On a day to day basis, there are few things I love as much as I love technology. From a young kid on, being an early adopter was something that would just make me giddy. I remember the first time I tore apart a TRS-80. Adding a Transwarp card to an Apple IIGS so it could support GS/OS, Apple Pro-DOS and MS-DOS all at once. Being a beta tester for OS/2 Merlin Watching the first of games with S3, Trident, Cirrus Logic graphic cards all to see the market upset when 3Dfx, then Nvidia came along. CPU manufacturers come and go — there are no more Via, Cirrus-Logic or NexGen processors anywhere that I know of running software. No MacSE with an easy-to-grab handle on the back.
What is interesting, however, is that 25 years ago, this would have been a hobby of only a small number of people who just enjoyed playing around with computers. Now, however, COVID has set in and more end users are looking to have something to do — and in 2020 PC sales, and PC part sales skyrocketed, literally off the charts escalating demand while production just couldn’t keep up. Now, US Companies are asking the Biden administration to help build more foundries in the United States, to end reliance on TSMC, a lead producer of chips, in order to stop the shortage. Is this really a viable plan? Could you suddenly get an Nvidia RTX 3080 at a non-scammed price tomorrow if the Biden Administration went for it? Would that AMD 5950X appear on a store shelf?
One of the great joys of having Joseph Biden as president is that I can take some time to talk about actual policy and things that could happen, should happen and will happen. Instead of fretting about the former guy blowing things up, we can talk about whether or not you can get together a gaming system so you can blow someone up online or build that PC you want, or even find an XBOX X Series One or Playstation 5. I want to specifically address the ask that has been made by US Companies, and what it would accomplish.
In a letter sent to the Biden administration on February 11th, the US Semiconductor industry put out the request: make building foundries a part of any infrastructure plan in the US.
Intel CEO Bob Swan, AMD CEO Lisa Su and several other top semiconductor executives urged President Joe Biden Thursday to rekindle domestic chip manufacturing with “substantial funding” as part of the White House’s economic recovery and infrastructure plan.
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“We therefore urge you to include in your recovery and infrastructure plan substantial funding for incentives for semiconductor manufacturing, in the form of grants and/or tax credits, and for basic and applied semiconductor research,” the letter said. “We believe bold action is needed to address the challenges we face. The costs of inaction are high.”
The letter goes on to make the case that the US is falling so far behind in global manufacturing that if something isn’t done, the US will find itself woefully short on supply and at the mercy of foreign production. This sounds terrible, right? That semiconductor companies aren’t coming to the US and because of that we are in really, really deep trouble. Well, before you tear your hair out thinking this is why you have been denied the latest hot tech, let me point out the argument being raised in this letter is pretty much, as Joe Biden would say, malarky. From Extreme Tech:
This is ridiculous twaddle. Samsung has literally just proposed building a foundry in Austin. In return for this grand act of corporate benevolence, it wants the county to hand over a 20-year 100 percent tax abatement. It wants the city of Austin to provide a 50 percent abatement over the same period of time, for a total value of over $800 million dollars. Not content with that, Samsung also wants to be excused from the estimated $252 million it would pay in school taxes over the same period. If it succeeds, the state of Texas will be responsible for making up the shortfall to the school district, leaving taxpayers literally on the hook.
Samsung, one of the leading producers is going to build a fab outside of Austin, Texas. In exchange for it, they already want incredible tax abatements to the county and city, going so far as including not having to pay taxes in school taxes. More than a billion dollars in incentives. The tech industry, while unbelievably profitable — Samsung had a profit margin over $34 billion, has no problems asking for big government hand outs from the market that is buying their product, on the hogwash that doing so will help shortages.
It just won’t. I want to go back to what I said up top, about the joy of being an early PC adopter. I loved dealing with older PCs. I still do, from time to time. In those days, chips could be in large packages, and early on, a heatsink was a passive item stuck on with a sticker. As the size of the die shrunk, the ability of manufacturers to do it did as well, because the cost of the foundry increased. This is one of the items that the tech industry uses to ask for more funds. What they aren’t telling you is that even if they received the funds they are asking for, getting these new foundries online isn’t something that happens tomorrow. In fact, it wouldn’t happen in a few weeks. Probably not in a few months. No, building a new foundry at a lower nanometer, test and ensure quality control can take real-time. You see, in 2020, TSMC, the foundry most well known for chip production for AMD and Nvidia, chips which are at the heart of the graphics card market, SoC and CPUs, announced they would build a megafab in Arizona. Their timeline to get the fabrication facility online? 2024.
TSMC's current six GigaFabs are situated in different locations in Taiwan, so it is highly unlikely that the company has any intentions to build six more GigaFabs in the U.S. any time soon. On the other hand, it can expand its Arizona fab in multiple phases as demand for its manufacturing services increases. At this point that's largely speculation. TSMC (and other foundries) only commit to expansions when it sees demand from customers. Since the Arizona facility is only expected to start operations in 2024, it's perhaps too early to discuss plans to expand this fab.
There will be pressure in the market for some time to come, only settling down in maybe the third quarter. In the end, this may create a lost generation. Cards falling in the Nvidia RTX 3xxx are being marked up at such a high rate that users will balk at paying three times the MSRP. The same is true of AMD Radeon cards, facing similar a scam practices. Consumers have become wary of paying fraud prices and rewarding a practice that only further strangles the market availability. Meanwhile, if you’re hunting for a PlayStation 5 or XBOX One Series X, both of which are powered by AMD Ryzen architecture manufactured by TSMC, availability is also going to be rough for a while.
So, what is an enthusiast to do? If you listen to technology companies, they will tell you to pressure your elected official to give them handouts to help them succeed. Balderdash. Your best solution for the moment is to wait and make sure you only pay MSRP if you want something. Don’t pay these crooks. If you can hold out, do so. If you listen to Steam, the most well-used graphics card for gamers right now is still the GTX 1660, not an RTX 3080. Your gaming experience in most games will be just fine at 1080P for now, and when you are ready for 1440P or 4K gaming, you can do so when parts are available. Owning a Playstion 4 or XBOX One (non-series X) gets you to access to all of the good games, and in most cases, a purchase on those platforms automatically entitles you to a free upgrade if you ever do get your hands on the new generation. So, you lose nothing by waiting.
I love being an early adopter. I have always found a lot of joy in being an early adopter. But being an early adopter doesn’t mean you have to do something ridiculous or break your bank account.