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Great news for the US. Great news for Apple, AMD, and Nvidia. Not so good news for Taiwan. The fact that the whole tech world is dependent on chips produced in

Great news for the US. Great news for Apple, AMD, and Nvidia. Not so good news for Taiwan. The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. Moving the fabs and talent further away from the island will not benefit the people of Taiwan at all. TSMC with its global influence has been a huge factor for guaranteeing safety of the island and peace in the Taiwan strait. On the other hand, TSMC is a corporation like every other and does what's best for their business. Most likely it's a huge win for everyone holding their stock. Are we going to see fabs in Central/Eastern Europe next? I'd hope so.

Salgat 4y ago
They don't really have a choice. Either they build fabs in other countries or those countries will simply invest/subsidize their own fabs (including Intel) to avoid a single point of failure for chip supply.
jimbob45 4y ago
Does China still want Taiwan if it's no longer technologically relevant? My understanding is that China is making similar strides in its own chip industry to the point where TSMC won't be as nearly as useful to them in 10 years as it is now.
- nonethewiser 4y ago
  Yes.
- whalesalad 4y ago
  Taiwan does far more than just TSMC. That is just one single company, albeit a very essential one. For instance, I don't like to buy hand tools (impact sockets, torque wrenches, etc) made in China, but Taiwanese tools are a higher quality and I have no hesitation purchasing them.
  - pifm_guy 4y ago
    I suspect that the hand tools made in China aren't low quality because China doesn't have the tech to make them better, but instead because making cheap low quality tools is more profitable. In fact, when taking apart China-made, China-designed products, I am frequently very impressed at cost-cutting measures that are taken with minimal impact on the functionality of the product.
  - deltaseventhree 4y ago
    Essential for you. But overall tsmc eclipses everything else Taiwan makes. If Taiwan stopped making those tools you would be impacted. The world overall... not so much.
    - mr_toad 4y ago
      > Essential for you. But overall tsmc eclipses everything else Taiwan makes. TSMC’s revenue is less than a tenth of Taiwan’s total export revenue. They might be the most profitable of Taiwan’s companies, but Taiwan has a huge economy. And it terms of impact on the world economy, Hon Hai precision, better known in the west as Foxconn, would like to say hi.
      - deltaseventhree 4y ago
  - fomine3 4y ago
    Many computer/electrics manufacturers and OEMs, like ASUS, Acer, Foxconn, Wistron, Pegatron, MediaTek, Synology, etc are HQ'd in Taiwan. Though PRC company may be able to supersede them, unlike TSMC.
- paperskull 4y ago
  Taiwan also serves the role as an unsinkable battleship right next door to Chinas mainland. Its military value extends far beyond its chip production capabilities in order for the US to check Chinas influence in SEA region.
  - wahern 4y ago
    The U.S. military doesn't stage any assets in Taiwan, not since shortly after rapprochement with China and establishment of the current strategic ambiguity. The U.S. military is very careful about both what and who it officially permits to land on Taiwan. Occasionally (on the order of years) there are borderline cases, such as a research vessel with U.S. Navy ties docking in Taiwan, and it becomes a huge thing in the Chinese media. AFAIU, high-level officers are rarely if ever given permission to enter Taiwan; direct military liaisons in Taiwan are limited to lower level staff officers. When this protocol is broken it's a tit-for-tat situation designed to send a message, and doesn't change anything of substance in how the relationship operates. Anyhow, the U.S. has no need nor desire to establish a presence on Taiwan. Okinawa and Korea are more than close enough for its purposes, peaceful or otherwise. And if the U.S. were to try to establish a presence, you can be sure China's invasion fleet would reach Taiwan before any significant U.S. materiel could make it ashore.
- speed_spread 4y ago
  Taiwan is the only place China can have a deep water port required by a fleet of nuclear submarines. Mainland coast waters are too shallow.
- monocasa 4y ago
  China wants Taiwan orthgonally to any economic value it would provide. Reunification is pretty core to their mythos at this point. In fact, I wouldn't be surprised if making Taiwan globally less economically relevant is core to their strategy for reunification. While the US is dependent on Taiwan for chips, Taiwan has a very important defense partner that China can't really compete with. But China has a way better chance of securing Taiwan if the rest of the global community only cares for ideological reasons.
