Allow me to translate this

Drew Nelson, the chief executive of IQE, one of Britain’s few semiconductor manufacturers, says the UK’s lack of production capacity leaves it exposed. “If the UK has to rely on foreign countries, which may or may not be friendly in the future, for all of its semiconductor hardware, it is going to be in a strategically extremely weak position,” he says.

“It’s an absolute tragedy because 30 years ago, when TSMC was founded, the UK led in the manufacture of silicon chips.The Government hasn’t really grasped the importance of investment in sovereign capabilities, in its own semiconductor industry.”

Nelson says the UK’s ability to produce its own chips should be a matter of national importance. The idle car factories and laptop shortages caused by the current shortage may well be seen as evidence of that.

All your money are belong to us”

A new silicon fab costs of the order of £5 billion. The UK doesn’t use enough chips of any one kind to make domestic production sensible – exports would have to happen to make a line economic. And if exports have to happen then we’re back to being reliant upon the rest of the world, aren’t we?

56 thoughts on “Allow me to translate this”

  1. ” And if exports have to happen then we’re back to being reliant upon the rest of the world, aren’t we?”

    Not really because we would at least have a factory making chips that we needed, even if it wasn’t functioning economically. Which if there is a crisis is not exactly the point. As the PPE issue showed us, sometimes you can’t get what you want from abroad at any price, because all the producers have been told by their respective governments not to export, and conserve stocks for the home market. Being able to produce something yourself in a time of trouble has a value in and of itself that only becomes apparent when the SHTF.

    You economists are all the same, you only ever think in Lsd. You assume that what is available at £X today on the open market will always be available for that price. When anyone with half a brain knows when a crisis hits price and availability change. As a farmer I’m sure it would be cheaper for me to have no tractors or machinery and just hire in contractors when needed. Which works fine when everything is running smoothly, the weather is playing ball. But when its been pissing down for weeks, everyone is behind on their farming operations and there’s a short window of opportunity to get the job done you don’t want to be waiting for a contractor to arrive, if he ever does. Hence why farmers all own their own kit, regardless of whether it costs more on paper, because they know they’ll need it in a crisis. If we rural yokels can work this out when are you ‘educated’ types going to catch up?

  2. So Much For Subtlety

    Hence why farmers all own their own kit, regardless of whether it costs more on paper, because they know they’ll need it in a crisis.

    Do you have your own helicopter? In case you get run over by a tractor and have to be air lifted to a hospital? How about a nice bio-reactor in case you need some penicillin?

    There are things that are cost-effective for Britain to make. There are things that are marginal. And then there are things that are not cost effective for Britain to make. A case can be made that chips fall into one of the first two categories – but a case does have to be made. You can’t just say that because British people like using GPS Britain ought to maintain its own rocket launch facility.

  3. IQE’s lack of profitability and revenue growth in the last few years combined with the bear raid in 2017 must be indicative of something. I wonder what

  4. @ Jim

    I know from living in the country that not all farmers own their own machines. Where I am, the grass cutting requires a “combine” type machine and a fleet of 4-5 tractors with trailers for the cutting. The same team goes around the 4 farms surrounding me cutting.

    Yes, the farmer might own a single tractor (that he uses most days) but he doesn’t own the rest. And yes, they cope with contractors, weather etc. Otherwise they’d have expensive machinery sat around for 360 days of the year doing nothing.

  5. “Do you have your own helicopter? In case you get run over by a tractor and have to be air lifted to a hospital? How about a nice bio-reactor in case you need some penicillin?

    There are things that are cost-effective for Britain to make. There are things that are marginal. And then there are things that are not cost effective for Britain to make. A case can be made that chips fall into one of the first two categories – but a case does have to be made. You can’t just say that because British people like using GPS Britain ought to maintain its own rocket launch facility.”

    Of course I don’t have a helicopter. But I do have transport that could take me to hospital if needed. I don’t rely on a taxi.

    The point is that in order for a complex society to keep functioning without massive disruption and loss of welfare for its people it needs as a collective to be able to keep the wheels turning in all situations. Its no good getting rid of loads of productive capacity because ‘abroad is cheaper’ if when a crisis hits we don’t have that item at all. Because then we all suffer more than we would have if we paid a bit more in the long term to allow a home production facility to stay in business.

