Usually around now (6am PST), HN tends to be dominated by Western (and some Eastern) European commentators. I've noticed they tend to have a weird mix of orientalist sentiment along with a "Europe should be able to do this too" sentiment (though in a lot of cases, this is moreso sentiment than reality).
Let me contribute my Europeanist sentiment by pointing out that the harmonious design of the fab is pure tatemae.
The Japanese professional class care fuckall about PFAS and environmental issues have always been low on the list of priorities. Sorry. I love the Hokkaido produce.
It's certainly something to be concerned about. Even the building where MOS Technology made the 6502 (in Norristown PA) is still a contaminated EPA superfund site. It's an industry with very nasty chemicals and a long history of leaking them.
>I've noticed they tend to have a weird mix of orientalist sentiment along with a "Europe should be able to do this too".
Is it wrong for people in Europe to wish for more cutting-edge/high-margin opportunities in their back yard, especially given the currently atrocious state of the job market?
Like you read news how TSMC's cutting edge chips are made in Taiwan and US fabs, then you looks at European fabs and the most cutting edge are 16/12nm.
People are seeing the lag with their own eyes and wish for some change.
Actively disrespecting other countries who worked hard on developing such capabilities and assuming European nations should be on the "big boys table" is what is so jarring.
Nothing stopped European nations like Belgium, Germany, Netherlands, France, Italy, etc from continuing to invest in domestic capacity 20 years ago, but most of their IP is now developed in American, Indian, or other Asian subsidiaries or JVs.
Just becuase Europe was historically the richest and most powerful continent doesn't mean it will be forever.
>Actively disrespecting other countries who worked hard on developing such capabilities and assuming European nations should be on the "big boys table" is what is so jarring.
Maybe there's a misunderstanding here, as there was no disrespecting anyone there with my comment, and I basically agree with your point.
That doesn't change that people here want those cutting edge manufacturing and job opportunities the US has. They don't want to be stuck competition with China in commodity widgets like cars or low margin 16nm-65nm microcontrollers.
There's a limited market for ASML machines, Siemens gas turbines, and Airbus planes which can't support economic growth of the entire block.
>Nothing stopped European nations like from continuing to invest in domestic capacity 20 years ago, but most of their IP is now developed in American, Indian, or other Asian subsidiaries or JVs.
They're developed outside of Belgium, Germany, France, Italy, etc since private businesses care most about prioritizing shareholder returns, not national sovereignty. And with Western EUs high labor costs, high taxes, high bureaucracy, strong unions, private companies slowly moved jobs elsewhere where it's cheaper to do business, no unions, less environmentalism, less labor protections, etc. Everyone with basic business know-how could have seen this coming but people still thought they could have their cake and eat it too in the globally cutthroat "free market" economy.
Case in point, Nokia just announced it is closing Infinera's Munich office and moving all operations to the US.
> That doesn't change that people here want those cutting edge manufacturing and job opportunities the US has. They don't want to be stuck competition with China in commodity widgets like cars or low margin 16nm-65nm microcontrollers
You can't build an ecosystem for bleeding edge work without an even larger pipeline of non-bleeding edge and even legacy workflow. For example, it's 14nm that pays the bills for TSMC - not 5nm/7nm.
And much of the entire Taiwanese electronics industry is largely coalesced around legacy nodes and low value work as well.
> There's a limited market for ASML machines
Made in American using American IP by a US DoE JV.
> high bureaucracy, strong unions, private companies slowly moved jobs elsewhere where it's cheaper to do business, no unions, less environmentalism, less labor protections, etc
Yet European Biopharma and chemicals engineering remains competitive despite having similar issues as a similar capex heavy industry with a significant IP component. It's really just an institutional issue.
>Yet European Biopharma and chemicals engineering remains competitive despite having similar issues as a similar capex heavy industry with a significant IP component. It's really just an institutional issue.
Pharma is not a commodity nor resembling anything like "free market" competition. It's a crazy patent minefield, massive regulatory moat, massive state subsidies and government protectionism plus sometimes backroom deals between pharma and politicians. Nothing remotely similar to commodities like consumer software and hardware.
> Nothing remotely similar to commodities like software and hardware
First, what I should have done earlier in this conversation because I keep forgetting how broad and complex of an industry this is:
What do you mean by the semiconductor industry? No country other than the US has an end-to-end domestic pipeline from design to fabrication to packaging to developing EDAs.
For this thread, I have limited my conversation to fabrication and package. These industries have largely coalesed around the US and Korea/Japan/Taiwan/China/ASEAN for decades because of industrial policies and educational programs.
For chip design, this industry is largely limited to the US, Israel, India, China, and Taiwan for decades due to a number of key hires at Intel back in the 1990s.
The strategy needed to develop a domestic chip design ecosystem is completely distinct from that for developing a domestic fabrication or packaging ecosystem.
> Pharma is not a commodity nor resembling anything like "free market" competition
It very much is depending on the type of compound, just like it is depending on the type of semiconductor (or downstream components).
> It's all about patents, massive regulatory moats, massive state subsidies and government protectionism plus backroom deals between pharma and politicians
Hate to break your cherry, but that's all industries. I remember our lawyers spending months working with the trade promotion ministry of a certain CEE state along with KPMG in order to get a sweet heart deal to open a dev hub in an IT park that was associated with a politically connected oligarch. The economics of biopharma really aren't that different from semiconductors:
1. You have an entirely separate design phase that is completely independent of synthesis/fabrication
2. You have entire sub-segments of the industry devoted just to synthesis/fabrication along with testing
3. Both are high capex/low margins industries, as Asian players in both China and India have largely disrupted the generics market while higher margin IP tends to be owned by the American subsidiaries of European Biopharma companies
4. It doesn't necessarily make sense to synthesize low margins APIs when you will inevitably be undercut by American, Chinese, or Indian players so the best solution is to specialize in design because that at least allows you to own IP.
