T J Rodgers on Semi Subsidies on CNBC

[Arthur Hanson]

T J Rodgers maintains the government does more damage than good in misallocating taxpayers' money in a so poorly. He maintains the government doesn't have the knowledge or expertise to allocate the money in a wise, productive manor. He maintained Sematech ended up being a waste of money by damaging the supply chain in such a way it causes harmful distortions that play political favorites. T J maintains the industry already has all the money it needs and the distortions of throwing money at the industry will cause distortions in the equipment and supply chains that will do more damage than good. I agree with T J that the industry has all the money it needs, and all extra money will do is cause distortions that hurt the companies that are financing themselves and doing an excellent job. Throwing money at companies that created their own problems has proven time and time again to be a losing strategy for all parties. He also pointed out that government subsidies have a poor record of success.

 

[Daniel Nenni]

I'm with TJ on this one.

U.S. Senate approves $52 bln chips bill in bid to reach compromise

The U.S. Senate on Monday again approved a bill to provide $52 billion in U.S. subsidies for semiconductor chips manufacturing in a bid to reach a compromise after months of discussions.

www.reuters.com

 

[jms_embedded]

All right then, so let me throw this one out here: what's the right answer here? not spend any taxpayer money and let industry players find their own solution? Is there important cooperation that isn't happening because each company is looking out only for its own interests? (This isn't a rhetorical question -- i'm curious what you all think we should be doing as a society, if anything.)

My own opinion is that pure subsidies are a bad idea, but consortium-level organization is helpful in some way (i'm just not sure which) and maybe an "X-Prize" style use of funds could be useful.

I don't trust pure capitalism to find the best answer on its own.

 

[Jozo035]

 

[coldsolder215]

All right then, so let me throw this one out here: what's the right answer here?

Organized labor, particularly among white collar types whose value is not so easily offshored despite India's best efforts. If the PMC could get over its ego and form a union then people like Ginny Rommetty and Brian Kyrzanich wouldn't get away with their crimes against American industry. Instead they use HR to turn their shops into bear pits and while everyone is busy trying to climb over one another they rip the copper out of the walls.

 

[Arthur Hanson]

All right then, so let me throw this one out here: what's the right answer here? not spend any taxpayer money and let industry players find their own solution? Is there important cooperation that isn't happening because each company is looking out only for its own interests? (This isn't a rhetorical question -- i'm curious what you all think we should be doing as a society, if anything.)

My own opinion is that pure subsidies are a bad idea, but consortium-level organization is helpful in some way (i'm just not sure which) and maybe an "X-Prize" style use of funds could be useful.

I don't trust pure capitalism to find the best answer on its own.

Back TSM over Intel as they build out their Phoenix foundry, why put your money in an also ran and get a return on our money, The government should buy a new stock issue that can be sold in a few years at a profit.

 

[jms_embedded]

Back TSM over Intel as they build out their Phoenix foundry, why put your money in an also ran and get a return on our money, The government should buy a new stock issue that can be sold in a few years at a profit.

I don't want my tax dollars picking winners and losers to "invest in", even if a choice appears to be obvious, which it isn't. Are TSMC and Intel the bottlenecks / supply chain risks here? I don't think so. (Maybe that's how the CHIPS act is going to work? grants/subsidies to large companies? if so, that's sad.)

I can picture lots of people laughing at this administration's survey last year. ("A survey. A survey?! That's how we're going to beat the shortage?") But it seems like the way to go is get some better sense of where the risks are, and support research / technology development to alleviate risks. ASML comes to mind, if EUV is one bottleneck; how do we get more machines? Perhaps OSAT supply chains are another....

 

[VCT]

Half subsidies and half prefer stock could be better.

 

[lilo777]

T J Rodgers maintains the government does more damage than good in misallocating taxpayers' money in a so poorly. He maintains the government doesn't have the knowledge or expertise to allocate the money in a wise, productive manor. He maintained Sematech ended up being a waste of money by damaging the supply chain in such a way it causes harmful distortions that play political favorites. T J maintains the industry already has all the money it needs and the distortions of throwing money at the industry will cause distortions in the equipment and supply chains that will do more damage than good. I agree with T J that the industry has all the money it needs, and all extra money will do is cause distortions that hurt the companies that are financing themselves and doing an excellent job. Throwing money at companies that created their own problems has proven time and time again to be a losing strategy for all parties. He also pointed out that government subsidies have a poor record of success.

Well, obviously you like his philosophy (advocacy of laissez-faire capitalism). You seemingly post about every his appearance on CNBC. The last one was here, so we already discussed it. Is it a surprise that [some] extremely wealthy individuals (T J Rodgers estimated net worth is $553M) prefer the government to lower the taxes and not interfere with "their" business?

 

[hist78]

I'd like the government to spend taxpayers' money only on military or national security related semiconductor programs and capacity. Other than that, it should leave the market to decide what, where, which, who, and how many the chips should be made.

Can federal government decide which node process, which product design, and which manufacturer will produce the best chips for controlling Ford F-150 pickup trucks' windows or AC? Imagine F-150 is just one of the model among many cars Ford makes and Ford is just one of the many automakers. Imagine automobile is just one of the many products needs semiconductors.

If US government can't answer the above question, then how can they know where to send the subsidies to? Unless they treat it like gambling in Las Vegas casinos.

 

[lilo777]

I'd like the government to spend taxpayers' money only on military or national security related semiconductor programs and capacity. Other than that, it should leave the market to decide what, where, which, who, and how many the chips should be made.

Can federal government decide which node process, which product design, and which manufacturer will produce the best chips for controlling Ford F-150 pickup trucks' windows or AC? Imagine F-150 is just one of the model among many cars Ford makes and Ford is just one of many automakers. Imagine automobile is just one of many products needs semiconductors.

If US government can't answer the above question, then how can they know where to send the subsidies to? Unless they treat it like gambling in Las Vegas casinos.

Look how it worked out in the last couple of years. Is not that one of the reasons the government finally decided to do something about it?

 

[jms_embedded]

I'd like the government to spend taxpayers' money only on military or national security related semiconductor programs and capacity

I definitely agree with you on that.

Can federal government decide which node process, which product design, and which manufacturer will produce the best chips for controlling Ford F-150 pickup trucks' windows or AC?

That's not the right question for the government to answer, and I don't want directly it handing out funds to pick winners and losers.

If we're going to spend taxpayer money, we (well, some appropriate agency) should work with the semiconductor industry and first figure out what it is that the industry can't do on its own. Spend more on capital equipment? Then give a small across-the-board tax break for capital equipment spending. Find trained workers? Then put money into scholarships/fellowships for electrical engineering related to the semiconductor industry. Is there a particular aspect of the supply chain that is at risk? Then find a way to incentivize any solution that helps, regardless of who finds it. Don't pick winners and losers.