    Where would we be in this covid crisis if we didn’t have the capacity to manufacture our own vaccines? At the whim of some politician in a far off land who doesn’t give a toss about us, that’s where.

  6. Another titbit, over 80% of IQE’s turnover comes from the USA and Taiwan. Only 1.6% derives from the UK. In a pinch, it could be that the UK could manage without the chips they produce. On the other hand, could we survive without the iPhones those chips are used in? Perhaps a farmer could advise?

  7. “Where would we be in this covid crisis if we didn’t have the capacity to manufacture our own vaccines?”

    The Pfizer vaccine that is being rolled out faster in the UK than any other nation upon Earth was designed in Germany and is manufactured in Belgium, by an American company…..

  8. “I know from living in the country that not all farmers own their own machines. Where I am, the grass cutting requires a “combine” type machine and a fleet of 4-5 tractors with trailers for the cutting. The same team goes around the 4 farms surrounding me cutting.

    Yes, the farmer might own a single tractor (that he uses most days) but he doesn’t own the rest. And yes, they cope with contractors, weather etc. Otherwise they’d have expensive machinery sat around for 360 days of the year doing nothing.”

    I’m sorry but you’re just wrong. The gang of harvesting equipment you see going from farm to farm is most likely owned by one single business that is renting those farms from the owners. That is to say the owners of the farms are landlords, they take a rent. The person doing the actual work makes damn sure he has the correct kit to do all the work he has to do in the time available.

    And yes, most farmers who farm their own land (as opposed to renting it out) do have kit sat in sheds for 11 months of the year that only comes out to do certain operations, because they know those operations are very weather dependent, and MUST be done within certain timescales or the entire crop is lost (or not planted). Combines are one such machine, balers are another, tractors will get used all year round, but most farms will have excess HP available for most of the year because its needed at certain specific times. Some machinery does tend to be more hired in, crop sprayers for example, as they can cover huge areas in a short space of time and have larger weather windows to operate in, similarly silage making equipment tends to be hired in as it too operates in a broader weather window. But harvesting equipment, cultivation and planting equipment, hay making equipment and handling equipment (forklifts and telehandlers) all live on farms 365 despite only getting used intensively for very short periods of time. Farmers can easily have hundreds of thousands if not millions tied up in equipment that sits idle for most of the year.

  9. So Much For Subtlety

    Jim January 22, 2021 at 9:53 am – “Of course I don’t have a helicopter. But I do have transport that could take me to hospital if needed. I don’t rely on a taxi.”

    But what if a Zombie Outbreak meant you could not drive? Then you would need a helicopter. Perhaps not everything is necessary in case of *any* emergency?

    “The point is that in order for a complex society to keep functioning without massive disruption and loss of welfare for its people it needs as a collective to be able to keep the wheels turning in all situations.”

    All situations? Zombies? Alien invasion? Nuclear attack from Iran? Simply restating your basically wrong position is not that convincing. No we do not need to prepare for all situations. We need only prepare for the reasonable ones. How reasonable is it that no one will sell us the chips we design?

    “Its no good getting rid of loads of productive capacity because ‘abroad is cheaper’ if when a crisis hits we don’t have that item at all.”

    YEs if Zombies attack we may be short of bananas. Therefore the hills of Wales should be covered in heated glass houses so that we can have our Cavendish even in a worst case? I don’t think so. Then we would just be poor.

    France does this with its military. Perhaps it makes sense with its military. Perhaps not. Has France ever been unable to source what it needs overseas?

    “Because then we all suffer more than we would have if we paid a bit more in the long term to allow a home production facility to stay in business.”

    A bit more? What makes you think it would be a bit more?

    “Where would we be in this covid crisis if we didn’t have the capacity to manufacture our own vaccines? At the whim of some politician in a far off land who doesn’t give a toss about us, that’s where.”

    Assuming that one politician has a monopoly of vaccines, we might. But I notice that they are being produced all over the world. And even in Oxford. We would be fine

  10. “The Pfizer vaccine that is being rolled out faster in the UK than any other nation upon Earth was designed in Germany and is manufactured in Belgium, by an American company…..”