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This is a question for each individual European nation, because this is something that the European Union cannot solve - do EU nations actually care about developing industrial policies intended to develop domestic capacity or not in specific industries.
If so, does each European nation actually have the state-level capacity and the human capital capacity to start making a case for investment.
Additionally, can any European state give the 50%-150% capital subsidy grants or 0-1% interest rate loans that countries like South Korea, Japan, China, Taiwan, the US, and India along with their state-level components?
After chatting with my friends who work on these types of questions in Bruxelles as well as a couple larger European capitals, the answer was no, simply because the fiscal leeway just doesn't exist and the demand really doesn't exist either. If Volkswagen AG or Groupe Renault is pushed into a corner, they will just shift manufacturing out of Europe and towards China or India respectively.
>Hate to break your cherry, but that's all industries.
It's not binary where it either it is or it isn't but there's various levels to it and Pharma gets special privilege over industries like cars, phones or semiconductors, since it deals with people's lives.
> as Asian players in both China and India have largely disrupted the generics
Then why did I never took an Indian or Chinese made paracetamol, but all generics in my EU country I ever took from the pharmacy ware locally made? Meanwhile I can't buy a locally made laptop, smartphone, GPU, it's all Asian made goods.
> Then why did I never took an Indian or Chinese made paracetamol, but all generics in my EU country I ever took from the pharmacy ware locally made
Because it was synthesized using Chinese and Indian sourced "Active Pharmaceutical Ingredients" (APIs) [0], both of whom synthesize around 80% of all APIs required by European pharma manufacturers.
The EU is trying to rectify this, especially after COVID when India decided to stop all exports of APIs and pharmaceuticals to Europe in order to prioritize domestic production [1], but it still takes time (they started in 2021, and it'll probably take another 5-7 years to build the critical mass needed to rebuild a domestic ecosystem).
> Meanwhile I can't buy a locally made laptop, smartphone, GPU, it's all Asian made goods
Becuase, as I have kept elucidating on multiple occasions on this thread, the entire ecosystem for these goods simply does not exist in Europe, and no European member state is interested in opening their pocketbooks to subsidize manufacturers to move to Europe in order to begin manufacturing the intermediate parts needed.
Countries like those across ASEAN, South Korea, Japan, Taiwan, China, the US, and India offer millions to billions of dollars in hard cash, land, tax subsidizes, or a mix of all 3 in order to attract or retain manufacturers. EU member states simply does not do the same for electronics. Some of them absolutely do so for biopharma (such as Denmark), but by and large they tend to be exceptions of the rule.
> Pharma gets special privilege over industries like cars, phones or semiconductors, since it deals with people's lives
Ime, Pharma PLIs and incentives are fairly comparable to those that would be provided to electronic industries as well. The same tax sops India gave to attract Apple to TN were similar to those that India gave Novartis and Bayer decades ago, and China has been using the same subsidy program it used to attract electronics manufacturing to attract and become a major player in the biopharma space.
>Because it was synthesized using Chinese and Indian sourced "Active Pharmaceutical Ingredients" (APIs) [0], both of whom synthesize around 80% of all APIs required by European pharma manufacturers.
And the EU pharma companies package it, slap their logos on it and make mega profits selling domestically.
>EU member states simply does not do the same for electronics.
Why do you think that is? Surely with a war next door and China not guaranteed be a cooperator all the time, that would be a priority.
> And the EU pharma companies package it, slap their logos on it and make mega profits selling domestically
Yep.
> Why do you think that is?
Because European nations lacks the linkages needed to build a competitive electronics industry.
Much of the industry is heavily linked across the Pacific, with the US, Japan, South Korea, Taiwan, and Singapore transferring technology, capital, and personnel across borders to setup supply chains.
This is different with biopharma, given how closely connected European majors are with American subsidiaries. It also really doesn't hurt that much of American pharma has historically been consolidated in Greater Boston and the Delaware region which is just across the Atlantic, and European biopharma players have acted as the technology, capital, and personnel partner for developing these industries in India and China (though both do still prefer American players because of better budgets and more bleeding edge IP).
Additionally, where leadership are from matters as well. In the 1970s to 1990s, much of the electronics and software industry's mid-level and upper level leadership was West Coast based, Israel, or Asian in origin, which meant linkages were built much earlier, such as Morris Chang (Texas Instruments), Jason Chang (IllinoisTech), Vinod Dham (Intel), Dov Frohman (Intel), Kim Choong-Ki (Fairchild), Gurpreet Singh (Continental Electronics), etc. Heck, Intel began packaging semiconductors in Malaysia all the way back in 1973 - decades before they initiatited similar investments in Ireland.
The only European company that had a similar size and scope of American or Asian companies in the electronics industry was Philips NV before it broke up, but it was never at the size and scale of American Apple, IBM, or HP or Japanese Sony, Toshiba, or Sharp - let alone their Korean challengers in the 2000s like Samsung, SK Hynix, or Hyundai or their Chinese challengers in the 2010s like Huawei, TCL, Xiaomi, etc.
Most European countries lack the same bench of diaspora in leadership positions in large swathes of innovation industries. You'll easily find European leaders in services industries along with biopharma, but you'd never find a similar clustering in software, hardware, and even increasingly in biopharma to a certain extent.
Heck, most Indians who attend a Max Plank Institute for biopharma related work now return to India with a professorship or to lead an India- or America-located lab for a major like Novartis, GSK, etc.
