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TSMC says efforts to rebuild US semiconductor industry are doomed to fail
- cft 4y agoAnd if you spell out why, you get flagged and downvoted. Chicken and egg problem.
- tkk23 4y agoPlease do spell it out. Why is rebuilding US semiconductor industry doomed to fail?
- caeril 4y agoI can't speak for cft, but there are two glaringly obvious reasons. One cultural, and one of a variety that cft is absolutely correct about: You will be downvoted, flagged, and then dang will arrive to warn you that this specific argument is not permitted on HN because it inevitably leads to unproductive flamewars. To be fair, dang is completely correct in this observation. It never leads to productive discussion, but it is nonetheless verboten.
- tkk23 4y agoThanks. I am oblivious to that argument but I am sure that I will read about it sooner or later. Regarding the cultural reason: Where is the obstacle? Somebody mentioned that TSMC receives the wavers from the USA. Why would it be possible to operate one set of clean-room machines, but not another? If I am not mistaken then there are also the Intel plants. They may have lost their lead, but they are still operating the machines.
- ceejayoz 4y ago> The contract manufacturer rose to become the top chipmaker in the world, commanding 20% of global wafer fabrication and 92% of advanced chip capacity. This is why I don’t worry too much about Chinese saber rattling towards Taiwan. Imagine the Chinese economy with 92% of the world’s supply of advanced computer chips gone.
- another_story 4y agoThis assumes rational decision making by current Party leadership. If the handling of covid, the housing market and Taiwan is any indication, it's anything but.
- hef19898 4y agoUp until Putin decided to just go ahead anyway and invade Ukraine I considered leadership in Russia, and by some extend of that, China to be autocratic but at least not stupid. That both, Putin and Ping, apparently lost all ability to properly calculate risk and derive rational decisions from that, was honestly a surprise. People like Erdogan and MBS, sure, those are just irrational, deluded bullies. Apparently Putin and, it seems, Ping, are the same
- enaaem 4y agoThey don’t get accurate information. If Xi or Putin tells the military and economic planners to prepare for war in the next 5 years, who’s going to tell them if they’re not ready?
- hef19898 4y agoThe same people that told Nazi leadership that Germany needs another 3-5 years to be ready for global war. And as back then, thise people will be ignored and replaced, the deluded leadership goes a head anyway (Ukraine showed us that much), things will gi to hell, people will die and ultimately the war they started will be lost.
- ClumsyPilot 4y ago> If the handling of covid, the housing market As opposed to British housing market, which has been called a housing crisis for the past 10 years? And our handling of covid where hundreds of thousands of people died needlessly, and elementary steps like improving ventilation or air filtration in school and large public buildings are not taken. From Brexit, to Afghanistan withdrawal, to energy dependancy on political opponent, I am under impression that decision making of western nations is more chaotic and erratic decisions than China's. We seem to take it as a given that as political leaders change, our decisions are erratic. But when China's decisions are erratic, that's pointed to as surprising or as failure. But Xi is not personally in charge of everything, there are various leaders and influencers withing the CCP and they change.
- piokoch 4y agoTSMC Taiwan is panicking that the World will loose its interest in defending Taiwan against China once processors can be made elsewhere. Plus TSMC is afraid it will start losing market once there will be more players there.
- gonzo41 4y agoThe real politics of the situation for Taiwan is that if a fight breaks out, the US will happily send them weapons but they need to do the fighting. The US will be happy to supply guns, but is naturally diversifying chip making to de-risk the issue for itself and the world. Look at Ukraine, aside from grain and a few specialty items, it's not a huge exporter to the world. Yet a serious war there has caused global problems. China going for an expansionist romp into Taiwan will be 20X as impactful. Anyway, I thought things were going to go a lot different in 1999, last 20 years have been a real ride.
- ideamotor 4y agoHow did you think things would go?
