34 ms·

TSMC looks to double down on U.S. chip factories as talks in Europe falter

437 points by adventured 5y ago

Cyril_HN 5y ago
I will be really shocked if the UK doesn't try to make a play for this. That would be an incredible boon to the UK position, especially post Brexit.
JohnJamesRambo 5y ago
I have no knowledge of the situation, why did they choose Arizona?
- mediaman 5y ago
  Interestingly this came as a loss to Washington, where there is already a significant fab owned by TSMC called WaferTech. Their facility is on the WA side of the Portland suburbs. Many felt WA was in the running because of the talent already there. This caused concerns that the future of the WaferTech fab facility is dimmer than before, since it probably makes less sense to pump billions more into it in the future.
  - bpodgursky 5y ago
    I live in WA and I don't blame them. The state government is not on a pro-business bent right now; most of the discussion is about how to make corporations pay their "fair share". (also, the gross receipts tax is... pretty dumb) If there's a more business-friendly state, absolutely would take it in a heartbeat.
    - KirillPanov 5y ago
      The kneejerk downvotes of this post make me ashamed of HN. > (also, the gross receipts tax is... pretty dumb) ... for manufacturers who aren't Boeing. It's true though. Taxing revenue instead of profit is a ridiculous policy which punishes manufacturers and favors every other industry at their expense. Giving one company (Boeing) its own special preferential revenue tax rate [1] of $\epsilon$ percent is not a solution. [1] https://j7dfh9pbumnyhazfmcsfgm9m.apnews.com/article/37d21240880df9b2e17bdea7c689e25f https://j7dfh9pbumnyhazfmcsfgm9m.apnews.com/article/37d21240... [*] [*] (apparently AP news is trying real hard to make their links look like malware or something)
      - DoreenMichele 5y ago
        The kneejerk downvotes here make me ashamed of HN. Lots of subs on Reddit grew tremendously during the pandemic. I'm guessing HN did too and has a worse case than usual of "eternal September."
        KirillPanov 5y ago
        Sadly, no; it's a side effect of how the HN voting system works -- it encourages virtue-signaling rather than curiosity.
        JohnJamesRambo 5y ago
        Rather than that, maybe people on HN want corporations to pay their taxes?
    - 0134340 5y ago
      Are you saying it's not fair in comparison to individuals? Is it any more than individuals pay (see graph) [0]? Because I see so many complaints here about poor businesses and the taxes they do (don't) pay. Don't forget that businesses need people, it's a symbiotic relationship, one isn't more important than the other. 0: https://www.forbes.com/sites/mikepatton/2015/10/31/a-brief-history-of-the-individual-and-corporate-income-tax/?sh=6e54a866b5b6 https://www.forbes.com/sites/mikepatton/2015/10/31/a-brief-h...
  - sircastor 5y ago
    Apple picked up a lot of talent out west Of Portland where a lot of Intel’s home base is. But I imagine trying to find space out here would be rough.
    - irrational 5y ago
      There is actually quite a lot of room because of the Urban Growth Boundary.
      - KirillPanov 5y ago
        Aren't manufacturing plants required to be inside a UGB? In Washington State they are, although existing plants are grandfathered. I guess they could expand the UGB, which is what the Eastern Washington counties do in order to attract manufacturers.
  - irrational 5y ago
    I would think the western suburbs of Portland would be more attractive. Intel has 5 huge fabrication plants in the Aloha/Hillsboro area. That is a large talent base to hire for the plant.
    - rsj_hn 5y ago
      From the article, Taiwan's estimation of the U.S. talent base is rather low: '"TSMC chairman and founder Morris Chang warned last month of higher operating costs and a thin talent pool for the U.S. plans in a rare public speech attended by Wei and chairman Mark Liu. "In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers," Chang said. He warned that "short-term subsidy can't make up for long-term operational disadvantage."' The body of the article also casts doubt on the total amount of U.S. investment, unlike the headline.
      - nwiswell 5y ago
        > In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers What does this even mean? That US engineers expect benefits and work-life balance?
        rsj_hn 5y ago
        It could be that. Or, for example, California Teachers angrily denouncing accelerated math classes as being immoral. Or perhaps a combination of the two.
        whoknowswhat11 5y ago
        I wouldn't call it angrily, but yes, a big focus has been on equity and eliminating different levels for students. Some elements make sense or I think would do little harm. I was high achieving in math - but the push to calc in high school does feel overdone I think - it's often a shallow understanding. They are very focused particularly on issues like 30%+ of Asian students and only 3-4% of other minorities being in advanced tracks of math education so they are trying to reduce those. Some neat ideas around doing more open ended tasks (cool!) in make that integration work better. That said, will likely be some tough corners because there are can be some pretty significant skill differences across a student body in a given grade. They are going to try and do more group work, and also one of the 5 new principles is to teach towards social justice in math as well as other areas which may provide more opportunity for engagement by all students.
  - magicsmoke 5y ago
    Also surprising is that TSMC was recently hit by water shortages due to a drought in Taiwan. Arizona isn't exactly drought resistant, yet they built there instead of rainy Washington.
    - ckozlowski 5y ago
      This made me scratch my head as well. The desert isn't exactly known for water supply, and given what I'd read elsewhere about how crucial water is for the process, I wondered if I was missing something somewhere. I did a quick search and found this: https://www.investors.com/news/technology/intel-stock-tsm-stock-seek-waterway-to-easing-chip-shortage-in-dry-arizona/ https://www.investors.com/news/technology/intel-stock-tsm-st... The takeaways: - Fab companies have invested in a lot of water reclamation and recycling regardless of location, as there's a lot of metals and other chemicals that need to be filtered out. (Asianometry goes over this more here: https://www.youtube.com/watch?v=785Uzi1mGAA https://www.youtube.com/watch?v=785Uzi1mGAA ) - Intel claims Arizona's water usage has stayed level in the area as industrial use has replaced agricultural, which uses less. I'm sure there's a cost-benefit play here, where the tax and other incentives outweigh the increased costs of water reclamation.
    - baybal2 5y ago
      There was a few hours long blackout in Taiwan today night, that was way beyond the time UPSes can last. Expect last 6 month worth of wafers in production to go down the drain in fabs which relied on battery backups only.
      - Alupis 5y ago
        The backup power supplies for these types of facilities are actually generators powered off gasoline or diesel, not just batteries, and can theoretically run forever (or at least as much fuel you can get).
        baybal2 5y ago
        You cannot backup power a whole modern fab, unless you build a small power station just for it. UPSes there are just to keep cleanroom clean, and most critical processes which can't be gracefully shut down.
- vmception 5y ago
  Natural resources like metals there. Just waiting for someone to invest in and gather. Proximity to these resources.
- topkai22 5y ago
  I know Intel already has plants down there as do a few other semi conductor companies. That means a ready workforce. I’d guess AZ also throws tax incentives their way as well, but that’s just conjecture.
- blululu 5y ago
  Chandler Arizona is the site of Intel's 14nm Fab[1]. There is a large pool of local talent that they can tap into. Add to this the fact that Arizona has relatively favorable laws for corporate investments and a relatively low cost of living and it's a natural choice. [1]: https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si...
  - bpodgursky 5y ago
    It's also geologically fairly stable.
    - culturestate 5y ago
      Is this really a primary concern? Most of their main fabs are in Taiwan, which is very seismically active.
      - jeppesen-io 5y ago
        That's precisely why. It costs A LOT to make a fab seismic resistant They've done this and know the costs
        culturestate 5y ago
        My point is that if you already successfully operate several seismically stable fabs and you're building a new one that's gonna cost you tens of billions of dollars anyway, there must be other factors that are higher on your requirements list.
        sanxiyn 5y ago
        Fabs deal with earthquakes by stopping. They'd rather not stop.
        deleted 5y ago
        [deleted]
- deleted 5y ago
  [deleted]
- adventured 5y ago
  Arizona has a very long semiconductor industry history: https://www.chipsetc.com/semiconductors-in-arizona.html https://www.chipsetc.com/semiconductors-in-arizona.html "The state of Arizona has been home to many semiconductor & electronics manufacturing Companies since the 1950's, including the SouthWest's Pioneer Semiconductor Company - Motorola. Motorola's research and development lab in Phoenix introduced the world's first commercial high-power germanium-based transistor in 1955. The lab would expand over time to become Motorola's semiconductor division and by 1960 they would have three manufacturing sites in the Phoenix area." "Intel corp., Arizona's 7th largest employer, started up their Fab 6 & Assembly Test facility in Chandler back in 1980, and their 720-acre Ocotillo Fab 12 site in 1996."
  - klipt 5y ago
    So is it also full of toxic superfund sites like Silicon Valley?
    - totalZero 5y ago
      Arizona has nine superfund sites including one at a former Motorola semiconductor facility. https://www.phoenixnewtimes.com/news/motorola-the-story-so-far-6432443 https://www.phoenixnewtimes.com/news/motorola-the-story-so-f...
