> So far, however, the law has done little to spur the construction of new semiconductor factories in Europe. The European Court of Auditors concluded last year that the EU is unlikely to achieve its goal of doubling Europe’s share of the global chip market by 2030.
They should make another law and probably a few more commissions of auditors.
I get its sarcasm but TSMC has done so much to try to get the Americans getting some decent yields in their new factories and it's failing so hard, there's real questions about whether they can ever meet their targets. They've sent thousands of existing Taiwanese workers to help at this point and from anecdotal things I hear it's not going well. (I live in Taiwan)
This stuff is all blood, sweat and tears to get it done, and to be honest a culture.
You can't just buy it off the shelf. If that was possible everyone would have gone paid for it like an Ikea product years ago.
Investment is risky and uncertain. If you did not do anything because it might fail, you would do nothing at all.
The inability to cope with failure is a culture that is common in Europe. Failure is so personally devastating, so destructive to social and cultural standing that not only must you not take risks but other people must be actively prevented from taking risk.
Maybe the US investment doesn't work, but the US will have tried at least. Taiwan is, ironically, the perfect example of where the initial impetus came from the government because there was no culture of risk-taking. Parts of Europe have a savings culture that is very similar to Taiwan and led to very poor growth and very high inequality.
If the US keeps trying, they will succeed. On here, the view was that China could never build out this capacity, they did. The only way to guarantee failure is to never try.
That's part of the culture OP was referencing. Another part is not having ad tech jobs easily available paying 5-10x as much for easier work. A big part of Asian success at hard tech fields is just not having better options.
The amount of supercars and high end vehicles in Hsinchu is unreal. Probably all anyone needs to know here, until you've seen it firsthand you wouldn't understand.
Great point. I read about this a few times. Here is a juicy quote that I found: "Ferrari sales in Taiwan doubled over a four-year period." Yikes! Hello, new money!
I get the sarcasm, but its not like e.g. TSMC popped up in a environment of pure libertarian free market capitalism. It was, from the beginning, a project of the Taiwanese state, and without significant public influence there is no way it would have become what it is. Are the EU laws what's needed? IDK. But without a proper public industrial policy besides "low taxes and few regulations" there is no way Europe will be able to get significant semiconductor-production up, the rich-get-richer phenomenon is just to strong.
I think the point is that laws alone mean nothing. As you note, Taiwan was more active than just having commissions and signing papers.
Airbus proves the EU can do this. It remains to be seen if they still have the ability to take constructive action, or if “add more bureaucracy” is the only tool remaining in the toolbox.
Airbus has been grandfathered into the current legal situation. Today a future Airbus would not be able to even start collecting data for its initial Environmental Impact Study.
And Boeing's rampant carelessness proves European laws can be beneficial. "Hurr durr, how about them European laws" is a low-effort comment that adds nothing to the discussions.
The argument that a slack regulatory environment is sufficient was disproven when the US government subsidized new fabs via the CHIPS Act (a new law!), and then went further and partially nationalized a failing Intel to prop it up.
I’ve seen someone explaining why it’s not as easy with semiconductors: Airbus can spread several different factories for different components around the EU. For semiconductors that’s not as feasible.
Thus countries would fight which one would have the semiconductors factory.
I think it was more or less this argument, which seems to make sense.
Another interesting fact is that Che-Chia Wei (the man who made TSMC what it is) received zero equity. Everything he has he bought himself at the market rate.
Don't you mean Morris Chang/張忠謀? He was the founder. Also, this near-meme level phrase "received zero equity" is meaningless when you are paying senior executives millions per year. They just buy shares with their earnings. He was one of the highest (if not highest) paid executive in Taiwan for more than a decade.
It was, from the beginning, a project of the Taiwanese state, and without significant public influence there is no way it would have become what it is.
Fun fact in this context: (Dutch) Philips was a major initial investor in TSMC (both in money and IP):
Only Philips was willing to sign a joint venture contract with Taiwan to put up $58 million, transfer its production technology, and license intellectual property in exchange for a 27.6 percent stake in TSMC.
Bosch never said that though, the "AI" stuff was about the production methods used in the fab, not that the fab produces chips "for AI". Instead these are fairly simple controllers going into cars.
Can you share any official communication where somebody claimed this fab was for AI?
It was pretty clear that this fab - much like the other Bosch facilities - is going to be for automotive and industry ICs, not for high end node sizes in CPUs or GPUs.
I think I've read "power management chips for AI" somewhere. Probably technically correct, but also a somewhat gratuitous reference to the current thing for silly PR reasons.
I don't think this is merely a gratuitous reference given the fact that AI demand is probably - among EVs - a key driver for the sales of power related ICs.
You probably mixed it up with the Infineon Smart Power Fab.
The Infineon Smart Power Fab was opened some months ago and builds power ICs for the energy market. Probably something like ACDC and DCAC converter ICs. This is also needed in AI data centers.
https://www.infineon.com/de/regional/dresden/smart-power-fab
European Semiconductor Manufacturing Company (ESMC), the TSMC fab in Dresden is still under construction and will produce logic chips in 28nm or 16nm. Bosch, Infineon, and NXP each have 10% share in this fab. I assume that it will mostly produce products which will be sold by these 3 companies, probably just the next generations from what they already sell. This fab was 50% subsidized by the German government.