    And the Oxford vaccine that most UK citizens will get is made here. If we didn’t have that capability we’d be stuck with the number of doses Pfizer would sell us.

  11. @SMFS: the wisdom is in deciding what things you need and what things you don’t. Some things are crucial for society to continue functioning, some things aren’t. Prattling on about about zombies and bananas makes you look like an idiot.

    And as it happens we do spend billions on maintaining a nuclear defence on the off chance someone (like Iran) might take a pop at us, according to you we should just get rid of all the subs and contract out our nuclear defence to someone else. Or do you consider that having control of our own nuclear defence at all times is better than ringing up the White House and saying ‘Here’s £1bn, please drop on a nuclear bomb on country X’, as they might decide they didn’t want to?

  12. So Much For Subtlety

    Jim January 22, 2021 at 10:22 am – “the wisdom is in deciding what things you need and what things you don’t. Some things are crucial for society to continue functioning, some things aren’t.”

    Well yeah Jim. Welcome to the party. This is what I said three posts ago.

    “Prattling on about about zombies and bananas makes you look like an idiot.”

    No, insisting that we need to produce *everything* in case of *anything* makes you look like a prat.

    “And as it happens we do spend billions on maintaining a nuclear defence on the off chance someone (like Iran) might take a pop at us, according to you we should just get rid of all the subs and contract out our nuclear defence to someone else.”

    Well no. As I said some things are important. Denying everything is important is not the same as saying nothing is. As it happens we do not build our own missiles. We buy from America. We may not even do our own warhead design these days. What you insist is that we should copy the French and pay a fortune to design and build our own nuclear systems. I would be fine with that but governments have always thought otherwise.

    So you said we need to produce everything. Do we need to produce bananas?

  13. I’m with Jim.

    Absolute Free Trade is a marvellous idea in the best of all possible worlds and when everybody does it. We don’t, however, live in that Panglossian world, even at the best of times and not everything relates to GDP.

    People venerate the Repeal of the Corn Laws, but look at that through rose-tinted spectacles. We went from the beef-eating and ale-drinking Englishman of 1815 to the cheap bread-eating and tea-drinking Englishman of 1885. Meanwhile our rivals, the US, Germany, and others, who didn’t sign up to the Free Trade utopian nostrums, overtook us.

    There were losers as well as winners, just as there have been in the last thirty years of “globalisation is the cure”. The winners have made out like pirates, but are, in the West, greatly outnumbered by the losers.

    Sure, millions in the developing world have been “dragged out of poverty”, but I am almost exclusively concerned with my fellow countryman. As our politicians should be, but the globalists have the lobbyists.

  14. How profitable are silicon foundries in general tho? My ignorant reckoning is they’re massively capital intensive, low margin ventures with enormous risk (Intel’s struggles in recent years should be illustrative, no? It’s like if the Beatles were having difficulty selling albums.)

    Dunno why the Far East has managed to hoover up so much of this industry (cheap labour probably isn’t a significant factor in this sort of business anymore, I assume? Lower energy costs, less environmental bullshit maybe?) but the last time UK Gov was a significant investor in consumer-grade tech hardware, we got products such as Clive Sinclair’s tiny telly and the Memotech MTX 512.

    What’s the Memotech MTX 512, eh? Exactly.

  15. As always, the “but it should be in country” needs to be justified. A couple of years back it was decided we needed our own vaccine plant just in case, and the only wrong part of that decision is that we should have made it four years previously.

    The US government runs it’s own silicon fab, not because it wants to compete with the commercial ones, but because a lot of old military chips are no longer made. The fab is very cheap to build and run because it uses the sort of equipment everyone else threw out yeas ago.

  16. Nota Benny, it’s not that long ago James Dyson wanted to build a new factory in England, and the local council told him to fuck off. So he did.

    Maybe it’s not the relative lack of subsidies that are the problem. What, exactly, is the point of investing in UK production when every layer of government is openly hostile to you, and are openly working to make it legally and financially impossible to do any activity that generates harmless CO2?

  17. Rupert – Yarp, cutting edge multi-squillion pound fighter jets and aircraft carriers are still running on CPUs and other silicon doohickeys that were already embarrassingly outdated in the consumer market around the time Ace of Base were in the charts. No particular reason why they shouldn’t.

