Obviously they cannot all be right.
The only that I think is given that will expand its global market share is China. Paradoxically because of the US sanctions and the fact that it relies so much on imports presently.
As a percentage of the market, that's true, but if the subsidies grow the whole market then every block's dollar value of market share can all go up.
Every startup learns this lesson quite early on. It's a heck of a lot easier to grow a market by 5% than it is to take 5% of the market from a competitor, mostly because competitors do things to try to stop you.
They could all be right that their market share will be higher if they adopt this policy than if they don’t.
What OP means is that it's a mathematical impossibility for everyone's market share to increase. It's a zero sum game, for any player's market share to increase, someone else's must decrease.
A multi billion dollar company will not just lay down and die when its shut out from the open market, it will use its muscles to create its own.
Hisense is not the market leader, but they have done a significant leap in the last 5 years (Not all of it through legal means thought)
Taiwan 80% -> 50%
EU 1% -> 10%
US 1% -> 10%
South Korea 9% -> 15%
China 9% -> 15%
And if 4/5 of them ended up "being right" would indicate that subsidy policies are effective, right?
That doesn't make sense given that all the other big blocks are cooperating across borders while China is subject to stiff export controls in an area with real technological chokepoints.
Sure they can, just ban imports. Each country/trade bloc ends up with their own chip.
If they really want to, they can just limit the export of ASML machines only to companies that have at least one of their fabs here in the EU.
But they won't. In stead they will just handover €30 billion of public money to multinational corporations with market caps larger than the yearly GDP of some EU countries.
Edit: For clarity, I'm not suggesting banning the export of ALL machines to outside the EU. I'm just saying they could force companies to also have at least one big fab inside the EU, for geopolitical purposes.
China will already have started their attempts. It isn't crazy to expect them to achieve success single handedly. If all of Asia starts mucking in the EU will get crushed. The EU does not have a track record of staying ahead when they tangle with Asians for tech manufacturing supremacy.
The EU can't parlay a temporary monopoly held by one manufacturing company into a useful strategic edge.
How did that go for China and Russia during the last... 20 years of them throwing all their money and brain power at it?
No, ASML is guarding profound insights. I run a community for silicon valley veterans from areas like silicon design, manufacturing, hardware design, top-tier testing equipment, military and research lab prototyping, etc. The stuff ASML is doing is night on impossible, and even the brightest minds I know in that community find it hard to begin to imagine the minute details that really make ASML's tech stack a possibility as opposed to a flight of fancy.
There's a very good reason why the powers that be decided to move heaven and earth to get TSMC out of Taiwan and onto safer ground. This knowledge is at the very edge of what we know about physics and manufacturing. There's no replicating it, there's only losing it and starting again from scratch with no genius insight at all.
I hope ASML has something like an internal journal, like oldschool HP or Bell Systems, and one day they'll release it, because it will revolutionize what we know about a lot of practical engineering, even if by then it's 30 years behind the curve of what they're doing at that point.
Depends on your definition of "tech", see e.g. Airbus.
As someone who's worked in semiconductors... [citation needed] on that claim.
>If the EU plays hardball to too great an extent, other countries will replicate the research.
If they could have, they would have. Many have been trying, and still are.
>China will already have started their attempts.
Not "will have". China has been trying to catch up for many years.
> The EU does not have a track record of staying ahead when they tangle with Asians for tech manufacturing supremacy.
You're just lumping "Asians" into one group, aren't you? China, Japan, Taiwan, Korea have very different strengths.
>The EU can't parlay a temporary monopoly held by one manufacturing company into a useful strategic edge.
Oh they absolutely can. So can Taiwan (and does so pretty successfully).
Why hasn't Japan done it yet? As I understand, ASML is the only maker of EUV etching machines at this point.
The economic incentives are there. They’ve BEEN there for decades. To think China doesn’t have an equivalent just because they haven’t cared enough yet is laughable.
I wouldn’t even bother with that much. You’re comparing international corporations’ reported revenue with one measure of one country’s general economy. I know a lot of us here are from countries that are either really really big or really really rich or both, but most countries are not really really big or really really rich. The only thing reported revenue, GDP, and market cap have in common is a unit you can denominate them in, but GDP as measured in dollars or euros or whatever still isn’t money in the bank (and neither is market cap).