GlobalFoundries also has a big 20nm Fab in Dresden.
The most advanced logic fab in the EU is the Intel fab in Ireland.
It is somewhat disappointing that Global Foundries basically stopped participating in the leading edge process node race around the time of the split with AMD. The world is in a rather precarious place with virtually all eggs in the TSMC basket.
[ Intel has yet to prove that it can sustain itself as a foundry for third parties, and until they do, I have a hard time believing the massive culture shift required across the whole company can be achieved without splitting the company up into separate parts. Samsung has fallen behind, but at least they have diversity across a variety of markets including HBM. Neither have leading edge fabs in Europe, so everything continues falls back on TSMC. ]
The fab itself can still be "state of the art" even when the product isn't (Germany needs chips for its industry, not for gaming PCs or AI data centers).
We both know that feature sizes became marketing names over a decade ago. The "12 nm" for that fab are of course the marketing name. In any case, it's a seriously old process at this point.
I think it's still /somewhat/ close to feature size - I think the fin pitch of the "N3" tsmc process was about 5nm, which gives a "minimum feature size" of ~2.5nm to ensure the "gap" between them.
I think one of the big differences is that the "Gate Contact Area" simply isn't the smallest "feature" anymore - but the ITRS that defined those names called it "feature size", not "gate size" from the beginning intentionally.
You probably could make a transitor with a gate size of a similar order to the "feature size", it'll just perform awfully to be completely useless.
1. They provided evidence (construction of a fab in Dresden).
2. Executives lie all of the time.
Aside: after all of the denunciations of AI companies claims of danger, I expected comments here to be denouncing this as a “ASML shill article trying to get the government to buy more of their product”. Not that I believe, but the contrast is striking.
since when are executives statements meant to produce more investment into them trustable?
even more so it is reasonable to assume their (executive) statement was a simplification ignoring small for the overall statement irrelevant exceptions
like ignoring there being a factory build which is small and only meant for older nodes producing embedded chips and is for the car industry only
because honestly while the factory does matter for Bosh, it doesn't really make much difference for the larger picture of chip production in the EU
I think there's potentially confusion around timing; the order for this facility would probably have been a year or so ago, so fits with not selling anything in 2026.
The claim in OP is that "ASML currently sells no chipmaking machines in Europe". A single chipmaking machine purchase into a fab in Europe would be enough to prove that claim wrong. The number of fabs in Taiwan is irrelevant to this claim.
They are not cracking EUV, they are finding ways that actually scale. Chips can be much cheaper than they are currently. I mean yes, obviously we cannot be confident ntil it happens, but they are already making 5nm with DUV.
When China leads chip making the rest of the world is just vasal states.
Going to higher densities with DUV needs high multi patterning which is very inefficient and ends up costing more than if they could do EUV with fewer patterns.
It's well known tech that is used globally, just not to that degree as yield and throughput goes way down
they'd just tell all their export ships to turn around and stop all exports
US would collapse in 30 days
it would be like the blockade US is doing to Cuba except 90% of every product we use and they wouldn't have to fire a single shot
they could also sell off the billions in US bonds and other assets
US economy would be utterly destroyed, we'd never recover because even the middle-class would be living out of their cars (now dead because all the parts for them are made in China)
Happy to hear India got mentioned by the same executive during that conversation. We are just started buying from them. I went to Semicon India 2026, held in delhi last week. The energy was amazing. Really pleasant. all big names including ASML.
It's is heartening looking at a country like India and thinking that it only seems to be a little behind China on the same trajectory. The little flashes of news as they start settling in to more interesting and high tech industries. Whatever good or evil comes out of their growing geopolitical power at least that is another billion people with a clear enough path to wealth and prosperity.
In my opinion, India is around 30 years behind China. This is unlikely to change for several reasons. However, the primary reason is that no Indian government ever had a manufacturing policy that comes close to China's. The service economy is strong but employs a tiny percentage of the population.
Most of Indian government spending is on welfare followed by endemic corruption. It leaves very little money for nation building.
Thirty? Try more like 10, and that’s only for the advanced nodes. Everything else, we will have capacity coming online soon enough.
Design, the gap is nonexistent in terms of talent deployed (though we have some way to go to have homegrown product companies). Which puts us roughly where Europe is.
Also consider, a tiny percentage of the Indian population is a ridiculous number of people. Dwarfing pretty much any other country except China.
Your last point on welfare and corruption is also false; 35% of government spend is on interest payments (which is kind of normal for most countries?) and 30% is on infrastructure and other capex. Defence is 8% and central welfare schemes plus co-sponsored schemes with the states are only 26%. The point being, while corruption is definitely a problem, it doesn’t significantly come out of the central budget. And welfare is smaller than infrastructure spending even if it’s quite significant (and it better be, in a country like this).
The infrastructure spending is where and how the corruption happen. The cases of bridge collapses in bihar gujarat, the mp 90 degree bridge etc should be obvious cases of corruption.
If India is 10 years behind China, that would mean in 2036 India will be where China is today. What's the chance of that happening?
