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European Commission Launches $12 Billion Chip Support Campaign

timothy posted about a year and a half ago | from the there-would-be-this-thing-called-comparative-advantage dept.

Businesses 111

An anonymous reader writes "Neelie Kroes, European Commission vice president responsible for the digital economy, wants to use 5 billion euros of European Union tax payers' money, together with matching funds from the chip industry, to recreate European success in semiconductors similar to that of Airbus. Because of its strategic importance to wealth creation Kroes wants Europe to reverse its decline in chip manufacturing and move back up from 10 percent to 20 percent of global production."

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Fristy Poss (-1)

Anonymous Coward | about a year and a half ago | (#43820239)

Booyah!

I am willing to go along ... (5, Insightful)

pablo_max (626328) | about a year and a half ago | (#43820255)

Assuming that what comes out of it is able to be used by ANY EU based (i.e. PAYING taxes here) firm. I think another stipulation to using any of the research money or outcome of said research should be that the firm which is also based on EU, must also produce the resulting products inside the EU. Not spending my money to gain a competitive advantage and then turn around and outsource all production to China or Brazil.
Basically, if we are paying, we better get real benefits.

Re:I am willing to go along ... (0)

Anonymous Coward | about a year and a half ago | (#43820295)

The investment bankers in outsourcing your nerd ass to Jinglytown, India will certainly see the benefits.

Re:I am willing to go along ... (1)

Anonymous Coward | about a year and a half ago | (#43820297)

Hi! Are you the guy who will release the 5 billion to the EC? I'm planning to start a new business, can you help me out? I just need a couple of hundred thousand euros. Pleeeeeeeaaase?

Re:I am willing to go along ... (1)

pablo_max (626328) | about a year and a half ago | (#43820505)

Hi back, jackass.

I know it is difficult for you to understand this, but in the EU, things are a little bit different than in the United States. While corporations do have a lot of power here, it is nothing like what you see across the ocean. We, the voters, tend to react more more actively to things which we disagree with. Not in every case of course, but on the whole, this is true.
So, in a way yes, I am that guy. I am tax paying, voting resident in the EU.

Re:I am willing to go along ... (0)

Anonymous Coward | about a year and a half ago | (#43821881)

Dude I was just joking. I live in the Netherlands by the way.

Re: I am willing to go along ... (0)

Anonymous Coward | about a year and a half ago | (#43824967)

You pathetic collectivist.
The chip will no doubt perform flawlessly - just like the Spanish ship, European GPS and other fantastic gizmos the government made for the Eurosheeple.

Re:I am willing to go along ... (2)

ebno-10db (1459097) | about a year and a half ago | (#43824975)

in the EU, things are a little bit different than in the United States. While corporations do have a lot of power here, it is nothing like what you see across the ocean

That must explain why in the EU insolvent banks were taken into receivership instead of bailing them out to the detriment of citizens (e.g. Ireland).

Re:I am willing to go along ... (1)

Opportunist (166417) | about a year and a half ago | (#43821853)

So you're that Nigerian prince who keeps sending me investment opportunities?

Re:I am willing to go along ... (0)

Anonymous Coward | about a year and a half ago | (#43820305)

Assuming that what comes out of it is able to be used by ANY EU based (i.e. PAYING taxes here) firm.

Of course, just like ANY EU based firm can buy and Airbus, or buy tickets for one, similarly they'll be able to buy chips made by this company/consortium.

Re:I am willing to go along ... (2)

Rockoon (1252108) | about a year and a half ago | (#43820423)

Ultimately this costs each EU citizen 10 euros each, on average.

I always try to consider the scenario where instead of taxation funding it, that the government instead set up a government-managed corporation that issued and sold stock to fund the project, with a share of future profits going to shareholders.

Some would say that this obviously doesnt work because otherwise a private corporation would already be doing it for the same purposes as the government project, however private corporations like to show actual profit and stuff.. and if it "obviously doesnt work" then its not obviously profitable.

Re:I am willing to go along ... (3, Insightful)

Teun (17872) | about a year and a half ago | (#43820487)

In the light of this proposal profit is more than direct return on investment.

There might and will be benefits for society at large, people get jobs, knowledge is gained and other new ventures can develop.

Those benefits don't show up in the books of investment bankers but are still very real.

Re:I am willing to go along ... (5, Insightful)

Anonymous Coward | about a year and a half ago | (#43820507)

It's not as simple as that.

Improved infrastructure provides a moderate benefit to a great many individuals and businesses which can add up to a net profit for the country. This doesn't mean that it would have been a good investment for a private company to build the infrastructure, because it is not possible to capture all the value that the infrastructure creates. For example, a toll road operator doesn't get paid for the reduced pressure on surrounding roads, but the users of those roads still benefit.

Similarly, this EU investment may make a net profit for the EU but that doesn't mean a corporation would make a profit doing the same thing.

Or it may be a giant waste of money. But the fact it wouldn't work as a corporation tells us nothing either way.

Re:I am willing to go along ... (4, Insightful)

SomeKDEUser (1243392) | about a year and a half ago | (#43820595)

This is a really dumb way of thinking about how the government spends money. A corporation does not need to make a profit: it needs to make a profit now. And not just now, but also high enough.

Governments are special in that they can finance things which bring in enormous profit in the very long run (fundamental research, very large infrastructure projects) or which have very large positive externalities (free roads). Without governments, you could not build dams: large ones become profitable after 50 years. No bank, no insurance company will accept such long-term risks: they may well not exist that long. Only countries can be reasonably certain of existing within such stretches of time.