jackpeterfletch 4y ago
Thats interesting. My initial thoughts on this came the from the opposite side in terms of Taiwans security. One of the major bounties for invading Taiwan would be in the acquisition and control of their chip manufacturing. Which - as you mention, the entire tech world is dependant on. By moving some of that capability offshore, that incentive is gone. Though I can see it from both sides.
- boringg 4y ago
  I thought the same thing. I believe it is more nuanced than that. PRC wants Taiwan regardless of its production value (geopolitical & PRC narrative) though I'm sure they would like the control of chip manufacturing. However if the US did move all of its strategic production off island there would be less value accrued to defending outside that said keeping a close presence on China expansion is important to the US. So it would still have value maybe a bit less so. Please excuse the human aspect of the population as we are separating that part of the discussion.
- abakker 4y ago
  Without the staff from TSMC, the Chinese Government probably can't run those facilities. I suspect there isn't much probability that china could mobilize and take those facilities as-is with no sabotage. The US has taken steps recently to reduce china's ability to make chips domestically. See - https://www.seattletimes.com/business/chip-gear-maker-asml-asks-u-s-staff-to-refrain-from-china-customers/ https://www.seattletimes.com/business/chip-gear-maker-asml-a...
  - nradov 4y ago
    The Chinese government also wouldn't be able to run those fabs without ongoing support from ASML and other key foreign vendors. The production machinery is extremely complex with many specialized parts and a significant software component. Reverse engineering and duplicating everything would take years.
    - phatfish 4y ago
judge2020 4y ago
> The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. But if they're entirely dependent on the US for defense in case of PRC invasion, is that healthy for the country?
- LegitShady 4y ago
  what are the alternatives?
  - nonethewiser 4y ago
    Move every critical industry to Taiwan.
  - yucky 4y ago
    Exactly what you're seeing. Move semiconductor industry out of Taiwan so then when China takes it, disruption is lessened.
    - LegitShady 4y ago
      the issue is "is it healthy for the country" which being taken over by china is not, so you aren't really addressing either the question I was responding to, or my question.
      - yucky 4y ago
        Well that's debatable. It depends entirely on how you define "healthy". We tend to look at things from a Western perspective, but that's rather presumptive isn't it?
        LegitShady 4y ago
        What's presumptive is to call something debateable without making a persuasive or even barely logical argument, throwing in a random jab at perspective without offering any opinion to talk about, and then calling your opponent presumptive. Basically you have no argument and no position except to be rude.
deltaseventhree 4y ago
It is categorically NOT a huge win for the stock. This is all happening because of US subsidies. The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. The subsidies only make this a viable option for political reasons. The decision to create a fab in Arizona is strictly speaking unprofitable and essentially a economically irrational move for the company. It is ONLY being done because of US demand and political tension from China. For a shareholder this move is not good when looking at it in terms of profit. I know this is a hard pill to swallow but it's true. Don't joke about Europe. The best place for tsmc to expand is actually china. But this won't happen for various reasons that we all know about.
- mixmastamyk 4y ago
  Short-sighted comment. You know how you develop expertise? That’s right, you invest in it.
  - deltaseventhree 4y ago
    Long sigted. The investment starts from scratch. Why not invest in some places cheaper? Why not invest in a place that has better expertise? Overall the long term vision is to wrestle some control away from China. That is the long term bet the US and tsmc are ultimately making and what's driving the decision. But economically this is a bad bet.
    - mixmastamyk 4y ago
      The why is obvious. Not having vital infra solely in the hands of a potential enemy is strategy 101. Economics are but one factor of many.
      - deltaseventhree 4y ago