Only an estimated 6 million Indians work in IT and tech services where the money is. India's working age population is approximately 950 million. India had the golden opportunity to bring manufacturing to India when Western companies wanted to reduce their dependence on China. But it wasted it.
I don't know where you are getting that 30% spending on infrastructue.
The 30% spending is from government numbers in the last budget, so let’s get that out of the way.
How many people do you think could conceivably work in manufacturing? And who buys all those manufactured goods? The social problem isn’t solved by quotas.
India's data collection is much worse than China's but we can also look at other metrics like exports. India exports less in total value than a resource-starved, tiny nation like South Korea.
Thus, India could at least add another 100 million manufacturing jobs, along with an additional 100 million service jobs to support manufacturing in logistics, trade, maintenance, customer support, insurance, and food service.
Given the structure of Indian constitution which gives very little power to local governments to raise revenue and build infrastructure, India is structurally limited as of now from ever becoming as developed as China, let alone western countries.
I see India becoming more like Brazil than China. That's not necessarily a bad thing since even Brazil is 4-5x richer in per capita than India.
> India's lead in pharma manufacturing is because of their willingness to ignore US patents
US patents are only valid in the US. India is not "ignoring" anything by not following foreign laws. Can someone with an Indian patent enforce it in the US?
"A PCT application does not itself result in the grant of a patent, since there is no such thing as an "international patent", and the grant of patent is a prerogative of each national or regional authority."
The opposite, all historical clear paths i.e. manufacturing/export led model is closed/closing (geopolitics + being automated away). Less clear service export also closing. The growth path that employs 100s of millions and 10s of millions are not available to Indian.
Reality is even PRC with most favorable conditions still left behind ~400m people because there's only so many opportunities. It's one thing to have ~1B who made it supporting ~400m who didn't vs India trending towards 1.7 B... and if they end up with 500m that makes it, and 1.2B that doesn't, then things may get very ugly in terms of governance. Now that 500m middle/upper class is large enough that India will in aggregate "make it" as geopolitical power, as in climb the tech tree, but due to sheer population and opportunities that looks now foreclosed, most of Indian's statistically, simply, won't. And when numerator/denominator of haves/have not too skewed, there's nothing haves can do (redistribute) even if they wanted to, which lbh, they won't. IMO this pretty much baked in dynamic for India for next few generations, unless we discover abundance.
with generations of parents forcing thier children to either be doctors or engineers, I would have expected India to lead the world in both of those categories.
They kinda did that to themselves, but it's slowly changing. My partner's iPhone 16 is made in India. They really do lack waste management infrastructure though, and it's pretty crucial for this type of manufacturing. They should also borrow the regional concentration of industries that China has done, it really does make things more efficient.
You can't just "borrow" some of the things from China without China politics. Regional concentration there is directly tied with their hukou system. No democratic government is able to implement that system without collapsing.
Most of China development is sui generis and not replicable elsewhere.
I've seen (at least in prior decades) a similar phenomenon where certain more laissez-faire US folks talked up Hong Kong's reputation for business-friendly taxation. Yet the other necessary parts of the system were glossed over, like the massive sovereign-wealth fund, or how half of all housing was government-run or subsidized.
I lived there, damnit! It sounds like you're some dude who saw Singapore Fun Facts once, and now you simply can't imagine that similar circumstances could arise more than once.
* Hong Kong does have a sovereign wealth fund, currently 10th biggest in the world [0]. It doesn't disappear just because Singapore's is bigger.
* Here's a article from 2021 with a nice stacked-graph showing 45% public housing. [1]
China is very much repeating the history of Japan, and while we can argue how democratic Japan was in the second half of the XX century it definitely wasn't totalitarian.
I don't think the important part is actually one for one replication of the system in China. I think the key parts to deliver progress are diversity of investment decisions, competitiveness in markets, and stable long term goals & fiscal support.
It's too easy to get tied up in political labels, when any hybrid of public and private support for those helps growth. None of political ideas has an exclusive lock on providing the factors. At this point, I really don't think any political system guarantees the development outcomes, there are examples of all labels which fail one to all of those progress factors.
> They should also borrow the regional concentration of industries that China has done, it really does make things more efficient.
That is actually something of a natural phenomenon (see [0] it is a large topic). Historically when a centre of excellence forms it tends to be a tight geographical region learning how to do work well.
Government policy should be cluster-friendly but as long as policy doesn't get in the way it happens naturally. The incentives on businesses are to form a cluster independently because the cluster in-group outcompetes businesses outside the cluster.
This happens ‘naturally’ but in China’s case I would say the majority is planned, see Shenzhen were 90%(?) of the worlds electronics are coming from. The basically send the engineering corps there, flattened the land with explosives and build a special economic zone.
Its a pretty complex topic. There are some hints in the book Extrastatecraft by
Keller Easterling, also the Great Leap Forward by Rem Koolhaas and a dozen more urbanism books. But these only highlight specific aspects, of which there are still many to be talked about.
"One example we use is the No.3 Memory of Lenin Tractor Repair Factory in Zhuhai, which already in 1973 had started repairing tractors outside the plan. It would take tractors that needed to be repaired from other units, repair them on the side of the plan, and then get payment in kind. That payment in kind was then either bartered further within Guangdong, or smuggled downriver to Hong Kong. By 1973 this unit had a Hong Kong bank account. If this had been discovered at the central level, these people would have been shot."
