The chips, and why they are missing.
We keep talking about the lack of chips, without anyone wondering why they are missing, and it is time to start asking, and PUNISH, who made the wrong decisions in the past.
First, the first reason for the shortage is that the so-called "supply chain managers" are the usual "umbrellas for sunny days". When sales fluctuate at 2/3% per year, they are great at managing a supply chain. As soon as, with covid, they found themselves working as supply chain managers because sales in certain sectors fluctuated by as much as 20/25%, we saw what they are. Empty bottles. Incompetent charlatans who passed off as managers, when they couldn't even manage a picnic.
Another medal of valor goes to those who drink whatever propaganda bullshit comes out of the asshole of Chinese propaganda.
The virus in China? Beaten! There they know how to lockdown! That's a serious government! They shouted in chorus all the BUGS who wanted to believe the usual "In the USSR everything is better", only instead of the USSR they have China.
On the other hand, the situation in China is catastrophic, waves of viruses devastate the most populated areas, to the point that suddenly factories have to be closed for one or two months in a row. The result is that production collapsed. You can shut down a factory where it produces cooked chickpeas, and just double the shifts to produce double and recover. But you don't close a silicon factory that easily.
But we also need a historical look. Because when, as we do now, we want to bring production back to Europe and the USA, it turns out that it is not easy at all, and it is a slow and complicated process.
- although the economic return is evident, it is difficult to find financiers, to the point that the EU, that is a kind of government, must intervene. With taxpayers' money, of course.
- it is hard to find people to go to work, despite the contribution margin in the world of chips would allow the workers of the new factories to pay a LOT.
What's the problem?
The problem is that TARGETED choices have been made in the past in designing investment policies. Only they were badly targeted. The paradigms of these choices were:
- a young man must never earn more than an old man.
- an innovative sector must never earn more than a traditional one.
- knowledge of new subjects and disciplines must never be worth more than past knowledge.
if we go to the Italian stock exchange, for example, but it also applies to the DAX or the CAC, we discover an impressive thing. The most popular companies are old companies, doing old things, with old methods.
Agribusiness. Textile. Plastic. Fashion. Automobiles. Building.
For heaven's sake I don't deny that these things are important. If they're that old, there must be a reason.
But we do not find as many companies linked to "modern" knowledge, and if we do find them they are few. Rare cases. Almost visionaries. And too much, too much, too few.
Why'? Because if you work in a "traditional" company and you are good, the peak of income occurs around 40/50 years, but more around 50. You have bread when you don't have teeth, and vice versa.
If you work in a silicon factory and you are good, the peak of income is already around 30. You have bread AND you have teeth.
This contrasts, however, with the first paradigm of fascist society: a young person must never earn more than an old man.
The result is that all sectors where the young earned more than the old were outsourced to China. And mind you, a SoC designer in China doesn't earn little. The thing that you don't pay them there is bullshit when it comes to Chip. China has created a middle class with this stuff.
Looking at things from an economic point of view, it would have been better to have things with low added value done in China, where low incomes weigh a lot, and keep HIGH added value products here. This is what economic theory says. But the opposite was done.
When one acts contrary to what material economic interest suggests, one can be sure that the decision was made using a political ideology, or a religious ideology. Or the mixture of the two, which is called fascist ideology.
Decision makers don't like building silicon factories. It would create a generation of young people who study electronics, earn for this new field of technology, and earn more (if they are good) than many old people in traditional fields.
And this, the fascist ideology does not like.
It is time to admit that relocations to China have not followed a mere economic interest, but a political and ideological interest, of those who cannot accept a society where the young can earn more than the old.
This is the point.
Only the idea that a traditional company (fashion, or automobile, or agri-food) can relocate production to China, makes politicians and public opinion pull their hair out. Does an automatic machine factory relocate? Evabbe ', we know, that's the way things are.
It was absolutely not in the economic interest to relocate companies with high added value. And, incredibly, not even those who did have earned it: the only ones who have gained a lot in relocations are those who produced things typical of traditional sectors.
But if we go to see who produces "new" stuff, "new" technologies, we discover that only the few companies that have kept production in the West have really earned it, with very few exceptions in some niche sectors.
So, to understand why it is so difficult today to bring modern industries to Europe, we need to understand what was the ideology that dominated the period of relocations in China:
- a young man must never earn more than an old man.