TL;DR; it is an essential function of governments to fund long-term, high-risk projects.

Re:I am willing to go along ... (1)

drinkypoo (153816) | about a year and a half ago | (#43822485)

Governments are special in that they can finance things which bring in enormous profit in the very long run (fundamental research, very large infrastructure projects) or which have very large positive externalities (free roads). Without governments, you could not build dams: large ones become profitable after 50 years.

Governments are also special in that they can finance things with your money, the collection of which is backed by threat of violence. They're special in that they control media (at minimum by granting licenses) and thus have an unparalleled ability to influence public opinion. They can thus not only tell you what you are permitted to think, but they can influence most people into thinking it. For example, they've convinced you that building dams is a good idea in spite of the environmental impact, instead of increasing efficiency and getting the power from other genuinely more sustainable sources, like offshore wind.

Re:I am willing to go along ... (0)

roman_mir (125474) | about a year and a half ago | (#43822597)

Yeah, governments are special alright. They are special in that they are vile, violent entities by the mob for the mob but as always the very fact that the mob votes for discrimination against a minority (anybody making more money than the majority of the mob) it creates lawless system that eventually destroys the economy and that fucked up society that 100% deserves that outcome.

By the way, if a private entity will not engage in a project it means that project should absolutely, without any doubt NOT be funded. ONLY private funding is a meaningful investment (and if it fails the failures is limited to that investor and the larger economy and society are not involved in that failure, at least not if the government is small enough that it cannot steal and redistribute to that failure).

I want to see complete deterioration of all government initiatives hopefully sooner rather than later, we need this cold shower to wake us up.

Re:I am willing to go along ... (1)

LongearedBat (1665481) | about a year and a half ago | (#43825451)

True. And that why it's a pity that modern democratic systems encourage the current party in power to focus no further than winning the next election. :/

Re:I am willing to go along ... (1)

bhima (46039) | about a year and a half ago | (#43820613)

Not every pursuit of man must be directly profitable... and demanding that they all be so, creates failure and market distortion.

Re:I am willing to go along ... (3, Insightful)

Opportunist (166417) | about a year and a half ago | (#43821947)

Private corporations are concerned with immediate success. They need to show something in their next quarter report or their stocks will fall. Things like investment in future endeavors is rare, and only risked if there's a chance to gain some sort of perpetual patent. But why bother with high investments in basic research when it's far more profitable to whip up some trivial patent of something even a dumb fuck in middle management could come up with?

No, basic research, the research that actually does lead to groundbreaking results and exciting new technology is NEVER conducted by companies. Never. Remember the laser? You know, the thing that drives your DVD and BluRay drives? Think that was what the idea of Einstein when he whipped up the theoretic basis for it in 1917? Hell, even current patent laws don't allow you to milk it for a century. And no, this is NOT the suggestion that we should extend patents beyond the insanity copyright has already reached. But I ramble.

A lot, and I really mean a LOT, of theoretic and practical research was necessary, from great minds like Ladenburg, Kastler, Basov and Maiman, and still it took the last one 'til the 1960s to produce a working laser, more than four decades after the theoretic foundation.

You think any company on this planet would think in terms like this?

You think any investor would invest in something that could take half a century to produce results you can market?

Hell, it took 'til the 1980s to produce consumer grade lasers. And 'til the 1990s and even 2000s to make them cheap. Today, though, they're everywhere, from consumer electronics to cutting edge science, from micrometer distance measuring to touch-less cutting. And of course playing DVDs and BluRays.

Think we'd have any of those things if we left innovation to the market?

Re:I am willing to go along ... (1)

AlphaWolf_HK (692722) | about a year and a half ago | (#43825407)

Because Quaero, which was born out of this exact same idea and thought process, also which cost in the 12 digits, was such the raving success that politicians said it would be.

Re:I am willing to go along ... (1)

bhima (46039) | about a year and a half ago | (#43820607)

I suspect that if the results of this effort were released with an appropriate hybrid Open-Source license, as well as providing both the Open-Source contributors & corporate funders /contributors with some sort of tax break, that more European people and firms would see more benefits, than if the results were locked up in some sort of Airbus-esque version of Intel. Comparing the business strategy that Intel pursued with Itanium to ARM's, I become more certain in this line of thinking.

Or to put it another way, an entity which was more like ARM than Intel or AMD but which did not have a foundational priority to maximize shareholder returns (i.e. not a Gesellschaft mit beschränkter Haftung (GmbH)) but instead with the priority to remain non-profit by folding all profits back into development efforts. And which produced and sold IP in similar ways as ARM but with hybrid licensing schemes, Open Source & non commercial projects could have access to certain parts of the IP, while commercial & proprietary projects would be required to buy a license or somehow contribute in kind. If the tax breaks for contributions were designed skilfully enough, then corporations inside the EU and paying taxes to the EU could, in a sense, spend less on R&D than it would cost to develop a new chip, by working on this EU wide collaboration and receive a commercial licence of similar value in return. The EU could protect cases of a 3rd party mass producing these chips as a commercial enterprise without a commercial license, with existing IP, contractual, and tax laws. So all corporations with EU subsidiaries would be obliged to follow these licenses, if they wished to use the chips and all chips or devices with chips would require the correct licensing to be sold in the EU.

In this way, any company could produce, or have a 3rd party produce, chips based on this IP and include them in their commercial offerings all over the world. However, EU companies who vigorously participated in the development could have advantages when it comes to providing chips to the EU market, while at the time encouraging lower costs for EU consumers by allowing for non-commercial licenses.