Turning Shenzhen from an off-limits border area into a special economic zone made it easy for those businesses to go legit and grow, but they were already waiting in the shadows to seize that opportunity.
Nice reference, thanks! And yeas, for sure proximity to Hong Kong was a big part of this! It is a financial hub, was a production hub, smuggling, triads, international hub, tax haven, the list goes on.
“Made in” has no clean and clear meaning, because our world is so interconnected that everything of sufficient complexity is made from parts that are made from parts that are made in other places.
The iPhones that are “made in india” contain sub-assemblies that are made in china, that contain chips that are made in taiwan, made of metals that were mined in africa, wrapped in plastics derived from middle east oil.
In this case, the motivation to finish a product in India is mostly about tariff bypassing; with the final assembly being pretty minimal. Not quite putting the badge on, but close.
A good metric is the difference in value between the precursor and the final product; for most Indian phone production, it's less than 1%.
This is also a big reason why Indian export headlines are a bit silly; they never account for the increased import associated with the high value components.
Unclear if this will change going forward; there are some companies doing a higher proportion of the value chain in India, and some big incentives... But to me it's unlikely.
> the motivation to finish a product in India is mostly about tariff bypassing
I don’t think that’s the whole story. Apple started making phones in india in 2017, back when the tariff situation was merely a twinkle in epstein’s best friend’s eye. I think back then it was about general supply chain diversity, more than tariffs specifically. Useful in cases of natural disasters, or trade embargo, and leverage in business negotiations.
By 2024 they were making 36 million iPhones in India, you don’t get to that capacity if you start in november, after the election. Way I see it india was the backup system, and tariffs are the reason they are using the backup system - not the reason they built the backup system in the first place.
> A good metric is the difference in value between the precursor and the final product;
I agree, that’s a useful metric, especially in this case. But it’s also not perfect. E.g. it’s easy to have a >50% “made in USA” product if all the parts are made in china but the last assembly step takes time. Labour in the US is more expensive, so 5-10min of clicking parts together can easily cost more than the parts themselves. You could increase the capacity of that type of manufacturing indefinitely without ever gaining any real independence.
TBH India going to sanctioned if they ever make meaningful inroad. Outsourcing some IV design to Bengaluru, Hyderabad, prune is not the same as if India wants to start stepping on leading edge fabrication money printing toes. But short/medium term, western semi projected to have 100,000s talent shortage so India probably best hope for western semi to stay staffed. VS PRC who is brrrting out enough talent for entire indigenous vertical semis supply chain.
Microchips? We don't do that in Europe. We need to invest on sending boomers on cruise ships and importing more Africans. With enough extra debt and directives it will work itself out. Probably.
Misleading article, they are selling to corporations already who in turn have plans to create a few fabs in Europe. So it is maybe more about European companies who are not buying, but that rests on difficult capital availability and fragmented nature of the continent. Europe is not one country after all, someone wants a fab in Germany, but the why is it not in France or Sweeden.
The EU needs to stop acting as if all is fine. The EU commission is totally useless, from A to Z. There is zero strategy in play here. They need to take a much more pro-active stance - fining US companies that work against europeans is fine, but you also need to have viable alternatives. And that simply is not happening right now.
The Dutch govt is slowly nationalising the chip industry, by making taxes so high no company can survive international competition, and then using this tax money to buy stock in all deep tech companies calling it investing.
Philosophy, theory, and arts are so intertwined with technology that a nation which does not build cannot be expected to remain at the forefront of those three.
In thermodynamics, through cycles of expansion and compression, useful work can be extracted. Similarly through economic cycles, America is able to extract wealth from rest of globe.
I'm fed up with the regular euro bashing. People are underestimating what EU countries can do. The whole history was similar. France, for example, was neither the first to build high-end luxury products nor was it the first to embrace the Industrial Revolution. It managed to catch up in any case.
EU countries went from killing each other in two of the most deadly wars to having a union in 30 years.
I wish that the EU did the same as China did years ago, and that is to block any non-EU tech company from entering the market. We could have had the Google/Meta equivalent years ago.
Considering France, Germany, The UK and many other EU governments have been taken over by politicians who's goal seems to be to wipe out the native population with an endless onslaught of migrants that do not share their heritage nor their values, and the shrinking free speech laws and insane amounts of over regulation, I don't see much hope for Europe.
I mean the EU got its diplomacy so badly wrong that it sparked one of the deadliest wars this century in Europe and the EU countries appear to be rearming in preparation for the state of war spreading. The EU seem to be in the process of destabilising the state that controls the largest cache of nuclear weapons in existence.
The project has not scored well on matters of war and peace. And there is still a far too likely possibility here that after re-arming and in an era of war the Europeans fall back to their old tricks and descend into a state of war against each other again, given that the adults keeping them peaceful seem to have left the building.
How could they not share the blame? Is the EU so institutionally weak it has no power to influence events in Europe? I don't see how they could be that ineffective.
China still does not have many companies on the level of American technology firms. Just restricting foreign competition in the domestic market is not enough for most places to compete; their domestic markets and investment levels are too underdeveloped to produce globally competitive companies.