- hef19898 4y agoGoing out on a limb: Taiwan is preparing, with a lot of covert and not so covert, support from the US and other allies with stakes in the region for a potantial war. That involves weapon deliveries, training and what not. It is clear from where the imvasion will come, no way China can hide the build up in material, people and shipping prior to an invasion. And that invasion is over once enough tranport vessels fail to cross the Taiwan straight. Something made easier having years upon years to build ordonance at the shore lines to just do that. So, the initial invasion might just fail, replacement material will come over the Pacific and from Japan, global trade will basically cease to exist. On top of that you have the fallout from a military failure in China itself. In short, it'll be a mess of epic proportions and Taiwan will most likely not be invaded successfully.
- 4y ago
- giuliomagnifico 4y agoUSA must do it, since the effort to rebuild the “Big China” in 2050 of Xi is not doomed to fail, at least USA (and the same for EU) should re shore part of the chip manufacturing fabrics, because now the market is totally un unbalanced.
- implements 4y agoBacked by the might of its own economy, surely the US can rebuild dominance in any technological area it happens to choose given its strategic position and aims? TSMC’s assertion “We’re the best, don’t even try competing” strikes me as “fear masked by false bravado” - a bit pointless, really.
- arrosenberg 4y agoPretty much. The US can subsidize the industry to any extent we want, not much TMSC could do to stop us.
- lotsofpulp 4y agoWhat would delay or stop the US is not having sufficient people with sufficient knowledge and having to re R&D it which is never guaranteed. Saudi Arabia’s king can give their people all the money they want, but they will not be able to buy the technical and management expertise and culture that takes decades to develop without waiting decades for it to develop, with the risk that it does not.
- arrosenberg 4y agoThats another problem we can throw money at until it is resolved.
- lotsofpulp 4y agoI will have to disagree. There are some aspects of life that are not purchase-able, at least not on a timescale that can be attributed to a single leadership group (and therefore unlikely to garner sufficient political support).
- arrosenberg 4y agoThats not a particularly compelling argument. Expertise is always for sale.
- herostratus101 4y agoVery low quality article, does not give any reasons at all why TSMC believes this (and they have an ulterior motive). Just a naked assertion.
- readingnews 4y agoEven if TSMC did say that... it would be completely normal in business. Any business anywhere: "Oh, our future competition? Yeah, you should not go with them, they are doomed to fail". That is standard operating procedure.
- skeeter2020 4y agoThe CEO said this almost verbatim to Pelosi on her recent trip to Taiwan. >> When US House Speaker Nancy Pelosi visited Taiwan in August, she met with Morris Chang and Mark Liu, chair of TSMC. Chang told Pelosi that Washington's efforts to rebuild its chip manufacturing were doomed to fail,
- dirtyid 4y ago1. Of course Morris Chang would say this. 2. It's also significant that Morris Chang openly is saying this. Publically, and repeatedly. And possibly specifically to Pelosi given the politics behind him merely being in the same room as her. Important read between the lines consideration is whether Chang's attitude will affect success of TSMC fabs in US. Apart from being burnt in past, he has also been consistently against building leading edge fabs abroad and IMO maybe personally invested in undermining unprofitable expansion efforts (without even going into geopolitics of silicon shield). The consensus when rumor of TSMC building fabs in US (pre CHIPs) was that it made no sense because TSMC already announced record CAPEX investment in TW months prior, and there was no money for new expansion let alone leading edge. Post confirmation of Arizona fab and so far the sentiment I've gleaned is that the CHIPs subsidies to TSMC + culture differences still makes the expansion not worthwhile for Chang. That's just the practical operations/economical considerations. Now layer on the geopolitics, i.e. eroding TW silicon shield, behind scene US pressure to get these fabs, unilateral export controls disrupting/severing TSMC's PRC business/interests. TLDR is maybe Chang is just really (understandably) annoyed at US fucking around with his company and maybe even him on an individual level considering there was probably some sticks being whipped behind the scenes especially if the CHIPs subsidy carrot wasn't enough. Question is if that will affect success of TSMC fabs in US. I'm sure you'll find similar feels in board rooms of Samsung/JP equipment makers. There's a reason US had to announce new unilateral export controls after talking up / pushing through CHIP4s as collective effort to constrain PRC tech, Asian semi countries have no interest in US gaining semi independence/dominance at their cost. E: To add, US discussion around TSMC has gotten to the absurd point where TW media in the past months had to retort: No US Army War College, we're not rigging fabs to explode; and we're not goin gto cooperate with paperclipping all our semi engineers in event of war. We're going prioritize evacuating grown ass men over women and children first like any other sane planners.