Naturally, this leaves open the possibility of a foreign group making unlicensed chips & devices for markets outside the EU. Essentially, this is a similar problem which ARM faces, but I am not familiar with any large examples of this kind of abuse... but I live in the EU, so it's possible that in various places around the world there are such things... but I guess, if they do exist, they've never become a big enough problem to make the news. Presumably this is due to the limitations that ARM places on their licensing in regards to 3rd party Fabs.

Re:I am willing to go along ... (1)

AmiMoJo (196126) | about a year and a half ago | (#43820609)

TFA mentioned Airbus. The investment on that had paid off many many times over despite the aircraft design not being public property.

This should be a conservative wet dream. The government wants a chip manufacturing industry but farms it out to the for-profit private sector.

Re:I am willing to go along ... (1)

longk (2637033) | about a year and a half ago | (#43820849)

ANY EU based firm.. which then funnels its profits elsewhere. Also to "produce" something in EU means what exactly? Assemble the final product? Solder the motherboards? A EU assembled phone with an EU produced CPU can't use Korean memory- and American graphics chips? The basic chemicals used must all come from Germany and be based on Norwegian oil? How far do you want to take this and to what effect?

Re:I am willing to go along ... (1)

K. S. Kyosuke (729550) | about a year and a half ago | (#43823105)

I think that raw materials can be excluded simply on the basis that not all of them can be mined in Europe in the first place.

Re:I am willing to go along ... (0)

Anonymous Coward | about a year and a half ago | (#43820959)

If this money is going into research it's probably going to be a fund where a bussiness can apply for 50% of the investment and have to match it with 50% of their own money. The IP that comes out of it will be owned by that bussiness. At least, that's how similar funds for aviation work in the EU.
http://www.cleansky.eu/

Violation of "Free Trade" (1)

Jane Q. Public (1010737) | about a year and a half ago | (#43822299)

Not that there aren't lots of problems with these so-called "free trade" agreements that really aren't... but this would definitely be a violation and would justify sanctions (such as tariffs) from treaty member nations.

What good does a "competitive advantage" do if the "profit advantage" is taken out of it?

Margaret Thatcher (-1)

Anonymous Coward | about a year and a half ago | (#43820259)

http://www.dailymail.co.uk/news/article-2330180/Woolwich-attacks-Man-charged-making-racist-anti-religious-Facebook-comments-British-soldier-s-death.html

"A 22-year-old man has been charged on suspicion of making malicious comments on Facebook following the murder of British soldier Lee Rigby.
Benjamin Flatters, from Lincoln, was arrested last night after complaints were made to Lincolnshire Police about comments made on Facebook, which were allegedly of a racist or anti-religious nature.
He was charged with an offence of malicious communications this afternoon in relation to the comments, a Lincolnshire Police spokesman said. ...
A second man was visited by officers and warned about his activity on social media, the spokesman added."

This is rich.

But just last month these jerkoffs were protesting about Margaret Thatcher, a champion for freedom.

Freedom, you idiots. You don't know how good you had it when Mrs Thatcher was in charge.

Re:Margaret Thatcher (0)

Anonymous Coward | about a year and a half ago | (#43820581)

"You don't know how good you had it when Mrs Thatcher was in charge."

The 3 million unemployed would beg to differ.

Throw money at it and hope it sticks? (0)

Anonymous Coward | about a year and a half ago | (#43820263)

That works with airplanes, because the R&D time is much slower. It isn't going to work with high tech. They now have 10% market share? Guess what? If you start hemorrhaging market share in high tech, you are completely fucked. If you don't have designs 5 years into the future then you are 5 years behind. Semiconductors tech isn't something you learn in a university--emerging designs are probably kept more secret than the best kept military secrets. And anybody that can help you catch up has signed a non-disclosure agreement. If you don't have the latest knowledge base and researchers who are preparing for 5 and 10 years into the future, you are SOL.

There are only two ways to catch up in the high tech field if you fall behind: sabotage or espionage. If the EC wants to catch up, they need to spend the money there.

Rare Earth Element Mining (0)

Anonymous Coward | about a year and a half ago | (#43820265)

That's where the money is at in the future, anyone can produce the chips.

Re:Rare Earth Element Mining (1)

ChrisMaple (607946) | about a year and a half ago | (#43820511)

Assuming that's true, how does it help the EU?

Re:Rare Earth Element Mining (1)

Grishnakh (216268) | about a year and a half ago | (#43820853)

They just need to find a lode of rare-earth elements somewhere in their borders.

Re:Rare Earth Element Mining (1)

fritsd (924429) | about a year and a half ago | (#43821091)

Somewhere like Ytterby [wikipedia.org] , perhaps..

Problem with rare-earth elements is not that they are rare, but that there are not really lodes (same for Indium [wikipedia.org] IIRC), so that it becomes cheap to get a bulk of ore but expensive to refine.

E.g. Neodymium [wikipedia.org] (I suspect it's needed for wind turbine magnets made of NdFeB, which we Europeans are going to need a lot more of very soon) was apparently mined from some kind of beach sand (Monazite) [wikipedia.org] .

Planned economy rarely works (1)

Hentes (2461350) | about a year and a half ago | (#43820299)

If keeping our chip production costs more than losing it, then overally this is a bad investment. You could argue that electronics manufacturing is a strategic sector, but in this case we should simply make it a rule to only accept European electronics for security sensitive apllications. That would create a market for domestic production, and keep it alive at a much lower price.