    - vineyardmike 5y ago
      Except most of it is useless. Silicon Valley at least is good for growing
- buryat 5y ago
  tax incentives, regardless of anything else even though it's a desert and the industry needs water.
RcouF1uZ4gsC 5y ago
> EU industry commissioner Thierry Breton, who has championed the Eurofab idea, also spoke with TSMC's Europe president, Maria Marced, last month. Although Breton publicly called the TSMC talk a "good exchange," a second person familiar with the matter said the TSMC talks in Europe have gone "very poorly." Sometimes it seems that EU politicians want to be seen as cutting a hard bargain with industry that they actually harm themselves and the EU. A big example was with the COVID vaccines. The EU felt the need to be seen as striking a good bargain, that for want of a few Euros per dose, they missed out getting the vaccine much earlier. With chips, if you really want the EU to be at the cutting edge of tech, you need these cutting edge fabs in the EU.
- nerbert 5y ago
  Yeah, that probably mixed with the idea that they should leave the space to local players (who will magically develop a cutting edge know-how?)
  - ericbarrett 5y ago
    It's not hopeless for the EU—many of the necessary machines for any reasonably recent chip fab come from European companies, e.g. ASML.
    - blibble 5y ago
      buying a chisel doesn't make you a master sculptor
      - wahern 5y ago
        If you've been selling the most advanced, most capable chisels for generations, unassailable, while your client master sculptors exchange titles.... I don't know what that makes you--kingmaker doesn't quite fit--but it's not nothing. It might make you wary of getting too close (figuratively or physically) to any particular client, lest you risk falling from grace as your client invariably will.
      - 5y ago
neonological 5y ago
You guys ever wonder why they don't choose California? These factories have huge environmental impacts that California is not okay with. These factories produce massive amounts of waste that cannot be recycled. This is also very likely to be the same exact reason as to why these talks didn't go so well in Europe. Arizona like Texas is more business friendly at the expense of not looking out for the well being of people who live in these locations. Ironically, right now by being more business friendly more people want to move to places like Arizona or Texas for jobs. It's a strange balancing act that has a lot of potential for being over corrected for. Industry brings business and economic growth but ruins the environment and has harms the people living in the area. The insidious thing is environmental costs are paid for much much later. The consequences of being way to business friendly in these places may only be apparent a decade from now just like how the price of being too business unfriendly is now very apparent in California.
- epistasis 5y ago
  I don't really like the euphemism of "business friendly" when it means "companies don't have to pay for their externalities." California is extremely entrepreneur-friendly, and have absolutely massive amounts of business compare to Arizona or Texas. The externalities are not minor either, there are 23 superfund sites in Santa Clara county from Silicon Valley's early years, where they did not bother to properly dispose of waste: https://www.theatlantic.com/technology/archive/2019/09/silicon-valley-full-superfund-sites/598531/ https://www.theatlantic.com/technology/archive/2019/09/silic...
  - neonological 5y ago
    >California is extremely entrepreneur-friendly, and have absolutely massive amounts of business compare to Arizona or Texas. I don't know if you've been following the news lately of a bunch of companies moving OUT of California to Texas. One of these people is Elon Musk. And guess what? I have a source: https://www.youtube.com/watch?v=Ez90rXhMWjE https://www.youtube.com/watch?v=Ez90rXhMWjE I'm not saying California is wrong. Far from it. They're right. These laws are made to protect the people. Like you said, it's not minor at all. I never said it was minor. However ANY state can decide that economic growth is more important than environmental safety and short term health of its' citizens and make a strategic move to make it's own location much more attractive to business. So the costs aren't clear. Do we want an economic wasteland or an environmental wasteland? This is my point. California is not dead yet, but the trends have been pointing in this direction for years.
cromka 5y ago
I don't think EU cuts deals with specific companies. What would TMSC expect here? That EU gave them money straight up? I don't know how this would work, but maybe I am missing something. If anything, EU would create a generic fund to subsidize any such investment coming from any company interested, but at EU level, it would definitely take time. Or they can talk to individual countries about subsidies, just like they do with the US. Plenty of them can afford it.
- teruakohatu 5y ago
  The USA (or states do), China does, even my little country of New Zealand does (our tax dollars fund Hollywood blockbusters). If the EU doesn't they are only going to miss out.
  - smnrchrds 5y ago
    New Zealand may have gone a bit too far in appeasing to corporations, if Kim Dotcom's saga is any indication.
  - rurounijones 5y ago
    Problem is the EU is not as "united" as the above examples. Which country gets the fab (and reaps the benefit) if the EU provides subsidies (Paid for by all)?
    - TMWNN 5y ago
      This is also why there won't ever be a European Silicon Valley. Paris isn't going to support any Europe-wide effort to create one that isn't located in the Hexagon, nor will Berlin support one that isn't somewhere in Germany. London pre-Brexit would not and did not support anything that might take away from Silicon Fen. While other US states encourage their own tech centers' growth, Floridians and New Yorkers and Texans are all aware of, benefit from, and are proud of Silicon Valley being in the US.
      - peoplefromibiza 5y ago
jimmcslim 5y ago
I’m dismayed that Australia isn’t doing more to foster local fabs.
- icelancer 5y ago
  Their massive import/export taxes on anything related to technology basically kills any of those types of ideas, unfortunately.
  - mkj 5y ago
    Looks like semiconductor equipment is zero tariff? https://www.abf.gov.au/importing-exporting-and-manufacturing/tariff-classification/current-tariff/schedule-3/section-xvi/chapter-84#8486 https://www.abf.gov.au/importing-exporting-and-manufacturing...
  - jeeeb 5y ago
    Australia has some of the lowest import / export tariffs in the world. I.E. they’re generally zero or close to.
    - icelancer 5y ago
      Tariffs, yes. Taxes, no. Simply comparing the cost of technology-based goods between AUS and USA/CAN - or worse, digital-based items - shows why Australia is not an attractive place for technology companies.
      - jeeeb 5y ago
        I don’t know of any particular taxes on technology goods in Australia. There’s 10% GST but that’s paid by consumers. For companies GST on inputs is all deductible.
      - dannyw 5y ago
        It's not taxes nor tariffs. It's the fact that we are generally an affluent country with high costs of living and wages, so the market can pay more.
ciabattabread 5y ago
So where would a EU fab be located?
- magila 5y ago
  Most likely Germany. Specifically Dresden since it already has a significant fabrication industry so there's a good supply of local expertise.
  - TMWNN 5y ago
    ... and there went any interest in Rome, Paris, Amsterdam, Copenhagen, Stockholm, Madrid, Lisbon, Warsaw, and Vienna in subsidizing that fab's construction.
xenihn 5y ago
I've been thinking about what would happen if there's an actual military crisis between China and Taiwan. I wonder if the United States would allow (and aid with) unlimited immigration from Taiwan for educated specialists, in an attempt to capture/retain as much skills and knowledge as possible.
- greatgoat420 5y ago
  It has been done in the past, Taiwan is a special topic for the US, I don't know that they would let it get to that point without intervening either diplomatically or militarily.
  - xenihn 5y ago
    Right, I'm just thinking that long-term military intervention to prevent capture/annexation of Taiwan is completely impossible, but short-term intervention meant to extract as many Taiwanese as possible prior to inevitable capitulation is very much an option.
    - greatgoat420 5y ago
      > I'm just thinking that long-term military intervention to prevent capture/annexation of Taiwan is completely impossible. You mean by China? I would certainly agree. Even with most countries not acknowledging Taiwan nationhood I would expect a strong international reaction to any military action by China due to Taiwan's special place in international technology exports.
    - dillondoyle 5y ago
      Why do you think this? I disagree, but am of the personal opinion that our advantage shrinks each year we don't seriously confront CCP.
    - nradov 5y ago
      Long term military intervention to prevent capture is completely possible if we're willing to pay the price. Weather and geography alone would make an amphibious invasion quite difficult. But China could easily wreck Taiwan's infrastructure and industry without invading.
SCAQTony 5y ago
The USA is also willing to defend Taiwan and currently the US has carrier groups in the south China sea. This suggests that the idea of building chips in the US may be a diplomatic courtesy and arguably an incentive.
- jlduan 5y ago
  It is a request from the U.S. https://www.reuters.com/technology/chipmaker-tsmc-eyeing-expansion-planned-arizona-plant-sources-2021-05-04/ https://www.reuters.com/technology/chipmaker-tsmc-eyeing-exp...
  - edrxty 5y ago
    Regardless of who made the request the reasoning still makes sense. Both the US and TSMC want this outcome the obvious quid pro quo helps.
- bigpumpkin 5y ago
