5 ms·

If TSMC brings state of the art fabrication to the US, doesn't that mean they're subject to seizure by the Defense Production Act we've all learned so much abou

If TSMC brings state of the art fabrication to the US, doesn't that mean they're subject to seizure by the Defense Production Act we've all learned so much about, TSMC's corporate fate becomes subject to CFIUS approval, and because of that, Taiwan loses a significant amount of political leverage to protect itself?

fermienrico 6y ago
LOL, that's literally the case with any foreign investment in physical assets. Tesla factory in Shanghai - if there is a war, all bets are off. CCP will raid the factory within the next 20 mins and employ military rule in the factory in about an hour's notice. Physical assets are in some ways the ultimate thing to own. Even services that run on data centers which are physical things. Semiconductors are physical objects that your Dropbox runs on.
- kick 6y ago
  Which is exactly why this rumor makes no sense.
  - fermienrico 6y ago
    This rumor makes perfect sense. Taiwan is looking at US to shield it from Chinese influence. Moving manufacturing to US and building on top of strong American-Taiwanese collaboration (which already exists) only makes sense. The US has strong laws for IP protection, has proper constitutional values and doesn't steal technologies on a whim without due process. Taiwan has benefited greatly from the US and the US has benefited greatly from Taiwan. I just wish American president was someone like the Taiwanese president. She is a strong, powerful and smart lady.
    - jandrese 6y ago
      No offense, but your post reads like the official propaganda channel of the Taiwan government.
      - fermienrico 6y ago
        Do you have anything to add besides this?
        jandrese 6y ago
        Maybe consider toning it back in the future if you don't want people rolling their eyes at your posts?
      - dang 6y ago
        Please follow the site guidelines in the future. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - catalogia 6y ago
      If the American government believed that TSMC facilities in America would meet America's demand for silicon, then wouldn't America lose that incentive to ensure Taiwan wasn't steamrolled by China? Supposing such a war did take place, TSMC might be unable to continue operating in Taiwan but still able to operate in some capacity in America. Would TSMC scrap the fabs in America just to spite the American government for the betrayal of Taiwan? That doesn't seem likely to me. I don't doubt that the Taiwanese president is smart, which is why I doubt this story.
      - transpute 6y ago
        > wouldn't America lose that incentive to ensure Taiwan wasn't steamrolled by China No, the opposite. Real trade enables balanced long-term interdependency, growth and innovation, unlike "free" trade focused on extraction and asymmetrical flows. The most valuable assets brought to the table by Taiwan and the USA are culture and these are complementary in the long term.
        kick 6y ago
        Because the US is so famously focused on the long-term and would totally protect a country from getting wiped out because of "shared culture." Taiwan needs all the leverage it can get, and giving the US the gift of no longer needing it would be the dumbest thing TSMC could do in the long and short term.
        transpute 6y ago
        Not shared culture, complementary culture. A real partnership can create more leverage, not less, instead of holding one card until it is overtaken by events.
    - kick 6y ago
      Moving manufacturing to the US takes away leverage. It makes no sense.
    - zwaps 6y ago
      US laws generally only hold for US citizens and US companies. The US had no issues using the NSA to spy on German IP and even bug the cellphone of Angela Merkel. And well, given that no consequences ever materialized, it won't seem like they'd need to stop at any time. So given that, thinking that the US has "strong laws" is a tad naive. You know, since literally the opposite already happened.
      - fermienrico 6y ago
        I implore you to read the US Supreme Court opinions in its full glory: https://www.supremecourt.gov/opinions/slipopinion/19 https://www.supremecourt.gov/opinions/slipopinion/19
      - perl4ever 6y ago
        There must be something lacking in this viewpoint, that US law is a liability for non-Americans, when you consider how entities around the world issue financial securities that are subject to US law when they could just not do that. I'm thinking, for example, of reading about Argentina issuing bonds governed by US law, in US currency.
xxpor 6y ago
Last I checked, the DPA doesn't allow seizure, just forced manufacturing for a price. I'm not sure about the specifics, but it sounds like the theory is that there's at least a little profit in the price used under the DPA.
- wahern 6y ago
  No law could permit uncompensated seizure as it would violate the 4th Amendment. Forced labor would violate the 13th Amendment. A better to way to look at it is that the DPA sets the rules for commercial activity--if you want to undertake commercial activity, you have to do so subject to the regulating law, which in the case of the DPA includes the possibility of building and selling whatever the government requests. You could always choose to just walk away, of course.
  - dragonwriter 6y ago
    > No law could permit uncompensated seizure as it would violate the 4th Amendment. 5th. > Forced labor would violate the 13th Amendment. Not if the laborers were convicts, but, yes, generally.
  - AaronFriel 6y ago
    The takings clause is quite interesting and I imagine that between the expansive national security powers granted to the President and Congress's assent, the Court and the Executive might find a way to justify such a taking perhaps by seizing the foreign ownership of the corporation. Of course the takings clause could also be satisfied by compensating TSMC, which perhaps due to sanctions or congressional action could be tied up indefinitely.

