Ford Dropped a Bombshell on Chips. GlobalFoundries Stock Is Taking Off.

[D Fresh]

All completely valid points, and certainly in the long run it seems at least partial vertical integration of the chip manufacturing would likely be a prudent decision. The problem is getting a CEO willing to stake their reputation on implementing a very expensive plan. Once you've made that investment, it's a hard ship to steer without risking a huge loss.

However, this is an issue within the semiconductor industry as well. I've had a few Joint Venture projects that I've worked on. There were two competitors building a fab together to reduce the risk to each company. Imagine how much sense it would make for the automakers to unite behind a common technology platform (not shared chips necessarily, but a shared development ecosystem tailored specifically to auto maker needs). It would make it easier for companies to modernize, it would help them all keep pace with safety needs (which could include shared chips), and it would reduce the development cost for any one player. I just don't see that ever happening. Edit: I should say I would be very surprised, however with the number of JVs that we've seen (Ford/Mazda, Toyota/Subaru, and many more), it's not impossible. Perhaps this is the catalyst we need to push auto makers to be more cooperative where it matters most.

For some perspective on this, I once worked for a division that provided the base library (along with a set of industry leading, custom timing rules) for chip design. This library was used by a number of different design teams. But the actual division I worked for struggled to earn a profit. We generated a lot of "internal" revenue, but it didn't equate directly to $$ in the bank. There was never a time that we didn't have to justify our existence. Budgets were repeatedly slashed because we were a cost center. All expense, no revenue (in the eyes of the bean counters anyway). It made for a very stressful environment.

Ford is a public company. As such, there will always be constant pressure to increase short-term profits. Engineering salaries are a huge hit to the bottom line, and it's hard to measure their contribution to the top line sometimes. It's kind of like most IT departments. If they do a good job, nobody notices them and execs have a hard time understanding why the costs are so high. So they cut costs, which attracts less capable employees. Suddenly you're saving a fortune on overhead, but your computer systems have problems all the time. Semiconductor development falls into the same trap. And once you slip and fall behind, it can be hard to catch up.

My final point is that making a reliable semiconductor fab takes a lot of work. It is a constant battle to find and fix tool issues. These aren't the type of thing you just pay to setup once and it runs itself, so you need to bring in the expertise to not only get the operation running, but also to keep it running. If this was easy, more people would be doing it.

Definitely easier said than done. But I think the pitfalls you talk about are the very reason for the partnership with GF.

I'm sure the hope is that by partnering with an industry insider they can succeed despite the dangers.

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[dtech]

I'm still in the industry, I have worked mainly in product qualification and test development, and now I'm in a product engineering role. I work with a lot of test data, driving failure analysis and fab feedback. We find a lot of manufacturing related issues.




There are certainly arguments to be made for integrating chip manufacturing. If they can work a deal with a fab to buy old fabs or equipment for cheap, then they might be able to make it viable. The problem is that the cost of those old technologies starts to rise at some point when you need to maintain the facilities. And then at some point it will become obsolete, the chips they use today will not be the same chips they need in 10 years (due to safety requirements most likely), and so will their facilities be able to make the new chips they need? If not, what do you do now after you've invested all of this time and money into your chip manufacturing?

Well you outsource it so that somebody else has to worry about all of that and you just need to find somebody that can make your chips.

The company I work for now is fabless. Vertical integration of the fabs was CRITICAL (in the eyes of us engineers anyway) for identifying and correcting manufacturing issues. It was a huge advantage that we had. But now? We have SIGNIFICANTLY (like orders of magnitude) fewer defects now, despite being in a significantly more dense node. Our yields are higher than ever despite the fact that these are the most advanced chips ever released by us.

Why? Because one fab can use the data of hundreds of customers and hundreds of thousands of wafer starts to identify a much wider array of issues than we could. They will know the root cause of an issue sometimes before we even notice that we have an issue. And most importantly driving down defectivity is literally one of their most critical roles as a foundry. There are economies of scale at work here that are really difficult to comprehend for those of us in the industry, nevermind those on the outside.

Edit: GF has been losing a lot of money for quite a long time. There is a reason they went public: additional funding and a shifting of risk away from Mubadala. They were sick and tiring of dumping hundreds of millions of investment capital into a business that was not generating a return. If a dedicated fab struggles to make money during a chip boom, how is a company like Ford going to do it?

These attempts at alliances for various reasons seem to come and go, most usually just fade off into nothing over time, iirc correctly there have been chip mfg alliances in the past launched with a good deal of fanfare , so time will tell. Like hearing from someone that understands the current state of the industry , in particular the way market forces impact the mfg end of the business.

 

[Langwilliams]

Also, you seem to be assuming that at some point things will go "back to normal." While I hope you are right, I don't see any evidence to support that. We're two years into this bullshit and it is not getting any better.