The thing that produces competitive industries is requiring them to compete globally. That's how Chinese cars got good (Tesla joint venture -> independent Chinese Tesla -> competitive domestic companies).
The three main reasons why the EU struggles to produce strong text companies are, IMO:
1. EU laws and regulations are very burdensome and cover everything from employees to packaging waste.
2. There is not enough capital that gets invested in EU tech companies to pay high tech salaries, again largely driven by more restrictive financial rules.
The result of these two is that European engineers tend to leave for the US, and European companies struggle to grow to American size.
Around 70% of American billionaires made their money themselves, while in the EU a similar share inherited it. Despite all the talk about social mobility in Europe being better than in the US, the truth is that the ultrawealthy in Europe have created a regulatory environment which makes it nearly impossible for real competition to exist.
Interesting! I would split regulation in two different types though. The fist one is merely the output of bureaucracy and good intentions and a second that is targeting US tech companies as EU can't compete.
>Around 70% of American billionaires made their money themselves, while in the EU a similar share inherited it.
The top 100 wealthiest Austrian families own two thirds of the country's wealth <https://news.ycombinator.com/item?id=36755835>, and none of the wealth came from tech companies. The same is likely true of Germany with one exception: SAP.
Put another way, the two wealthiest German-born tech people (except the founders of SAP) are Peter Thiel and Andy Bechtolsheim, both of whom earned their billions in the US.
> Just restricting foreign competition in the domestic market is not enough ...
Yes, It is not sufficient but I would argue it was necessary. In case of China it allowed them to have a set of domestic copycat companies like Baid, Alibaba and Tencent, that enabled high demand for local engineers to serve their needs and that allowed to have a large pool of competent domestic engineers which now can benefit other emerging sectors too. It keeps surprising how many top contributors to large OSS projects are from China.
Yes definitely, this is why I see the shift with AI as an opportunity to push forward new companies. EU needs to put the focus on hardware where it did have a competitive advantage few years ago (still have on B2B hardware)
> I wish that the EU did the same as China did years ago, and that is to block any non-EU tech company from entering the market. We could have had the Google/Meta equivalent years ago.
You can do it even today. But you can't bring back manufacturing from China. You gave them your techology and the market.
>EU countries went from killing each other in two of the most deadly wars to having a union in 30 years.
I guess you mean EEC in 1958, because EU was officially formed in 1993. And normally people would count the period of the two World War and starting to count by the end of it. Either way it is a lot more than 30 years.
Yes indeed ! What is important is that the same people/generation who witnessed the atrocities of war and resented each other decided to create a union
times change. past greatness is not a reliable predictor for the future. Mongolia is rather unlikely to be the largest empire ever again, don't you think?
its political stability and relative prosperity makes it an important consumer market, sure, but it's increasingly clear that Europe is no longer "great" great. its wealth was a product of being ahead of the rest of the world for a long time technologically and militarily, but the colonial era is over, so many others had caught up and are now eating their lunch. even the big three -- Germany, France, and Britain -- are in cultural, economic, and demographic decline. the alliance that binds them is loose and incoherent, promoting stagnation rather than innovation. the US brain drains its brightest while Europe itself frantically replaces its aging natives with whoever is willing to cross its undefended borders.
if the US or China had disappeared tomorrow, it would affect the rest of the world. what does an average person outside of Europe own that was made in Europe or couldn't be made in China instead? even ASML, its crown jewel, is built upon American tech and would be rebuilt in the US within a decade if there was necessity to do so.
America and China cannot build ASML or anything close or they would have (China may soon). Europe is the same as ever. America relies on tech software which is getting replaced very quickly by AI. China relies on cheap labour which will get more expensive as they become more prosperous.
Totally aligned ! As a European, I was never into this US bashing. I looked up to the Americans in the same way the french did back in the 19th century when they gifted them statue of liberty
> I'm fed up with the regular euro bashing. People are underestimating what EU countries can do.
I'm from the EU and glad to be a part of it. I just wish it was easier to do multi-national projects (I think anything aerospace or military related shows how little the countries want to collaborate) or even just tackle large projects and undertakings better.
Hell, in regards to chips I'd be happy with at least 2020 level performance chips for servers, desktops and laptops, even ARM ones. Okay maybe that is aiming too high cause my current Ryzen 7 5800X is from 2020 and so is my M1 MacBook Air and I don't see the need to upgrade, even 2016 would be good enough. Just more domestic production, CPUs, GPUs, memory, storage, everything else.
How well have you thought this through? I have a lot of questions if they went this route.
Why are there no buyers as it is? Doing this would force lower margins for ASML, effectively knee-capping a Crown Jewel of European technology and business. Do you think the EU should subsidize those losses?
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[ 36.0 ms ] story [ 871 ms ] threadThey should make another law and probably a few more commissions of auditors.
[0] https://web.archive.org/web/20260308224411/https://www.gov.u...
This stuff is all blood, sweat and tears to get it done, and to be honest a culture.
You can't just buy it off the shelf. If that was possible everyone would have gone paid for it like an Ikea product years ago.
The inability to cope with failure is a culture that is common in Europe. Failure is so personally devastating, so destructive to social and cultural standing that not only must you not take risks but other people must be actively prevented from taking risk.