  Currently, no carrier group is in the South China Sea [1] [1] https://news.usni.org/category/fleet-tracker https://news.usni.org/category/fleet-tracker
  - nradov 5y ago
    True, but US carrier strike groups do occasionally operate close to Taiwan and smaller surface action groups make more frequent FONOPs through the Taiwan Strait and South China Sea. For now at least the US appears committed.
  - SCAQTony 5y ago
    Thank you for the correction, however, twentyfour days ago there were: https://news.usni.org/2021/04/09/u-s-carrier-strike-group-amphibious-warships-massed-in-south-china-sea-as-regional-tensions-simmer https://news.usni.org/2021/04/09/u-s-carrier-strike-group-am...
- sudosysgen 5y ago
  Building chips in the US is definitely a disincentive. There is much less of a reason to protect Taiwan if this industry will be safe no matter what in the US with the required expertise accessible no matter the outcome of the invasion.
lousken 5y ago
Is automotive industry all that EU cares about? What about IoT/robotics? The fact that TSMC want to build only their older fab here is really disappointing to me.
- deleted 5y ago
  [deleted]
- AlchemistCamp 5y ago
  The EU has also supplied both weapons and technology that are currently threatening Taiwan: https://www.businessinsider.com/european-companies-are-supplying-china-with-billions-in-weapons-and-military-technology-2014-4 https://www.businessinsider.com/european-companies-are-suppl... France alone was the #2 supplier from 2015-2019: https://euro-sd.com/2020/03/news/16688/sipri-biggest-arms-exporters-and-importers/ https://euro-sd.com/2020/03/news/16688/sipri-biggest-arms-ex... You really can't blame Taiwan for not rushing to put its most cutting edge expertise in the EU.
  - xwolfi 5y ago
    We also sold a lot to Taiwan. There's really no anti-Taiwan military strategy in France: we sell to whomever buys. I live in Hong Kong and I was happy to hear the water cannon used to tame the revolutionaries was made in my homeland. I'm sure if Taiwan needs our help to kill or tame people, we'll happily provide. Something has to finance socialism, and it certainly won't be the sweat and blood of my fellow countrymen.
    - mannerheim 5y ago
      That's false. France hasn't exported arms to Taiwan since 2005 according to SIPRI <https://armstrade.sipri.org/armstrade/page/values.php https://armstrade.sipri.org/armstrade/page/values.php>. All Taiwanese arms imports since 2015 have come from the United States.
    - idiotsecant 5y ago
      in Capitalism's majesty it provides equal access to incredibly expensive military technology to both the world's 2nd largest economy and it's 36th largest economy economy!
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ChuckMcM 5y ago
Geopolitically this makes a lot of sense. Will be interesting to see how China reacts as it moves forward. If Intel is serious this time about letting third parties into their fabs then it could be quite the reversal of fortune. However, as I've said in the past Intel is most likely to do this with "alternate" process streams, in order to not expose their full capabilities to competitors. High hopes but low expectations. Real estate in AZ could be a good investment though.
- m00x 5y ago
  Why China? Most of the major chip fabs aren't made in China. They're mostly made in Taiwan, South Korea and the US. Unless we're strictly talking about TSMC, which does have 2/18 fabs in China.
  - artificial 5y ago
    The location of Taiwan to the mainland is the perceived concern with the Chinese navy and the reach of the American military. Recently a squadron was moved from Guam. China has been expanding its influence/territory via islands in the South China Sea over the last decade. I think it’s a strategic concern.
  - lstamour 5y ago
    This article explains some of the conflict: https://www.voanews.com/east-asia-pacific/can-taiwans-silicon-shield-protect-it-against-chinas-aggression https://www.voanews.com/east-asia-pacific/can-taiwans-silico... China’s stance on Taiwan is clear[1] but given Taiwan doesn’t agree, it has remained independent despite what China says. The same was true for Hong Kong until recently, however, so concerns remain. The US is waking up to realizing that they have a heavy reliance on China for civilian goods and a slight to moderate risk that it might be disrupted or used against them in future. The worry I suppose is that it might be easier for supply chain-based attacks to weaken US defences, not that we’ve seen anything like this in practice yet due to how easy it is to exploit existing software bugs, for example. 1. https://www.cfr.org/backgrounder/china-taiwan-relations-tension-us-policy https://www.cfr.org/backgrounder/china-taiwan-relations-tens...
MangoCoffee 5y ago
its always interesting to read the comments on HN regarding China/Taiwan situation. Chinese invasion (Taiwan) threat is always there. It didn't stop when Nixon visit China and it didn't stop when American abandoned Taiwan to have a business relationship with China for more than 40 years. the threat is so old now. there are some running jokes in Taiwan like "China threatening to invade Taiwan since my grandpa is alive then my father. I hope I get to see it before I die". a lot of Taiwanese already numb to the threat. did South Korea stop everything whenever North Korea did a Nuke test? American can throw ton of money into the semis industry like China big fund. maybe throw money at Intel, free money to companies like TSMC or Samsung to setup more fabs in the US or throw money at a home grown semis foundry?
- vkou 5y ago
  I am generally on the 'wrong' side of these conversations on HN, but... > did South Korea stop everything whenever North Korea did a Nuke test? I believe the two threats are not remotely equivalent. In a world of MAD, nuclear weapons are only a credible defensive deterrent, because offensive use of them is suicide. The US would start a nuclear war, in response to a North Korean first-strike. Whereas with respect to China and Taiwan, nobody, including the US is going to start a nuclear war over that aggression, and nobody, including the US is going to start a conventional war against a major nuclear power. If you have any doubts on this - consider that you are alive to read this post... Because the US did not start either a nuclear, or a conventional-with-good-possibility-of-turning-nuclear war over Russian adventures in Crimea.
  - deleted 5y ago
    [deleted]
  - staticman2 5y ago
    In real life, people sometimes commit suicide in what's called "suicide by cop", they attack police so the police kill them. The idea that we or China can't have a commander in chief who commits suicide by war, or otherwise behaves irresponsibly and takes the rest of us with them, strikes me as a tad optimistic.
whereinaz 5y ago
Anyone know exactly which city or cities these new factories will be built in?
TheBill 5y ago
Hundreds of comments and no one mentions that if the three gorges dam goes it's 30%+ of china gone. A literal single ton warhead ( ballistically delivered torpedo ) would accomplish this. More likely to be a nuke but...
- DaiPlusPlus 5y ago
  If anyone were to actually do that, China would retaliate - no rational actor would do that. And I don't think any irrational actor (ISIS?) is interested in going after China right now though...
  - google234123 5y ago
    Exactly, there are lots of targets in lots of countries (thinking of things like nuclear plants) that would cause a similar reaction.
    - DaiPlusPlus 5y ago
      I think an improvised torpedo attack against the dam is easier than attacking a nuclear plant.
baybal2 5y ago
That's a very phaustian bargain US gets. The astronomical sum on the cheque to the TSMC, means they can finally stomp Samsung — their only competitor in the leading node. US will be getting their Xilinx FPGAs for F35, but be left with no competition for the leading edge semi manufacturing, which is way worse long term. People grew forgetful of the time when mainstream CPUs sold at >$1000
_the_inflator 5y ago
"European chip and auto companies, for their part, are mostly lined up against the idea. They would prefer subsidies for the older-generation chips that are heavily used by car manufacturers and are in short supply. Many of TSMC's most lucrative customers, such as Apple, are U.S.-based, while its European customer base is made up of mostly of automakers buying less-advanced chips." Oh boy... This is exactly why EU will always stay third behind USA, China... "We don't need e mobility, we have the best combustion engines!" Tesla owns VW now. "We don't need Apple like chips" This hurts. Apple and rest does many things differently and way better than EU. We should learn from them. Or do I miss something?
- stdgy 5y ago
  Not to mention it takes years to build these fabs. Do they think the automotive industry will use the same chips forever?
  - whazor 5y ago
    These fabs are already there, it would mainly be increasing capacity.
  - numpad0 5y ago
    Tesla Model S is a 2009 design if you think about it, though they did upgrade the touchscreen computer once in 2019
    - enchiridion 5y ago
      Eh, yes and no. New computer, new screen, new grill, new batteries, new engine, probably a bunch of other stuff I can't think of off the top.
- whazor 5y ago
  As far as I understand, both Tesla and VW use the same older automotive chips (in the thousands). The self driving and infotainment chips are of course newer but very few. They send messages to the older more reliable chips.
mjgs 5y ago
I wonder how significant it is that there is all this worldwide expansion of chip making factories just as we get to 3nm architectures, I say that because there aren’t very many nm’s left, what happens when we get to zero?
- parsecs 5y ago
  It's mostly a marketing term right? They might do something like 0.5 or add some letters like X or whatever.
  - whatbutwhy 5y ago
    I think so. IBM recently produced a new "5nm" chip. In reality the physical size is closer to 24nm, if I remember correctly. The numbers you hear don't literally mean the physical size of the transistor, it refers to something else.