US gets really unhappy and makes Taiwan ban exports of TSMC chips and products containing TSMC chips to EU. Oops.
EU would've to onshore the whole supply chain first. Probably a 100B-1T€, 10-30y endavour. Good luck with that.
This kills the crab.
Specifically, that would force the development of a (probably taxpayer-funded) US competitor. Even at the cost of delaying the shrink cycle by a few years.
LOL
This would devastate the world economy. Gl getting chips for phones, computers, satellites...
There's only a handful of companies in the world producing chips at scale, so it wouldn't be too out of the question.
You could even invite the Chinese to put their fabs in the EU so that they get a chip sector they control but also make them a bit more dependent on the EU, in stead of the EU on China.
But hey, we can also just handover €30 billion of taxpayer money to TSMC and Intel, I guess.
Those GDPs varies from about €18 billion (Malta) to about €4 trillion (Germany).
Which is what the parent is directly addressing.
anyway: GDP is more closely related to revenue than it is market cap.
Also, setting high goals might not be a bad thing, even if you don't reach them you might still get far and do enough change to make a significant impact on something.
A semiconductor factory takes time to build and to ramp up
This info is from December 2022, so by now I will assume something is already finished or in the final stages and possibly more plans have been made.
[1] https://www.anandtech.com/show/18966/tsmc-delays-arizona-fab...
Obviously, companies want to make money, but the goals of the government have somewhat been at odds with funding growth and innovation in this sector because of some resentment on the ground from citizens. Tax legislation is all over the place and it's becoming more and more expensive to hire experts from around the world. I understand the sentiment to start hiring at home, but at a certain point, you have to take stock of what is available and get to work with what tools you have. Invest in education for your local population (lots of cuts in the past two decades) but don't punish individuals and companies trying to get work done and benefit your economy.
The infrastructure is basically all in place for Europe to foster its own Silicon Valley, with homegrown production to boot!, but it will come down to politics to make it a reality. These goals are good baby steps, but they need to ramp up quick if the EU is serious about becoming a global competitor.
Anecdotally, I feel like Sweden produces more startups that grow large worldwide. I presume, they have less regulations in place + English is more widespread I guess.
Yet, they are also part of the EU.
Why would you presume that? Working back from wrong assumptions and biases is never a good idea.
Getting work done is one thing, why should locals support tax breaks for expats?
"Technology companies including ASML Holding NV and Adyen NV called on the Dutch government to maintain a tax break that seeks to attract expatriates to the Netherlands.
Ingrid Thijssen, head of the Confederation of Netherlands Industry and Employers, said the government for budget reasons is considering shrinking or scrapping a rule that exempts 30% of an expat’s salary from income tax for five years."[0]
[0] https://www.bloomberg.com/news/articles/2022-05-06/dutch-tec...
Adult immigrants will benefit less from the system than locals over their lifetime, but may end up contributing as much. Adult immigrants with advanced degrees who come to work here for a few years and then move out are penalized quite severely by the tax system, to the point where I think it makes very little sense to do that.
On my locally quite high $80k annual income (STEM PhD, 40yo), my employer pays an additional $36k in taxes and pension. Then I pay $22k in income taxes and 25% VAT on everything I buy.
Why would anyone with an advanced degree from China, India or the U.S. come to work here? Lowering the taxes for a couple of years following immigration, possibly proportionally to level of education, would encourage immigration and would be ethically defensible.
In many cases resentment is for low-skilled (or no skills at all) migration. Yet many european governments punish highly-skilled migrants yet don't listen to their citizens regarding actual issues on migration. Loose-loose situation for citizens, companies and governments.
This x1000. Germany, for example, created the worldwide market for solar in the first place with the EEG subsidies, and German companies were technology and market leaders for a long time.
So great if you're a physics PhD, but if you're going in there as a software engineer thinking you'll be working with the latest and greatest, you'll be in for a shock. Not to mention that it's a huge ship that's very difficult to turn around in terms of introducing new technologies or paradigms. It's classic BigCorp politics all the way through.
Satisfying natural gas demand without The Pipe was also unrealistic.