Maybe the US investment doesn't work, but the US will have tried at least. Taiwan is, ironically, the perfect example of where the initial impetus came from the government because there was no culture of risk-taking. Parts of Europe have a savings culture that is very similar to Taiwan and led to very poor growth and very high inequality.
If the US keeps trying, they will succeed. On here, the view was that China could never build out this capacity, they did. The only way to guarantee failure is to never try.
Airbus proves the EU can do this. It remains to be seen if they still have the ability to take constructive action, or if “add more bureaucracy” is the only tool remaining in the toolbox.
*could.
Airbus has been grandfathered into the current legal situation. Today a future Airbus would not be able to even start collecting data for its initial Environmental Impact Study.
And Boeing's rampant carelessness proves European laws can be beneficial. "Hurr durr, how about them European laws" is a low-effort comment that adds nothing to the discussions.
The argument that a slack regulatory environment is sufficient was disproven when the US government subsidized new fabs via the CHIPS Act (a new law!), and then went further and partially nationalized a failing Intel to prop it up.
And there’s a supply chain, with packaging often separate from fab.
It seems like a reasonable objection but not a showstopper.
Nobody said that. That is a strawman
For those unaware, Mo Chang rarely gives interviews, let alone to English language media. This Acquired podcast episode is pretty incredible: https://www.acquired.fm/episodes/tsmc-founder-morris-chang
Fun fact in this context: (Dutch) Philips was a major initial investor in TSMC (both in money and IP):
Only Philips was willing to sign a joint venture contract with Taiwan to put up $58 million, transfer its production technology, and license intellectual property in exchange for a 27.6 percent stake in TSMC.
https://en.wikipedia.org/wiki/TSMC#History
It was pretty clear that this fab - much like the other Bosch facilities - is going to be for automotive and industry ICs, not for high end node sizes in CPUs or GPUs.
The Infineon Smart Power Fab was opened some months ago and builds power ICs for the energy market. Probably something like ACDC and DCAC converter ICs. This is also needed in AI data centers. https://www.infineon.com/de/regional/dresden/smart-power-fab
European Semiconductor Manufacturing Company (ESMC), the TSMC fab in Dresden is still under construction and will produce logic chips in 28nm or 16nm. Bosch, Infineon, and NXP each have 10% share in this fab. I assume that it will mostly produce products which will be sold by these 3 companies, probably just the next generations from what they already sell. This fab was 50% subsidized by the German government.
GlobalFoundries also has a big 20nm Fab in Dresden.
The most advanced logic fab in the EU is the Intel fab in Ireland.
[ Intel has yet to prove that it can sustain itself as a foundry for third parties, and until they do, I have a hard time believing the massive culture shift required across the whole company can be achieved without splitting the company up into separate parts. Samsung has fallen behind, but at least they have diversity across a variety of markets including HBM. Neither have leading edge fabs in Europe, so everything continues falls back on TSMC. ]
I think one of the big differences is that the "Gate Contact Area" simply isn't the smallest "feature" anymore - but the ITRS that defined those names called it "feature size", not "gate size" from the beginning intentionally.
You probably could make a transitor with a gate size of a similar order to the "feature size", it'll just perform awfully to be completely useless.
So you seem to know more about ASML's business than the ASML executive quoted in this article.
1. They provided evidence (construction of a fab in Dresden).
2. Executives lie all of the time.
Aside: after all of the denunciations of AI companies claims of danger, I expected comments here to be denouncing this as a “ASML shill article trying to get the government to buy more of their product”. Not that I believe, but the contrast is striking.
even more so it is reasonable to assume their (executive) statement was a simplification ignoring small for the overall statement irrelevant exceptions
like ignoring there being a factory build which is small and only meant for older nodes producing embedded chips and is for the car industry only
because honestly while the factory does matter for Bosh, it doesn't really make much difference for the larger picture of chip production in the EU
Will lie for billions of taxpayers money.
oddly cheering for this but I doubt it will end well
* https://www.reuters.com/world/china/how-china-built-its-manh...
When China leads chip making the rest of the world is just vasal states.
It's well known tech that is used globally, just not to that degree as yield and throughput goes way down
they'd just tell all their export ships to turn around and stop all exports
US would collapse in 30 days
it would be like the blockade US is doing to Cuba except 90% of every product we use and they wouldn't have to fire a single shot
they could also sell off the billions in US bonds and other assets
US economy would be utterly destroyed, we'd never recover because even the middle-class would be living out of their cars (now dead because all the parts for them are made in China)
I'm hoping for India development but that is quite far from the truth yet.
Depends on what you mean by "a little behind". Reading Patrick McGee's "Apple in China" (https://en.wikipedia.org/wiki/Apple_in_China) made me think otherwise.
In my opinion, India is around 30 years behind China. This is unlikely to change for several reasons. However, the primary reason is that no Indian government ever had a manufacturing policy that comes close to China's. The service economy is strong but employs a tiny percentage of the population.
Most of Indian government spending is on welfare followed by endemic corruption. It leaves very little money for nation building.
Design, the gap is nonexistent in terms of talent deployed (though we have some way to go to have homegrown product companies). Which puts us roughly where Europe is.
