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Yeah, but the key difference is that Taiwan is under direct threat from China. Mr. Xi openly said that he will take back Taiwan by force if necessary. Weakening

Yeah, but the key difference is that Taiwan is under direct threat from China. Mr. Xi openly said that he will take back Taiwan by force if necessary. Weakening the Taiwan semiconductor industry is certainly part of this playbook, too. Imagine if the US would consider India to be part of its territory and asking for a "re-unification". I am sure that in this case India would try to prevent key software engineers from leaving, too. Actually, I am surprised that Taiwan has done so little so far.

newacct583 5y ago
All that may be true, but the net effect of this policy is to artificially depress wages of people working in Taiwan. Even if one buys into the "existential threat" model, it seems like forcing that burden onto the backs of your most important competitive asset is... sort of horrifyingly counterproductive.
- ipnon 5y ago
  Presumably they would be poached to work in China and not Taiwan.
  - newacct583 5y ago
    That's the policy. But the effect is that TSMC doesn't need to raise salaries to retain workers, they can rely on the government to prevent the workers from being recruited in the first place. (edit: Can I say how amazingly hilarious it is watching all these notionally free-marketeer libertarians who believe in just compensation rush in to explain why it's totally OK for the Taiwanese government to shamelessly restrain trade as long as they're trying to stick it to the PRC?)
    - threatofrain 5y ago
      Taiwanese workers may find their wages lowered due to lack of China bidding on their salaries, but there's still the rest of the world.
      - sudosysgen 5y ago
        The vast majority of the pressure comes from China.
    - donw 5y ago
      TSMC will always lose that bid against a hostile state actor (the PRC) which can totally ignore market value in pursuit of strategic goals.
      - rorykoehler 5y ago
        It’s absurd people dumping on Taiwan don’t realise this. There is no way for Taiwan to compete with CCPs deep pockets if the CCP has decided it needs these engineers at all costs.
        newacct583 5y ago
        But again, TSMC not only isn't trying to compete with "CCPs deep pockets", they're not even trying to compete with Apple or Intel! The time for that complaint is if they're still seeing poaching despite paying FAANG-scale salaries commensurate with their now-FAANG-scale revenue. To wit: TSMC is one of the big boys now, it's time to act like it and pay their workers. What they're doing right now is trying to cheat by using their government as a weapon against their own employees.
    - fighterpilot 5y ago
      It doesn't aritificially depress wages if China was offering artificially high wages in the first place.
      - spaced-out 5y ago
        If these people really are critical to the survival and future of your country, how can any wage be too high?
        fighterpilot 5y ago
        You're thinking in absolutes. We would both agree that a billion dollars a month is too high. And I don't see how what you've said is related to what I said, which was a critique of the idea that this move is artificially depressing wages when allegedly it's an attempt to stop poaching of key talent at artificially high non market rates.
        spaced-out 5y ago
        >We would both agree that a billion dollars a month is too high. I would not necessarily agree. There are CEOs who make around that amount, why shouldn't an engineer make that much if they're equally important to the organization? From what I could gather from Google, TSMC engineers make far less than I do as a FAANG engineer, and TSMC posted a ~$14 billion profit last year. If these employees are so important to Taiwan's future, why can't they at least pay them FAANG-level salaries? It's not that they don't have the money.
        fighterpilot 5y ago
        Because they're not equally important. Most engineers don't add billions of dollars of value. If a miscellaneous engineer resigns, it will have in most cases little impact on the prospects of the company. Most add only incremental value. The superstar seven figure ICs do get paid as such but they're rare, most people aren't that capable of that much value add as an IC. The company made billions in profits. That could be due to a number of reasons. IP, relationships, network effects, scale economies, regulatory capture, brand equity, etc.
    - elefanten 5y ago
      There are other places in the world Taiwanese talent can work. And other sources of FDI in Taiwan that can create wage competition -- see other comments about Google. China is uniquely and specifically trying to destroy Taiwan. The exception makes sense and doesn't have a totalizing effect.
    - blackoil 5y ago
      This is kind of an anti-dumping measure by Taiwan.
      - sudosysgen 5y ago
        It's not an anti-dumping measure. TSMC would be profitable paying their workers that much and so will be SMIC.
viking1066 5y ago
Most Indians would be thrilled to become US citizens. So this is not a good analogy.

