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Why the global chip shortage is making it so hard to buy a PS5

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  1. skybrian
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    Despite the headline, this is an interview about chip manufacturing in general. There are lots of good bits in this interview, but here are some quotes: [...]

    Despite the headline, this is an interview about chip manufacturing in general. There are lots of good bits in this interview, but here are some quotes:

    Right now, the Biden plan, I think it’s $50 billion or $52 billion in incentives, subsidies. Is that enough? Is that the first payment? Is this something that needs to continue to start building more chips in the United States?

    I would say it’s not bad for a down payment. I had somebody from deep within Washington call me up and ask me how much money it would take to catch up with TSMC. I had just been to the GlobalFoundries fab in Malta, New York, and they had spent $15 billion to get 30,000 wafer starts per month at 14 nanometers — so it’s not even leading edge, but it’s a nice fab. They’ve done a good job there. TSMC Fab 12 has a capacity of 250,000 wafer starts per month. TSMC Fab 14 has about 250,000. TSMC Fab 15 has about 250,000. TSMC Fab 18, they’re targeting the same capacity. So I told this person, “Oh, I don’t know. You’d probably have to spend 10 times what GlobalFoundries spent up in Malta, New York.” I could hear him fall out of his chair.

    [...]

    When you hear about the subsidy packages, are people like, “Then we have to package them”?

    No, it’s not that sophisticated. That’s one of the reasons I try to educate as many people as I can about how complex this is. So for example, the Biden administration produced that 100-day report on critical supply chains. And they sent it to me the morning it came out and I read the whole thing, which was a long report. It was 220-some pages, I read the whole thing. And my response to that was okay, after you’re done with those four supply chains, I’ll give you another four where we’re dependent on various parts of the world for all those different pieces. And when we’re done with those four, I’ll give you another four. And when you’re done with those four, I’ll give you another four. And how long would you like to play this game?

    I do think it’s important for us to be able to manufacture the most advanced semiconductor technology in the US, because as I said, that’s important for innovation, but if you think you’re going to be an island, not dependent on the rest of the world for anything else, then all you’re doing is echoing Xi Jinping’s dual circulation strategy, which is “I want the world to be dependent on me, but I don’t want to be dependent on anybody else.” I don’t think it’s going to happen.

    When we look at the plants being proposed in the United States, there’s the Samsung factory in Texas. There’s a couple of big fabs being proposed in Arizona. These are places that are being hit by climate change. The Samsung fab had to shut down. Arizona’s in a desert.

    Chip manufacturing is very water-dependent. Is that something that plays into this whole conversation? Where we put these fabs, how much power they need, how much water they need, is actually more important than a tax subsidy package from a lesser-regulated state.

    Absolutely. I had somebody call me from Arizona asking me, what can we do to get the Samsung fab located in Arizona? And I said, get more water. And they said, we have plenty of water. I said, but the Colorado River Compact is coming up for renegotiation. And you guys are in a historic drought for the last 20 years. And you need a lot of water for chip manufacturing. Taiwan is having a drought because normally their reservoirs are filled by the typhoons over there. And they had a very dry year. In Taiwan they were trucking water to the fabs. So all those resource constraints are important. And I don’t know why we like to build fabs in deserts. By the way, that was a lesson that goes back; I first heard that 25-plus years ago, because Intel has a fab in New Mexico on the Rio Grande, just on the north side of Albuquerque. And I was at a company, we had a factory just downstream from that fab. And they had come to us asking for more of our water allocation. Guys, this is a desert.

    4 votes