Also consider, a tiny percentage of the Indian population is a ridiculous number of people. Dwarfing pretty much any other country except China.
Your last point on welfare and corruption is also false; 35% of government spend is on interest payments (which is kind of normal for most countries?) and 30% is on infrastructure and other capex. Defence is 8% and central welfare schemes plus co-sponsored schemes with the states are only 26%. The point being, while corruption is definitely a problem, it doesn’t significantly come out of the central budget. And welfare is smaller than infrastructure spending even if it’s quite significant (and it better be, in a country like this).
Only an estimated 6 million Indians work in IT and tech services where the money is. India's working age population is approximately 950 million. India had the golden opportunity to bring manufacturing to India when Western companies wanted to reduce their dependence on China. But it wasted it.
I don't know where you are getting that 30% spending on infrastructue.
How many people do you think could conceivably work in manufacturing? And who buys all those manufactured goods? The social problem isn’t solved by quotas.
India's data collection is much worse than China's but we can also look at other metrics like exports. India exports less in total value than a resource-starved, tiny nation like South Korea.
https://www.perplexity.ai/search/3aba98a3-cba1-49d8-bcb4-869...
Thus, India could at least add another 100 million manufacturing jobs, along with an additional 100 million service jobs to support manufacturing in logistics, trade, maintenance, customer support, insurance, and food service.
Given the structure of Indian constitution which gives very little power to local governments to raise revenue and build infrastructure, India is structurally limited as of now from ever becoming as developed as China, let alone western countries.
I see India becoming more like Brazil than China. That's not necessarily a bad thing since even Brazil is 4-5x richer in per capita than India.
That’s great, but does not translate well to ..say.. manufacturing modern chips or jet engines.
US patents are only valid in the US. India is not "ignoring" anything by not following foreign laws. Can someone with an Indian patent enforce it in the US?
https://en.wikipedia.org/wiki/Patent_Cooperation_Treaty
https://en.wikipedia.org/wiki/List_of_parties_to_internation...
"A PCT application does not itself result in the grant of a patent, since there is no such thing as an "international patent", and the grant of patent is a prerogative of each national or regional authority."
So, actually, No.
The opposite, all historical clear paths i.e. manufacturing/export led model is closed/closing (geopolitics + being automated away). Less clear service export also closing. The growth path that employs 100s of millions and 10s of millions are not available to Indian.
Reality is even PRC with most favorable conditions still left behind ~400m people because there's only so many opportunities. It's one thing to have ~1B who made it supporting ~400m who didn't vs India trending towards 1.7 B... and if they end up with 500m that makes it, and 1.2B that doesn't, then things may get very ugly in terms of governance. Now that 500m middle/upper class is large enough that India will in aggregate "make it" as geopolitical power, as in climb the tech tree, but due to sheer population and opportunities that looks now foreclosed, most of Indian's statistically, simply, won't. And when numerator/denominator of haves/have not too skewed, there's nothing haves can do (redistribute) even if they wanted to, which lbh, they won't. IMO this pretty much baked in dynamic for India for next few generations, unless we discover abundance.
Most of China development is sui generis and not replicable elsewhere.
I lived there, damnit! It sounds like you're some dude who saw Singapore Fun Facts once, and now you simply can't imagine that similar circumstances could arise more than once.
* Hong Kong does have a sovereign wealth fund, currently 10th biggest in the world [0]. It doesn't disappear just because Singapore's is bigger.
* Here's a article from 2021 with a nice stacked-graph showing 45% public housing. [1]
[0] https://en.wikipedia.org/wiki/Sovereign_wealth_fund
[1] https://www.chinadailyhk.com/hk/article/249172
It's too easy to get tied up in political labels, when any hybrid of public and private support for those helps growth. None of political ideas has an exclusive lock on providing the factors. At this point, I really don't think any political system guarantees the development outcomes, there are examples of all labels which fail one to all of those progress factors.
That is actually something of a natural phenomenon (see [0] it is a large topic). Historically when a centre of excellence forms it tends to be a tight geographical region learning how to do work well.
Government policy should be cluster-friendly but as long as policy doesn't get in the way it happens naturally. The incentives on businesses are to form a cluster independently because the cluster in-group outcompetes businesses outside the cluster.
[0] https://en.wikipedia.org/wiki/Economic_geography
"One example we use is the No.3 Memory of Lenin Tractor Repair Factory in Zhuhai, which already in 1973 had started repairing tractors outside the plan. It would take tractors that needed to be repaired from other units, repair them on the side of the plan, and then get payment in kind. That payment in kind was then either bartered further within Guangdong, or smuggled downriver to Hong Kong. By 1973 this unit had a Hong Kong bank account. If this had been discovered at the central level, these people would have been shot."
Turning Shenzhen from an off-limits border area into a special economic zone made it easy for those businesses to go legit and grow, but they were already waiting in the shadows to seize that opportunity.
There are a few more SEZs https://en.wikipedia.org/wiki/Special_economic_zones_of_Chin... but none did as well as Shenzhen, probably because of location factors.
The iPhones that are “made in india” contain sub-assemblies that are made in china, that contain chips that are made in taiwan, made of metals that were mined in africa, wrapped in plastics derived from middle east oil.
