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There are advanced Fabs in Israel, Intel and TSMC are both building next gen Fabs in Arizona. It's not like Twain is the only place with advanced chip fabs(thou

There are advanced Fabs in Israel, Intel and TSMC are both building next gen Fabs in Arizona. It's not like Twain is the only place with advanced chip fabs(though yes the vast majority of the capacity is there and IIRC thats where their latest process nodes are but I don't think the military is dependent on those absolute cutting edge process nodes)

heavyset_go 4y ago
Those fabs won't start producing for years.
ElevenLathe 4y ago
Taiwan is also the center of a lot of specialist equipment (not the big swiss-watch ASML machines, but stuff like wafer transports, cleanroom gear, etc.) and consumables (chemicals, bunny suits, etc.). I don't know how extensive and fragile that ecosystem is but I live in eastern Michigan and it seems like every small to midsize town has some tiny automotive supplier that is somehow still in business even while the big plants have moved on. I suspect this is largely because they have no competitors and it is specialist work that doesn't really scale (meaning there is only so much of this work to go around, even if global auto sales 10x) so no one is really motivated to compete either. The result is that the GM and Ford plants leave the country, but still rely on a relatively small set of expertise and tooling that only exist in the rust belt. Presumably, a thorough nuking of the Midwest would (in addition to lots of other unpleasant effects, like the death and famine millions, perhaps billions) at least require the pause of the majority of auto manufacturing around the globe. Assuming people still wanted cars after such an event, it could be recovered, but it would take time. I got a little carried away with the Michigan analogy, but IMO it doesn't go far enough: Taiwan is far more integral to the global semiconductor industry than Detroit is to the global auto industry.
nscalf 4y ago
I agree that this isn't an indefinite problem, but the current state of affairs is that TSMC is irreplaceable on the world's fabrication scene. The military definitely has some need for cutting edge process nodes, though I can't say how much. This is intentionally vague, but it seems safe to say there are a number of high end missile guidance systems, a variety of AI implementations, and drone systems that likely all have some dependence on high end chips. Not to mention the economic reliance on TSMC, Apple alone is ~7% of the S&P500. I think if we fast forward 5-10 years, Taiwan will not be this much of an absolute, but it will take years for these new fabs to come online. Until there are viable alternatives, Taiwan is a massive risk.

heavyset_go 4y ago

Those fabs won't start producing for years.

ElevenLathe 4y ago

Taiwan is also the center of a lot of specialist equipment (not the big swiss-watch ASML machines, but stuff like wafer transports, cleanroom gear, etc.) and consumables (chemicals, bunny suits, etc.). I don't know how extensive and fragile that ecosystem is but I live in eastern Michigan and it seems like every small to midsize town has some tiny automotive supplier that is somehow still in business even while the big plants have moved on. I suspect this is largely because they have no competitors and it is specialist work that doesn't really scale (meaning there is only so much of this work to go around, even if global auto sales 10x) so no one is really motivated to compete either. The result is that the GM and Ford plants leave the country, but still rely on a relatively small set of expertise and tooling that only exist in the rust belt. Presumably, a thorough nuking of the Midwest would (in addition to lots of other unpleasant effects, like the death and famine millions, perhaps billions) at least require the pause of the majority of auto manufacturing around the globe. Assuming people still wanted cars after such an event, it could be recovered, but it would take time. I got a little carried away with the Michigan analogy, but IMO it doesn't go far enough: Taiwan is far more integral to the global semiconductor industry than Detroit is to the global auto industry.

nscalf 4y ago

I agree that this isn't an indefinite problem, but the current state of affairs is that TSMC is irreplaceable on the world's fabrication scene. The military definitely has some need for cutting edge process nodes, though I can't say how much. This is intentionally vague, but it seems safe to say there are a number of high end missile guidance systems, a variety of AI implementations, and drone systems that likely all have some dependence on high end chips. Not to mention the economic reliance on TSMC, Apple alone is ~7% of the S&P500. I think if we fast forward 5-10 years, Taiwan will not be this much of an absolute, but it will take years for these new fabs to come online. Until there are viable alternatives, Taiwan is a massive risk.