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US Govt's sluggish Chips Act payouts slam the brakes on Samsung's fab, delayed to 2025 (www.tomshardware.com)

submitted 10 months ago by [email protected] to c/[email protected]

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[–] [email protected] 5 points 10 months ago (1 children)

How is the size of Samsung relative to South Korea’s GDP relevant? Apple is a bigger company and it wouldn’t open a factory in the US without subsidies.

[–] [email protected] 0 points 10 months ago (1 children)

Apples chips are made by TSMC and Samsungs size reflects how deep their pockets are. They aren't holding back because they haven't received 1% of funding from the US government.

[–] [email protected] 4 points 10 months ago* (last edited 10 months ago) (1 children)

Samsung isn’t a charity and Samsung Electronics has its own books independently from other companies in the chaebol. The US needs to give Samsung a reason to manufacture in the US. Make it attractive vs. all the other countries.

Samsung have made SoCs for Apple before and Apple does its own manufacturing and whatnot in the US that it does receive subsidies for.

Apple is amongst the companies that have received the biggest state and local subsidies in the U.S. It got US$891 million in 2021.

https://www.macobserver.com/analysis/apple-receive-subsidies-from-us-states/

[–] [email protected] 2 points 10 months ago* (last edited 10 months ago) (1 children)

For tech and media companies, much of the money went towards building R&D centers, relocations of corporate offices and office campuses in certain states.

Not all such payments are though well received. Back in December, a subsidy to Apple from North Carolina, where the company is building a new campus, was branded 2021’s “Worst Economic Development Deal of the Year” by the Center for Economic Accountability (CEA). The arrangement is worth over US$846 million. John Mozena, president of the CEA, said:

A billion dollars is a lot of money for North Carolina’s taxpayers and communities, because that’s a billion dollars’ worth of public services not being funded. But for a company like Apple, which reported more than a billion dollars a day in revenues this past year, it isn’t anywhere near enough money to move the needle on a major site selection decision.

Seems none of this went toward any sort of manufacturing capacity. Furthermore, the article mentions Samsung received $1.2B in subsidies already from state and local governments, roughly in line with what they'd be receiving from the CHIPS Act. Of course they're not a charity, but how is 1% of funding holding back the entire project if they're paying the other 99% out of their own pocket? As I said originally, this is just a convenient cover to deflect away from their own poor performance as a company and put the onus on the government.

[–] [email protected] 3 points 10 months ago (1 children)

As I said originally, this is just a convenient cover to deflect away from their own poor performance as a company and put the onus on the government.

Then explain TSMC doing the same. It is more believable that the subsidies aren’t enough to make manufacturing attractive and more needs to be done.

[–] [email protected] 2 points 10 months ago (1 children)

I already explained that TSMC can't get their fab running because they don't want to pay US wages to contractors and employees. This has been widely reported on already.

[–] [email protected] 3 points 10 months ago (1 children)

There you go. So for Samsung too a similar reason is more likely. A Fab would require workers, land, supply chain, and so on. Subsidies are only one part of the equation, and if any other part is unattractive then more subsidies would be needed.

You need to understand that the reason CHIPS Act exists in the first place is to make it attractive for companies to set up fabs in the US. If the US was already attractive, the CHIPS Act wouldn't be necessary.

[–] [email protected] 1 points 10 months ago

Samsung already has facilities here in the US unlike TSMC, so labor costs should be no surprise to them.

I do realize the reasoning behind the CHIPS Act and I also understand that it has already been signed into law, which is why I call BS on Samsung's claimed reasoning.

The money is there and whether it gets paid out today or 6 months from now, they'll be eligible all the same. To claim that they can't afford to continue on with their plans because they don't have the money in their pocket right now doesn't make sense as Samsung has a ton of money already and this subsidy represents a miniscule fraction of their total investment.

My point all along is that their claimed excuse here is bullshit. If they can't afford it without subsidizing 1/100th of their investment immediately, they can't afford it with the subsidy either and that has nothing to do with the government. It'd be like claiming you can totally afford a $20,000 car but a $20,200 car is too far out of reach.