4 ms·

I found the geopolitical portion to be the most important aspect here. China has shown a willingness to flex its muscles on enforcing its values beyond their bo

I found the geopolitical portion to be the most important aspect here. China has shown a willingness to flex its muscles on enforcing its values beyond their borders. China is smart, and plays a long game. We don't want to wake up one day and find they've flexed their muscles on their regional neighbors similar to their rare earths strong-arming from 2010-2014 and not have fab capabilities to fall back on in the West. (For that matter, I'm astounded that after 2014 the status quo returned on rare earths with very little state-level strategy or subsidy to address the risk there.)

Spooky23 6y ago
That’s a good comparison... CPUs are increasingly a commodity.
okl 6y ago
> [...] and not have fab capabilities to fall back on in the West. I'm not too concerned: - There are still a number of foundries in western countries that produce chips which are good enough for "military equipment". - Companies like TSMC are reliant on imports of specialized chemicals and tools mostly from Japan/USA/Europe. - Any move from China against Taiwan would likely be followed by significant emigration/"brain drain".
- Lopiolis 6y ago
  The issue isn't just military equipment though. When your entire economy is reliant on electronic chips, it's untenable for all of those chips to come from a geopolitical opponent. That gives them a lot of influence over business and politics without having to impact military equipment.
- ineedasername 6y ago
  National security doesn't just extend to direct military applications. Pretty much every industry and piece of critical infrastructure comes into play here. It won't matter if western fabs can produce something "good enough" if every piece of technological infrastructure from the past 5 years was built with something better. As for moves again at Taiwan, China hasn't given up that prize. Brain drain would be moot if China simply prevented emigration. I view Hong Kong right now as China testing the waters for future actions of that sort. Happily though I also view TSMC's pending build of a fab in Arizona as exactly that sort of geographical diversification of industrial and human resources necessary. We just need more of it.
  - MangoCoffee 6y ago
    >As for moves again at Taiwan, China hasn't given up that prize. CCP hasn't give up since KMT high-tailed to Taiwan. for more than 40+ yrs American cozy up with the Chinese govrt and doing business with China. American told Taiwan govrt not to "make trouble" but we all know China is the one who make all the troubles with military threat and flying aircraft over Taiwan, day in and day out. Taiwan have build up a impressive defensives from buying weapon (US) to develop its own. yes, China can take Taiwan. that's 100% but at what price. that's what Taiwanese is betting on, China will think twice about invading.
    - nine_k 6y ago
      I bet TSMC has a number of bombs planted around the most critical machines, much like Switzerland has bombs planted around most critical tunnels and bridges. Trying to grab Taiwan with force alone, even if formally successful, would mean losing its crown jewels forever.
      - icefo 6y ago
        The bombs have been removed some years ago in Switzerland as the risk of them going off was deemed greater than the risk of sudden invasion. Just to nitpick, your point absolutely stands
      - blackrock 6y ago
        TSMC is not really that important. It’s currently only useful for the cutting edge of CPUs, and especially for mobile phones, that can get the battery boost from using a more efficient processor. Military hardware uses CPU technology that’s 10+ years old, of which the Chinese are capable of fabricating themselves on the mainland. The stuff needs to be rugged, and likely, radiation-proofed. And besides, isn’t it easier for Switzerland to just launch missiles at the bridges, instead of actively maintaining explosive devices on each bridge?
        nine_k 6y ago
        Maybe TSMC is not that important for making advanced weapons. It is still important for billion-dollar markets like cell phones, cloud servers, desktop and laptop computers, etc. For instance, Apple, which happens to somehow rack in money selling computing devices, is very dependent on TSMC, without a viable replacement available now.
- bee_rider 6y ago
  Yeah, for some reason, I assumed that military equipment mostly used, like, low performance but reliable stuff. In-order processors, real time operating systems, EM-hardening. Probably made by some company like Texas Instruments, who will happily keep selling you the same chip for 30 years.
  - ineedasername 6y ago
    Well, I doubt the US military is too concerned with chasing the transistor density per cm^2, but there are cutting edge areas of military tech in the form of weapons guidance, fighter jet avionics & weapons systems, etc. that may require more advanced capabilities in components-- I don't know. (As an aside, when we sell things like fighter jets to other countries, they do not get the same avionics & weapons/targeting systems that we use)