    - naruvimama 5y ago
      Most chips are 2D. IBM made a 2nn equivalent in 2D, by using 3D.
- pengaru 5y ago
  angstroms
  - exporectomy 5y ago
    NO! Bad unit!
    - cerved 5y ago
      Ångström is the shit
  - mjgs 5y ago
    I wonder what the abbreviation will be, it doesn’t have an obvious one.
EvilEy3 5y ago
I remember reading when Europe was center of innovation in the world. What a disgrace.
- yosito 5y ago
  I don't think Europe has been the center of innovation since before the World Wars.
- bserge 5y ago
  Well, the EUV lithography equipment that everyone currently uses (and Intel can't figure out how to adapt, apparently) is made in Europe.
aaaaaaaaaaah 5y ago
Where does the water come from in Arizona?
- stdgy 5y ago
  Phoenix gets its water from the Salt and Verde Rivers, the Colorado River and ground water (wells). SRP (Salt River Project) manages the Salt and Verde Rivers and CAP (Central Arizona Project) manages the water from the Colorado. Some interesting data can be drilled into here in the Power BI report: https://new.azwater.gov/ama/ama-data https://new.azwater.gov/ama/ama-data
nabla9 5y ago
>TSMC chairman and founder Morris Chang, warned last month of higher operating costs and a thin talent pool for the U.S. plans in a rare public speech attended by Wei and chairman Mark Liu. >"In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers," Chang said. He warned that "short-term subsidy can't make up for long-term operational disadvantage."
- tibbydudeza 5y ago
  HB-1 visa's for about 50,000 Taiwanese to staff the new TMSC plant in Arizona - guess how well that is going to play with the GOP.
  - SkyMarshal 5y ago
    It’s within the realm of possibility that the GOP might make an exception for this, since they’re also concerned about supply chains of defense and security-critical components, and about keeping the US’s lead in semiconductors.
- VWWHFSfQ 5y ago
  I read the transcripts of his speech. It was more of a pro-Taiwan rally than anything. He's very old and obviously very proud of what he's built. But a lot of what he said made no sense. Especially the parts about Americans being lazy and using an example of being willing to work through-the-night for the good of the company. This was from the 1980s when Apple and Microsoft engineers were literally sleeping under their desks. Again, he's an old guy with a lot of Taiwanese nationalistic pride. It's not much more than that.
raverbashing 5y ago
So, one thing that people seem to miss is that there are two Moore's Laws. Everybody knows about the 1st one, but the second one is as follows: > says that the cost of a semiconductor chip fabrication plant doubles every four years https://en.wikipedia.org/wiki/Moore%27s_second_law https://en.wikipedia.org/wiki/Moore%27s_second_law And I fear that's what's going to be our stone wall in the evolution. Yes, building the most modern plants make sense. But producing more of the older generation chips also make sense (don't think all the stuff in your phone is the latest generation neither!)
abc03 5y ago
Most Taiwanese fear that they have to re-unite with China. I personally don't think that China will invade Taiwan. If mainland Chinese people will see, that their government is bombarding other Chinese I'm not sure if they approve of that and realize that they don't want to belong to China. The biggest goal of the Communist government is to stay in power. It will probably be too dangerous for them to risk. And by the way, young Taiwanese and Taiwanese that live for many generations in Taiwan don't think they are mainland Chinese. They are Chinese heritage but I haven't heard one say we want to re-unite with China. There are many newer generations from mainland China in Taiwan that probably don't mind as much but people from old families in Taiwan for sure don't associate themselves with mainland China.
- varjag 5y ago
  Right, Chinese killing Chinese and approving of that is unheard of :/ Remember that PRC is transitioning from being committee run to a personalistic dictatorship. If the calculus shifts only so slightly that one Xi would find advantages of an attack overweigh the risks, it will happen. There is much lower decision threshold now with one person in charge. It's only a combination of objective factors: .tw defence potential, America's reading to defend it and criticality of certain Taiwan assets that keep it from happening.
supergirl 5y ago
does TSMC own any valuable tech? I thought they just purchase the machines from ASML, a dutch company. if there is market for chips, why doesn't some EU company set up a foundry in EU? I'm sure there are many capable companies and the lithography tech is already made in EU.
- dannyw 5y ago
  EUV machines are a small but critical part of overall 7nm and lower fabrication.
- stdgy 5y ago
  You don't just 'purchase machines' to magically create cutting edge semiconductors. If this were the case, why in the world would ASML be selling them to TSMC? ASML's Q1 Net Revenue: $2.79 billion TSMC Q1 Net Revenue: $12.9 billion Don't you think ASML would just pocket the world's semiconductor income if this were the case? The machines are only a part of the equation. How you use the machines and the processes you develop to create cutting edge semiconductors are arguably the more important part of the equation. As someone else mentioned in the comments, think of it as the difference between being a chisel manufacturer and a master sculptor. The tools are only a part of the equation. The methods and processes developed by TSMC are valuable pieces of technology. This value has an additional moat surrounding it due to the astronomical capital investment required to use it. Even if you knew of all of TSMC's process information, you wouldn't be able to use it without tens of billions of dollars in investments, many years of construction, an adequately skilled workforce and right customer contacts.
  - supergirl 5y ago
    by that logic, why doesn't TSMC build the machines themselves and pocket the money?
    - MangoCoffee 5y ago
      different company have different skillset. Apple designed M1 but outsourced to TSMC for production. if Apple can design, surely they can produce, no? just buy some EUV machines, create the fab process and build a fab. easy, right?
intricatedetail 5y ago
They should come to UK.
babayega2 5y ago
The Nikkei has a detailed article [0] on the steps that China is taking to compete with TSMC and other western chip factories. I think a lot of commenters would be meaningful if they took time to read the other side of the problem and not just run into nationalist and inflammatory war. [0] https://asia.nikkei.com/Spotlight/The-Big-Story/US-China-tech-war-Beijing-s-secret-chipmaking-champions https://asia.nikkei.com/Spotlight/The-Big-Story/US-China-tec...
- EE84M3i 5y ago
  >compete with TSMC and other western chip factories Is TSMC is a western company?
  - apexalpha 5y ago
    When talking about "spheres of influence" China (and Russia) are seen as not-Western while Japan/SK/Taiwan are seen as Western, due to the American military umbrella.
    - tekknik 5y ago
      Does this mean Taiwan is part of the US? China doesn’t seem to agree with this.
- throwaway4good 5y ago
  That is a fantastic article. I have tried submitting it here unfortunately it didn't catch much interest. Very sad at the level of discussion here at hn when it comes to the US-China tech war. It is quite fascinating what is happening in China where the country is forced to rebuild a full semiconductor industry. Every established player here in the west has a Chinese counterpart being forstered. It is really a Chinese Sputnik moment and a whole of society effort. Must be a great time to be Chinese semiconductor engineer. As for TSMC, it has with the current Taiwanese goverment, placed itself firmly in the US camp where they will let go of any Chinese customer at the US government's command. However a considerable minority (maybe even a majority in business circles) in Taiwan see themselves as Chinese and are not at all sympathetic to US containment policies on China.
Zenst 5y ago
So they had talks with the EU and disagreed so the news is they are not building a factory in Europe. I do wonder if the talks had gone amicably, would the story say EU then. I do appreciate for many the terms EU and Europe are interpolatable but in reality they are not. Do also keep in mind that such actions/statements by companies can often be a case of political bargaining and TSMC in effect telling the EU - look we don't want to be messed about, if your serious then now is the time to decide and if not, we will not delay things any further in your endless talking. Another article upon this matter: https://www.itpro.co.uk/hardware/components/359547/tsmc-eu-chip-factory-talks-reportedly-falter https://www.itpro.co.uk/hardware/components/359547/tsmc-eu-c...
websg-x 5y ago
https://money.udn.com/money/story/5612/5458270 https://money.udn.com/money/story/5612/5458270 TSMC deny the report and is proceeding with the original plan at this stage.
LatteLazy 5y ago
It must be strange and interesting to run a company (supposedly an economic entity) with such high political involvement.
- hnfong 5y ago
  Who, like Mark Zuckerberg? :D
anjel 5y ago
An Arizona fab will likely have an interesting effect on the way SW CA/NV/AZ "share" the Colorado River.
- whoisburbansky 5y ago
  Do fabs typically have high water requirements compared to other heavy industry?
mips_avatar 5y ago
Someone from TSMC reached out to me on LinkedIn to apply to a 4 year program (2 years in Taiwan 2+ years in Arizona). As a software PM I don’t know they pegged me right, but interesting how they are recruiting.
- Roritharr 5y ago
  Did they offer relocation? I'm always curious what kind of deals are in place for the families involved.
  - mips_avatar 5y ago
    So they offered everything paid for in Taiwan, and a competitive US salary even while in Taiwan.
chkaloon 5y ago
"In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers," - ouch