    Tbh I’m absolutely in favour of everybody using Motorola 68000 based computers with double density floppy disk storage. Cosy.

  18. @ Jim

    “I’m sorry but you’re just wrong.” is a strong statement you have no evidence for. Perhaps where you are there are large farms who can afford to own their own machinery. Up here in the North that isn’t the case.

    What I can say for sure (because I observe this) is the team that cuts/bales on the surrounding farms leave the bales with the farmer and THAT farmer uses them throughout winter/spring so they are not just passive landlords.
    The opposite arrangement isn’t the case either – the farmers are not tenants of the machinery owners as I know some of them own the land they farm (because they have told me the history of the farm and it’s ownership).

  19. The “Oxford” vaccine is being manufactured by Astrazeneca, a British-Swedish conglomerate, and the first doses are being manufactured in Germany and the Netherlands, although there are plans to move production to the UK. Of their 76000 global employees, only 2000 or so seem to be based in the UK. So much for the homegrown capability

  20. Mr King: Even on The Archers this is made clear, Eddie’s annual trek around the farms hiring out himself and his equipment.

  21. “The UK doesn’t use enough chips of any one kind to make domestic production sensible – exports would have to happen to make a line economic…”

    There is some confusion here. UK citizens certainly USE enough chips to keep many fab plants in business. But UK FACTORIES do not manufacture enough electronic equipment to justify sourcing locally-built chips (we have about a dozen special-purpose and other small facilities).

    However, the above only refers to what exists at the moment. Like Brexit, we should be looking to how things will change. In the EU we bought tomatoes from Spain – now we have left, we can either argue for trying to get a special deal to continue buying from Spain, or start buying from somewhere like Turkey, Sudan or India. Similarly for silicon.

    We have a demand market. That is a strong influence for change…

  22. “What I can say for sure (because I observe this) is the team that cuts/bales on the surrounding farms leave the bales with the farmer and THAT farmer uses them throughout winter/spring”

    Thats silage making. It is one of the farming operations that is largely contracted out these days, mainly because you don’t need that special weather conditions to make make it. 3-4 dryish days will suffice. So yes in those situations it makes sense for the smaller farmer not to have an expensive baler and bale wrapper lying around for most of the year doing nothing. That being said many farmers till own their own baler, just in case.

    Whereas pretty much every cereal farmer will have their own combine, because the chances are in a tricky season everyone will want the contractor on their farm at the same time. There often isn’t enough time for him to spread the work out. Ergo people have machinery all year so they can guarantee its ready to work at the drop of a hat for the few weeks they need it.

    I never said ‘everything’ must be done in house, just that the important stuff should be. Its all about balance. The fanaticism and monomania of the Free Traders matches that of the pro-immigration lot. If a bit of free trade is good then exporting your entire industrial base must be better! A few immigrants gets us curry houses, Chinese takeaways and better footballers so lets import all of Africa, Asia and the Middle East!

  23. A modern cutting-edge chip fab costs billions, yes. But if our use case is e.g. guidance chips for military, these don’t have to be modern. The first drone strike was in 2001 – that’s twenty years ago now. The UK govt could buy/build a cheap vintage chip fab, and just use it to churn out military chips. There’s even a bloke on YouTube who makes chips in his garage (see Sam Zeloof).

    Alternatively they could just store excess inventory of all the chips they need, instead of having a just-in-time model. Probably much cheaper too.

  24. “The UK doesn’t use enough chips of any one kind to make domestic production sensible – exports would have to happen to make a line economic. And if exports have to happen then we’re back to being reliant upon the rest of the world, aren’t we?”

    Surely the rest of the world is dependent upon US? For a product they, for whatever reason, don’t make?

    By that argument, though, it is doubtful that any country on Earth has enough of an internal market to support in-country production, China included. Silicon chips are a commodity product these days. The NAND Flash memory chip has gone from being a premium product circa 2001 to being a throwaway item that you get on USB sticks. (A 1GB USB or SD card back then would have cost a serious money and be used only by high end digital cameras. Can you even buy one today?)

