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TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world t

by api 5y ago

TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world to Taiwan's security against the PRC.

bombcar 5y ago
And he's saying it wouldn't be "profitable" because they'd have overcapacity. But countries wanting to bring it in-house may not care about that, or be willing to pay for that. Ignoring shortages, Russia would be much happier right now to be oversupplied with the chips they need than having to get them through China. And lots of other countries are now re-evaluating what risks may be inherent in their supply chains.
- ltbarcly3 5y ago
  So TMSC would also stop being profitable by that logic I think, unless there is some structural advantage they have?
  - bombcar 5y ago
    That's likely why they're trying to dissuade people from doing it; also if you DO bring something in-house you're likely to bring in the highest margin chips, which of course affects TMSC's bottom line.
pphysch 5y ago
This is an oft-repeated meme that doesn't align with the historical facts. TSMC is a distant secondary factor in the geopolitical competition over Taiwan, which is a continuation of the Chinese civil war that started in 1927 and has never officially ended. If TSMC didn't exist, or was located in e.g. Vietnam, Taiwan would still be a vital strategic asset in Washington's stated policy to contain Communist China (as part of the "first island chain" [1]). There would still be a geopolitical competition without TSMC. [1] - https://en.wikipedia.org/wiki/First_island_chain https://en.wikipedia.org/wiki/First_island_chain
- flyinglizard 5y ago
  Vague geopolitical considerations are very secondary and policy dependent compared to the real and abrupt chaos which will ensue if TSMC is taken out.
  - jaywalk 5y ago
    This is exactly correct. If China took out TSMC, we would have an unimaginable global catastrophe on our hands that would make Covid look like nothing. There are far too many eggs in that basket.
    - hackernewds 5y ago
      This seems like an exaggeration. What are the resulting catastrophe?
      - samus 5y ago
        The semiconductor industry would be set back a few decades because the main production facilities for the current node and many previous nodes would be gone. It's not just the equipment, but also the institutional knowledge about how to operate it best.
      - WillPostForFood 5y ago
        If China invaded Taiwan, and the world response was something like the response to Russia's invasion of Ukraine (economic isolation), it would mean losing 500 billion dollars of imported products, and an uncountable loss of products that are dependent of that 500 billion. Look at what a small kink in chip supply is doing to car pricing and supply. Imagine instead of a kink in the supply chain, the supply goes to zero for several years. Now imagine that affecting thousands of products that are either wholly manufactured in China and Taiwan, or dependent on components made in China and Taiwan.
      - jaywalk 5y ago
        The number of chips within a five foot radius of you at this very moment that were manufactured by TSMC could easily be in the double digits. So imagine that all of the devices containing those chips are no longer able to be produced because nobody else can make the necessary chips.

by api 5y ago

TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world to Taiwan's security against the PRC.

bombcar 5y ago

And he's saying it wouldn't be "profitable" because they'd have overcapacity. But countries wanting to bring it in-house may not care about that, or be willing to pay for that. Ignoring shortages, Russia would be much happier right now to be oversupplied with the chips they need than having to get them through China. And lots of other countries are now re-evaluating what risks may be inherent in their supply chains.

ltbarcly3 5y ago
So TMSC would also stop being profitable by that logic I think, unless there is some structural advantage they have?
- bombcar 5y ago
  That's likely why they're trying to dissuade people from doing it; also if you DO bring something in-house you're likely to bring in the highest margin chips, which of course affects TMSC's bottom line.

pphysch 5y ago

This is an oft-repeated meme that doesn't align with the historical facts. TSMC is a distant secondary factor in the geopolitical competition over Taiwan, which is a continuation of the Chinese civil war that started in 1927 and has never officially ended. If TSMC didn't exist, or was located in e.g. Vietnam, Taiwan would still be a vital strategic asset in Washington's stated policy to contain Communist China (as part of the "first island chain" [1]). There would still be a geopolitical competition without TSMC. [1] - https://en.wikipedia.org/wiki/First_island_chain https://en.wikipedia.org/wiki/First_island_chain

flyinglizard 5y ago
Vague geopolitical considerations are very secondary and policy dependent compared to the real and abrupt chaos which will ensue if TSMC is taken out.
- jaywalk 5y ago
  This is exactly correct. If China took out TSMC, we would have an unimaginable global catastrophe on our hands that would make Covid look like nothing. There are far too many eggs in that basket.
  - hackernewds 5y ago
    This seems like an exaggeration. What are the resulting catastrophe?
    - samus 5y ago
      The semiconductor industry would be set back a few decades because the main production facilities for the current node and many previous nodes would be gone. It's not just the equipment, but also the institutional knowledge about how to operate it best.
    - WillPostForFood 5y ago
      If China invaded Taiwan, and the world response was something like the response to Russia's invasion of Ukraine (economic isolation), it would mean losing 500 billion dollars of imported products, and an uncountable loss of products that are dependent of that 500 billion. Look at what a small kink in chip supply is doing to car pricing and supply. Imagine instead of a kink in the supply chain, the supply goes to zero for several years. Now imagine that affecting thousands of products that are either wholly manufactured in China and Taiwan, or dependent on components made in China and Taiwan.
    - jaywalk 5y ago
      The number of chips within a five foot radius of you at this very moment that were manufactured by TSMC could easily be in the double digits. So imagine that all of the devices containing those chips are no longer able to be produced because nobody else can make the necessary chips.