Comment by alephnerd
16 days ago
Packaging isn't done by TSMC.
Packaging is extremely low value and commodified, so companies prefer to contract it out to OSATs like Amkor.
Same reason why most companies became fabless - margins are much more competitive this way compared to owning your own fab.
This margin-oriented mindset is arguably one of the driving factors that makes the US lose its industrial base.
No, its a global product silicon chips, america ships em to 100+ countries and will lose its edge if it doesnt stay at the top.
Margins are crucial for this, the driving factor that made US lose its industrial base, is red-tape, red-tape, red-tape, red-tape, political interference, militant unionism (unions are good and fine, militant unions are not), and foolish gov laws which did not make sure that labour standards are consistent for all products in american market, to make sure slave-labour or extremely shoddy labour standard based countries do not erode away great american jobs and its industrial base.
Margins are fine, and good. Unfair competition, rules and red-tape for domestic manufacturers but none for foreign companies, is what killed it.
It’s cheaper for a chinese company to ship to american households than it is for a local american company to an american household… , this is purely because of crazy gov regulations.
Government regulations (like not polluting the water or forcing your workers into 40 hours a week of unpaid overtime) may be part of it. But China has been known to "dump" commodities into foreign markets to destroy those markets
Here's one random article I quacked, and this issue has been going on for years it ain't new: https://edition.cnn.com/2024/03/28/business/china-goods-expo...
China has also devalued its currency to facilitate this dumping spree
Another random quack (more on the how than history, but the impacts are detailed) https://gbtimes.com/how-does-china-devalue-their-currency/
So the narrative that "the US is choking itself with silly regulations and can't compete as a result" is a pure fiction afaict.
3 replies →
Companies in every country have this mindset.
Even Taiwan has largely offshored packaging to ASEAN, China, and India. And Taiwan got packaging because the Japanese manufacturers offshored to there.
The difference is that only recently with the CHIPS Act did the US gov't put money to support strategic industries at large scale.
The US in its history after the 60's would invent a lot of core industrial tech, but then we'd let Japan, Germany, etc. actually commercialize because we didn't want to pick winners.
We invented CNC machining, SMT / pick-n-place for PCBs, industrial robot arms, etc., and these were all American dominated, but foreign countries supported homegrown companies long-term, and those American companies went bust.
Aren’t Intel and Samsung doing packaging research in the US?
3 replies →
Indeed, Apple* seem to be one of the only companies with the long term vision to integrate vertically and improve industry as a result. The short term pennies-on-the-dollar of outsourcing is just brain-dead and non-innovative.
*this is an observation from someone who has never bought a new apple product due to their increasingly closed eco-system
odd that you're not an Applehead but still think they're somehow "improving" the industry.
perhaps you mean "they provide competition among peers like Samsung and Sony, without which the industry would go slower, perhaps with worse products"?
ah, just noticed that you qualified "bought a new Apple..."
Are you proposing that the United States should operate factories without regard to margin?
No. Sustaining a business with a margin doesn't necessarily mean that maximizing the margin has to be the ultimate goal. A company can look to maximize market share, revenue, or other ambitions.
Well... farming exists....
I'm not sure I agree microchips are as critical as stable food supply, but I'd be willing to entertain the idea they're close enough to be treated specially.
Modern packaging - high density 2.5D/3D is defintely not a commodity.
Final packaging is.