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T J Rodgers Says Government Wastes Money

Arthur Hanson

Well-known member
On CNBC today T J Rodgers says every time the government hands the chip industry money, it has been squandered and wasted and gave several examples. He said Intel has all the money it needs and doesn't need to be given money. He also stated that poor management not only caused Intel's problems, but auto companies poor management of their inventory with the exception of Toyota caused their problems. He also stated the only chips that really matter are the high-end chips now, for everyone is now making simple chips. He also stated Intel should spend their own money, not the governments. He clearly stated, "Run your company better, don't ask for help".
 

Daniel Nenni

Admin
Staff member
I agree. To make things worse Apple is saying that next quarter revenues might be reduced due to a chip shortage so the false narrative continues. Apple under forecasted mature node chips like many other companies so what did they expect?


- In the current quarter, Apple expects revenue to be $3 billion to $4 billion less than what it could be if Apple could build enough iPads and Macs to meet demand.

- It turns out Apple is dealing with the same microchip shortage that has snarled companies and industries around the world.

- Apple CEO Tim Cook said the issue was not in the bleeding edge, high-performance chips that power the heart of its gadgets, but in “legacy node” chips which use older manufacturing methods.
 

tooLongInEDA

New member
TJ is bang on here. Intel has voluntarily chosen to spend billions of doallrs on share buy-backs in the past several years. Since they presumably believe the ROI/capital from that is greater than investing in fabs. Their first order problems do not seem to include lack of money.

If Intel's view is correct, the US government would surely be better buying Intel shares than giving them the cash.

Thinking out loud - if the US has a strategic need for domestic fab production, is it not possible to come to some sort of joint venture arrangement with TSMC ? Or do TSMC simply refuse to do this sort of thing ? You would imagine the US has some leverage as effective defence guarantor of Taiwan.
 

herbs88

New member
Which chips are in short supply exactly? Those chips are in Macs and iPads but not in iPhones? Who designed and who made those chips?
Apple designed their own PMICs.
the iphone 12s employ APL1094s. APL1096s & 1097s were used in the M1 macbooks. My guess is that the new M1 iPads could be using 1096s also. TSMC fabricated the PMICs on 200mm wafers, definitely mature nodes...
 

lilo777

Member
On CNBC today T J Rodgers says every time the government hands the chip industry money, it has been squandered and wasted and gave several examples. He said Intel has all the money it needs and doesn't need to be given money. He also stated that poor management not only caused Intel's problems, but auto companies poor management of their inventory with the exception of Toyota caused their problems. He also stated the only chips that really matter are the high-end chips now, for everyone is now making simple chips. He also stated Intel should spend their own money, not the governments. He clearly stated, "Run your company better, don't ask for help".
It sounds like he wants to say that everyone but him is stupid. I have no idea what the root cause of the shortages is but clearly pandemic caused massive disruptions and dislocations. It's not always possible to predict the future. The fact that this criticism comes from Mr. Rodgers is interesting. Here is what Wikipedia says about him: "Rodgers is known for his public relations acumen, brash personality, and strong advocacy of laissez-faire capitalism". So he objects to all subsidies on philosophical grounds. Also, him being a founder and long term CEO of Cypress Semiconductor, how well is Cypress doing? It looks like they shipped most of their manufacturing to South East Asia. So he is technically one of the reasons why US Government now has to do something avout domestic semiconductor manufacturing.
 

Daniel Nenni

Admin
Staff member
Which chips are in short supply exactly? Those chips are in Macs and iPads but not in iPhones? Who designed and who made those chips?

Apple has mature node chips at Samsung and TSMC. Samsung has had some problems in Texas so that may be it. Samsung makes Apple chips in Texas.
 

james juang

New member
Apple designed their own PMICs.
the iphone 12s employ APL1094s. APL1096s & 1097s were used in the M1 macbooks. My guess is that the new M1 iPads could be using 1096s also. TSMC fabricated the PMICs on 200mm wafers, definitely mature nodes...
PMICs must be the hottest item in the world. QCOM has trouble allocating enough wafer capacity for its own PMICs too. I wonder if TSMC's Nanjing expansion has anything to do with this particular shortage.
 

herbs88

New member
I wonder if TSMC's Nanjing expansion has anything to do with this particular shortage.
I am not too sure about that. The Nanking expansion should be focused on 28nm. The BCD node TSMC uses for consumer electronics should be 200-mm/90nm. Even for high-end mobile devices, they would be on 300-mm/40nm.
 

james juang

New member
I am not too sure about that. The Nanking expansion should be focused on 28nm. The BCD node TSMC uses for consumer electronics should be 200-mm/90nm. Even for high-end mobile devices, they would be on 300-mm/40nm.
Yes! Not sure if CMOS 28nm is able to provide enough current. UMC also has an expansion plan for 28 nm. Given TSMC's 28 nm utilization rate has not been very impressive for quite some time, what is their thinking then?
 