      - deleted 4y ago
        [deleted]
CoolGuySteve 4y ago
By the time the fab comes online in 2024 (which seems optimistic), 4nm should be a half-step generation or so behind. TSMC also has a dozen or so fabs in Asia, so it's not clear how the single plant in Arizona is going to meet capacity requirements or how often that plant will be retrofitted with newer equipment. This plant and the federal subsidies backing it seem more like a way for defense contractors to domestically source relatively recent fab processes over the next couple decades rather than something intended solely for consumer products. The fact that consumer facing companies are interested in using the fab when it comes online doesn't necessarily mean they'll still be using it 10 years from now unless TSMC keeps it up to date.
- NeverFade 4y ago
  TSMC expects to begin mass production of 3nm chips in its Taiwan fabs by 2023 Q4: https://seekingalpha.com/article/4546779-tsmc-no-3nm-soon https://seekingalpha.com/article/4546779-tsmc-no-3nm-soon This isn't my field, but I'm not sure what's the excitement about an Arizona plant that will optimistically start production a year later with an older process.
  - tnel77 4y ago
    Indeed. There are zero domestic use cases for that ancient 4nm tech…
    - 0cf8612b2e1e 4y ago
      How many consumers or even servers are running latest generation? 4nm indeed seems like it would have legs for a long time.
      - tnel77 4y ago
        Exactly. I get how having the latest and greatest would be ideal, but scoffing at 4nm seems silly to me.
  - metalliqaz 4y ago
ksec 4y ago
I don't see anything changing yet in terms of Global Influence. TSMC will still have their leading edge, state of art, and majority of capacity in Taiwan for the foreseeable future. The 4nm US Fab, based on N5, will be two years behind in 2024, where TSMC will be producing N3 class in volume and N2 in 2025. Given the N3 Class are long node before moving to something more exotic and expensive N2 with GAFFET. I would expect the US Fab to be upgraded and start producing N3 in 2026 on US Soil.
chaosbolt 4y ago
Chip manufacturing is both the reason everyone is protecting them and also why China wants them so bad.
- andy_ppp 4y ago
  No the reason they want to invade is to project power into the wider pacific, nationalism, imperialism and the people and human capital not just limited to semi conductors. The factories will be destroyed in any invasion, the US will guarantee it, I promise.
  - amelius 4y ago
    > The factories will be destroyed in any invasion, the US will guarantee it I promise. Maybe the place isn't so safe after all.
  - bpanon 4y ago
    On what basis do you predict the US will destroy the factories?
    - arghnoname 4y ago
      I doubt the parent has access to American war plans, but it's reasonable to guess that the US would prefer for China not to have intact TSMC plants because it provides enormous leverage. It's the same as blowing up Nordstream II. This is standard war stuff, and if the US is at war with China, heavy sanctions, etc, we wouldn't be able to buy the chips anyway. Why not drop a cruise missile on it? Personally I hope such a thing doesn't happen. If I had to guess, Taiwan will eventually come under mainland China's control, but I hope this is done very slowly and in a bloodless way following a referendum by the Taiwanese themselves (e.g., only after certain guarantees of autonomy are made and the Taiwanese opt for the 'easy route'). I doubt mainland China will accept this thorn in their side indefinitely.
      - riversflow 4y ago
        > e.g., only after certain guarantees of autonomy are made and the Taiwanese opt for the 'easy route' Is that really so plausible after what happened in Hong Kong?
trompetenaccoun 4y ago
They're not closing shop in Taiwan, rather manufacturers are shifting away from China and the US government is probably encouraging/subsidizing new plants there. So this is overall a good healthy development that should have happened many years ago.
pphysch 4y ago
> TSMC with its global influence has been a huge factor for guaranteeing safety of the island and peace in the Taiwan strait. This narrative is echoed around the internet, but if you study the actual history of the Taiwan Strait Crises (which started before the semiconductor was invented), it never comes up in official discussion or analysis. See Kissinger, for example. Cynically, this narrative was possibly promoted by the USG/Taiwan-lobby to put lipstick on what has always been a naked display of power politics. Washington wants its First Island Chain to contain China [1], and Beijing doesn't want Washington to have it. [1] - https://en.wikipedia.org/wiki/Island_chain_strategy https://en.wikipedia.org/wiki/Island_chain_strategy