    The semiconductor manufacturing sector has slimmed down massively in the last fifteen years because each successive generation of chips requires finer and finer photolithography. You need a large investment to buy the next generation of machinery, but it is coming to an end as Moore’s Law is not indefinite.

    If anything, now is a good time to be preserving capacity in some level, because most of the genuinely large producers, in similarly high cost countries like Japan, have been haemorrageing money from the sector for years and are dutifully cross-subsidising the shit out of it to keep it viable. NEC moved into Wireless communications, Toshiba raised it’s nuclear power sector by buying Westinghouse from BNFL (Another thing the British just can’t do apparently!) Fujitsu shifted to focusing upon lucrative, IBM-style, software and services and Mitsubishi and Hitachi both shift money around their massive conglomerate structures to compensate.

    Last time I looked, every one of them maintains a semiconductor manufacturing division. Market power, and all that.

  25. @ Jim

    Fine, let’s take your example “every cereal farmer will have their own combine”. Do you have a second one in case the first doesn’t work when you need it? No, perhaps you have your own mechanic on payroll to fix it? Perhaps you test it before it’s needed to allow time to fix?

    So what if the component that breaks isn’t made in the UK? You might say, well lets make it here. So, you have a broken rubber component (seal or conveyor/fan belt etc) in your machine which for performance reasons uses natural rubber.

    Are you suggesting we grow rubber in the UK so we don’t rely on trade?

  26. Bloke in North Dorset

    Jim’s point in his first point, before the discussion went argumentum ad absurdum in record time is a fair one, the crises has shown the we need a bit more just-in-case and a little less just-in-time for some goods.

    Obviously PPE is one of them and perhaps some chips for strategic purposes are another. You’d like to think that strategic military chips weren’t at risk and that someone did a bit of DD along the way, but when the tide went out the US military found that most of the vaccines it used for its personnel were manufactured in China, or so it was reported.

  27. “Do you have a second one in case the first doesn’t work when you need it? No, perhaps you have your own mechanic on payroll to fix it? Perhaps you test it before it’s needed to allow time to fix?”

    Some farmers do have two machines that do exactly the same thing, maybe a newer shiny one as a main machine, and the old one that the new one replaced as an emergency back up. Its a common farming practise – experience has taught us that a machine will often break down on a Friday at 6pm when no-one is available to provide spare parts etc until Monday at the earliest. As for mechanics, good ones will work 24/7 during the busy periods, as they can earn good money, and its good for trade if you keep your customers running at a stressful time, they’ll send work your way in the quieter times. And yes, machines that are sat idle for most of the year will be thoroughly serviced before their working season. It would be pretty stupid to let it sit for 10 months of the year and then expect everything to work perfectly the very day you want to first use it.

  28. MrKing

    I think you are erecting a Jim-shaped Strawman. As BiND says…”before the discussion went argumentum ad absurdum “.

    Nothing is that binary, either/or, black or white. It’s just a question of priorities and there is a very good case to be made that the priorities have shifted too far into the “everything will be fine always” camp.

  29. It would be pretty stupid to let it sit for 10 months of the year and then expect everything to work perfectly the very day you want to first use it.

    By way of contrast that’s precisely how PHE and the NHS behaved after the spring covid peak.

  30. @ Recusant

    Jim sugegsted that “Being able to produce something yourself in a time of trouble has a value in and of itself that only becomes apparent when the SHTF” was something we want.” and gave an example in farming (then proceeded to suggest they know more than economists).

    The rest of the thread was examples (for varying levels of realism) about why that wouldn’t work. It boils down to some things might be and other not so much. This also varies with time (we wouldn’t support our own buggy whip makers now would we?).

    That leads into the main point, we can predict what will or won’t be important, so we need to give everyone the freedom to do what they want. Jim can have a main machine and his old spare if he wants. Another farmer can hire in if that suits them. We don’t need to make this government policy.

    For me however, it suggests that farmers are shielded from the real economics (probably by subsidy/tariffs) and would make different choice once we take them away.

