The stage of what might never be is out there. There is a larger stage of what is about to happen and what might never happen. And I for one have no idea where to stand. You see, it is about what we read and what we do not know, or do we? To get there I need to do an old setting, a simple calculation, like you had in primary school (year 1) the stage is 34-15. Now you do it like there is no tomorrow, but then it was different. In that setting we had four minus five is not possible, so we borrow 10 then it becomes fourteen minus five making nine. Three minus one is two, that minus one is one, one and nine make nineteen, that is how we learned the simplest calculation (in 1969). It is not the math, it is the setting of borrowing one from the left making fourteen instead of four minus five. It is the borrowing part. You see, a setting hit me when I was confronted with ‘Micron to build $7 bln plant in Japan to expand DRAM production – report’ (at https://www.reuters.com/technology/micron-build-7-bln-plant-japans-hiroshima-report-2021-10-20/). In the article we see “U.S. memory chip maker Micron Technology Inc (MU.O) will build a new factory at its Japanese production site in Hiroshima at a cost of 800 billion yen ($7.0 billion), the Nikkan Kogyo newspaper reported on Wednesday.” Under most situations I merely shrug my shoulders. What do I care? Yet when my mind saw this, it raced back to several of these announcements. I believe it was 2018, it could have been 2017. Yet the stage then was that the resources needed for DRAM were limited. A finite equation on resources and the pressure was on. I personally believe that shortage was never dealt with, so it is nice to see a plant being built ‘too address shortage of DRAM’, but if there is still a shortage for manufacturing the problem merely shifts, it does not go away. TechRadar gave us in April “the company wants to optimise the use of its limited supply of silicon”, as one source gives us in May “Demand is much higher for all types of silicone products than one year ago. Demand started to increase in 4Q 2020 as global economies opened. Even when parts of the world were hit with second and third waves of Covid, economies did not shut down as they did in 1Q and 2Q 2020. As of today, demand is the same or slightly higher than prior to the pandemic”, this is not enough. You see it is one of the most common elements in the world, so we should not run out, but the mining and acquiring of it comes with health risks and there lies the rub. Forbes also gives us “China has called chip independence a top national priority in its latest five-year plan, while U.S. President Joe Biden has vowed to build a secure American supply chain by reviving domestic manufacturing. Even the European Union is mulling measures to make its own chips. But success is anything but assured.” There we also see more. The article (at https://www.bloomberg.com/graphics/2021-chip-production-why-hard-to-make-semiconductors/) gives us a lot to think about and if it isn’t the $7,000,000,000 they expect to spend, it is nothing against getting the right people, as such it could be seen as a severn billion dollar long-shot. Yet the stage of getting the Silica Dioxide has not been reached yet. The article also shows us “Building an entry-level factory that produces 50,000 wafers per month costs about $15 billion. Most of this is spent on specialised equipment—a market that exceeded $60 billion in sales for the first time in 2020.” So exactly how does one save on a plant that is already 8 billion short in month one? The numbers make no sense. Now, it is perfectly possible that they are two different plants, but the stage of 7 billion is weird all whilst several plants are being build and there is still a need for Silica Dioxide for the wafers.
Now, I could be very wrong here, and that might be the case, but consider that 2020 gave us ‘TSMC to build advanced chip plant in southern Taiwan’ (May 2021), ‘Bosch opens Dresden chip plant as Europe aims for independence from Asia’ (Jun 2021), and let that not misdirect you, there are hundreds of plants, a massive amount of them in China, the stage becomes not merely who creates the chip, but who will have the plant to mine and create the required Silica Dioxide. It could be another stage for Saudi Arabia as sand is something they have in abundance, but to get one into the other takes time and takes the right secure machines as well as a few other skills. When this implodes (a not unlikely setting) the one who HAS the Silica Dioxide has an advantage. China claimed to be independent at present, most others cannot make that claim. China produces 64% of all silicon on the planet and the US pissed them off. Almost 10% is in Russia that leaves a lot less for the rest of the planet, so when I see the stage of two plants being build, I merely wonder where they get their source materials. The US at present creates less than 5% of all Silicon and the UK even less (number unknown to me). So when we see the larger stage and we look for Mineral Commodity Summaries we might learn that there are a few more kinks in those cables. Yes, I am willing to accept that they MIGHT solve those. Yet when was the last time you made a long-shot using billions on the word ‘MIGHT’?
In all this I might be the one wrong here, but when you see three of these plants being made within a year and you realise the cost involved and there is a stage where the required resources for manufacturing are in many places, yet the bulk is in two places that certain politicians cannot reach. How does that investment sound to you?
I wouldn’t bet my stove on that risk, let alone a house (or apartment) but they are willing to bet the bank, I wonder what optional short term benefits they get before these tactical deciders seemingly run off with a large bonus to a beach far, far away.
P.S. WordPress is still not fixing the colour issue.