One thing I don't understand is why fabs got uprooted from USA. There doesn't seem to be cost savings if you try to offshore a multi-billion dollar fab because labor is not the main cost. So fab in China/Taiwan/USA should cost more or less same money to run.
As a sibling comment points out, there is still significant fab capacity in the US.
There are a LOT of things to untangle. The first thing is the difference between leading edge fabrication, and everything else. If you look at this wiki list of active fabs (https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...), you'll see lots of plants still building stuff at 45nm+, and a large chunk building in 22-45nm.
There are only 3 main leading edge manufacturers', TSMC, Intel, and Samsung (I'm discounting Global Foundry since they publicly announced they're not chasing smaller process nodes). All of them concentration their fabs in their home country. Intel has some fabs in Ireland (I don't really know why..), Israel (Intel's Israel team is top-notch and a real contributor to Intel's success, so I guess that makes sense), and one in China (cause that's the world we live in). All of Intel's leading edge plants (10 and 7nm) are in the USA.
Of the non-leading edge plants, you'll also find that the majority of companies also concentrate their fabs in their home country, with American companies being a bit more dispersed. I would evaluate that the majority of fabs reside in a company's home country. I wager a bunch of the greater American dispersion comes from mergers/acquisitions. There's been a lot consolidation in the chip industry (at every level and vertical) in the last few decades.
I think what you're seeing isn't so much companies moving their fabs off shore. What you have is that most companies are no longer willing to invest their own R&D into pushing fabrication processes, so they stop building new fab plants, and instead look for a fabrication house to buy from. And today there's really only one choice, TSMC, which happens to be Taiwanese.
I've been reading Fabless: The Transformation of the Semiconductor Industry lately, and there's a whole bit in there about TSMC.
TSMC was the first company to be a "pure-play" company that did no design work and only manufactured orders. This was back in the days when the guys at Intel and IBM had the attitude that to be a real player in the industry, you had to have your own fab. But there was an increasing amount of fabless design houses in the US that would piggyback off the excess fab capacity that Intel/IBM had after they were done with their own chips, and TSMC targeted that demand by tables companies for manufacturing capacity directly.
The takeaways I got was fabs moved away from the US because TSMC and the like figured out an innovative business model that let them focus on a single part of the supply chain that provided substantial cost savings for all these new fabless companies in the US. Meanwhile, the old established players like Intel/IBM with fab experience weren't willing to hop on this new segment and kept their fab capacity mainly for making their own designs. Although TSMC started in a high capital low return segment, as opposed to fabless that could produce and capture most of the value in a chip design, the IP itself, TSMC eventually became so good at what they do and process nodes became so expensive to develop that no other US companies had the incentive to enter this segment from scratch and lose money for years before catching up with TSMC for frankly not very high returns. The only US company keeping up with TSMC is Intel, and that's because they've been manufacturing from the start and have enough volume to make investing in a fab and spreading that fixed expenditure over all their chips worth it.
Transistors, microchips and fabs were all born and thrived in USA. One would think USA would have first mover advantage because this is very very hard to replicate tech but for some reason, fabs got completely eradicated from USA.
Have you ever wondered what's inside a new $20 billion Fab made of that makes it so expensive? Where is that equipment designed, developed and manufactured?
There exists extremely high-tech sector called "Semiconductor Capital Equipment Industry". All the instruments and equipment involved in deposition, lithography, etch and clean, inspection, metrology, and prosess control is super expensive.
Most of that technology is in the hands of Japanese (Nikon, Canon, Hitachi High-Technologies,Tokyo Electron and too many others to name), ASML Holding is big European player and largest supplier of photolithography systems. American companies involved are Applied Materials (their Semiconductor Systems), Lam Research and KLA-Tencor.
Yes absolutely, but why not protect these innovations by operating these machines completely under our own supervision?
It's a lot easier to duplicate a production chain if you have full access to the machines (which come with extensive training). And you can even copy the process on a machine-by-machine basis, which makes it much simpler.
1) You do realize a large amount of people here aren't american?
2) Many (including myself) believe that a tightly coupled international trade is the by far most efficient way we have of avoiding violent conflict between countries.
There are still plenty of fabs in the USA. The Wikipedia page on the list of fabs puts over a hundred in the US[0]. I remember at one point when Samsung made most of the A Chips for Apple, the fab was actually in Texas though they do have a bunch in South Korea as well.
Employing 48k qualified people (like TSMC did in 2018) isn't cheap anywhere, and it's likely 2-3 times more expensive in the US. Maybe $1.5B/yr in Taiwan and $5B/yr in the US?
Indeed, running a public company in Taiwan is known not to be a pleasant thing.
Taiwan government is very activist when it comes to henpecking corporations on "governance standards." Boards of a lot of important companies are de-facto micromanaged by the state.
A stark contrast to the US, where laxity on that front is negated by mindbogglingly complex securities regulations.
For US, you can still play your game, just pay enough for lawyers. For Taiwan, not so much. Choose your poison.
Maybe, but the biggest coal-fired power plant in the world is there for example (look up Taichung Power Plant) and those things aren't known for being clean.
ROI = Return on Investment. Most people in practice calculate that in excel as a percentage of profit over their capital investment.
Smart business people know there's more important things than a dimensionless number, but hey, Peter Principle and "math is hard." See Black-Scholes and the 2008 recession for how wrong that can go.
I used to do math tutoring for economics students. Boy, that was an eye-opener! I had to explain over and over what independent variables meant, and how that affected for example derivatives. As bad as p-hacking and the social sciences.
Econ Student: "Can I just plug these lists of numbers in the formula and write down the answer?"
Me: "What are the numbers measuring? Are they independent?"
Typically a process step means a completely new fab. Thus when you Build a new one everything is on the table: cost of land, cost of labor, skill level of labor, distance from HQ... So when intel build new fabs in Penang and later PRC these all went into the decision. The old fabs are still around making older-generation parts.
Ah. So what they did at the Penang site was bonding, testing and packaging? (Not sure I'm using the correct terminology.)
That makes more sense now that I think of it. Can't imagine there was a steady supply of electricity there back in the early 70s. (Got any source though?)
I did wonder if Apple would build a fab; I mean what else do you do with all that cash you've got sloshing about, and they must use a fair chunk of output of a fab.