- sopchi 4y ago
  I was very surprised to find in the recent New Yorker long article about Chinese-Taiwanese Relations [1] that TSMC was only mentioned at the very end. I was expecting this to be central to the story. I recommend reading the whole thing to anyone who has an hour to spare. "One of the most important deterrents to war is Taiwan’s role in producing semiconductors. Seventy per cent of the world’s most advanced chips are manufactured there, many of them at the Taiwanese Semiconductor Manufacturing Company. [...] China is similarly reliant on the highest-end chips produced in Taiwan; it doesn’t have the equipment or the expertise to manufacture them. If China seized control of Taiwan’s semiconductor factories, it could conceivably force local workers to run them. But the factories depend on a constant flow of Western material, software, expertise, and engineers, without which production would cease in a matter of weeks. Pottinger told me, “If the Chinese took the factories, there’s no way the West would help run them.”" [1] https://www.newyorker.com/magazine/2022/11/21/a-dangerous-game-over-taiwan https://www.newyorker.com/magazine/2022/11/21/a-dangerous-ga...
- wahern 4y ago
  > Cynically, this narrative was possibly promoted by the USG/Taiwan-lobby to put lipstick on what has always been a naked display of power politics. I also suspect this narrative is at the very least supported if not conceived by Taiwan as propaganda. But we don't need to be cynical. What this narrative does is establish in the minds of Americans a shared interest in Taiwan and, arguably, even a shared identity. That's not intrinsically bad, malicious, nor even disingenuous on the part of the Taiwanese. Especially for a country as large and resource rich (in every meaning of the term) as the United States, all overseas interests and identities are built principally on fictions; some built very deliberately, but many which grew organically. IMO, the high technology dependency narrative fits comfortably between pure ideology (democratic solidarity!) and pure real politick, e.g. oil. Unlike the case with oil interests, the narrative speaks to a coevolution of our industrial and economic bases on equal terms in tandem with political ideology, and thus posits a shared future. And given how quickly and easily the narrative has spread, it has a strong organic character to it--even if Taiwanese political strategists planted the seeds, the soil was more than accommodating. Such a crafted narrative to me seems more like an invitation than manipulation. (Either way, admittedly such characterizations are dependent on one's chosen perspective.) Nonetheless, it should be recognized for what it is; taken literally it leads to erroneous conclusions. If the U.S. aggressively defends Taiwan in an invasion attempt, it won't be because of TSMC and fears of a chip shortage; it'll be because the American public has become invested in the idea of a free and democratic Taiwan, and willing to believe and accept that the US's long-term self-interests are furthered by putting itself and its citizens in the way of considerable, even existential harm. The story of TSMC would just be one of many--albeit an important one--along the road which brought the nation to that state of mind.
wnevets 4y ago
> Not so good news for Taiwan. Doubtful. This is obviously in exchange for continued military support from America. Protection from the world's greatest Navy is well worth a single chip plant.
TEP_Kim_Il_Sung 4y ago
*China (Best China, not to be confused with West China) Great for Arizona. Hope it brings them jobs.
- Maursault 4y ago
  > Great for Arizona. Hope it brings them jobs. And water!
  - TEP_Kim_Il_Sung 4y ago
    Arizona water is being used by U.S. subsidized foreign-owned farms. https://www.azcentral.com/in-depth/news/local/arizona-environment/2019/12/05/biggest-water-users-arizona-farms-keep-drilling-deeper/3937582002/ https://www.azcentral.com/in-depth/news/local/arizona-enviro...
hammock 4y ago
>Great news for the US. Great news for Apple, AMD, and Nvidia. Not so good news for Taiwan. The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. Moving the fabs and talent further away from the island will not benefit the people of Taiwan at all. Naive question, can we relocate the people of Taiwan?
- black_puppydog 4y ago
  Think about that for a second: why would they want to be relocated? And when is the last time you can remember someone deciding "let's relocate these other people that I'm not part of" and that being okay? I mean, one of these relocations is literally called "march of tears".