- an innovative sector must never earn more than a traditional one.
- knowledge of new subjects and disciplines must never be worth more than past knowledge.
This is the point that is holding back the operation. Although there are chip manufacturers in Europe (Infineon, Siemens, Philips Semiconductors, STM and others), the company at the forefront of the European silicon race with European funds is obviously…. Intel. Which, in the event of a crisis, would direct all production to the American market.
Why don't giants like the ones I mentioned intend to invest? For a simple reason: creating a large silicon industry in Europe means creating a sector in which a young person can earn more than an old one.
Furthermore, knowing how to draw silicon would become more important to participate in Masterchef to make lasagna with snail sperm, according to the millenary tradition of Manzoni's memory.
And as if that weren't enough, an innovative sector would make money, big money.
And since European companies are prone to the dominant ideology in Europe, the result is that there is only one company available to collect tens of billions: an American.
Lately, many have put up a kind of metal detector, which reveals the conspiracy. So I'd like to clarify one thing: I'm not talking about conspiracies.
If everyone in Nazi Germany was behaving like Nazis it was not "a conspiracy", it was simply a dominant ideology. If in some areas many are anti-Semites it is not a conspiracy: it is a dominant ideology in the area.
It does not necessarily take a plot against pork to explain that millions of Muslims do not eat pork: just observe that there is a dominant ideology against pork.
Likewise, I am not claiming that there is a conspiracy of the strong powers against young people: I am claiming that there is a dominant ideology against them.
And it is the fact that it is dominant, which prevents us from seeing it "from within". If you were raised in Jeddah you would not notice that there is an ideology of rejection of pork. First of all you would not miss it, or you would find it so natural not to eat it (you would not find it in any shop) that in the end you would not even waste the time it takes to say "pork should not be eaten": you cannot even find it for sale, nobody around you eats it, why the hell would you name that ban?
Dominant ideologies become invisible in the area in which they dominate.
If you look at Islam from the inside , you will find no trace of the contempt for women, nor of the prohibition of eating pork in public discourse. That is the dominant ideology, there is no need to repeat it every ten minutes, it is considered natural, just behave consistently.
On the contrary, these are things that can be seen well from the outside, if you are Western or come from a different culture. Or if you've never had the dominant bullshit before.
The dominant ideology, where more and less, in Europe, is called "gerontocracy". It has many meanings.
For example, while in Germany it is tolerated that young people have a little power and a decent amount of money, from which they will then have to sweat up to 50 to have REAL power and BIG money, in Italy the idea of gerontocracy says that however young people should have NO power. Distrust is extreme.
Likewise, we do not flinch if a sixteen-year-old is said to be "not mature enough to vote", while it is calmly accepted that an 80-year-old senile stoner can. It is said that it takes at least 50 years to be presidents of the republic, and no one wonders what physiological and / or neurological basis has this limit. It takes 18 years to drive a car, 17 for a helicopter: but the need for age limits is so high that we don't even ask ourselves questions about their consistency.
Gerontocracy is so dominant that we consider it "natural".
Having established which ideology is hegemonic in Europe, we must now ask ourselves how it fits in with an economy that allows really young people (and only them) to enrich. Ferragni doesn't bother because she got rich on social media, she bothers because when she was young she earned more than the old, but they couldn't do it because, in fact, for a person over 45 to become an "influencer" it is practically impossible, except in very rare cases, of a niche.
Chips are made of knowledge inaccessible to the old, but very accessible to the young. This, in a gerontocratic nation, cannot be accepted, and that is why the chip industry, when it existed, was among the first to be sent far.
The case of the chip industry, then, for the gerontocrats is even more unbearable. Because if you build a silicon factory, you need A LOT of young people, who you will have to pay well for. It is no longer Ferragni or an influencer every million that enriches. It is a mass that enters the middle class.
It is a crowd that may have even less money than the 60-year-old rich man, but being young they have the energy and enthusiasm to enjoy them. Berlusconi who buggers a model will never enjoy it as much as a 14-year-old boy touching his first girlfriend's boobs. It's a question of age: the body is what it is.
You can say goodbye to any kind of industry that pays a lot, a lot of young people, and especially those who know the newest sciences. A gerontocrat CANNOT bear this. None of them.
To get out of chip addiction, one thing is needed: to accept that many young people will have very well-paid jobs.
And this, for the gerontocrats, is not good at all.