5 ms·

What's TSMC's secret sauce compared to American fabs? Cheap labour? Government handouts?

by person_of_color 6y ago

reducesuffering 6y ago
Management incompetence. Too many non-technicals running Intel and GlobalFoundries the past decade.
phkahler 6y ago
They got EUV working in production.
- person_of_color 6y ago
  Surely America can churn out good Semiconductor physicists?
  - netsharc 6y ago
    Dat "Murica!" pride. "TSMC is ahead, is it handouts?" (Hint, Boeing also gets a shitton of handouts, hmm, and they built planes that actively overrode the pilots, and actively wanted to crash instead of fly.) Maybe if education wasn't so neglected that teachers have to use their own money to buy supplies, and creationism is taught as a valid theory, and instead maths and science are improved by a shitton, then you can churn those semiconductor physicists. So, who's going to plant their flags on this comment?
  - mjevans 6y ago
    Could it? Yes. Is studying to become such a profession something valued by the culture at large? Not really. STEM generally in America is seen as something for dweebs and nerds to do. At least within the last two decades the really smart math types have been busying with legalized gambling on the stockmarket. A comparison of salaries, free time and quality of life after work, and other life metrics would probably lead many to consider other fields of work.
  - jbay808 6y ago
    They all get paid more to develop web frameworks though.
pwdisswordfish4 6y ago
Better work ethic + lower hubris in the work force. American fabs source heavily from a pool of people with a background in the US military. The intent is that it yields a certain caliber (positive connotation) of worker. What they get is the ego of the American male whose path after high school was to join the military. Now actually send that person through the meat grinder, thus ratcheting up their tolerance for bureaucratic incompetence of the sort highlighted in Catch-22, then consider that the US military's infinite budget means that the cost of anything is never experienced in a direct, visceral way, et voila.
- wyldfire 6y ago
  > American fabs source heavily from a pool of people with a background in the US military. I wonder what historical factors contributed to that tendency? What are the forces against starting a new business in this space -- it must be an enormous undertaking to build the production facility?
  - HeadsUpHigh 6y ago
    Probably in the tens of billions plus a decade to get something advanced working. You can do older nodes yes, and there is plenty of business there but your competitors have already amortized those costs and have business relationships built already.
  - redis_mlc 6y ago
    > it must be an enormous undertaking to build the production facility It's impossible for any kind of startup to build a modern fab because of the billions in capital needed, and the risk of never getting a working process (ask Intel about how hard that is.) An established company could probably get the DOD or state handouts to finance most of it, but you still have the risky fab process right, which is chemical-based. And even if you could, you'd need a reason to build a fab, which becomes obsolete the minute it's online.
futhey 6y ago
There aren't really subsidies for TSMC here in Taiwan. I would say labor cost is relatively cheap (compared to western countries), and security is relatively high (compared to the Chinese ecosystem). A big reason it happened here is probably more to do with how manufacturers started combating intellectual property theft decades ago. Firms who wanted to manufacture in China manufactured a few key components in Taiwan to maintain control over output, then shipped them to Guangzhou for final assembly. I'm not sure there's a "secret sauce". It's more they quietly built a decade plus lead on their closest competitors when they were in the "less desirable market" (compared to Intel, AMD, and Nvidia), and there are huge barriers to entry, with little short-term incentive to DIY (vs. contract manufacturing). TSMC is actually now Taiwan's single biggest energy consumer, using about 5% of the entire country's electrical supply.
- blueblisters 6y ago
  > There aren't really subsidies for TSMC here in Taiwan. Subsidies don't need to be direct cash handouts/tax deductions. I think the real advantage TSMC gets over its non-Asian competitors is government spending on infrastructure specifically for silicon fabrication. TSMC has guaranteed access to water, electricity and engineering talent from local universities on a resource constrained island. It's smart industrial policy that is the key behind the rise of a lot of Asian tigers, and something other countries should study as well - laissez faire is not always the optimal answer to innovation.
deepnotderp 6y ago
TSMC is just better right now, better management, better culture, better engineers.
ksec 6y ago
>What's TSMC's secret sauce compared to American fabs? I have seen this being asked so many times but it still irritate me a lot. TSMC's secret sauce is the wrong question to ask. You need to ask why GF and most importantly Intel are ( Fill in any or all negative words you may like ). And that is about as polite as I could have put it.
sasaf5 6y ago
Not just one secret sauce, but as it is usually the case, a mixture of many things: concentrated long term investment, available talent and infrastructure, geopolitics, hability to make strong business networks, etc... If you force me to pick one to be the secret sauce though, I would risk to pick their business model. TSMC was a key element in the rise of the fabless value chain, while other fab powerhouses were more vertically integrated. The engineers in my circle who have done designs with their processes usually say good things about the experience.