  - hammock 4y ago
    35 million or so Latin Americans have relocated themselves to the US, even piled into dark crowded trucks and given up their life savings to dangerous coyotes, to do so. I would imagine the the specter of Communist China knocking on your door and breathing down your neck would be a motivator for many Taiwanese. And there would be a great opportunity for the US to welcome them with open arms as allies
    - deleted 4y ago
      [deleted]
    - puffoflogic 4y ago
      You're assuming the population of Taiwan views itself in the same position vis a vis CCP as the government of Taiwan does, which is not a historically probable claim, for all that the situation is quite complex.
      - hammock 4y ago
        As far as I can see no one in this thread was taking about “the government of Taiwan” (a complicated term in itself), just the people of Taiwan.
anigbrowl 4y ago
Fair point, but the rest of the world will still be customers for chips made in Taiwan, and US defense promises to Taiwan are likely worth more if the economic flows are not just unidirectional.
credit_guy 4y ago
> The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. That's a very cynical view. What exactly does Ukraine produce that's so important for the West?
- _kbh_ 4y ago
  https://www.reuters.com/technology/exclusive-ukraine-halts-half-worlds-neon-output-chips-clouding-outlook-2022-03-11/ https://www.reuters.com/technology/exclusive-ukraine-halts-h... > WASHINGTON, March 11 (Reuters) - Ukraine's two leading suppliers of neon, which produce about half the world's supply of the key ingredient for making chips, have halted their operations as Moscow has sharpened its attack on the country, threatening to raise prices and aggravate the semiconductor shortage.
  - credit_guy 4y ago
    “Neon Gas Market size is forecast to reach $61.46 million by 2025” [1]. The US has given Ukraine more than 50 billion in military aid. That’s more than double the annual neon gas market … every single day. [1] https://www.industryarc.com/Research/Neon-Gas-Market-Research-501412 https://www.industryarc.com/Research/Neon-Gas-Market-Researc...
- philwelch 4y ago
  Every Russian soldier, vehicle, or round of ammunition expended in Ukraine for increasingly diminishing returns is a Russian soldier, vehicle, or round of ammunition that will never harm a NATO member.
  - rsj_hn 4y ago
    > Every Russian soldier, vehicle, or round of ammunition expended in Ukraine for increasingly diminishing returns is a Russian soldier, vehicle, or round of ammunition that will never harm a NATO member. Sure, and it's also 10 dead Ukrainian soldiers that will never return to their families, and a few thousand people living an extra day in war, and a few hundred more Ukrainian refugees that must be subsidized in Europe, a few dead Ukrainian civilians that die of Russian shelling, and a few dead Ukrainian civilians in Donbas that die of Ukrainian shelling, and the further demilitarization of both NATO and the US as they run out of munitions and equipment to send (and lack the industrial base to make up for the shortfall). It is also a few more percent lopped off of European GDP as the continent plunges into a steep recession due to the energy crisis. It is only by weighing of the lives of the people in the conflict at zero that the U.S. justifies prolonging this proxy war and continuing to arm and subsidize Ukraine. It is truly willing to fight Russia until the last Ukrainian, and until Europe is completely de-industrialized.
dontbenebby 4y ago
>Great news for the US. Great news for Apple, AMD, and Nvidia. Not so good news for Taiwan. The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. Moving the fabs and talent further away from the island will not benefit the people of Taiwan at all. Is it possible part of why China wants control of China is to control these factories, so if they move production to America paired with demanding existing diplomatic agreements be honored, China will be less obsessed with seizing, for lack of better phrasing, a unique resource?
Der_Einzige 4y ago
The people of Taiwan appear to have decided that they support peaceful unification given how they voted for the KMT this election.
philwelch 4y ago
The CCP’s intensifying rhetoric about unification paired with Taiwan’s low level of military readiness is somewhat troubling and I’m not sure how much TSMC is going to help matters on its own. A lot of Taiwanese elites have vested interests on the mainland, and CCP subversion and espionage are reportedly rampant. At some point Taiwan is going to have to be willing to actually defend their sovereignty.