We're only 19 months into 15 days to flatten the curve. The Ohio legislator had to pass a law taking away the ability of the governor an or state health director to impose mandates an lockdowns for more than X days without legislative approval. Had they not done this RINO Gov DeWine would still have us living under mask mandates an limited restaurant occupancy. When you give them this power it's almost impossible to take it back.

 

[Megawatt]

I'm still in the industry, I have worked mainly in product qualification and test development, and now I'm in a product engineering role. I work with a lot of test data, driving failure analysis and fab feedback.….

Would you by chance happen to know of, or work with Atomera Incorporated? Or are there Atomera crates containing EPI deposition tool being delivered to your location?

 

[HarryManback]

Would you by chance happen to know of, or work with Atomera Incorporated? Or are there Atomera crates containing EPI deposition tool being delivered to your location?

Nope. I haven't physically worked with silicon in a decade, I get to work from home, write code, and crunch numbers all day long.

 

[JohnnyO]

I just hope everyone learned a valuable lesson these past couple years about not relying on other countries (especially ones who hate us) and not put all their eggs in one basket so to speak.

I was gonna say, it would be greatly helpful if chips and other things were made here.

 

[Tom_C]

I was gonna say, it would be greatly helpful if chips and other things were made here.

Sure. The main problem is the cost. If you can get cheap labor, and people will sign up to work in the cheap, the you can produce product for less. In the USA, you are likely not going to get people to work for slave wages to produce chips.

 

[D Fresh]

Sure. The main problem is the cost. If you can get cheap labor, and people will sign up to work in the cheap, the you can produce product for less. In the USA, you are likely not going to get people to work for slave wages to produce chips.

Agreed. The US is full of lazy entitled douchebags that think the world should be handed to them on a silver platter.

Send the work elsewhere, where people want to better themselves.

 

[Megawatt]

Nothing cheap when it comes to semiconductors. New plants cost $10 Billion each. Nothing fast when it comes to making chips. One wafer takes three months to make and that’s at 24 hrs a day operation. Here is a good read.

Chip Linky

 

[evoaire]

Nothing cheap when it comes to semiconductors. New plants cost $10 Billion each. Nothing fast when it comes to making chips. One wafer takes three months to make and that’s at 24 hrs a day operation. Here is a good read.

Chip Linky

Go Intel!

 

[Trigganometry]

All this improved technology and manufacturing is awesome. Sustainability and growth is another ball of wax all together. How is this so you ask? I’m using this as an example. We own a facility in Costa Rica that is located in a “tax free manufacturing zone.” We got into this area of the world about 13 years ago. Many of the big players worldwide in medical devices are located here. One of the government’s rules is in order for “ticans” to work in this zone you need to have a college degree. That includes the facility’s janitor! When we first started we had about 25 employees. Today that has ballooned to 450 and 3 shifts. Now the problem is getting skilled degreed employee’s at a fair wage price. Everyone else in the business park has the same problem and wage wars started.

US mainland has a more serious problem. The quality of its workforce is not what will be necessary for sustainable growth. Until that is corrected you can throw all the money you want at it. Doesn’t mean you’re going to be successful in a world of tic-toc contributors.

 

[VAMike]

I was gonna say, it would be greatly helpful if chips and other things were made here.

Not really. The american money that's funding the current system wouldn't magically start thinking long-term just because you force it to move operations somewhere else. We would have exactly the same problems, just in a different place.

 

[Gerder]

Another reason that I'm happy I have a Ford in the driveway. We need to build more things at home and stop funding foreign governments that don't have our interests in mind. I'd like to see us do something like Germany does and decentralize manufacturing - make small towns across the US specialize in building certain things. This was actually a Ford idea once: Henry Ford: Village Industries - The Henry Ford

??? Seems u know more about Germ than me as a citizen of the 52nd state
Tell us more... I‘m afraid u didn‘t realize how small this country is compared to the us, china, russia, etc.pp. Here Flatland means u can drive for 15 minutes without hitting the next village… and this spots are hard to find.

 

[Gerder]

…
Do you take pride in buying products made in China? Some things manufactured in China are of high-quality, too. They are also often inexpensive (artifically inexpensive when you account for how they achieve low prices), ubiquitous, and hard to avoid. Each purchase also strengthens the Chinese economy, and emboldens human rights violations and global hegemony.

Do you really not care where something is made?

maaaaan, if ur getting pride of buying things u have other problems… definitely…
human rights, c‘mon… I mean how long are women and black people allowed to vote in the US? what about Manning and Assange? if u sit in the glashouse …

 

[BladeRanger]

Some good news for a change. Looks like Ford made a huge deal that will help them with the chip shortage.

https://www.markettradingessentials...on-chips-globalfoundries-stock-is-taking-off/

This is an awesome news for US. I was wondering of cars uses FPGAs or CPLDs or they have a standalone processors. I read an article that cars manufactures uses an old technologies for their processors and interfaces which is getting harder to manufacture.

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