newacct583 5y ago

All that may be true, but the net effect of this policy is to artificially depress wages of people working in Taiwan. Even if one buys into the "existential threat" model, it seems like forcing that burden onto the backs of your most important competitive asset is... sort of horrifyingly counterproductive.

ipnon 5y ago
Presumably they would be poached to work in China and not Taiwan.
- newacct583 5y ago
  That's the policy. But the effect is that TSMC doesn't need to raise salaries to retain workers, they can rely on the government to prevent the workers from being recruited in the first place. (edit: Can I say how amazingly hilarious it is watching all these notionally free-marketeer libertarians who believe in just compensation rush in to explain why it's totally OK for the Taiwanese government to shamelessly restrain trade as long as they're trying to stick it to the PRC?)
  - threatofrain 5y ago
    Taiwanese workers may find their wages lowered due to lack of China bidding on their salaries, but there's still the rest of the world.
    - sudosysgen 5y ago
      The vast majority of the pressure comes from China.
  - donw 5y ago
    TSMC will always lose that bid against a hostile state actor (the PRC) which can totally ignore market value in pursuit of strategic goals.
    - rorykoehler 5y ago
      It’s absurd people dumping on Taiwan don’t realise this. There is no way for Taiwan to compete with CCPs deep pockets if the CCP has decided it needs these engineers at all costs.
      - newacct583 5y ago
        But again, TSMC not only isn't trying to compete with "CCPs deep pockets", they're not even trying to compete with Apple or Intel! The time for that complaint is if they're still seeing poaching despite paying FAANG-scale salaries commensurate with their now-FAANG-scale revenue. To wit: TSMC is one of the big boys now, it's time to act like it and pay their workers. What they're doing right now is trying to cheat by using their government as a weapon against their own employees.
  - fighterpilot 5y ago
    It doesn't aritificially depress wages if China was offering artificially high wages in the first place.
    - spaced-out 5y ago
      If these people really are critical to the survival and future of your country, how can any wage be too high?
      - fighterpilot 5y ago
        You're thinking in absolutes. We would both agree that a billion dollars a month is too high. And I don't see how what you've said is related to what I said, which was a critique of the idea that this move is artificially depressing wages when allegedly it's an attempt to stop poaching of key talent at artificially high non market rates.
        spaced-out 5y ago
        >We would both agree that a billion dollars a month is too high. I would not necessarily agree. There are CEOs who make around that amount, why shouldn't an engineer make that much if they're equally important to the organization? From what I could gather from Google, TSMC engineers make far less than I do as a FAANG engineer, and TSMC posted a ~$14 billion profit last year. If these employees are so important to Taiwan's future, why can't they at least pay them FAANG-level salaries? It's not that they don't have the money.
        fighterpilot 5y ago
        Because they're not equally important. Most engineers don't add billions of dollars of value. If a miscellaneous engineer resigns, it will have in most cases little impact on the prospects of the company. Most add only incremental value. The superstar seven figure ICs do get paid as such but they're rare, most people aren't that capable of that much value add as an IC. The company made billions in profits. That could be due to a number of reasons. IP, relationships, network effects, scale economies, regulatory capture, brand equity, etc.
  - elefanten 5y ago
    There are other places in the world Taiwanese talent can work. And other sources of FDI in Taiwan that can create wage competition -- see other comments about Google. China is uniquely and specifically trying to destroy Taiwan. The exception makes sense and doesn't have a totalizing effect.
  - blackoil 5y ago
    This is kind of an anti-dumping measure by Taiwan.
    - sudosysgen 5y ago
      It's not an anti-dumping measure. TSMC would be profitable paying their workers that much and so will be SMIC.

viking1066 5y ago

Most Indians would be thrilled to become US citizens. So this is not a good analogy.