab where they threw McKinsey at the problem. This was in 2006 and 2007, in 2009 the fab shut down for good.
I think it must be a shock for software-oriented management, when they encounter the manufacturing sides of businesses like Intel, or Infineon. In manufacturing, so much depends on regularity, predictability. Software is the opposite—you sprint, get into a market and sprint to the next thing. It’s true that software is eating the world, and scales better than hardware. So I don’t think there was any big conspiracy, over the last 25-30 years. Intel is part software, and that’s the part that sustains them now. Same at AMD. It was just the obvious move.
To build fabs in the US, you need more of everything we don’t have anymore. You need more chemicals, concrete, skilled trades, machine shops, electrical grid upgrades, road upgrades, and most of all predictability. In Asia, somehow, they get predictability. Here, things can be predictable, in a bad way, and unpredictable in a bad way. Just discussing government involvement in an industry, which we think of as fine in the US, doesn’t sound fine in Asia. It sounds like a big change. Unpredictable.
I feel like there is a role for government, in getting infrastructure in place, making it possible to permit new global scale chemical production, and the rest. It would help semiconductors, and other chemical-oriented industries. Its an uncomfortable fact that fabs rely on reliable supplies of chemicals, more than anything else, and we’re constrained in the US. We import a lot, and it’s crazy; expensive, takes 6-8 weeks, and you have to keep a 40 day supply. In Asia, they can operate lean and mean and bank the cost savings. The US supply chain has holes everywhere though, from PPE (my god, we have to be able to make N95 and surgical masks in the USA!!), to production of certain grades of steel, to high spec high volume machine shops. A million little holes.
It’s a lot of little things, little cuts and efficiencies, that got us in the helpless position we are today, begging for Lithium, rare earths, high purity chemicals, PPE, etc. It can be reversed, but, the strategy is still the same, slow decline. I think all of us would notice if the US strategy truly changed. But it hasn’t yet.