  31. Having worked in the semiconductor (silicon chip) industry for 20+ years, from the late 80’s into the late 00’s, I can tell you the claim being made by Drew Nelson at IQE is absolute baloney. The UK has never led in the manufacture of silicon chips.
    @Jim. Leaving aside the fact that the real key is design, not manufacture, semiconductors cover a multitude of functions requiring different manufacturing technologies, it’s not possible to build a factory to “make the chips we need”.
    The model of specialised manufacturing (but not design) companies such as TSMC allows companies such as ARM, the only succesful British semiconductor of scale, to thrive.

  32. Bloke in North Dorset

    By way of contrast that’s precisely how PHE and the NHS behaved after the spring covid peak.

    Even the worst supply chain managers know that stock is managed on a first in first out basis.

    On 2nd thoughts, this would be the NHS …..

  33. To over-simplify a tad, the economics of silicon manufacturing have three major phases.

    The first is nobody know how to do it at all, or very few. In that phase you find companies like Motorola and Intel getting a leg up on the almost non-existent everybody else, and what they do is a bloody miracle, and they get used to charging $500 for an 8MHz 68000 etc

    The next is that the tooling industry now have enough customers that Moore’s Law kicks in and suddenly every serious player has to deal with the cost of buying new tooling every few years. This sorts out the manufacturers into specialist and TSMC. TSMC is very, very good at what it does. DRAMs and transistors become commodities. That makes computer systems cheap, so even Raspberry Pis can support professional-level operating systems and design tools – so anybody can afford to design chips. [Moore’s Law is an observation that every 18 months or so the number of transistors you can print on a given area of silicon doubles while maintaing more or less constant cost; this is done by printing smaller transistors with shorter wires which switch faster than the old ones so your 8MHz 68000 is suddenly half the cost and twice the performance]

    The third phase is when Moore’s Law stops. Then nobody ever has to buy state of the art bleeding edge machines just to stay in business. And though there’s a long path between getting to (say) 3nm chips and never getting smaller, the cost of getting smaller is so large that it just ain’t worth doing for most things, so the race slows and stops.

    We’re in the third phase right now. You can build stuff in 28nm CMOS – an old technology – that lets you put hundreds or thousands of processors on a single not too expensive chip and which run at 1-3GHz and get an enormous amount of work done per second. Build them in 3nm and you’ll get around 100x (10x x 10x) as many processors. But they won’t run much faster. And the thing will act as a small but potent electric fire because the transistors are just shitty at actually turning off (the smaller they are the worse they are) so there’s a vast amount of current just leaking all the time. And if you’re cunning about design and software and packaging, you can put 100 of your 28nm chips together and it’ll go pretty damn fast. So you don’t need the 3nm technology for many things.

    So TLDR and all that, but the effect of this is that you can build highly advanced chips of awesome capability using a decade-old technology cheap.

    It’s absolutely not that the UK strategically needs such capability, it’s that it – like the loathsomely-named ‘Maker’ market – will soon be so cheap that anybody can do it and so some people will. Then anybody who wants a custom piece of silicon will be able to take the design to a company which will print the thing for them cheap fast and reliable. For *most* reasonable designs. And you probably wouldn’t start with 28nm. Soon, 14nm or even 10 will be old cheap technologies…

    It’s a bit like metalwork companies. Not everybody needs a metalwork company, but enough do that you can probably find one ‘nearby’ which will take your CNC files and ship you back nice extruded aluminium boxes with all the holes and writing and logos that you wanted. [And soon for hobby scale few-offs, you can buy a CNC machine for a few thousand dollars – less than a pair of good loudspeakers – and do it yourself economically]

    Fun times ahead! [Well, if you fancy yourself a computer architect…]

  34. I think we are getting to the heart of the problem

    Nelson says the UK’s ability to produce its own chips should be a matter of national importance.

    Wouldn’t that involve having access to all sorts of proprietary tech and designs? Thus rendering the desire somewhat impractical

  35. It seems that we should welcome Global Warming, which will release Jim and his compadres from the tyranny of short and unpredictable weather windows.

  36. If you asked this guy about any other industry he’d tell you ‘they’re different’. Because its all about juche when its your company on the line and all about ‘global marketplace’ for everyone else.

