The machines and processes needed to package the individual integrated circuits are fantastically expensive but the margins are so low in that step that it's only profitable at massive scales.
So you put the fantastically expensive machines near where most of the customers are and most of the customers are in Asia.
Works the same way with fiber optic cables. Making the long skinny bits is hard and high-margin. Actually turning them into cables is easy and low-margin.
So Corning makes huge spools of fiber optic cable in Arizona, North Carolina, and New York (I think) and ships it off to Taiwan and China where it is made into the cables that you plug into stuff.
Marine shipping is just about the most fuel efficient way of moving things between any two places, by a lot. A 100,000 dwt ship can get 1050 miles per gallon per ton of cargo. It takes about a teaspoon full of fuel to move an iPhone sized device across the pacific when I ran the numbers last.
To ship things to/from these fabs by sea you have to add the cost of shipping by truck between Phoenix and (presumably) LA. Not sure how big of a difference that makes.
Plus, chips are small in size and cost a lot so you can fit a lot in a container. Per unit shipping costs probably come out to be pretty low. Especially when compared to the political costs and risks associated with not onshoring.
Your overall point is probably right, but "tens of thousands of dollars of value in each gram" seems like an exaggeration. How much does one CPU weigh?
Depends on the chip. A typical consumer processor is 100-200 mm². Wafers are about 1mm thick (actually a bit less, but close enough) and silicon has a density of 2300kg/m³. So it's 2.3mg/mm² of wafer area. The chip is then 0.23-0.46g. if it's high end and worth $1000, then the wafers are $2-4000 per gram. Probably the low end of that since the fancier chips are usually the physically bigger ones.
However, low-end processors will be worth radically less ($100 CPUs aren't 10x smaller) and things like top-end FPGAs will be worth substantially more. An Agilex 7 can be $40,000 and if it's got less then 4 grams (around 1700mm², or 41mm*41mm), the wafer is worth over $10k/gram. The entire chip is 56x56, and from the package drawing, the die appears to be around 30x30, so it exceeds the threshold.
This is assuming all the value of the retail price is the main wafer, which is also not true.
Thousands per gram, certainly seems possible, though I doubt it's even that on average across all chips, and considering that there is non-wafer content in the price. Tens of thousands is probably pushing it. However, it's certainly likely to be rather more than gold in terms of specific value ($100/g, ish). Harder to fence, though.
Order of magnitude it's within range. A single wafer for something higher end is worth tens of thousands of dollars. So whatever that weighs. It's not much.
I'm suprised they can't ship (flat) packaging that could be used in Arizona with a simple assembly line.
If they had that packaging design then for this to make financial sense the two way shipping (and loading, unloading, custom clearance etc) would have to be less than shipping the packaging, the setup cost per unit cost of putting the chip in a box
Wait, wait. In the context of semiconductor manufacturing packaging does not mean what you think it means. It is not putting the product in a paper box.
It is about cutting the wafer into individual chips, wire bonding the silicone to pins, and covering the whole thing with epoxy.
The machines and processes needed to package the individual integrated circuits are fantastically expensive but the margins are so low in that step that it's only profitable at massive scales.
So you put the fantastically expensive machines near where most of the customers are and most of the customers are in Asia.
Works the same way with fiber optic cables. Making the long skinny bits is hard and high-margin. Actually turning them into cables is easy and low-margin.
So Corning makes huge spools of fiber optic cable in Arizona, North Carolina, and New York (I think) and ships it off to Taiwan and China where it is made into the cables that you plug into stuff.
Marine shipping is just about the most fuel efficient way of moving things between any two places, by a lot. A 100,000 dwt ship can get 1050 miles per gallon per ton of cargo. It takes about a teaspoon full of fuel to move an iPhone sized device across the pacific when I ran the numbers last.
To ship things to/from these fabs by sea you have to add the cost of shipping by truck between Phoenix and (presumably) LA. Not sure how big of a difference that makes.