437 points by adventured 5y ago

I will be really shocked if the UK doesn't try to make a play for this. That would be an incredible boon to the UK position, especially post Brexit.

JohnJamesRambo 5y ago

I have no knowledge of the situation, why did they choose Arizona?

mediaman 5y ago
Interestingly this came as a loss to Washington, where there is already a significant fab owned by TSMC called WaferTech. Their facility is on the WA side of the Portland suburbs. Many felt WA was in the running because of the talent already there. This caused concerns that the future of the WaferTech fab facility is dimmer than before, since it probably makes less sense to pump billions more into it in the future.
- bpodgursky 5y ago
  I live in WA and I don't blame them. The state government is not on a pro-business bent right now; most of the discussion is about how to make corporations pay their "fair share". (also, the gross receipts tax is... pretty dumb) If there's a more business-friendly state, absolutely would take it in a heartbeat.
  - KirillPanov 5y ago
    The kneejerk downvotes of this post make me ashamed of HN. > (also, the gross receipts tax is... pretty dumb) ... for manufacturers who aren't Boeing. It's true though. Taxing revenue instead of profit is a ridiculous policy which punishes manufacturers and favors every other industry at their expense. Giving one company (Boeing) its own special preferential revenue tax rate [1] of $\epsilon$ percent is not a solution. [1] https://j7dfh9pbumnyhazfmcsfgm9m.apnews.com/article/37d21240880df9b2e17bdea7c689e25f https://j7dfh9pbumnyhazfmcsfgm9m.apnews.com/article/37d21240... [*] [*] (apparently AP news is trying real hard to make their links look like malware or something)
    - DoreenMichele 5y ago
      The kneejerk downvotes here make me ashamed of HN. Lots of subs on Reddit grew tremendously during the pandemic. I'm guessing HN did too and has a worse case than usual of "eternal September."
      - KirillPanov 5y ago
        Sadly, no; it's a side effect of how the HN voting system works -- it encourages virtue-signaling rather than curiosity.
        JohnJamesRambo 5y ago
        Rather than that, maybe people on HN want corporations to pay their taxes?
  - 0134340 5y ago
    Are you saying it's not fair in comparison to individuals? Is it any more than individuals pay (see graph) [0]? Because I see so many complaints here about poor businesses and the taxes they do (don't) pay. Don't forget that businesses need people, it's a symbiotic relationship, one isn't more important than the other. 0: https://www.forbes.com/sites/mikepatton/2015/10/31/a-brief-history-of-the-individual-and-corporate-income-tax/?sh=6e54a866b5b6 https://www.forbes.com/sites/mikepatton/2015/10/31/a-brief-h...
- sircastor 5y ago
  Apple picked up a lot of talent out west Of Portland where a lot of Intel’s home base is. But I imagine trying to find space out here would be rough.
  - irrational 5y ago
    There is actually quite a lot of room because of the Urban Growth Boundary.
    - KirillPanov 5y ago
      Aren't manufacturing plants required to be inside a UGB? In Washington State they are, although existing plants are grandfathered. I guess they could expand the UGB, which is what the Eastern Washington counties do in order to attract manufacturers.
- irrational 5y ago
  I would think the western suburbs of Portland would be more attractive. Intel has 5 huge fabrication plants in the Aloha/Hillsboro area. That is a large talent base to hire for the plant.
  - rsj_hn 5y ago
    From the article, Taiwan's estimation of the U.S. talent base is rather low: '"TSMC chairman and founder Morris Chang warned last month of higher operating costs and a thin talent pool for the U.S. plans in a rare public speech attended by Wei and chairman Mark Liu. "In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers," Chang said. He warned that "short-term subsidy can't make up for long-term operational disadvantage."' The body of the article also casts doubt on the total amount of U.S. investment, unlike the headline.
    - nwiswell 5y ago
      > In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers What does this even mean? That US engineers expect benefits and work-life balance?
      - rsj_hn 5y ago
        It could be that. Or, for example, California Teachers angrily denouncing accelerated math classes as being immoral. Or perhaps a combination of the two.
        whoknowswhat11 5y ago
        I wouldn't call it angrily, but yes, a big focus has been on equity and eliminating different levels for students. Some elements make sense or I think would do little harm. I was high achieving in math - but the push to calc in high school does feel overdone I think - it's often a shallow understanding. They are very focused particularly on issues like 30%+ of Asian students and only 3-4% of other minorities being in advanced tracks of math education so they are trying to reduce those. Some neat ideas around doing more open ended tasks (cool!) in make that integration work better. That said, will likely be some tough corners because there are can be some pretty significant skill differences across a student body in a given grade. They are going to try and do more group work, and also one of the 5 new principles is to teach towards social justice in math as well as other areas which may provide more opportunity for engagement by all students.
- magicsmoke 5y ago
  Also surprising is that TSMC was recently hit by water shortages due to a drought in Taiwan. Arizona isn't exactly drought resistant, yet they built there instead of rainy Washington.
  - ckozlowski 5y ago
    This made me scratch my head as well. The desert isn't exactly known for water supply, and given what I'd read elsewhere about how crucial water is for the process, I wondered if I was missing something somewhere. I did a quick search and found this: https://www.investors.com/news/technology/intel-stock-tsm-stock-seek-waterway-to-easing-chip-shortage-in-dry-arizona/ https://www.investors.com/news/technology/intel-stock-tsm-st... The takeaways: - Fab companies have invested in a lot of water reclamation and recycling regardless of location, as there's a lot of metals and other chemicals that need to be filtered out. (Asianometry goes over this more here: https://www.youtube.com/watch?v=785Uzi1mGAA https://www.youtube.com/watch?v=785Uzi1mGAA ) - Intel claims Arizona's water usage has stayed level in the area as industrial use has replaced agricultural, which uses less. I'm sure there's a cost-benefit play here, where the tax and other incentives outweigh the increased costs of water reclamation.
  - baybal2 5y ago
    There was a few hours long blackout in Taiwan today night, that was way beyond the time UPSes can last. Expect last 6 month worth of wafers in production to go down the drain in fabs which relied on battery backups only.
    - Alupis 5y ago
      The backup power supplies for these types of facilities are actually generators powered off gasoline or diesel, not just batteries, and can theoretically run forever (or at least as much fuel you can get).
      - baybal2 5y ago
        You cannot backup power a whole modern fab, unless you build a small power station just for it. UPSes there are just to keep cleanroom clean, and most critical processes which can't be gracefully shut down.
vmception 5y ago
Natural resources like metals there. Just waiting for someone to invest in and gather. Proximity to these resources.
topkai22 5y ago
I know Intel already has plants down there as do a few other semi conductor companies. That means a ready workforce. I’d guess AZ also throws tax incentives their way as well, but that’s just conjecture.
blululu 5y ago
Chandler Arizona is the site of Intel's 14nm Fab[1]. There is a large pool of local talent that they can tap into. Add to this the fact that Arizona has relatively favorable laws for corporate investments and a relatively low cost of living and it's a natural choice. [1]: https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si...
- bpodgursky 5y ago
  It's also geologically fairly stable.
  - culturestate 5y ago
    Is this really a primary concern? Most of their main fabs are in Taiwan, which is very seismically active.
    - jeppesen-io 5y ago
      That's precisely why. It costs A LOT to make a fab seismic resistant They've done this and know the costs
      - culturestate 5y ago
        My point is that if you already successfully operate several seismically stable fabs and you're building a new one that's gonna cost you tens of billions of dollars anyway, there must be other factors that are higher on your requirements list.
        sanxiyn 5y ago
        Fabs deal with earthquakes by stopping. They'd rather not stop.
        deleted 5y ago
        [deleted]
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adventured 5y ago
Arizona has a very long semiconductor industry history: https://www.chipsetc.com/semiconductors-in-arizona.html https://www.chipsetc.com/semiconductors-in-arizona.html "The state of Arizona has been home to many semiconductor & electronics manufacturing Companies since the 1950's, including the SouthWest's Pioneer Semiconductor Company - Motorola. Motorola's research and development lab in Phoenix introduced the world's first commercial high-power germanium-based transistor in 1955. The lab would expand over time to become Motorola's semiconductor division and by 1960 they would have three manufacturing sites in the Phoenix area." "Intel corp., Arizona's 7th largest employer, started up their Fab 6 & Assembly Test facility in Chandler back in 1980, and their 720-acre Ocotillo Fab 12 site in 1996."
- klipt 5y ago
  So is it also full of toxic superfund sites like Silicon Valley?
  - totalZero 5y ago
    Arizona has nine superfund sites including one at a former Motorola semiconductor facility. https://www.phoenixnewtimes.com/news/motorola-the-story-so-far-6432443 https://www.phoenixnewtimes.com/news/motorola-the-story-so-f...
  - vineyardmike 5y ago
    Except most of it is useless. Silicon Valley at least is good for growing
buryat 5y ago
tax incentives, regardless of anything else even though it's a desert and the industry needs water.