Re:Planned economy rarely works (0)

Anonymous Coward | about a year and a half ago | (#43820385)

There's a place in the actual position paper where they talk about ``secure'' and ``independent.'' This seems to be more about having a strategic national chip manufacturing capability than it's about economic benefit.

Sure : Internet was spontaneous generated :) (0)

Anonymous Coward | about a year and a half ago | (#43820451)

For instance ..... oh well ... guess what ? Network deployment was planted and financed by US tax payers .... it realy pays of IMHO (Disclamer : I am not an IRS "customer" :P)

Not Comparable (1)

ChrisMaple (607946) | about a year and a half ago | (#43820629)

The internet was started by the Defense Department, and other government entities expanded it. Eventually it was commercialized, grew greatly, and the government portion of the hardware has become an insignificant portion or decommissioned. The internet's hardware today is almost all paid for by non-tax money.

Semiconductor manufacturing is older than the internet and has always been dominantly commercial. Putting government money into semi mfg today is not seed money, it's "industrial policy" (a part of fascism).

The cases are not similar enough to provide guidance.

Re:Not Comparable (0)

Anonymous Coward | about a year and a half ago | (#43820947)

Semiconductor manufacturing is capital heavy industry, and requires a suitable ecosystem with large enough supporting economy. Similar funding programs have been used to focus commercialization of research for decades already.

Putting government money into semi mfg today is not seed money, it's "industrial policy" (a part of fascism).

Are agricultural subsidies is part of fascism also, or is the involvement of a big, evil company the deciding factor?

Re:Not Comparable (1)

kwbauer (1677400) | about a year and a half ago | (#43822039)

"Are agricultural subsidies part of fascism also..." Yes, fascism, socialism, communism, take your pick. They are part of those systems.

The Web as well (0)

Anonymous Coward | about a year and a half ago | (#43822823)

The Web was invented at another European shared facility; CERN.

Re:Planned economy rarely works (1)

Bender_ (179208) | about a year and a half ago | (#43820549)

The semiconductor industry is a bit different. No fab is ever build without massive government subsidies. Just google about globalfoundries in new york.

Re:Planned economy rarely works (0)

Anonymous Coward | about a year and a half ago | (#43820873)

Just Plain Wrong.

ARM? (1)

Anonymous Coward | about a year and a half ago | (#43820303)

I know they don't do the fabrication, but how much EU tax payer money did ARM need? 50% of this will go to Brussels admin, 25% will go to local pork barrelling, and maybe 25% will end up in subsidising German engineering, which probably funds 50% of these Quangos to begin with.

Re:ARM? (1)

Coeurderoy (717228) | about a year and a half ago | (#43822897)

Nope Brussels admin is actually somewhat cheaper, although US based lobbying is significantly adding to the cost. Most probably 20% will go into various random FP8 projects. And close to 80% will go to STMicroelectronics, Infineon, Accent, NXP, Inside Secure, etc... And of course ARM Holdings (a British company)... And the products will find their way into Automotive, Aeronotics and various other industrial domains. With a little bit of luck some of the funds will be used to do fundamental research in the basic technology (how to draw really small pictures on bizarre materials, preferably in three dimentions since it would seem to be the best way to really boost the power of individual chips). And if we do not do this, then whenever we develop any high tech product whatsoever our "competitors" can skew the prices just by deciding if yes or now they'll be willing to provide enough chips.... So although in general I'm not a big fan of Ms Kroes, in this case, even knowing all the risk for leakage, I'm all for it.

wealth is going elsewhere for a reason (1)

Anonymous Coward | about a year and a half ago | (#43820309)

If people are not allocating money to chip production it's because they can create more wealth DOING OTHER THINGS.

All he will do is in a wholly unimaginative way is force wealth allocation back to a less productive industry because he can't imagine there might be something else which is even better.

Re:wealth is going elsewhere for a reason (0)

Anonymous Coward | about a year and a half ago | (#43820651)

She.

Re:wealth is going elsewhere for a reason (0)

Anonymous Coward | about a year and a half ago | (#43821349)

Bloody women ;-)

Re:wealth is going elsewhere for a reason (0)

Anonymous Coward | about a year and a half ago | (#43820977)

And I suppose it's a complete waste of time mining rare earth elements, since China does it for less money than other countries.

But ... what happens if an artificial shortage is created by the dominant manufacturer? "Oh shit, looks like we're screwed" isn't an acceptable response.

Maybe you haven't heard, but it turns out that we can't trust "the markets" to act in the interests of the greater good.

Re:wealth is going elsewhere for a reason (0)

Anonymous Coward | about a year and a half ago | (#43821389)

Markets act by the multitude of individual choice - that's freedom.

If individual choice is constrained, that's to the extent of the constraint coercion; people before forced to do things against their will.

That's *wrong*. It's wrong if I point a gun at you and take your wallet. It's wrong if the State passes a law which forces you to invest in arbitrary industry N by taxing you and spending the money there.

Of course, people acting with freedom have the freedom to be unwise, to make mistakes, to be, well, human.

Rather than than coercion - and I'd trust a market better than the alternative, which is the State.

You mention rare earth shortages. I would mention war, poverty, injustice, instituionalized corruption, racism, the madness of every countries tax regime, the insanity and inhumanity of the various social security systems out there, the current financial crisis, with its roots in the creation of Freddie Mac and Fannie Mae back in the 1930s, the current euro crisis, etc, etc, etc, etc. It's a long, long list.