fermienrico 6y ago

LOL, that's literally the case with any foreign investment in physical assets. Tesla factory in Shanghai - if there is a war, all bets are off. CCP will raid the factory within the next 20 mins and employ military rule in the factory in about an hour's notice. Physical assets are in some ways the ultimate thing to own. Even services that run on data centers which are physical things. Semiconductors are physical objects that your Dropbox runs on.

kick 6y ago
Which is exactly why this rumor makes no sense.
- fermienrico 6y ago
  This rumor makes perfect sense. Taiwan is looking at US to shield it from Chinese influence. Moving manufacturing to US and building on top of strong American-Taiwanese collaboration (which already exists) only makes sense. The US has strong laws for IP protection, has proper constitutional values and doesn't steal technologies on a whim without due process. Taiwan has benefited greatly from the US and the US has benefited greatly from Taiwan. I just wish American president was someone like the Taiwanese president. She is a strong, powerful and smart lady.
  - jandrese 6y ago
    No offense, but your post reads like the official propaganda channel of the Taiwan government.
    - fermienrico 6y ago
      Do you have anything to add besides this?
      - jandrese 6y ago
        Maybe consider toning it back in the future if you don't want people rolling their eyes at your posts?
    - dang 6y ago
      Please follow the site guidelines in the future. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - catalogia 6y ago
    If the American government believed that TSMC facilities in America would meet America's demand for silicon, then wouldn't America lose that incentive to ensure Taiwan wasn't steamrolled by China? Supposing such a war did take place, TSMC might be unable to continue operating in Taiwan but still able to operate in some capacity in America. Would TSMC scrap the fabs in America just to spite the American government for the betrayal of Taiwan? That doesn't seem likely to me. I don't doubt that the Taiwanese president is smart, which is why I doubt this story.
    - transpute 6y ago
      > wouldn't America lose that incentive to ensure Taiwan wasn't steamrolled by China No, the opposite. Real trade enables balanced long-term interdependency, growth and innovation, unlike "free" trade focused on extraction and asymmetrical flows. The most valuable assets brought to the table by Taiwan and the USA are culture and these are complementary in the long term.
      - kick 6y ago
        Because the US is so famously focused on the long-term and would totally protect a country from getting wiped out because of "shared culture." Taiwan needs all the leverage it can get, and giving the US the gift of no longer needing it would be the dumbest thing TSMC could do in the long and short term.
        transpute 6y ago
        Not shared culture, complementary culture. A real partnership can create more leverage, not less, instead of holding one card until it is overtaken by events.
  - kick 6y ago
    Moving manufacturing to the US takes away leverage. It makes no sense.
  - zwaps 6y ago
    US laws generally only hold for US citizens and US companies. The US had no issues using the NSA to spy on German IP and even bug the cellphone of Angela Merkel. And well, given that no consequences ever materialized, it won't seem like they'd need to stop at any time. So given that, thinking that the US has "strong laws" is a tad naive. You know, since literally the opposite already happened.
    - fermienrico 6y ago
      I implore you to read the US Supreme Court opinions in its full glory: https://www.supremecourt.gov/opinions/slipopinion/19 https://www.supremecourt.gov/opinions/slipopinion/19
    - perl4ever 6y ago
      There must be something lacking in this viewpoint, that US law is a liability for non-Americans, when you consider how entities around the world issue financial securities that are subject to US law when they could just not do that. I'm thinking, for example, of reading about Argentina issuing bonds governed by US law, in US currency.

xxpor 6y ago

Last I checked, the DPA doesn't allow seizure, just forced manufacturing for a price. I'm not sure about the specifics, but it sounds like the theory is that there's at least a little profit in the price used under the DPA.

wahern 6y ago
No law could permit uncompensated seizure as it would violate the 4th Amendment. Forced labor would violate the 13th Amendment. A better to way to look at it is that the DPA sets the rules for commercial activity--if you want to undertake commercial activity, you have to do so subject to the regulating law, which in the case of the DPA includes the possibility of building and selling whatever the government requests. You could always choose to just walk away, of course.
- dragonwriter 6y ago
  > No law could permit uncompensated seizure as it would violate the 4th Amendment. 5th. > Forced labor would violate the 13th Amendment. Not if the laborers were convicts, but, yes, generally.
- AaronFriel 6y ago
  The takings clause is quite interesting and I imagine that between the expansive national security powers granted to the President and Congress's assent, the Court and the Executive might find a way to justify such a taking perhaps by seizing the foreign ownership of the corporation. Of course the takings clause could also be satisfied by compensating TSMC, which perhaps due to sanctions or congressional action could be tied up indefinitely.