What's TSMC's secret sauce compared to American fabs? Cheap labour? Government handouts?

reducesuffering 6y ago

Management incompetence. Too many non-technicals running Intel and GlobalFoundries the past decade.

phkahler 6y ago

They got EUV working in production.

person_of_color 6y ago
Surely America can churn out good Semiconductor physicists?
- netsharc 6y ago
  Dat "Murica!" pride. "TSMC is ahead, is it handouts?" (Hint, Boeing also gets a shitton of handouts, hmm, and they built planes that actively overrode the pilots, and actively wanted to crash instead of fly.) Maybe if education wasn't so neglected that teachers have to use their own money to buy supplies, and creationism is taught as a valid theory, and instead maths and science are improved by a shitton, then you can churn those semiconductor physicists. So, who's going to plant their flags on this comment?
- mjevans 6y ago
  Could it? Yes. Is studying to become such a profession something valued by the culture at large? Not really. STEM generally in America is seen as something for dweebs and nerds to do. At least within the last two decades the really smart math types have been busying with legalized gambling on the stockmarket. A comparison of salaries, free time and quality of life after work, and other life metrics would probably lead many to consider other fields of work.
- jbay808 6y ago
  They all get paid more to develop web frameworks though.

pwdisswordfish4 6y ago

Better work ethic + lower hubris in the work force. American fabs source heavily from a pool of people with a background in the US military. The intent is that it yields a certain caliber (positive connotation) of worker. What they get is the ego of the American male whose path after high school was to join the military. Now actually send that person through the meat grinder, thus ratcheting up their tolerance for bureaucratic incompetence of the sort highlighted in Catch-22, then consider that the US military's infinite budget means that the cost of anything is never experienced in a direct, visceral way, et voila.

wyldfire 6y ago
> American fabs source heavily from a pool of people with a background in the US military. I wonder what historical factors contributed to that tendency? What are the forces against starting a new business in this space -- it must be an enormous undertaking to build the production facility?
- HeadsUpHigh 6y ago
  Probably in the tens of billions plus a decade to get something advanced working. You can do older nodes yes, and there is plenty of business there but your competitors have already amortized those costs and have business relationships built already.
- redis_mlc 6y ago
  > it must be an enormous undertaking to build the production facility It's impossible for any kind of startup to build a modern fab because of the billions in capital needed, and the risk of never getting a working process (ask Intel about how hard that is.) An established company could probably get the DOD or state handouts to finance most of it, but you still have the risky fab process right, which is chemical-based. And even if you could, you'd need a reason to build a fab, which becomes obsolete the minute it's online.

futhey 6y ago

There aren't really subsidies for TSMC here in Taiwan. I would say labor cost is relatively cheap (compared to western countries), and security is relatively high (compared to the Chinese ecosystem). A big reason it happened here is probably more to do with how manufacturers started combating intellectual property theft decades ago. Firms who wanted to manufacture in China manufactured a few key components in Taiwan to maintain control over output, then shipped them to Guangzhou for final assembly. I'm not sure there's a "secret sauce". It's more they quietly built a decade plus lead on their closest competitors when they were in the "less desirable market" (compared to Intel, AMD, and Nvidia), and there are huge barriers to entry, with little short-term incentive to DIY (vs. contract manufacturing). TSMC is actually now Taiwan's single biggest energy consumer, using about 5% of the entire country's electrical supply.

blueblisters 6y ago
> There aren't really subsidies for TSMC here in Taiwan. Subsidies don't need to be direct cash handouts/tax deductions. I think the real advantage TSMC gets over its non-Asian competitors is government spending on infrastructure specifically for silicon fabrication. TSMC has guaranteed access to water, electricity and engineering talent from local universities on a resource constrained island. It's smart industrial policy that is the key behind the rise of a lot of Asian tigers, and something other countries should study as well - laissez faire is not always the optimal answer to innovation.

deepnotderp 6y ago

TSMC is just better right now, better management, better culture, better engineers.

ksec 6y ago

>What's TSMC's secret sauce compared to American fabs? I have seen this being asked so many times but it still irritate me a lot. TSMC's secret sauce is the wrong question to ask. You need to ask why GF and most importantly Intel are ( Fill in any or all negative words you may like ). And that is about as polite as I could have put it.

sasaf5 6y ago

Not just one secret sauce, but as it is usually the case, a mixture of many things: concentrated long term investment, available talent and infrastructure, geopolitics, hability to make strong business networks, etc... If you force me to pick one to be the secret sauce though, I would risk to pick their business model. TSMC was a key element in the rise of the fabless value chain, while other fab powerhouses were more vertically integrated. The engineers in my circle who have done designs with their processes usually say good things about the experience.