Re:wealth is going elsewhere for a reason (1)

Coeurderoy (717228) | about a year and a half ago | (#43822961)

Part of what "freemarketeers" do not understand, is that a big chunk of the market is managed by the chinese comunist party. They are happy to see "red" when anybody insinuate that "self regulating", "invisible hand of the market", etc does not work that well, but they see no issue in sending a large part of their own production capacity and control of it into the hand of a bunch of people who does not believe in "free market" at all, but in having a small group managing by force an "harmonious society" (a large part of being harmonious is do not complain about the boss....) So what do we do when for example china decides that it does not really need the money from a very small chip controling the average laptop keyboard and prefers to export their own brand in order to capture much more value out of their production. At any time with the current structure of the market the PRC could make some strategic descisions and just by limiting the transfer of very cheap pieces completelly disrupt the production of HP, IBM, Apple and Oracle....

Re: wealth is going elsewhere for a reason (0)

Anonymous Coward | about a year and a half ago | (#43824069)

it is a fundamental fallacy of libertarianism that governments are evil because they wield force to make people collectively do what they individually wouldn't
.

in fact, this is a feature: it is the very monopoly of the state on violence which allows civilisation to stand.

TL;DR if you want to be coerced only by free individuals into paying them, go live in Somalia.

Excellent (0)

Anonymous Coward | about a year and a half ago | (#43820311)

Excellent initiative.

Ask IBM why they left . . . ? (4, Interesting)

PolygamousRanchKid (1290638) | about a year and a half ago | (#43820323)

IBM used to produce chips in Sindelfingen, Germany. They shut it down a long time ago. On the other hand, Mercedes Benz automobiles are still rolling off the Daimler assembly line in Sindelfingen. So it's not like it's the location or lack of skilled workers or anything like that.

So why is that . . . ? Of course, cars are not chips, despite the Slashdot penchant for car analogies. But it would be interesting to know why someone like IBM pulled out, before dumping a bunch of money on the problem . . .

And what about Siemens . . . ? Do they still make chips . . . ?

Re:Ask IBM why they left . . . ? (3, Informative)

Nimatek (1836530) | about a year and a half ago | (#43820359)

Infineon Technologies (http://en.wikipedia.org/wiki/Infineon_Technologies), a Siemens spin-off do. They actually even have more facilities than listed on the wiki page.

Re:Ask IBM why they left . . . ? (0)

Anonymous Coward | about a year and a half ago | (#43820399)

IBM wants slave found in india and china, at the same time, nobody will check who are working for them over there.
Recently I learned that one of the IBM offshore guy got a job as senior consultant in a big four company, that guy couldn't even proceed a simplest task ( 3 steps task and he failed on it, not one time but three time ). When I see the requirement to even be considered in a big four in Europe, it's just too funny.
All that outsource shit in india, china and other is happening only to milk money from "westerner's investor" and tax' payers.

What about STMicroelectronics, NXP, LFoundry... (1)

Anonymous Coward | about a year and a half ago | (#43820439)

Lots of them in places such as Grenoble valley ... (One of the IT historical grounds in the world)

There used to be there labs from IBM, Bull and all those behemots from IT pioneer ages ;-)

Re:What about STMicroelectronics, NXP, LFoundry... (2)

Bender_ (179208) | about a year and a half ago | (#43820545)

They are still there. As well as several Infineon Fabs in Germany (Dresden, Regensburg, Warstein) and Austria (Villach), a massive fab by Globalfoundries in Dresden and a large fab by Intel in Ireland.

Re:Ask IBM why they left . . . ? (1)

Bender_ (179208) | about a year and a half ago | (#43820543)

I am pretty sure IBM did not leave due to any reason directly related to the location. Semiconductor fabs can have a relatively short lifetime, depending on the technology. The IBM fab had been in operation for decades, if I am not mistaken.

If you want a leading edge fab, it is quite possible that some technology changes (e.g. wafer size conversion) make it uneconomical to upgrade an existing fab. In that case you need to build a new shell. Locations for new fabs are often significantly influenced by incentive payments from the local government. For example the new globalfoundries fab in new york state got billions of incentive payments. IBM most likely decided to discontinue the site after moving the products to a more modern fab that was build somewhere where they got more money...

Re:Ask IBM why they left . . . ? (1)

tlambert (566799) | about a year and a half ago | (#43823115)

I am pretty sure IBM did not leave due to any reason directly related to the location. Semiconductor fabs can have a relatively short lifetime, depending on the technology. The IBM fab had been in operation for decades, if I am not mistaken.

If you want a leading edge fab, it is quite possible that some technology changes (e.g. wafer size conversion) make it uneconomical to upgrade an existing fab. In that case you need to build a new shell. Locations for new fabs are often significantly influenced by incentive payments from the local government. For example the new globalfoundries fab in new york state got billions of incentive payments. IBM most likely decided to discontinue the site after moving the products to a more modern fab that was build somewhere where they got more money...

The German, French, and Irish foundries Are losing on feature size. X-Fab is limited to around 180nm features, and the most recent French STMicroelectronics plant can barely do 32nm for relatively small die sizes. Most design houses these days are fabless, and the feature size is a determining factor on cooling requirements and power consumption. Frankly, Intel makes better chips, and they are pretty much willing to fab for anyone these days, If you don't care because you're doing a slower ARM design, then TSMC, UMC, or Samsung is good enough.