npunt 6y ago
Ben missed an important part of the geopolitical difference between TSMC and Intel: Taiwan is much more invested in TSMC's success than America is in Intel's. Taiwan's share of the semiconductor industry is 66% and TSMC is the leader of that industry. Semiconductors helps keep Taiwan from China's encroachment because it buys them protection from allies like the US and Europe, whose economies heavily rely on them. To Taiwan, semiconductor leadership is an existential question. To America, semiconductors are just business. This means Taiwan is also likely to do more politically to keep TSMC competitive, much like Korea with Samsung.
- mc10 6y ago
  > Semiconductors helps keep Taiwan from China's encroachment because it buys them protection from allies like the US and Europe, whose economies heavily rely on them. Are there any signed agreements that would enforce this? If China one day suddenly decides to take Taiwan, would the US or Europe step in with military forces?
  - davish 6y ago
    The closest I've found is this: https://en.wikipedia.org/wiki/Taiwan_Relations_Act https://en.wikipedia.org/wiki/Taiwan_Relations_Act Not guaranteed "mutual defense" of any sort, but the US at least has committed itself to helping Taiwan protect itself with military aid. The section on "Military provisions" is probably most helpful.
  - wwtrv 6y ago
    There are no official agreements since neither US nor any major European countries recognize Taiwan/ROC but US has declared multiple times that they would defend Taiwan (see ‘ Taiwan Relations Act’ & Six Assurances’)
  - koheripbal 6y ago
    https://en.wikipedia.org/wiki/Taiwan_Relations_Act https://en.wikipedia.org/wiki/Taiwan_Relations_Act > The Taiwan Relations Act does not guarantee the USA will intervene militarily if the PRC attacks or invades Taiwan
PKop 6y ago
>I'm astounded Our political system and over financialized economy seem to suffer from same hyper short term focus that many corporations chasing quarterly returns run in to. No long term planning or focus, and perpetual "election season" thrashing one way or another while nothing is followed through with. Plus, in 2, 4 or 8 years many of the leaders are gone and making money in lobbying or corporate positions. No possibly short-term-painful but long term beneficial policy gets enacted, etc. And many still uphold our "values" and our system as the ideal, and question any that would look towards the Chinese model as providing something to learn from. So, I anticipate this trend will continue.
- echelon 6y ago
  It appears the Republicans are all-in on the anti-China bandwagon. Now you just have to convince the Democrats. I don't think this will be hard. Anyone with a brain looking at the situation realizes we're setting ourselves up for a bleak future by continuing the present course. The globalists can focus on elevating our international partners to distribute manufacturing: Vietnam, Mexico, Africa. The nationalists can focus on domestic jobs programs and factories. Eventually it will become clear that we're going to staff them up with immigrant workers and provide a path to citizenship. We need a larger population of workers anyway.
  - ineedasername 6y ago
    My impression was that Republicans were only half-hearted about China as that issue made it's way through President Trump's administration. The general tone I felt was that things like tariffs were tolerated in support of their party's leader, not the tariffs themselves. And the backtracking on sanctions on specific Chinese firms indicated there was little/no significant GOP support pushing President Trump to follow through. The requirement that TikTok sell off its US operations was watered down into a nice lucrative contract for Oracle, though all that's in limbo and the whole issue has lost steam, its fate possibly resting in the courts, or with a new administration that will be dealing with many larger issues. The molehill -> mountain issue of Hunter Biden's association with a Chinese private equity fund will raise lots of loud rhetoric, but more for partisan in-fighting than action against China. Meanwhile the US, the West, Corporations will pay lip service to decrying human rights violations and labor conditions. China will accept this as the need to save face, while any stronger action will be avoided to prevent China from flexing its economic muscles against the corporations or countries that rely on their exports. No company wants to be the next hotel chain forced to temporarily take down their website & issue an embarrassing apology. No country wants to be the next Japan, cut off from rare earth exports. Just look at Hong Kong: Sure the US has receded from such issues in the last 4 years, but it's not like any other country did anything more than express their displeasure in various diplomatically acceptable ways.