Arthur Hanson

Well-known member

Having worked on numerous government projects of many types, the allocation and application of capital and resources are dominated by politics at the cost of substantial misdirection and waste once it's applied. Even when the best companies and people are involved, they are usually significantly constrained in the application and use of resources with rare exceptions.
 

TDaly

Moderator
Rodgers makes a correct argument for a free market approach to the general issue of supply-demand and sourcing in industry. The invisible hand knows better than government. Industries that whiffed on demand forecasting and inventory management during COVID (or any other time for that matter) deserve no pity, inclusive of and starting with the auto industry.

That said, the free market misses a key dimension of "hand-eye coordination": national security. The free market is blind to the geopolitical threat of the over-concentration of supply of products critical to national security in specific regions. This is the case the US is dealing with today.

The CHIPS ACT should be tightly focused on incentivizing the re-shoring of production only of key technologies that the US is missing, specifically those that are critical to national security (defense, intel, cyber, space) and critical infrastructure. Public funding to incentivize and accelerate basic research and workforce development (STEM education) is also worthy. The semi industry and its downstream customers have the incentive and capital to fund the development, ecosystem build-out and capacity to translate basic research into economic value add. But they will focus their investments on the regions of the world that optimize the combination of financial returns, efficiency in supply chain, access to talent and customers, and acceptable political risk mitigation. The past 30 years has demonstrated this optimization is not in the US.

A focused, well structured and run CHIPS ACT can mitigate US national security risk by changing the optimization equation and being a catalyst to re-shore critical technologies. Rodgers misses the point that the objective of the ACT is not and has not been to "fix chip shortages".
 
I was only half listening, but I think the President of TMSC
CEO on 60 minutes last night said TMSC would be caught
up with its customer order by end of June.
 

chipsntexas

New member
Rodgers makes a correct argument for a free market approach to the general issue of supply-demand and sourcing in industry. The invisible hand knows better than government. Industries that whiffed on demand forecasting and inventory management during COVID (or any other time for that matter) deserve no pity, inclusive of and starting with the auto industry.

That said, the free market misses a key dimension of "hand-eye coordination": national security. The free market is blind to the geopolitical threat of the over-concentration of supply of products critical to national security in specific regions. This is the case the US is dealing with today.

The CHIPS ACT should be tightly focused on incentivizing the re-shoring of production only of key technologies that the US is missing, specifically those that are critical to national security (defense, intel, cyber, space) and critical infrastructure. Public funding to incentivize and accelerate basic research and workforce development (STEM education) is also worthy. The semi industry and its downstream customers have the incentive and capital to fund the development, ecosystem build-out and capacity to translate basic research into economic value add. But they will focus their investments on the regions of the world that optimize the combination of financial returns, efficiency in supply chain, access to talent and customers, and acceptable political risk mitigation. The past 30 years has demonstrated this optimization is not in the US.

A focused, well structured and run CHIPS ACT can mitigate US national security risk by changing the optimization equation and being a catalyst to re-shore critical technologies. Rodgers misses the point that the objective of the ACT is not and has not been to "fix chip shortages".
This take here is spot on in my estimation. TJ is very good when it comes to the market, but as you state he has missed the primary point of both Chips Act & supply chain concerns. Intel alone cannot fix this, as they are not the part of the supply chain in peril so much as their suppliers. Overall improvement of domestic supply, from materials, equipment, knowledge and talent - those are critical and the focus of these efforts. TSMC, Intel and Samsung expanding will only work if they have enough support around their domestic sites. And that's really the whole of the discussion - can the US provide that? and how/when?
 

Daniel Nenni

Admin
Staff member
I was only half listening, but I think the President of TMSC
CEO on 60 minutes last night said TMSC would be caught
up with its customer order by end of June.

TSMC can only speak to wafer production but there are many more steps in making a chip especially when it comes to automotive chips. Wafer production will not be a problem in 2H 2021 and beyond. Mark said it very clearly: Automotive cut orders in 2020 and were caught with a surge of business in 2021 and now there is panic chip buying. This is deja vu to the toilet paper crisis we had in the US last year. Thanks to my wife we now have enough toilet paper to last a year. The automotive supply chain is doing the same, absolutely.
 
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