Given their relative production volumes from the European fabs that are out there, this is more or less a subsidy for X-Fab. Here is a nearly identical article from June of last year:

http://www.euractiv.com/innovation-enterprise/eu-eyes-airbus-chips-amid-market-news-513171 [euractiv.com] ...basically, they call for chip fabs every year, and it mostly goes to Germany.

Re:Ask IBM why they left . . . ? (0)

Anonymous Coward | about a year and a half ago | (#43820575)

NCR used to make their own chips too. Then they realized that it was cheaper to just buy from Intel.

Mercedes is a luxury brand - like Prada.

Computer chips are industrial commodities - like plastic.

The difference - margins. And the kind of person who buys a Mercedes wouldn't like the idea of it being assembled in China - even many of its parts are in fact made in China ( There's a reason why Consumer Reports puts Ford's overall brand quality above them. Or just look at Mercedes warranty. 3/36? For a $100K car?!)

Re:Ask IBM why they left . . . ? (1)

Grishnakh (216268) | about a year and a half ago | (#43820871)

One of the reasons the high-end luxury car brands have lower quality scores is because their owners have higher expectations, and complain more about minor problems. If there's a squeak or rattle in your new $100k Mercedes, you take it back to the dealership for warranty repairs. If there's a squeak in your $15k Ford, you just live with it. So Mercedes looks bad because it has an incident of a warranty repair, whereas Ford doesn't.

Also, Mercedes is not a luxury brand in Europe, only in the USA.

Re:Ask IBM why they left . . . ? (1)

cheesybagel (670288) | about a year and a half ago | (#43821539)

Yeah and then NCR grew irrelevant while SGI went bankrupt.

IBM don't make stuff (1)

Anonymous Coward | about a year and a half ago | (#43820645)

IBM left lots of market, at the root of the problem is IBM's patents, they found it easier to make patents of things than the things themselves and just become a big parasitic patent troll. This is why they announce battery initiatives (their Battery 500), not to make batteries, but to make plausible sounding patents in the field of batteries.

IBM leaving a country doesn't mean anything, they've been pulling back from lots of real world projects and I doubt their fab work would continue without the supercomputer subsidy it gets.

I don't think these EU Subsidies work, I remember their Google competitor, the money went to Thomson who spent it on Thomson, and the little money that was available in private funding for search dried up, as nobody wanted to compete with the EU. It had the opposite effect of the intended effect. Thomson canned the project after the German end plugged the plug. They delivered nothing much.

IBM incidentally are the first in line for any EU money, because they know the processes to apply, have the people in place in Brussels and the contacts to set up the meetings and jump the hurdles. Often the people in the departments deciding on the bids are ex-IBM'ers or from the other big lobby groups. So these subsidies usually send money out to big lobbying companies, often American, not the actual EU development companies.

The biggest problem with these EU subsidies is they need to be cross border, to target an EU wide project. So only a few companies need apply, and those companies usually have the fake projects already set up ready to receive the money. So Kroes gives the nod and wink to semiconductors, Nokia, Philips, ST Micro etc. will already know about this due to the close lobbying, will already have the projects that can receive that money split across borders and ready for the subsidy.

Re:IBM don't make stuff (0)

Anonymous Coward | about a year and a half ago | (#43820851)

this is all a rant based on incorrect information. sounds great,
but without facts there's no logic to it.

here's ibm's microelectronics website http://www-03.ibm.com/technology/ and here's http://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants a list containing ibm chip manufacturing plants.

batteries have nothing to do with this, and i don't know specifics on ibm and batteries. however, ibm's MO is to do basic research into a field and try to use company innovations to create products. ibm have many disk drive related products, but it was ibm that put gmr to use in disk drive heads, enabling current storage densities.

that is the opposite of what you claim. ibm fields real products, and they have a long history of doing so.

Re:IBM don't make stuff (0)

Anonymous Coward | about a year and a half ago | (#43820899)

"here's ibm's microelectronics"

here from my comment:
"I doubt their fab work would continue without the supercomputer subsidy it gets"

"batteries have nothing to do with this, and i don't know specifics on ibm and batteries. however, ibm's MO is to do basic research into a field and try to use company innovations to create products."
That's false, they make patents. There never will be a battery maker.

"that is the opposite of what you claim. ibm fields real products, and they have a long history of doing so."
They *had* a history of making products, it is history.

Re:IBM don't make stuff (1)

cheesybagel (670288) | about a year and a half ago | (#43821555)

IBM used to manufacture disk drives but they sold that off a long time ago.

Re:IBM don't make stuff (0)

Anonymous Coward | about a year and a half ago | (#43823173)

This is incorrect. Most EU research funding programs require that you form a consortium with roughly 1/3 big enterprise, 1/3 SME and 1/3 academic work share for your proposal. Only the academic consortium members get 100% funding, the commercial partners get only 50% and have to match the funds. About one in 15 funding recipent gets audited each year for correct book keeping. I know that there is some "creative" book keeping but you can't be too blatant.

Much power lies with the EU project officer you get asigned. The project officer reviews regularly your progress in scientific and other criteriea and has the power to cancel the funding when dissatified. Some of these officers are known to be merciless and not easily pleased.

Re:Ask IBM why they left . . . ? (0)

Anonymous Coward | about a year and a half ago | (#43820661)

I would guess that it is easier to ship chips from China than new Benzs? Just a thought... Also I imagine IBMs production scale on chips isn't what it used to be.

Re:Ask IBM why they left . . . ? (0)

Anonymous Coward | about a year and a half ago | (#43823077)

IBM used to produce chips in Sindelfingen, Germany.