Spooky23 6y ago

That’s a good comparison... CPUs are increasingly a commodity.

okl 6y ago

> [...] and not have fab capabilities to fall back on in the West. I'm not too concerned: - There are still a number of foundries in western countries that produce chips which are good enough for "military equipment". - Companies like TSMC are reliant on imports of specialized chemicals and tools mostly from Japan/USA/Europe. - Any move from China against Taiwan would likely be followed by significant emigration/"brain drain".

Lopiolis 6y ago
The issue isn't just military equipment though. When your entire economy is reliant on electronic chips, it's untenable for all of those chips to come from a geopolitical opponent. That gives them a lot of influence over business and politics without having to impact military equipment.
ineedasername 6y ago
National security doesn't just extend to direct military applications. Pretty much every industry and piece of critical infrastructure comes into play here. It won't matter if western fabs can produce something "good enough" if every piece of technological infrastructure from the past 5 years was built with something better. As for moves again at Taiwan, China hasn't given up that prize. Brain drain would be moot if China simply prevented emigration. I view Hong Kong right now as China testing the waters for future actions of that sort. Happily though I also view TSMC's pending build of a fab in Arizona as exactly that sort of geographical diversification of industrial and human resources necessary. We just need more of it.
- MangoCoffee 6y ago
  >As for moves again at Taiwan, China hasn't given up that prize. CCP hasn't give up since KMT high-tailed to Taiwan. for more than 40+ yrs American cozy up with the Chinese govrt and doing business with China. American told Taiwan govrt not to "make trouble" but we all know China is the one who make all the troubles with military threat and flying aircraft over Taiwan, day in and day out. Taiwan have build up a impressive defensives from buying weapon (US) to develop its own. yes, China can take Taiwan. that's 100% but at what price. that's what Taiwanese is betting on, China will think twice about invading.
  - nine_k 6y ago
    I bet TSMC has a number of bombs planted around the most critical machines, much like Switzerland has bombs planted around most critical tunnels and bridges. Trying to grab Taiwan with force alone, even if formally successful, would mean losing its crown jewels forever.
    - icefo 6y ago
      The bombs have been removed some years ago in Switzerland as the risk of them going off was deemed greater than the risk of sudden invasion. Just to nitpick, your point absolutely stands
    - blackrock 6y ago
      TSMC is not really that important. It’s currently only useful for the cutting edge of CPUs, and especially for mobile phones, that can get the battery boost from using a more efficient processor. Military hardware uses CPU technology that’s 10+ years old, of which the Chinese are capable of fabricating themselves on the mainland. The stuff needs to be rugged, and likely, radiation-proofed. And besides, isn’t it easier for Switzerland to just launch missiles at the bridges, instead of actively maintaining explosive devices on each bridge?
      - nine_k 6y ago
        Maybe TSMC is not that important for making advanced weapons. It is still important for billion-dollar markets like cell phones, cloud servers, desktop and laptop computers, etc. For instance, Apple, which happens to somehow rack in money selling computing devices, is very dependent on TSMC, without a viable replacement available now.
bee_rider 6y ago
Yeah, for some reason, I assumed that military equipment mostly used, like, low performance but reliable stuff. In-order processors, real time operating systems, EM-hardening. Probably made by some company like Texas Instruments, who will happily keep selling you the same chip for 30 years.
- ineedasername 6y ago
  Well, I doubt the US military is too concerned with chasing the transistor density per cm^2, but there are cutting edge areas of military tech in the form of weapons guidance, fighter jet avionics & weapons systems, etc. that may require more advanced capabilities in components-- I don't know. (As an aside, when we sell things like fighter jets to other countries, they do not get the same avionics & weapons/targeting systems that we use)

npunt 6y ago

Ben missed an important part of the geopolitical difference between TSMC and Intel: Taiwan is much more invested in TSMC's success than America is in Intel's. Taiwan's share of the semiconductor industry is 66% and TSMC is the leader of that industry. Semiconductors helps keep Taiwan from China's encroachment because it buys them protection from allies like the US and Europe, whose economies heavily rely on them. To Taiwan, semiconductor leadership is an existential question. To America, semiconductors are just business. This means Taiwan is also likely to do more politically to keep TSMC competitive, much like Korea with Samsung.