  37. The U.K. had a company that produced semiconductor equipment, the bits that created the pattern/design on the silicon….been through many changes of ownership and financial crisis which suggest even this is marginal business (main site was just off the M4 Coldra junction).
    As for the old chips, it’s true that capacity is kept for these, but also can be very expensive to buy what is redundant/no longer supported fabbing equipment

  38. Agammamon
    “If you asked this guy about any other industry he’d tell you ‘they’re different’. Because its all about juche when its your company on the line and all about ‘global marketplace’ for everyone else.”

    Yes, at the individual level (helicopters and combines) Jim weighs the risk —likelyhood and consequence— against the cost and makes a decision that he is comfortable with; when it becomes abstract then ‘we’ should do something: no price too high, if it saves one life…

  39. @ Diogenes
    We do, in fact, have one of the world leaders in vaccines. Wellcome. But their manufacturing capacity has been reserved for the Glaxo-Sanofi vaccine which is still going through trials because someone ran clinical trials at the wrong dosage level.
    Why? because Glaxo took over Burroughs Wellcome in 1995

  40. Convenience Yield.

    Being roughly the opposite of opportunity cost.

    Which is what Jim was initially getting towards, I think. Anyway, nobody round here owns a combine. Although there’s lots of other kit that they borrow off each other when needed.

    Anyway, specialisation, standardisation and commoditisation, y’know, production efficiency, JIT, does tend to optimise out resilience. Because, redundancy and oppotunity cost. So it goes. Notionally, SARS-CoV-2 presents an opportunity to re-learn resilience. Not that I’m holding my breath.

    exports would have to happen to make a line economic. And if exports have to happen then we’re back to being reliant upon the rest of the world, aren’t we?”

    Is true enough, but there’ll be times when the convenience yield will go through the damn roof – justifying the costs. But then there’s planning, and then there’s politics.

  41. I do incline to Jim’s side of the argument because I just know that all those foul, fiendish foreigners are out to get us.

    I especially like his argument about the weather. But I’ve never believed in windmills or solar panels anyway.

    I note that the first action of that idiot Biden is to hack away at Trump’s efforts to make the US completely independent of the Middle East. But I never really expected him to just abandon the damn place and leave the locals to go to hell after their own fashion anyway.

  42. So Much For Subtlety

    djc January 22, 2021 at 7:45 pm – “Jim weighs the risk —likelyhood and consequence— against the cost and makes a decision that he is comfortable with”

    No he did not. I did. He claimed we should have every protection against anything regardless of risk

  43. So Much For Subtlety

    Jim January 22, 2021 at 1:19 pm – “I never said ‘everything’ must be done in house, just that the important stuff should be.”

    I don’t know. I think you were doing a good impression of claiming everything should be. Important stuff? Sure. But what is important? Are chips? There is a global marketplace out there. They are not exactly easy to stop moving around the world.

    “If a bit of free trade is good then exporting your entire industrial base must be better!”

    There is no chance of that. But there is a chance that old and dirty industry will move off shore and be replaced by more advanced industry. We may not produce as much steel but we produce a lot of the more expensive and specialised steels.

    “A few immigrants gets us curry houses, Chinese takeaways and better footballers so lets import all of Africa, Asia and the Middle East!”

    It is not fair to conflate the two. I do not want even one curry house. We should have a massively negative immigration rate.

  44. ” He claimed we should have every protection against anything regardless of risk”

    Quote me where I said that. You’ve made that up in your own head as a straw man argument.

    What I know is that Western societies are far too un-resilient, they rest on a knife edge of everything being ‘just right’ all the time. As Covid is showing us thats not a good place to be, and covid isn’t even that serious a threat (politically it is, in reality it carries no existential threat to society. Had we let it burn through, yes a few hundred thousand would have died. We’re importing that many people every year anyway, society would have hardly noticed a year later. Its politics that makes it into a perpetual crisis).

    When something really serious comes along (not necessarily a disease, could be anything, a war, a natural disaster like a massive volcanic eruption cooling the planet and reducing crop yields, there’s lots of things out there that could happen to knock the world out of its current ‘globalist’ setting) we need to be able to continue to function as a society from our own resources. Not bananas or zombie defences, but sensible stuff like energy, food, industrial capability. Imagining that everything will always be like they have been for the last 70 years is foolish in the extreme and will as some point condemn a large proportion of the country to poverty, hardship and death, because no one has bothered to design some resilience into the system.