IBM still designs semiconductors in Böblingen, 10 min from Sindelfingen. And just half an hour away in Reutlingen are two Bosch semiconductor fabs.

Can you say import tariff? (0)

Anonymous Coward | about a year and a half ago | (#43820331)

This is the kind of thing that results in trade wars.

Intel (1)

Anonymous Coward | about a year and a half ago | (#43820355)

don't forget Intel in Leixlip, Ireland - they seem to be doing ok

I have a better idea (1)

mike555 (2843511) | about a year and a half ago | (#43820383)

They would have much more success if they rather were to (among other things): - lower taxes substantially, - amend/abolish ridiculous labor laws which are killing startups, to allow to hire and fire personnel more freely, - stop throwing taxpayers' money at "projects" and rather lower taxes when they have too much money :), - abolish VAT (probably the worst kind of tax in terms of negatively affecting economy).

Re:I have a better idea (1)

Grishnakh (216268) | about a year and a half ago | (#43820509)

amend/abolish ridiculous labor laws which are killing startups

I'm just curious; what kind of labor laws do they have which are killing startups? Over here in the US, hiring isn't that hard when you only have a few employees, and even asl long as as it's under 40 I hear the labor laws aren't too hard to keep up with. Over 40, however, it starts getting really complicated, at least that's what a small company I used to work for told me.

Re:I have a better idea (0)

Anonymous Coward | about a year and a half ago | (#43820589)

The labor laws aren't the problem in most european countries, the problems lay in various other requirements and legal fees necessary to start a buisness here.

Re:I have a better idea (1)

Grishnakh (216268) | about a year and a half ago | (#43820785)

Like what? I'm just curious. For instance, suppose I have a small family (mom-n-pop) business here in the USA (that sells on the internet, rather than being tied to a specific locale), and decide I want to move to Europe. What would I be in for?

You would probably go to the UK (1)

mha (1305) | about a year and a half ago | (#43821113)

Coming from the US you would probably want to have a "Ltd" in the UK, because UK and US law are very similar (since US law is based on UK law, surprise). Since it's the EU you would then be able to do business in any EU country using that UK business. It is a simple operation (founding a UK "Ltd"). Advice can be found on lots of web pages.

Creating a corporation is EASY (Germany) (1)

mha (1305) | about a year and a half ago | (#43821097)

I created a "GmbH" (a limited liability corporation) at no time (1 visit to a notary) and very little cost (the "full" version, not the "1€" version) - and that is what you want for a "real" business. This kind of legal entity can be used for businesses worth hundreds of millions, I use it only for my freelancer business. Costs are accounting (fully outsourced), I have to publish a limited version of my yearly balance sheet, and some taxes. Even with accounting 100% outsourced I consider having this possibly quite "oversized" legal entity (for my business purposes) quite cheap, which is why I decided to get it.

So don't tell me creating businesses (in Germany at least) is "difficult" or "expensive" - you obviously don't know what you are talking about.

Re:Creating a corporation is EASY (Germany) (1)

Coeurderoy (717228) | about a year and a half ago | (#43823009)

Same in France, I created three different companies in France over 20 years, the first one in the bad old days took me 2 weeks, then one week, then 2 days, apparently it's faster now. I also created one in Spain, and that was a pain, and way to expensive, but thei're just changing the law to make it easier. And if you are creating a startup the real cost of firing is not the 1 to three month of salary that you might need to pay to get rid of the person, but the fact that you lost time with him or her in the early nimble stage of the your company. So if you are unable to plan three month in advance and know who you'll need, and if you will be able to pay them or not, including : are they able to pivot if needed ? Then you've got nothing to do in a startup go waste the time of some big behemot when the inertia will keep them going even if you screw up...

Re:I have a better idea (1)

Anonymous Coward | about a year and a half ago | (#43820801)

how is VAT worse than sales tax?

Old ideas (0)

Anonymous Coward | about a year and a half ago | (#43822875)

It varies across Europe, so I don't understand your general claim. Your "factual" description of the situation is not correct.

- My Northern European country has lower corporate taxes rates than the US in general.

- Hiring and firing is pretty easy, but not without reason.

- VAT is probably the most logical tax, it taxes spending and not income. It's pretty fair regardless of income levels, much more so than income taxes.

Re:I have a better idea (0)

Anonymous Coward | about a year and a half ago | (#43823293)

No thanks, we don't want to become the USA.

Just give it to ARM. (0)

Anonymous Coward | about a year and a half ago | (#43820409)

Just give it to ARM and be done with it.

It could help fund ARM to considerably faster speeds and more capability to be useful for multi-tasking and other features.

Possibly good news for me (0)

Anonymous Coward | about a year and a half ago | (#43820471)

My contract with the university is till the end of this year (also, hopefully will PhD-graduate before that). My research is in microfabrication, so not electronic chips, but close enough that my chances of employment have increased thanks to this 5G€.

(In case Slashdot doesn't display it correctly, the last character is the Euro sign)

Re:Possibly good news for me (1)

Coeurderoy (717228) | about a year and a half ago | (#43823017)

Good luck :-)

you're fired!!! (-1)

Anonymous Coward | about a year and a half ago | (#43820497)

i like to go wee wee with my pee pee

Good idea (1)

WOOFYGOOFY (1334993) | about a year and a half ago | (#43820535)

Because an Intel monopoly is the worst of all possible outcomes

The problem w/ manufacturing in the EU (0)

Anonymous Coward | about a year and a half ago | (#43820681)

The problem with semi-conductor manufacturing in the EU is that the EU has so many regulations, particularly with regard to perceived hazards involving chemicals, that it may be totally impossible to ever build a modern FAB anywhere there. Literally hundreds of chemical species are in their lists of banned substances it's amazing that anything can be made or grown there.