RcouF1uZ4gsC 5y ago

> EU industry commissioner Thierry Breton, who has championed the Eurofab idea, also spoke with TSMC's Europe president, Maria Marced, last month. Although Breton publicly called the TSMC talk a "good exchange," a second person familiar with the matter said the TSMC talks in Europe have gone "very poorly." Sometimes it seems that EU politicians want to be seen as cutting a hard bargain with industry that they actually harm themselves and the EU. A big example was with the COVID vaccines. The EU felt the need to be seen as striking a good bargain, that for want of a few Euros per dose, they missed out getting the vaccine much earlier. With chips, if you really want the EU to be at the cutting edge of tech, you need these cutting edge fabs in the EU.

nerbert 5y ago
Yeah, that probably mixed with the idea that they should leave the space to local players (who will magically develop a cutting edge know-how?)
- ericbarrett 5y ago
  It's not hopeless for the EU—many of the necessary machines for any reasonably recent chip fab come from European companies, e.g. ASML.
  - blibble 5y ago
    buying a chisel doesn't make you a master sculptor
    - wahern 5y ago
      If you've been selling the most advanced, most capable chisels for generations, unassailable, while your client master sculptors exchange titles.... I don't know what that makes you--kingmaker doesn't quite fit--but it's not nothing. It might make you wary of getting too close (figuratively or physically) to any particular client, lest you risk falling from grace as your client invariably will.
    - 5y ago

neonological 5y ago

You guys ever wonder why they don't choose California? These factories have huge environmental impacts that California is not okay with. These factories produce massive amounts of waste that cannot be recycled. This is also very likely to be the same exact reason as to why these talks didn't go so well in Europe. Arizona like Texas is more business friendly at the expense of not looking out for the well being of people who live in these locations. Ironically, right now by being more business friendly more people want to move to places like Arizona or Texas for jobs. It's a strange balancing act that has a lot of potential for being over corrected for. Industry brings business and economic growth but ruins the environment and has harms the people living in the area. The insidious thing is environmental costs are paid for much much later. The consequences of being way to business friendly in these places may only be apparent a decade from now just like how the price of being too business unfriendly is now very apparent in California.

epistasis 5y ago
I don't really like the euphemism of "business friendly" when it means "companies don't have to pay for their externalities." California is extremely entrepreneur-friendly, and have absolutely massive amounts of business compare to Arizona or Texas. The externalities are not minor either, there are 23 superfund sites in Santa Clara county from Silicon Valley's early years, where they did not bother to properly dispose of waste: https://www.theatlantic.com/technology/archive/2019/09/silicon-valley-full-superfund-sites/598531/ https://www.theatlantic.com/technology/archive/2019/09/silic...
- neonological 5y ago
  >California is extremely entrepreneur-friendly, and have absolutely massive amounts of business compare to Arizona or Texas. I don't know if you've been following the news lately of a bunch of companies moving OUT of California to Texas. One of these people is Elon Musk. And guess what? I have a source: https://www.youtube.com/watch?v=Ez90rXhMWjE https://www.youtube.com/watch?v=Ez90rXhMWjE I'm not saying California is wrong. Far from it. They're right. These laws are made to protect the people. Like you said, it's not minor at all. I never said it was minor. However ANY state can decide that economic growth is more important than environmental safety and short term health of its' citizens and make a strategic move to make it's own location much more attractive to business. So the costs aren't clear. Do we want an economic wasteland or an environmental wasteland? This is my point. California is not dead yet, but the trends have been pointing in this direction for years.

cromka 5y ago

I don't think EU cuts deals with specific companies. What would TMSC expect here? That EU gave them money straight up? I don't know how this would work, but maybe I am missing something. If anything, EU would create a generic fund to subsidize any such investment coming from any company interested, but at EU level, it would definitely take time. Or they can talk to individual countries about subsidies, just like they do with the US. Plenty of them can afford it.

teruakohatu 5y ago
The USA (or states do), China does, even my little country of New Zealand does (our tax dollars fund Hollywood blockbusters). If the EU doesn't they are only going to miss out.
- smnrchrds 5y ago
  New Zealand may have gone a bit too far in appeasing to corporations, if Kim Dotcom's saga is any indication.
- rurounijones 5y ago
  Problem is the EU is not as "united" as the above examples. Which country gets the fab (and reaps the benefit) if the EU provides subsidies (Paid for by all)?
  - TMWNN 5y ago
    This is also why there won't ever be a European Silicon Valley. Paris isn't going to support any Europe-wide effort to create one that isn't located in the Hexagon, nor will Berlin support one that isn't somewhere in Germany. London pre-Brexit would not and did not support anything that might take away from Silicon Fen. While other US states encourage their own tech centers' growth, Floridians and New Yorkers and Texans are all aware of, benefit from, and are proud of Silicon Valley being in the US.
    - peoplefromibiza 5y ago

jimmcslim 5y ago

I’m dismayed that Australia isn’t doing more to foster local fabs.

icelancer 5y ago
Their massive import/export taxes on anything related to technology basically kills any of those types of ideas, unfortunately.
- mkj 5y ago
  Looks like semiconductor equipment is zero tariff? https://www.abf.gov.au/importing-exporting-and-manufacturing/tariff-classification/current-tariff/schedule-3/section-xvi/chapter-84#8486 https://www.abf.gov.au/importing-exporting-and-manufacturing...
- jeeeb 5y ago
  Australia has some of the lowest import / export tariffs in the world. I.E. they’re generally zero or close to.
  - icelancer 5y ago
    Tariffs, yes. Taxes, no. Simply comparing the cost of technology-based goods between AUS and USA/CAN - or worse, digital-based items - shows why Australia is not an attractive place for technology companies.
    - jeeeb 5y ago
      I don’t know of any particular taxes on technology goods in Australia. There’s 10% GST but that’s paid by consumers. For companies GST on inputs is all deductible.
    - dannyw 5y ago
      It's not taxes nor tariffs. It's the fact that we are generally an affluent country with high costs of living and wages, so the market can pay more.

ciabattabread 5y ago

So where would a EU fab be located?

magila 5y ago
Most likely Germany. Specifically Dresden since it already has a significant fabrication industry so there's a good supply of local expertise.
- TMWNN 5y ago
  ... and there went any interest in Rome, Paris, Amsterdam, Copenhagen, Stockholm, Madrid, Lisbon, Warsaw, and Vienna in subsidizing that fab's construction.

xenihn 5y ago

I've been thinking about what would happen if there's an actual military crisis between China and Taiwan. I wonder if the United States would allow (and aid with) unlimited immigration from Taiwan for educated specialists, in an attempt to capture/retain as much skills and knowledge as possible.

greatgoat420 5y ago
It has been done in the past, Taiwan is a special topic for the US, I don't know that they would let it get to that point without intervening either diplomatically or militarily.
- xenihn 5y ago
  Right, I'm just thinking that long-term military intervention to prevent capture/annexation of Taiwan is completely impossible, but short-term intervention meant to extract as many Taiwanese as possible prior to inevitable capitulation is very much an option.
  - greatgoat420 5y ago
    > I'm just thinking that long-term military intervention to prevent capture/annexation of Taiwan is completely impossible. You mean by China? I would certainly agree. Even with most countries not acknowledging Taiwan nationhood I would expect a strong international reaction to any military action by China due to Taiwan's special place in international technology exports.
  - dillondoyle 5y ago
    Why do you think this? I disagree, but am of the personal opinion that our advantage shrinks each year we don't seriously confront CCP.
  - nradov 5y ago
    Long term military intervention to prevent capture is completely possible if we're willing to pay the price. Weather and geography alone would make an amphibious invasion quite difficult. But China could easily wreck Taiwan's infrastructure and industry without invading.