- mytailorisrich 4y agoMorris Chang is a Chinese Nationalist, so obviously his point of view includes what he thinks best for the Republic of China. TSMC is a strategic asset and most of its value and leverage it confers stem from it being physically located in Taiwan. That's exactly why the US are pushing for them to build more fabs in the US and why Taiwanese authorities are most probably not keen but they also need to preserve their relation with the US...
- rob74 4y agoThe graph with the semiconductor market shares by country could use some more data points. For instance, it would be interesting to see if AMD's decision to build some fabs in Germany (https://de-m-wikipedia-org.translate.goog/wiki/AMD_Saxony?_x_tr_sl=de&_x_tr_tl=en&_x_tr_hl=de&_x_tr_pto=wapp https://de-m-wikipedia-org.translate.goog/wiki/AMD_Saxony?_x...) significantly moved the needle upwards for "Europe" starting with 1999...
- heisenbit 4y agoEvery quantum leap in technology like EUV provides opportunities for new entrants. While the entry price is steep this is somewhat mitigated by the entry door being narrow i.e. tooling suppliers. Conveniently ASML has lost China as a customer due to the US embargo so negotiations about pricing for the US deliveries are a bit more relaxed than what one would expect with such narrow supply.
- nonrandomstring 4y agoIf Taiwan really sees chips as a "silicon shield" that's all the more reason to redouble efforts to diversify sources. But I'm confused, because the title is: "TSMC says efforts to rebuild US semiconductor industry are doomed to fail" It's obvious why they want to say that but nowhere in the short piece is there a single word as to "why?". Doom is not discussed. Nor in the linked Taiwan Financial Times. Morris Chang must have some sort of theory, right? Economic? Technical? Political? Maybe its that TSMC just manufacturer stuff. They transparently produce silicon for anyone who wants it around the world. Intel (read the many recent HN threads here about management engines, non-transparency etc) bake political control agendas into their silicon. Biden should spend that $50B on creating a portfolio of smaller, independent rivals to AMD and Intel's fabrication. With state of the art fab plants that just make what their customers ask them to we can let the US/Euro market in silicon IP flourish... RISC-V and much more. Propping up behemoths that have wonky agendas, lines of old and failing products, and refuse to listen to what markets really want might be the "doom" Mr Chang is alluding to.
- pkilgore 4y agoArticle didn't say why it was doomed to fail? I miss something?
- sylware 4y agoSaw on TV that china is committed to merge taiwan by any means (or this is scare propaganda). China has nukes, then the US and others will only provides weapons, and taiwan ppl will have to do the dying themselves (exactly like Ukraine). Either Taiwan gets a nuclear shield which is NATO alike (a country ready to die with them in a nuclear war) or it is a "done deal". I guess leading-edge chip manufacturing will have to move in a country without an authoritative regime and with an explicit nuclear shield.
- Isinlor 4y agoChina declared that it will use force in Taiwan if "possibilities for a peaceful reunification should be completely exhausted". From Chinese Anti-Secession Law: Article 8: In the event that the "Taiwan independence" secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that major incidents entailing Taiwan's secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China's sovereignty and territorial integrity. https://www.europarl.europa.eu/meetdocs/2004_2009/documents/fd/d-cn2005042601/d-cn2005042601en.pdf https://www.europarl.europa.eu/meetdocs/2004_2009/documents/...