Re:The problem w/ manufacturing in the EU (1)

Grishnakh (216268) | about a year and a half ago | (#43821007)

Literally hundreds of chemical species are in their lists of banned substances it's amazing that anything can be made or grown there.

That shouldn't be a problem for growing things; you just wouldn't use any pesticides or artificial fertilizers. Farmers got along just fine hundreds of years ago before all these substances were invented. Considering how much food the EU produces (and exports), they don't seem to be having a problem there.

But yes, for modern manufacturing, having a lot of banned toxic substances would be a problem. It just isn't possible to make most manufactured goods without handling toxic or hazardous substances at some point.

Not a problem (0)

Anonymous Coward | about a year and a half ago | (#43822911)

That's not the problem at all, and comes across as rather strange. I seriously doubt your credentials with regards to "perceived hazards". Even the Chinese are realizing that they can't continue polluting without consequences.
EU legislation, like RoHS, is now the global de facto standard. If you want to sell to Europe you have to follow it. So now they just manufacture to that [highest] standard regardless of the intended end destination for the product. I seriously doubt the environmental conditions are worse in Taiwan now.

Profits? (1)

Anonymous Coward | about a year and a half ago | (#43820809)

A lot of these chip manufacturers build commodity products that don't make much (if any) money. Most of the profit is concentrated at the top of the food chain with Intel, IBM, etc.

Re:Profits? (0)

Anonymous Coward | about a year and a half ago | (#43820993)

Proof that marketing is more important than products. Until the manufacturers go bankrupt, anyway.

Case in point (1)

ndverdo (799508) | about a year and a half ago | (#43821281)

I was at an EU company which built a worldwide massive business based on what was in-house developed silicon - a chip - as crystallization point. The semiconductor capability was consecutively sold and innovations of a similar kind did not happen as far as I know thereafter.

So very stupid (0)

Anonymous Coward | about a year and a half ago | (#43821523)

Any time a government has to pay to make something worth doing, it means it's bad for the economy. People have this naive idea that jobs are good for the economy (not true, jobs are the result of a strong economy, not the other way around) and that all trade benefits the economy. Nope. Intelligent trade, where both parties get something better than what they are trading away, benefits the economy. So if a company wants to hire someone, and that person is willing to work for what the company is willing to pay, then they both benefit, as does the economy. But when the company isn't willing to pay what people are willing to work for, and the government has to step in to pay to make it happen, that means the economy is taking a direct hit of the difference. In the long run, and for that matter the medium and short runs, too, this will be damaging to the economy and will cost more jobs and more money than it will bring in.

5 billion euros is a pittance in this sector (1)

cheesybagel (670288) | about a year and a half ago | (#43821637)

As an example NY State gave $1.37 billion in financial incentives to GlobalFoundries in order for them to locate a plant there. These included $665 million in capital. That was one plant. Semiconductor manufacturing plants typically double in price with each manufacturing node generation. The commission wants to fund 450mm plants which will be a helluva more expensive. All those billions will probably only be enough to fund 2-3 leading edge fabs.

Most of the money will likely go to GlobalFoundries and Siemens in Dresden and STMicro in Grenoble. My guess is the EU Commission will grant the funds to any corporation willing to erect a manufacturing plant in those places. It does not necessarily need to have their corporate headquarters in the EU.

The rest of the money will likely go to the Netherlands in order for ASML to create the next generation lithography tools.

Re:5 billion euros is a pittance in this sector (1)

cheesybagel (670288) | about a year and a half ago | (#43821641)

s/450mm/400mm/

Only one winner (1)

axonis (640949) | about a year and a half ago | (#43821775)

Last time I checked Applied Materials was an American Company and had the whole fab business tied up globally... EU Pollies just Stoopid Social Slaves then OR paying back some of the billions they scamed from Intel and Microsoft ? ;)

Re:Only one winner (1)

axonis (640949) | about a year and a half ago | (#43821883)

http://www.appliedmaterials.com/ [appliedmaterials.com]
Shut up Slave - just getting by
check out the obama video ;) ha ha EU Austin is your capital

Better Horse-Carriages? (0)

Anonymous Coward | about a year and a half ago | (#43824671)

Why don't they invest in *modern* technology? Instead of trying to over-re-engineer something from the last century's early latter half?

Airbus (1)

manu0601 (2221348) | about a year and a half ago | (#43825117)

I am not sure that Airbus could be created with today's EU treaties. State were a lot involved, something that today's EU fight like hell. And the EU cannot act instead of member states because it does not have their financial strength.

Some would want to change that by having member states giving more money to the EU, but since the EU is totally antidemocratic and since EU leaders are not responsible at all before tax payers, I would prefer that problem to be fixed by reverting to the previous situation where member states were allowed as industrial investors. Airbus and Ariane demonstrated the approach works quite well.

Eurocrat thugs (0)

Anonymous Coward | about a year and a half ago | (#43825159)

This is another example of the European centrally planned economy. The bloody thing is guaranteed to fail.
Let's not forget Kroes used to be postal clerk. That is exactly the background one would expect from a eurocrat hell-bent on wasting 5bn of taxpayer money.
The USSR had tractors, the EUUSR will have the 21st century equivalent. Morons.

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