A semi truck carries +- 15 tons of cargo and gets an average of about 6 MPG, so about 90 MPG/ton.
Trains are pretty efficient as well.
Chips are small, so one truck once a few days may suffice.
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Interesting. Could you give a brief description of how you got that number? Eg. what factors were considered.
Those numbers match what comes up with a quick search:
https://www.extension.iastate.edu/grain/topics/EstimatesofTo...
That study uses 1,043.4 mpg for the fuel economy of a 100,000 dwt ship.
Videos of transportation ship engines are cool. Each cylinder is wide enough for a person to lay down inside it.
https://youtu.be/G0eMyA388bE
This is how most modern supply chains look like.
Plus, chips are small in size and cost a lot so you can fit a lot in a container. Per unit shipping costs probably come out to be pretty low. Especially when compared to the political costs and risks associated with not onshoring.
> you can fit a lot in a container
Guys these are microchips on wafers. You can put a million dollars worth in your jacket pocket. They aren't being shipped in containers.
These are literally microchips. Tens of thousands of dollars of value in each gram.
Shipping cost is fundamentally irrelevant, you can put $100MM worth on a direct flight and have room left over for your family and friends.
https://www.freightwaves.com/news/dsv-unveils-details-for-ne...
^certainly there's activity in that space
Your overall point is probably right, but "tens of thousands of dollars of value in each gram" seems like an exaggeration. How much does one CPU weigh?
Depends on the chip. A typical consumer processor is 100-200 mm². Wafers are about 1mm thick (actually a bit less, but close enough) and silicon has a density of 2300kg/m³. So it's 2.3mg/mm² of wafer area. The chip is then 0.23-0.46g. if it's high end and worth $1000, then the wafers are $2-4000 per gram. Probably the low end of that since the fancier chips are usually the physically bigger ones.
However, low-end processors will be worth radically less ($100 CPUs aren't 10x smaller) and things like top-end FPGAs will be worth substantially more. An Agilex 7 can be $40,000 and if it's got less then 4 grams (around 1700mm², or 41mm*41mm), the wafer is worth over $10k/gram. The entire chip is 56x56, and from the package drawing, the die appears to be around 30x30, so it exceeds the threshold.
This is assuming all the value of the retail price is the main wafer, which is also not true.
Thousands per gram, certainly seems possible, though I doubt it's even that on average across all chips, and considering that there is non-wafer content in the price. Tens of thousands is probably pushing it. However, it's certainly likely to be rather more than gold in terms of specific value ($100/g, ish). Harder to fence, though.
Order of magnitude it's within range. A single wafer for something higher end is worth tens of thousands of dollars. So whatever that weighs. It's not much.
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I'm suprised they can't ship (flat) packaging that could be used in Arizona with a simple assembly line.
If they had that packaging design then for this to make financial sense the two way shipping (and loading, unloading, custom clearance etc) would have to be less than shipping the packaging, the setup cost per unit cost of putting the chip in a box
Wait, wait. In the context of semiconductor manufacturing packaging does not mean what you think it means. It is not putting the product in a paper box.
It is about cutting the wafer into individual chips, wire bonding the silicone to pins, and covering the whole thing with epoxy.
Here is a video which explains it better: https://www.youtube.com/watch?v=7gg2eVVayA4
It would be indeed crazy if they would ship the ready chips to Taiwan just to be put in a paper box.
basically the input of the process is a wafer which looks like this: https://waferpro.com/wp-content/uploads/2016/08/Patterned-Lo...
And the output of the process is something which looks like this: https://res.cloudinary.com/rsc/image/upload/b_rgb:FFFFFF,c_p...
The packaging in this context is not wire bonding but CoWoS - chip-wafer and wafer-wafer bonding.
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You seem to be confusing the term packaging...it is not the box, it is how the chips are assembled together to make the final product.
https://www.youtube.com/watch?v=-egYoxajTz0
Dont downvote the guy for not knowing this very specific definition of 'packaging'
Right, but he assumed he knew a technical term when he didn't, which is unwise.