SCAQTony 5y ago

The USA is also willing to defend Taiwan and currently the US has carrier groups in the south China sea. This suggests that the idea of building chips in the US may be a diplomatic courtesy and arguably an incentive.

jlduan 5y ago
It is a request from the U.S. https://www.reuters.com/technology/chipmaker-tsmc-eyeing-expansion-planned-arizona-plant-sources-2021-05-04/ https://www.reuters.com/technology/chipmaker-tsmc-eyeing-exp...
- edrxty 5y ago
  Regardless of who made the request the reasoning still makes sense. Both the US and TSMC want this outcome the obvious quid pro quo helps.
bigpumpkin 5y ago
Currently, no carrier group is in the South China Sea [1] [1] https://news.usni.org/category/fleet-tracker https://news.usni.org/category/fleet-tracker
- nradov 5y ago
  True, but US carrier strike groups do occasionally operate close to Taiwan and smaller surface action groups make more frequent FONOPs through the Taiwan Strait and South China Sea. For now at least the US appears committed.
- SCAQTony 5y ago
  Thank you for the correction, however, twentyfour days ago there were: https://news.usni.org/2021/04/09/u-s-carrier-strike-group-amphibious-warships-massed-in-south-china-sea-as-regional-tensions-simmer https://news.usni.org/2021/04/09/u-s-carrier-strike-group-am...
sudosysgen 5y ago
Building chips in the US is definitely a disincentive. There is much less of a reason to protect Taiwan if this industry will be safe no matter what in the US with the required expertise accessible no matter the outcome of the invasion.

lousken 5y ago

Is automotive industry all that EU cares about? What about IoT/robotics? The fact that TSMC want to build only their older fab here is really disappointing to me.

deleted 5y ago
[deleted]
AlchemistCamp 5y ago
The EU has also supplied both weapons and technology that are currently threatening Taiwan: https://www.businessinsider.com/european-companies-are-supplying-china-with-billions-in-weapons-and-military-technology-2014-4 https://www.businessinsider.com/european-companies-are-suppl... France alone was the #2 supplier from 2015-2019: https://euro-sd.com/2020/03/news/16688/sipri-biggest-arms-exporters-and-importers/ https://euro-sd.com/2020/03/news/16688/sipri-biggest-arms-ex... You really can't blame Taiwan for not rushing to put its most cutting edge expertise in the EU.
- xwolfi 5y ago
  We also sold a lot to Taiwan. There's really no anti-Taiwan military strategy in France: we sell to whomever buys. I live in Hong Kong and I was happy to hear the water cannon used to tame the revolutionaries was made in my homeland. I'm sure if Taiwan needs our help to kill or tame people, we'll happily provide. Something has to finance socialism, and it certainly won't be the sweat and blood of my fellow countrymen.
  - mannerheim 5y ago
    That's false. France hasn't exported arms to Taiwan since 2005 according to SIPRI <https://armstrade.sipri.org/armstrade/page/values.php https://armstrade.sipri.org/armstrade/page/values.php>. All Taiwanese arms imports since 2015 have come from the United States.
  - idiotsecant 5y ago
    in Capitalism's majesty it provides equal access to incredibly expensive military technology to both the world's 2nd largest economy and it's 36th largest economy economy!

kdmdmdmmdmd 5y ago

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ChuckMcM 5y ago

Geopolitically this makes a lot of sense. Will be interesting to see how China reacts as it moves forward. If Intel is serious this time about letting third parties into their fabs then it could be quite the reversal of fortune. However, as I've said in the past Intel is most likely to do this with "alternate" process streams, in order to not expose their full capabilities to competitors. High hopes but low expectations. Real estate in AZ could be a good investment though.

m00x 5y ago
Why China? Most of the major chip fabs aren't made in China. They're mostly made in Taiwan, South Korea and the US. Unless we're strictly talking about TSMC, which does have 2/18 fabs in China.
- artificial 5y ago
  The location of Taiwan to the mainland is the perceived concern with the Chinese navy and the reach of the American military. Recently a squadron was moved from Guam. China has been expanding its influence/territory via islands in the South China Sea over the last decade. I think it’s a strategic concern.
- lstamour 5y ago
  This article explains some of the conflict: https://www.voanews.com/east-asia-pacific/can-taiwans-silicon-shield-protect-it-against-chinas-aggression https://www.voanews.com/east-asia-pacific/can-taiwans-silico... China’s stance on Taiwan is clear[1] but given Taiwan doesn’t agree, it has remained independent despite what China says. The same was true for Hong Kong until recently, however, so concerns remain. The US is waking up to realizing that they have a heavy reliance on China for civilian goods and a slight to moderate risk that it might be disrupted or used against them in future. The worry I suppose is that it might be easier for supply chain-based attacks to weaken US defences, not that we’ve seen anything like this in practice yet due to how easy it is to exploit existing software bugs, for example. 1. https://www.cfr.org/backgrounder/china-taiwan-relations-tension-us-policy https://www.cfr.org/backgrounder/china-taiwan-relations-tens...

MangoCoffee 5y ago

its always interesting to read the comments on HN regarding China/Taiwan situation. Chinese invasion (Taiwan) threat is always there. It didn't stop when Nixon visit China and it didn't stop when American abandoned Taiwan to have a business relationship with China for more than 40 years. the threat is so old now. there are some running jokes in Taiwan like "China threatening to invade Taiwan since my grandpa is alive then my father. I hope I get to see it before I die". a lot of Taiwanese already numb to the threat. did South Korea stop everything whenever North Korea did a Nuke test? American can throw ton of money into the semis industry like China big fund. maybe throw money at Intel, free money to companies like TSMC or Samsung to setup more fabs in the US or throw money at a home grown semis foundry?

vkou 5y ago
I am generally on the 'wrong' side of these conversations on HN, but... > did South Korea stop everything whenever North Korea did a Nuke test? I believe the two threats are not remotely equivalent. In a world of MAD, nuclear weapons are only a credible defensive deterrent, because offensive use of them is suicide. The US would start a nuclear war, in response to a North Korean first-strike. Whereas with respect to China and Taiwan, nobody, including the US is going to start a nuclear war over that aggression, and nobody, including the US is going to start a conventional war against a major nuclear power. If you have any doubts on this - consider that you are alive to read this post... Because the US did not start either a nuclear, or a conventional-with-good-possibility-of-turning-nuclear war over Russian adventures in Crimea.
- deleted 5y ago
  [deleted]
- staticman2 5y ago
  In real life, people sometimes commit suicide in what's called "suicide by cop", they attack police so the police kill them. The idea that we or China can't have a commander in chief who commits suicide by war, or otherwise behaves irresponsibly and takes the rest of us with them, strikes me as a tad optimistic.

whereinaz 5y ago

Anyone know exactly which city or cities these new factories will be built in?

TheBill 5y ago

Hundreds of comments and no one mentions that if the three gorges dam goes it's 30%+ of china gone. A literal single ton warhead ( ballistically delivered torpedo ) would accomplish this. More likely to be a nuke but...

DaiPlusPlus 5y ago
If anyone were to actually do that, China would retaliate - no rational actor would do that. And I don't think any irrational actor (ISIS?) is interested in going after China right now though...
- google234123 5y ago
  Exactly, there are lots of targets in lots of countries (thinking of things like nuclear plants) that would cause a similar reaction.
  - DaiPlusPlus 5y ago
    I think an improvised torpedo attack against the dam is easier than attacking a nuclear plant.

baybal2 5y ago

That's a very phaustian bargain US gets. The astronomical sum on the cheque to the TSMC, means they can finally stomp Samsung — their only competitor in the leading node. US will be getting their Xilinx FPGAs for F35, but be left with no competition for the leading edge semi manufacturing, which is way worse long term. People grew forgetful of the time when mainstream CPUs sold at >$1000

_the_inflator 5y ago

"European chip and auto companies, for their part, are mostly lined up against the idea. They would prefer subsidies for the older-generation chips that are heavily used by car manufacturers and are in short supply. Many of TSMC's most lucrative customers, such as Apple, are U.S.-based, while its European customer base is made up of mostly of automakers buying less-advanced chips." Oh boy... This is exactly why EU will always stay third behind USA, China... "We don't need e mobility, we have the best combustion engines!" Tesla owns VW now. "We don't need Apple like chips" This hurts. Apple and rest does many things differently and way better than EU. We should learn from them. Or do I miss something?

stdgy 5y ago
Not to mention it takes years to build these fabs. Do they think the automotive industry will use the same chips forever?
- whazor 5y ago
  These fabs are already there, it would mainly be increasing capacity.
- numpad0 5y ago
  Tesla Model S is a 2009 design if you think about it, though they did upgrade the touchscreen computer once in 2019
  - enchiridion 5y ago
    Eh, yes and no. New computer, new screen, new grill, new batteries, new engine, probably a bunch of other stuff I can't think of off the top.
whazor 5y ago
As far as I understand, both Tesla and VW use the same older automotive chips (in the thousands). The self driving and infotainment chips are of course newer but very few. They send messages to the older more reliable chips.

mjgs 5y ago

I wonder how significant it is that there is all this worldwide expansion of chip making factories just as we get to 3nm architectures, I say that because there aren’t very many nm’s left, what happens when we get to zero?

parsecs 5y ago
It's mostly a marketing term right? They might do something like 0.5 or add some letters like X or whatever.
- whatbutwhy 5y ago
  I think so. IBM recently produced a new "5nm" chip. In reality the physical size is closer to 24nm, if I remember correctly. The numbers you hear don't literally mean the physical size of the transistor, it refers to something else.
  - naruvimama 5y ago
    Most chips are 2D. IBM made a 2nn equivalent in 2D, by using 3D.
pengaru 5y ago
angstroms
- exporectomy 5y ago
  NO! Bad unit!
  - cerved 5y ago
    Ångström is the shit
- mjgs 5y ago
  I wonder what the abbreviation will be, it doesn’t have an obvious one.