mc10 6y ago
> Semiconductors helps keep Taiwan from China's encroachment because it buys them protection from allies like the US and Europe, whose economies heavily rely on them. Are there any signed agreements that would enforce this? If China one day suddenly decides to take Taiwan, would the US or Europe step in with military forces?
- davish 6y ago
  The closest I've found is this: https://en.wikipedia.org/wiki/Taiwan_Relations_Act https://en.wikipedia.org/wiki/Taiwan_Relations_Act Not guaranteed "mutual defense" of any sort, but the US at least has committed itself to helping Taiwan protect itself with military aid. The section on "Military provisions" is probably most helpful.
- wwtrv 6y ago
  There are no official agreements since neither US nor any major European countries recognize Taiwan/ROC but US has declared multiple times that they would defend Taiwan (see ‘ Taiwan Relations Act’ & Six Assurances’)
- koheripbal 6y ago
  https://en.wikipedia.org/wiki/Taiwan_Relations_Act https://en.wikipedia.org/wiki/Taiwan_Relations_Act > The Taiwan Relations Act does not guarantee the USA will intervene militarily if the PRC attacks or invades Taiwan

PKop 6y ago

>I'm astounded Our political system and over financialized economy seem to suffer from same hyper short term focus that many corporations chasing quarterly returns run in to. No long term planning or focus, and perpetual "election season" thrashing one way or another while nothing is followed through with. Plus, in 2, 4 or 8 years many of the leaders are gone and making money in lobbying or corporate positions. No possibly short-term-painful but long term beneficial policy gets enacted, etc. And many still uphold our "values" and our system as the ideal, and question any that would look towards the Chinese model as providing something to learn from. So, I anticipate this trend will continue.

echelon 6y ago
It appears the Republicans are all-in on the anti-China bandwagon. Now you just have to convince the Democrats. I don't think this will be hard. Anyone with a brain looking at the situation realizes we're setting ourselves up for a bleak future by continuing the present course. The globalists can focus on elevating our international partners to distribute manufacturing: Vietnam, Mexico, Africa. The nationalists can focus on domestic jobs programs and factories. Eventually it will become clear that we're going to staff them up with immigrant workers and provide a path to citizenship. We need a larger population of workers anyway.
- ineedasername 6y ago
  My impression was that Republicans were only half-hearted about China as that issue made it's way through President Trump's administration. The general tone I felt was that things like tariffs were tolerated in support of their party's leader, not the tariffs themselves. And the backtracking on sanctions on specific Chinese firms indicated there was little/no significant GOP support pushing President Trump to follow through. The requirement that TikTok sell off its US operations was watered down into a nice lucrative contract for Oracle, though all that's in limbo and the whole issue has lost steam, its fate possibly resting in the courts, or with a new administration that will be dealing with many larger issues. The molehill -> mountain issue of Hunter Biden's association with a Chinese private equity fund will raise lots of loud rhetoric, but more for partisan in-fighting than action against China. Meanwhile the US, the West, Corporations will pay lip service to decrying human rights violations and labor conditions. China will accept this as the need to save face, while any stronger action will be avoided to prevent China from flexing its economic muscles against the corporations or countries that rely on their exports. No company wants to be the next hotel chain forced to temporarily take down their website & issue an embarrassing apology. No country wants to be the next Japan, cut off from rare earth exports. Just look at Hong Kong: Sure the US has receded from such issues in the last 4 years, but it's not like any other country did anything more than express their displeasure in various diplomatically acceptable ways.