In the not quite unrealistic scenario of tensions between China and US increasing, with China possibly annexing Taiwan, it is clear that chips will have to come from Europe, US, Japan and maybe South Korea for the Western market. I think most of these investments are considering that scenario, and then they have to tweak the numbers and make unrealistic estimates to sell that idea as a regular business plan.
In 2000 the EU Lisbon strategy announce that it would be "the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion", by 2010
ASML has brains ( and brains are rarely for sale like that, it takes forever to get a large qualified workforce ), suppliers ( their machines are made of very high grade components that are nearly impossible to source ), and a solid head start.
This isn't a software company.
It's just more practical to work with them.
There are long ass supply chains
Wafers per month?
Also of all things the only real European adversary could target, some fragile equipment and ephemeral IP isn't not one.
The last paragraph says they "would need about a dozen new fabs to be built and in full volume production by 2030"
max out 12*20 = $240B, but they say total cost $500B. Supply chain really on par with fab cost? Hm.
[cost] - ChatG estimates $10-20 for SOTA on par with TSMC
- https://www.quora.com/How-much-does-it-cost-to-build-a-semic...
- transitively sourced to a "third-party analysis by IBS" https://www.granitefirm.com/blog/us/2023/04/29/cost-of-chip-...
good luck building a working fab from scratch without a blank check 20-year R&D investment.
Just like how the EU finance a hundreds of millions of dollars for a Google competitor that we haven't heard of today. [1]
[1]: https://arstechnica.com/uncategorized/2007/07/eu-approves-16...
https://cordis.europa.eu/article/id/28084-eu-clears-state-ai...
The EU (and its members) does that for every key technology. For cloud they did it at least 2 or 3 times.
I vaguely remember a bunch of alternative "clouds" were created so they have a sovereign cloud, and then bought back by a big telco linked to the state.
Then the big telco have it managed by Huawei [1]
[1] https://www.orange-business.com/en/press/orange-business-ser...
Kind of weird that these wastes of money are never in the news, not even during Brexit.
Most people won't have heard about most the successful companies that resulted from the combination of military spending and research grants, much less the many failures on the way.
If we knew how to pick the successes ahead of time, there's be no point in gov funding, or in venture capital firms, because they'd be able to go into any mainstream bank and loan finance their entire business with regular business loans.
Government research funding almost inherently should have a high failure rate, because they offer the most value where they enable research that is so high risk they can't get funding elsewhere both because of the occasional big win, but also because of the side effects of creating eco systems.
That's not to say that doesn't also lead to lots of stupid projects getting funded, and lots of mismanaged funding programs that deserve scrutiny. But it's also always easier to recognize the stupidity after the fact...
The only feasible solution I could think of is let Taiwan joined the EU.
“ The goal of the EU’s $43 billion Chips Act of achieving a 20% world market share for European producers by 2030”
Well, one doesn't need to look very long at Von der Leyen to work out it's probably both.
Look at what she did before becoming EU Commission president ("Among friends and foes alike, von der Leyen’s stewardship of the [German] defense ministry, which she [..] headed since 2014, [was] regarded as a failure."[0]), and look at how she ended up with the job of EU Commission president. The best (worst?) bit is that she wasn't even a candidate for the job she got.
I have several ex-RAF friends, and their joke back then was that von der Leyen had more children than her ministry had working fast jets.
[0] https://www.politico.eu/article/ursula-von-der-leyen-biograp...
https://www.theregister.com/2021/10/07/alternative_search_pr...
We just aren't serious about this. If we were, Google and Microsoft would be banned in the EU. (Including other companies which are receiving a lot of money to prioritize Google or Microsoft software, like Mozilla and Apple.)
And it's not like there aren't other reasons to ban them : https://en.wikipedia.org/wiki/Max_Schrems#Schrems_II
ASML already announced they're leaving the Netherlands. No 100% with those words, but they already know where they're going.
Germany (Berlin) (still EU, but at least there's a better climate). Enough space, people, life it good, lots of their partners are there.
Otherwise: Switzerland.
No sources.. But a highly technical CEO of such an important company does not 'threaten' our country to leave without actual plans and intention. I've said many times, if ASML was American, its marketcap would be 3-4x.
Shell, Unilever, KLM all left the Netherlands already.