- sylware 4y agoI know and I was talking in the case of this exhaustion. I thought it was kind of obvious.
- icu 4y agoPost-Covid, supply chains will be moved back to North America as Governments and companies adapt to the changing geopolitical climate that the demographic collapse will create. I think some of the industrial plant will locate in the US, but a lot of it will locate in Mexico, which has a location advantage, far better demographics than China, and cheap labor compared to both the US and China (Chinese average wages are actually higher than Mexican average wages). I think TSMC knows that tech is at the top of a pyramid that relies on industrialization and military might to secure it. IMHO we are going into a very unsecure future where we will see an accelerated decline in all the factors that contributed to globalization. In particular, I worry a lot about food security and supply when global markets in fertilizer are disrupted, energy security when global markets in fossil fuels are disrupted, and manufacturing of all goods when commodity markets are disrupted. As much as I want a clean energy and EV revolution in my estimation, it cannot happen without Russian raw materials. Furthermore, unless there are amazing leaps or breakthroughs in energy generation, energy storage, and food production without fertilizer, the rest of the world—but not the US—will be in for an uncomfortable few decades. TSMC executives will of course try to influence US politicians, but I think US politicians know that US voters are fatigued with foreign military excursions. US active-duty numbers are already historically low, and I suspect this has to do with difficulty with recruitment. I think it is fair to ask, "Am I defending my country by fighting China in Taiwan?"
- baybal2 4y ago
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- zxspectrum1982 4y agoTaiwan is impossible to defend, plain and simple. It's too close to China and too far from the US.
- jleyank 4y agoMad. Bet that Taiwan lacks nukes? Maybe not enough to matter but (rogue) states have surprised people. And Ukraine demonstrated that there’s no other option to guarantee borders. I think they have the tech chops to do it. Material can be “found”.
- baybal2 4y ago
- graphe 4y agoBad article. Tl;dr Doom is implied. Never spoken of. Generic story refactored you’ve read a million times about Morris founding TSMC. Geopolitics implied. TSMC says it’s doomed, while it helps the US make plants. I am not worried about China invading. It’ll be over for them. Even if they take over Taiwan with no casualties on either side and everyone wanting to make chips as usual, they still fail without Dutch lithography which is like TSMC for another required process. https://thediplomat.com/2022/08/lithography-the-achilles-heel-of-chinas-semiconductor-industry/ https://thediplomat.com/2022/08/lithography-the-achilles-hee... They don’t have the high quality silicon required either, that comes from the US.
- compsciphd 4y agounless there's a fundamental difference in labor costs for US vs foreign fabs (i.e. the general reason manufacturing has left the US), I don't see why its "doomed to fail". What's the fundamental difference between building a fab in Taiwan, US, Europe, Israel or wherever else besides for the ongoing labor cost?
- lizardactivist 4y agoI hope they are right. The semi industry in Taiwan and Asia in general has been a boon for the world, with fast, high-quality manufacturing at great prices for anyone who needs it. The US has always sought to influence this to some extent with sanctioning countries, and threatening the asian semi industry directly with further sanctions if they were to continue to sell to countries the US don't approve of. This also highlights exactly how the US views and uses its own semi industry: as a weapon and means of control by dependence. A strong asian semi industry would mean slightly higher prices for US American consumers, but it would certainly be better for the world as a whole, and that's what really matters.
- lost_tourist 4y agoSorry TSMC I think we'll do just fine and you'll have a challenger for the crown within the next 10 years. The USA knows that China with Xi at its head is only going to become more belligerent and isolationist. The government will be pouring a lot of money into onshoring this stuff so when war with China inevitably breaks out we'll only be caught with our pants down to our knees and not our ankles when it comes to manufacturing and semiconductor tech.
- simonblack 4y agoThe only way that the US can produce a competitive semiconductor industry is if that industry is completely roboticised. The US's wage levels and infrastructure costs are too high to be globally competitive enough for success, apart from the over-valuing of the US Dollar.