If this was making things like cars or toilet paper, where the design and manufacturing methods are well understood, that’s exactly what would happen.
Making computer chips was well understood. You take a slice of single-crystal silicon, dope its surface with something, use a photo mask and a light to etch off the doping where you don’t want it. Repeat that process a few dozen or a few hundred times to etch transistors into the silicon, then slice it up into chips and package them.
Machines that do this are readily available.
The problem is, we made those transistors smaller. And smaller. And smaller. And smaller. And smaller.
Then we ran into problems like how to etch features on the silicon that are smaller than the wavelength of light. And we found solutions to that. And so we made the transistors smaller. And smaller. And smaller.
So now to create a current-gen computer chip, you need a process called EUV- Extreme Ultra Violet. Red light has a longer wavelength than blue light, so when you want smaller wavelength to etch smaller features into the chip you eventually go from red to blue to ultraviolet and eventually to extreme ultraviolet. Problem THERE is there’s no EUV bulbs available, and if there were they’d be useless because atmospheric air absorbs EUV, and even if you do it in a vacuum glass absorbs EUV too. So you can only manipulate this light with mirrors, which have to be ground to an insane level of precision.
The resulting machine is quite impressive. You have a giant cavity kept in perfect vacuum. In one side you have an EUV source- that’s a little machine that dispenses a tiny droplet of tin, which as it falls is hit by a laser to blast it into a weird shape, then another much bigger laser that vaporizes it. In the process of vaporizing it releases EUV light. This light is reflected by shaped mirrors carved into the surfaces of the vacuum chamber that reflect and focus the EUV into a linear beam. Below that (also in vacuum) you have the mask and the wafer, and by moving them back and forth while the beam is active you etch features ‘smaller than light’ into the chip.
The result is a chip with current pathways less than 100 silicon atoms wide. And if you want to make current-gen computer memory, that’s the only way we’ve got to build it.
EUV machines are pretty much only made by one company, ASML. They cost a fortune and they’re in insanely high demand. Like I’ve heard of a guy getting hired by a company for over million a year simply because he’s friends with a purchasing manager at ASML and might be able to get the company that hired him a build slot.
And it’s not just buy the machine and hit ‘start’, there’s a ton of other stuff involved.
Bottom line- for a company that already has experience in current-gen chipmaking, setting up a fab like this costs $15-20 billion. And it isn’t just ‘sign a check and come back tomorrow’, the process of building a fab from the project being approved to the first wafer coming off the line is 2-3 years minimum.
Now here’s the bigger problem- semiconductors are always a cyclical market, or at least always have been. Demand (and thus prices) goes up, demand/prices come down. So if you invest $20 billion when prices are high, then in 2-3 years when the cycle is at its low nobody’s gonna be buying your output. And of course, adding more chips to the market will affect market prices (supply and demand). So companies that are building fabs have to look 5-10 years ahead to determine if they’ll get ROI on a fab before they build.
And that brings us to the next issue- with AI, we’re in uncharted territory. The computing market has been pretty well understood since the early 90s. There’s demand for PCs and laptops and servers and gadgets, and it goes up and down and new products come out that changes the mix of what’s ordered, but the cycle more or less continues. Up and down.
Then AI happens. And suddenly we have near-instant, unheard-of levels of demand. And it’s all for current-gen top-shelf stuff- HBM (high bandwidth memory) and GPUs and specialty silicon like NPUs.
Now there are more fabs being built. But it’s also starting to be better understood that AI is a bubble, which almost certainly will pop. So if you’re a DRAM maker and you spend $40 billion building a fleet of new fabs and then the bubble pops, you’re gonna be fucked. That’s why you don’t see everybody+dog diving into the DRAM market face first.
Even if it worked it wouldn’t. Neoliberals and free-market advocates will tell you that competitors would rise up if there were no regulations.
But some industries (like silicon and microchips and other advanced tech) are just impossible to breakthrough without years or decades of setting up and operating without profit vs current players.
And those current players, given no market regulations, will still use their money to do anything possible to stifle upcoming competitors or buy them out.
The dream of capitalism was born pre industrial age, under models of “apples sold at the farmers’ market”.
The reality is we have advanced a lot and need mixed economies to keep things fair for most people.
If capitalism works, we’ll start to see competitors enter the market and prices would go down.