A good metric is the difference in value between the precursor and the final product; for most Indian phone production, it's less than 1%. This is also a big reason why Indian export headlines are a bit silly; they never account for the increased import associated with the high value components.
Unclear if this will change going forward; there are some companies doing a higher proportion of the value chain in India, and some big incentives... But to me it's unlikely.
I don’t think that’s the whole story. Apple started making phones in india in 2017, back when the tariff situation was merely a twinkle in epstein’s best friend’s eye. I think back then it was about general supply chain diversity, more than tariffs specifically. Useful in cases of natural disasters, or trade embargo, and leverage in business negotiations.
By 2024 they were making 36 million iPhones in India, you don’t get to that capacity if you start in november, after the election. Way I see it india was the backup system, and tariffs are the reason they are using the backup system - not the reason they built the backup system in the first place.
> A good metric is the difference in value between the precursor and the final product;
I agree, that’s a useful metric, especially in this case. But it’s also not perfect. E.g. it’s easy to have a >50% “made in USA” product if all the parts are made in china but the last assembly step takes time. Labour in the US is more expensive, so 5-10min of clicking parts together can easily cost more than the parts themselves. You could increase the capacity of that type of manufacturing indefinitely without ever gaining any real independence.
Govt do work as long as beneficiaries are good friends - tatas and adani for example. I cautiously optimistic
Europe will keep making manufacturing equipment, but leave the actual production to those who have the grid capacity and capital.
We will keep working on philosophy, theory and arts. Let the rest of the world get their hands dirty building things.
EU countries went from killing each other in two of the most deadly wars to having a union in 30 years.
I wish that the EU did the same as China did years ago, and that is to block any non-EU tech company from entering the market. We could have had the Google/Meta equivalent years ago.
I don't want the problems those kind of companies bring. The world would be better without Facebook and Instagram in particular.
Maybe, but it's also better to have our own alternatives for those than to rely in so many cases on US tech only
What do you mean by this? Ukraine is not part of the EU.
The project has not scored well on matters of war and peace. And there is still a far too likely possibility here that after re-arming and in an era of war the Europeans fall back to their old tricks and descend into a state of war against each other again, given that the adults keeping them peaceful seem to have left the building.
You're going to have to really spell it out for us how Russia invading Ukraine is the EU's fault.
The thing that produces competitive industries is requiring them to compete globally. That's how Chinese cars got good (Tesla joint venture -> independent Chinese Tesla -> competitive domestic companies).
The three main reasons why the EU struggles to produce strong text companies are, IMO:
1. EU laws and regulations are very burdensome and cover everything from employees to packaging waste.
2. There is not enough capital that gets invested in EU tech companies to pay high tech salaries, again largely driven by more restrictive financial rules.
The result of these two is that European engineers tend to leave for the US, and European companies struggle to grow to American size.
Around 70% of American billionaires made their money themselves, while in the EU a similar share inherited it. Despite all the talk about social mobility in Europe being better than in the US, the truth is that the ultrawealthy in Europe have created a regulatory environment which makes it nearly impossible for real competition to exist.
The top 100 wealthiest Austrian families own two thirds of the country's wealth <https://news.ycombinator.com/item?id=36755835>, and none of the wealth came from tech companies. The same is likely true of Germany with one exception: SAP.
Put another way, the two wealthiest German-born tech people (except the founders of SAP) are Peter Thiel and Andy Bechtolsheim, both of whom earned their billions in the US.
Yes, It is not sufficient but I would argue it was necessary. In case of China it allowed them to have a set of domestic copycat companies like Baid, Alibaba and Tencent, that enabled high demand for local engineers to serve their needs and that allowed to have a large pool of competent domestic engineers which now can benefit other emerging sectors too. It keeps surprising how many top contributors to large OSS projects are from China.
Maybe in terms of valuation. In terms of tech itself, I would say they are pretty close, few years behind maybe with gap closing
Which wouldn't do Europe a lot of good at this point. EU needs a TSMC and an Anthropic/OpenAI.
You can do it even today. But you can't bring back manufacturing from China. You gave them your techology and the market.
I guess you mean EEC in 1958, because EU was officially formed in 1993. And normally people would count the period of the two World War and starting to count by the end of it. Either way it is a lot more than 30 years.
if the US or China had disappeared tomorrow, it would affect the rest of the world. what does an average person outside of Europe own that was made in Europe or couldn't be made in China instead? even ASML, its crown jewel, is built upon American tech and would be rebuilt in the US within a decade if there was necessity to do so.
I'm from the EU and glad to be a part of it. I just wish it was easier to do multi-national projects (I think anything aerospace or military related shows how little the countries want to collaborate) or even just tackle large projects and undertakings better.
Hell, in regards to chips I'd be happy with at least 2020 level performance chips for servers, desktops and laptops, even ARM ones. Okay maybe that is aiming too high cause my current Ryzen 7 5800X is from 2020 and so is my M1 MacBook Air and I don't see the need to upgrade, even 2016 would be good enough. Just more domestic production, CPUs, GPUs, memory, storage, everything else.
Why are there no buyers as it is? Doing this would force lower margins for ASML, effectively knee-capping a Crown Jewel of European technology and business. Do you think the EU should subsidize those losses?