EvilEy3 5y ago

I remember reading when Europe was center of innovation in the world. What a disgrace.

yosito 5y ago
I don't think Europe has been the center of innovation since before the World Wars.
bserge 5y ago
Well, the EUV lithography equipment that everyone currently uses (and Intel can't figure out how to adapt, apparently) is made in Europe.

aaaaaaaaaaah 5y ago

Where does the water come from in Arizona?

stdgy 5y ago
Phoenix gets its water from the Salt and Verde Rivers, the Colorado River and ground water (wells). SRP (Salt River Project) manages the Salt and Verde Rivers and CAP (Central Arizona Project) manages the water from the Colorado. Some interesting data can be drilled into here in the Power BI report: https://new.azwater.gov/ama/ama-data https://new.azwater.gov/ama/ama-data

nabla9 5y ago

>TSMC chairman and founder Morris Chang, warned last month of higher operating costs and a thin talent pool for the U.S. plans in a rare public speech attended by Wei and chairman Mark Liu. >"In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers," Chang said. He warned that "short-term subsidy can't make up for long-term operational disadvantage."

tibbydudeza 5y ago
HB-1 visa's for about 50,000 Taiwanese to staff the new TMSC plant in Arizona - guess how well that is going to play with the GOP.
- SkyMarshal 5y ago
  It’s within the realm of possibility that the GOP might make an exception for this, since they’re also concerned about supply chains of defense and security-critical components, and about keeping the US’s lead in semiconductors.
VWWHFSfQ 5y ago
I read the transcripts of his speech. It was more of a pro-Taiwan rally than anything. He's very old and obviously very proud of what he's built. But a lot of what he said made no sense. Especially the parts about Americans being lazy and using an example of being willing to work through-the-night for the good of the company. This was from the 1980s when Apple and Microsoft engineers were literally sleeping under their desks. Again, he's an old guy with a lot of Taiwanese nationalistic pride. It's not much more than that.

raverbashing 5y ago

So, one thing that people seem to miss is that there are two Moore's Laws. Everybody knows about the 1st one, but the second one is as follows: > says that the cost of a semiconductor chip fabrication plant doubles every four years https://en.wikipedia.org/wiki/Moore%27s_second_law https://en.wikipedia.org/wiki/Moore%27s_second_law And I fear that's what's going to be our stone wall in the evolution. Yes, building the most modern plants make sense. But producing more of the older generation chips also make sense (don't think all the stuff in your phone is the latest generation neither!)

abc03 5y ago

Most Taiwanese fear that they have to re-unite with China. I personally don't think that China will invade Taiwan. If mainland Chinese people will see, that their government is bombarding other Chinese I'm not sure if they approve of that and realize that they don't want to belong to China. The biggest goal of the Communist government is to stay in power. It will probably be too dangerous for them to risk. And by the way, young Taiwanese and Taiwanese that live for many generations in Taiwan don't think they are mainland Chinese. They are Chinese heritage but I haven't heard one say we want to re-unite with China. There are many newer generations from mainland China in Taiwan that probably don't mind as much but people from old families in Taiwan for sure don't associate themselves with mainland China.

varjag 5y ago
Right, Chinese killing Chinese and approving of that is unheard of :/ Remember that PRC is transitioning from being committee run to a personalistic dictatorship. If the calculus shifts only so slightly that one Xi would find advantages of an attack overweigh the risks, it will happen. There is much lower decision threshold now with one person in charge. It's only a combination of objective factors: .tw defence potential, America's reading to defend it and criticality of certain Taiwan assets that keep it from happening.

supergirl 5y ago

does TSMC own any valuable tech? I thought they just purchase the machines from ASML, a dutch company. if there is market for chips, why doesn't some EU company set up a foundry in EU? I'm sure there are many capable companies and the lithography tech is already made in EU.

dannyw 5y ago
EUV machines are a small but critical part of overall 7nm and lower fabrication.
stdgy 5y ago
You don't just 'purchase machines' to magically create cutting edge semiconductors. If this were the case, why in the world would ASML be selling them to TSMC? ASML's Q1 Net Revenue: $2.79 billion TSMC Q1 Net Revenue: $12.9 billion Don't you think ASML would just pocket the world's semiconductor income if this were the case? The machines are only a part of the equation. How you use the machines and the processes you develop to create cutting edge semiconductors are arguably the more important part of the equation. As someone else mentioned in the comments, think of it as the difference between being a chisel manufacturer and a master sculptor. The tools are only a part of the equation. The methods and processes developed by TSMC are valuable pieces of technology. This value has an additional moat surrounding it due to the astronomical capital investment required to use it. Even if you knew of all of TSMC's process information, you wouldn't be able to use it without tens of billions of dollars in investments, many years of construction, an adequately skilled workforce and right customer contacts.
- supergirl 5y ago
  by that logic, why doesn't TSMC build the machines themselves and pocket the money?
  - MangoCoffee 5y ago
    different company have different skillset. Apple designed M1 but outsourced to TSMC for production. if Apple can design, surely they can produce, no? just buy some EUV machines, create the fab process and build a fab. easy, right?

intricatedetail 5y ago

They should come to UK.

babayega2 5y ago

The Nikkei has a detailed article [0] on the steps that China is taking to compete with TSMC and other western chip factories. I think a lot of commenters would be meaningful if they took time to read the other side of the problem and not just run into nationalist and inflammatory war. [0] https://asia.nikkei.com/Spotlight/The-Big-Story/US-China-tech-war-Beijing-s-secret-chipmaking-champions https://asia.nikkei.com/Spotlight/The-Big-Story/US-China-tec...

EE84M3i 5y ago
>compete with TSMC and other western chip factories Is TSMC is a western company?
- apexalpha 5y ago
  When talking about "spheres of influence" China (and Russia) are seen as not-Western while Japan/SK/Taiwan are seen as Western, due to the American military umbrella.
  - tekknik 5y ago
    Does this mean Taiwan is part of the US? China doesn’t seem to agree with this.
throwaway4good 5y ago
That is a fantastic article. I have tried submitting it here unfortunately it didn't catch much interest. Very sad at the level of discussion here at hn when it comes to the US-China tech war. It is quite fascinating what is happening in China where the country is forced to rebuild a full semiconductor industry. Every established player here in the west has a Chinese counterpart being forstered. It is really a Chinese Sputnik moment and a whole of society effort. Must be a great time to be Chinese semiconductor engineer. As for TSMC, it has with the current Taiwanese goverment, placed itself firmly in the US camp where they will let go of any Chinese customer at the US government's command. However a considerable minority (maybe even a majority in business circles) in Taiwan see themselves as Chinese and are not at all sympathetic to US containment policies on China.

Zenst 5y ago

So they had talks with the EU and disagreed so the news is they are not building a factory in Europe. I do wonder if the talks had gone amicably, would the story say EU then. I do appreciate for many the terms EU and Europe are interpolatable but in reality they are not. Do also keep in mind that such actions/statements by companies can often be a case of political bargaining and TSMC in effect telling the EU - look we don't want to be messed about, if your serious then now is the time to decide and if not, we will not delay things any further in your endless talking. Another article upon this matter: https://www.itpro.co.uk/hardware/components/359547/tsmc-eu-chip-factory-talks-reportedly-falter https://www.itpro.co.uk/hardware/components/359547/tsmc-eu-c...

websg-x 5y ago

https://money.udn.com/money/story/5612/5458270 https://money.udn.com/money/story/5612/5458270 TSMC deny the report and is proceeding with the original plan at this stage.

LatteLazy 5y ago

It must be strange and interesting to run a company (supposedly an economic entity) with such high political involvement.

hnfong 5y ago
Who, like Mark Zuckerberg? :D

anjel 5y ago

An Arizona fab will likely have an interesting effect on the way SW CA/NV/AZ "share" the Colorado River.

whoisburbansky 5y ago
Do fabs typically have high water requirements compared to other heavy industry?

mips_avatar 5y ago

Someone from TSMC reached out to me on LinkedIn to apply to a 4 year program (2 years in Taiwan 2+ years in Arizona). As a software PM I don’t know they pegged me right, but interesting how they are recruiting.

Roritharr 5y ago
Did they offer relocation? I'm always curious what kind of deals are in place for the families involved.
- mips_avatar 5y ago
  So they offered everything paid for in Taiwan, and a competitive US salary even while in Taiwan.

chkaloon 5y ago

"In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers," - ouch