It’s hard to be a better advocate without diving into the politics of why we’re in the situation we are, which also doesn’t address the amount of political power you and I have relative to the interests that want said technological consolidation to exist.
And given that the tech community trends towards political philosophies like libertarianism, which is inherently anti-organization and anti-collectivist, I’m not sure how you begin to scratch the surface of what a real solution looks like.
Politics are a factor but economics is a bigger one. With any technology, each successive generation inevitably requires larger and larger capital investments. Ideally governments should do more to preserve competition but when it costs >$10B to develop a new microchip manufacturing process that inherently limits how many players the market can support. And if one company bets on the wrong technology or gets the timing wrong that can leave them too financially weak to survive.
> when it costs >$10B to develop a new microchip manufacturing process that inherently limits how many players the market can support.
Does it though? TSMC's market cap is over a trillion dollars. Likewise Nvidia. What's $10B compared to these numbers? Less than 1%. Maybe we couldn't have a thousand of them, but why couldn't we have ten?
Not only that, this technology isn't a single invention, so why does it have to be a single company? Couldn't some companies make the fabs and other ones operate them, causing them each to require less capital and be easier to compete with on its own? Couldn't the various pieces of equipment in the fabs each be developed by a separate company?
"It costs >$10B to do this as a vertically integrated conglomerate" is bad, so maybe don't have that.
I assume it's cheaper to own the whole vertical slice at this scale, so you can control everything. Given that there's the financial incentive to do it, how would you prevent companies from growing vertically? If you declared a legal limit, how would you prevent a single entity from forming a chain of companies, effectively producing one huge vertical company as well?
> I assume it's cheaper to own the whole vertical slice at this scale, so you can control everything.
In general it's the opposite: Internal politics destroys value and a single point of failure is a business risk even if you own it because failure is rarely intentional.
As an example of the first, Kodak invented digital cameras but then failed to capitalize on them because it would have cannibalized their film business, and now their film business is dead anyway but so is the entire company. As an example of the second, Intel has vertically integrated fabs but now that their fabs are behind it's sinking the rest of the company. You could tell a similar story about AMD a decade and a half ago and spinning off their fabs is a big part of what saved them. IBM was also a big vertically integrated monster back in the day and they got out-competed by, well, everybody, and now they're a hollowed out consultancy.
The way out of this for a large conglomerate is to not take internal dependencies. So for example, Samsung makes both DRAM and devices, and they typically use their own DRAM in their own devices. But it's industry standard DRAM that they sell to anyone who is willing to pay them for it, and if Samsung's DRAM fabs all got destroyed by a natural disaster or their technology fell behind for some reason, their device units could immediately switch to a competitor until their DRAM unit got their house back in order. Likewise, if their consumer devices became uncompetitive their DRAM unit could still sell to the rest of the market because they're not fully beholden to a single internal customer. And having that serves as a canary; Intel didn't have external fab customers so it didn't notice them switching to TSMC, which would otherwise have been a red flag.
The "problem" is that you need to have some foresight. Everything's great until it isn't. If a company waits until one of the internal units has a problem before realizing that it's a single point of failure for other business units, it's too late to redesign the ship after you've already hit the iceberg.
Mostly the reason that these things are so capital intensive is due to market consolidation. If you want to do something useful and stay small, you have 2 choices: get crushed by a bigco or get absorbed.
Economics (allocation of scarce resources) is mostly defined by politics. For instance how you said that companies have to shut down if they take one bad risk and they don't get another chance - there was an explicit political decision that companies should work that way.
This piece could be infinitely long trying to address every single angle that is relevant, big or small. Or it could just cut to the heart of the matter and ask us all to fill in the rest. I’m fine with the latter, personally, as the “why” is not really what they’re debating. Whatever the cause(s), the end result is currently undesirable and necessitates action. We can unpack the “why” as we try to fix it.
And given that the tech community trends towards political philosophies like libertarianism, which is inherently anti-organization and anti-collectivist, I’m not sure how you begin to scratch the surface of what a real solution looks like.