  45. “We went from the beef-eating and ale-drinking Englishman of 1815 to the cheap bread-eating and tea-drinking Englishman of 1885.”

    Sigh.

    Nope. Bread really was the staff of life in 1815 and by 1885 the import of Argentinian beef had made it cheap enough to be part of an ordinary diet.

  46. “Had we let it burn through, yes a few hundred thousand would have died.”

    In the UK? No way. The 3 enforced lockdowns were each (needlessly) put in place after the respective infection peaks, the Government/NHS’s own numbers are ever more clear. Good advice and voluntary stuff, seasonality, normal virus burn through, and similar drove what happened.

    Agree with most of the rest.

  47. “In the UK? No way. The 3 enforced lockdowns were each (needlessly) put in place after the respective infection peaks, the Government/NHS’s own numbers are ever more clear. Good advice and voluntary stuff, seasonality, normal virus burn through, and similar drove what happened.”

    You are most likely correct, I was being generous to the ‘covid is the worst thin evaahh!’ brigade. As you say it appears the politicians have the uncanny knack of picking the very peak of the wave to implement more restrictions (as an aside the fact that they have managed this feat 3 time suggests intent over luck in my opinion).

    And we have no way of knowing how many of the current excess death total are as a result of the restrictions themselves. Its guaranteed to be a figure greater than zero.

  48. (as an aside the fact that they have managed this feat 3 time suggests intent over luck in my opinion).

    Maybe not. I once played a chap at squash who was so bad I quietly changed to using my left hand. The next couple of times he was just as bad and I used my left hand throughout. There was no intent on his part: he was just bloody awful at squash. I can’t remember what excuse I used to avoid playing him again.

    I expect politics is full of people like him.

  49. I’ve been reading quite a bit lately about TSMC, the Taiwanese chip fabber.
    Coming up to Christmas I’ve been contemplating building a new P.C. , only catch is, a lot of the processors (AMD) and graphics chips (AMD & NVIDIA) are having severe supply shortages. It’s difficult, to the point of impossible to purchase any of the latest chips.

    INTEL has dropped the ball so badly in terms of their manufacturing processes that they are seriously considering outsourcing some manufacturing to TSMC.

    TSMC on their part are now the main suppliers of chips to Apple, AMD, XBox, Playstation etc.
    They have become so popular that they are going to be investing up to $28 Billion in capital expenditure in 2021 on their new 5nm and 7nm lines. Those are NHS scale numbers.

    To get to the point though, is this not a case of putting all your eggs in one basket? Literally one fab company responsible for the chips that go into a multitude of consumer and business products worldwide?

    I can see where Jim is coming from with respect to maintaining some basic know how and manufacturing capability in a sector which is as important to modern life as food production.

    The future is uncertain and we know from past experience that circumstances can change detrimentally over a distressingly short space of time.

    Is it not reasonable to strike a balance between efficiency (which makes us all richer over time) and resilience (which helps us overcome periods of unpredictability)?

  50. SMFS January 22, 2021 at 11:49 pm

    As you have selectively quoted me to misrepresent what I said, I am inclined to believe you have also not been entirely fair to Jim

  51. “Literally one fab company responsible for the chips that go into a multitude of consumer and business products worldwide?”

    The Boxing Day Tsunami in, er, Thailand?, had an effect on the supply of HDDs – the main, almost sole manufacturer of, IIRC, actuators was in the region.

    Similarly, you can buy flat screen TVs and monitors from any number of firms – unfortunately, there only about two or three firms that make the actual panels. There’s only a single Dutch grower of the type of tomatoes that are used in sandwiches, as they don’t leak juice everywhere and make the bread soggy inside 30 seconds.

  52. If one looks objectively at the world situation right now I would say there is a pretty good chance that China and the USA will have a shooting war at some point in the next 20-30 years. The tectonic plates are inexorably moving towards a confrontation between the old Alpha Male and the new and rising upstart. Were that to occur, even if it was relatively contained to some flashpoint location (Taiwan?) then the whole ‘we can get what we need from China et al and don’t need our own factories etc’ theory would be out of the window.

Leave a Reply

Your email address will not be published. Required fields are marked *