If capitalism worked.
The problem is it’s not quite so easy.
If this was making things like cars or toilet paper, where the design and manufacturing methods are well understood, that’s exactly what would happen.
Making computer chips was well understood. You take a slice of single-crystal silicon, dope its surface with something, use a photo mask and a light to etch off the doping where you don’t want it. Repeat that process a few dozen or a few hundred times to etch transistors into the silicon, then slice it up into chips and package them.
Machines that do this are readily available.
The problem is, we made those transistors smaller. And smaller. And smaller. And smaller. And smaller.
Then we ran into problems like how to etch features on the silicon that are smaller than the wavelength of light. And we found solutions to that. And so we made the transistors smaller. And smaller. And smaller.
So now to create a current-gen computer chip, you need a process called EUV- Extreme Ultra Violet. Red light has a longer wavelength than blue light, so when you want smaller wavelength to etch smaller features into the chip you eventually go from red to blue to ultraviolet and eventually to extreme ultraviolet. Problem THERE is there’s no EUV bulbs available, and if there were they’d be useless because atmospheric air absorbs EUV, and even if you do it in a vacuum glass absorbs EUV too. So you can only manipulate this light with mirrors, which have to be ground to an insane level of precision.
The resulting machine is quite impressive. You have a giant cavity kept in perfect vacuum. In one side you have an EUV source- that’s a little machine that dispenses a tiny droplet of tin, which as it falls is hit by a laser to blast it into a weird shape, then another much bigger laser that vaporizes it. In the process of vaporizing it releases EUV light. This light is reflected by shaped mirrors carved into the surfaces of the vacuum chamber that reflect and focus the EUV into a linear beam. Below that (also in vacuum) you have the mask and the wafer, and by moving them back and forth while the beam is active you etch features ‘smaller than light’ into the chip.
The result is a chip with current pathways less than 100 silicon atoms wide. And if you want to make current-gen computer memory, that’s the only way we’ve got to build it.
EUV machines are pretty much only made by one company, ASML. They cost a fortune and they’re in insanely high demand. Like I’ve heard of a guy getting hired by a company for over million a year simply because he’s friends with a purchasing manager at ASML and might be able to get the company that hired him a build slot.
And it’s not just buy the machine and hit ‘start’, there’s a ton of other stuff involved.
Bottom line- for a company that already has experience in current-gen chipmaking, setting up a fab like this costs $15-20 billion. And it isn’t just ‘sign a check and come back tomorrow’, the process of building a fab from the project being approved to the first wafer coming off the line is 2-3 years minimum.
Now here’s the bigger problem- semiconductors are always a cyclical market, or at least always have been. Demand (and thus prices) goes up, demand/prices come down. So if you invest $20 billion when prices are high, then in 2-3 years when the cycle is at its low nobody’s gonna be buying your output. And of course, adding more chips to the market will affect market prices (supply and demand). So companies that are building fabs have to look 5-10 years ahead to determine if they’ll get ROI on a fab before they build.
And that brings us to the next issue- with AI, we’re in uncharted territory. The computing market has been pretty well understood since the early 90s. There’s demand for PCs and laptops and servers and gadgets, and it goes up and down and new products come out that changes the mix of what’s ordered, but the cycle more or less continues. Up and down.
Then AI happens. And suddenly we have near-instant, unheard-of levels of demand. And it’s all for current-gen top-shelf stuff- HBM (high bandwidth memory) and GPUs and specialty silicon like NPUs.
Now there are more fabs being built. But it’s also starting to be better understood that AI is a bubble, which almost certainly will pop. So if you’re a DRAM maker and you spend $40 billion building a fleet of new fabs and then the bubble pops, you’re gonna be fucked. That’s why you don’t see everybody+dog diving into the DRAM market face first.
Even if it worked it wouldn’t. Neoliberals and free-market advocates will tell you that competitors would rise up if there were no regulations.
But some industries (like silicon and microchips and other advanced tech) are just impossible to breakthrough without years or decades of setting up and operating without profit vs current players.
And those current players, given no market regulations, will still use their money to do anything possible to stifle upcoming competitors or buy them out.
The dream of capitalism was born pre industrial age, under models of “apples sold at the farmers’ market”.
The reality is we have advanced a lot and need mixed economies to keep things fair for most people.