Salgat 4y ago

They don't really have a choice. Either they build fabs in other countries or those countries will simply invest/subsidize their own fabs (including Intel) to avoid a single point of failure for chip supply.

jimbob45 4y ago

Does China still want Taiwan if it's no longer technologically relevant? My understanding is that China is making similar strides in its own chip industry to the point where TSMC won't be as nearly as useful to them in 10 years as it is now.

nonethewiser 4y ago
Yes.
whalesalad 4y ago
Taiwan does far more than just TSMC. That is just one single company, albeit a very essential one. For instance, I don't like to buy hand tools (impact sockets, torque wrenches, etc) made in China, but Taiwanese tools are a higher quality and I have no hesitation purchasing them.
- pifm_guy 4y ago
  I suspect that the hand tools made in China aren't low quality because China doesn't have the tech to make them better, but instead because making cheap low quality tools is more profitable. In fact, when taking apart China-made, China-designed products, I am frequently very impressed at cost-cutting measures that are taken with minimal impact on the functionality of the product.
- deltaseventhree 4y ago
  Essential for you. But overall tsmc eclipses everything else Taiwan makes. If Taiwan stopped making those tools you would be impacted. The world overall... not so much.
  - mr_toad 4y ago
    > Essential for you. But overall tsmc eclipses everything else Taiwan makes. TSMC’s revenue is less than a tenth of Taiwan’s total export revenue. They might be the most profitable of Taiwan’s companies, but Taiwan has a huge economy. And it terms of impact on the world economy, Hon Hai precision, better known in the west as Foxconn, would like to say hi.
    - deltaseventhree 4y ago
- fomine3 4y ago
  Many computer/electrics manufacturers and OEMs, like ASUS, Acer, Foxconn, Wistron, Pegatron, MediaTek, Synology, etc are HQ'd in Taiwan. Though PRC company may be able to supersede them, unlike TSMC.
paperskull 4y ago
Taiwan also serves the role as an unsinkable battleship right next door to Chinas mainland. Its military value extends far beyond its chip production capabilities in order for the US to check Chinas influence in SEA region.
- wahern 4y ago
  The U.S. military doesn't stage any assets in Taiwan, not since shortly after rapprochement with China and establishment of the current strategic ambiguity. The U.S. military is very careful about both what and who it officially permits to land on Taiwan. Occasionally (on the order of years) there are borderline cases, such as a research vessel with U.S. Navy ties docking in Taiwan, and it becomes a huge thing in the Chinese media. AFAIU, high-level officers are rarely if ever given permission to enter Taiwan; direct military liaisons in Taiwan are limited to lower level staff officers. When this protocol is broken it's a tit-for-tat situation designed to send a message, and doesn't change anything of substance in how the relationship operates. Anyhow, the U.S. has no need nor desire to establish a presence on Taiwan. Okinawa and Korea are more than close enough for its purposes, peaceful or otherwise. And if the U.S. were to try to establish a presence, you can be sure China's invasion fleet would reach Taiwan before any significant U.S. materiel could make it ashore.
speed_spread 4y ago
Taiwan is the only place China can have a deep water port required by a fleet of nuclear submarines. Mainland coast waters are too shallow.
monocasa 4y ago
China wants Taiwan orthgonally to any economic value it would provide. Reunification is pretty core to their mythos at this point. In fact, I wouldn't be surprised if making Taiwan globally less economically relevant is core to their strategy for reunification. While the US is dependent on Taiwan for chips, Taiwan has a very important defense partner that China can't really compete with. But China has a way better chance of securing Taiwan if the rest of the global community only cares for ideological reasons.

jackpeterfletch 4y ago

Thats interesting. My initial thoughts on this came the from the opposite side in terms of Taiwans security. One of the major bounties for invading Taiwan would be in the acquisition and control of their chip manufacturing. Which - as you mention, the entire tech world is dependant on. By moving some of that capability offshore, that incentive is gone. Though I can see it from both sides.

boringg 4y ago
I thought the same thing. I believe it is more nuanced than that. PRC wants Taiwan regardless of its production value (geopolitical & PRC narrative) though I'm sure they would like the control of chip manufacturing. However if the US did move all of its strategic production off island there would be less value accrued to defending outside that said keeping a close presence on China expansion is important to the US. So it would still have value maybe a bit less so. Please excuse the human aspect of the population as we are separating that part of the discussion.
abakker 4y ago
Without the staff from TSMC, the Chinese Government probably can't run those facilities. I suspect there isn't much probability that china could mobilize and take those facilities as-is with no sabotage. The US has taken steps recently to reduce china's ability to make chips domestically. See - https://www.seattletimes.com/business/chip-gear-maker-asml-asks-u-s-staff-to-refrain-from-china-customers/ https://www.seattletimes.com/business/chip-gear-maker-asml-a...
- nradov 4y ago
  The Chinese government also wouldn't be able to run those fabs without ongoing support from ASML and other key foreign vendors. The production machinery is extremely complex with many specialized parts and a significant software component. Reverse engineering and duplicating everything would take years.
  - phatfish 4y ago

judge2020 4y ago

> The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. But if they're entirely dependent on the US for defense in case of PRC invasion, is that healthy for the country?

LegitShady 4y ago
what are the alternatives?
- nonethewiser 4y ago
  Move every critical industry to Taiwan.
- yucky 4y ago
  Exactly what you're seeing. Move semiconductor industry out of Taiwan so then when China takes it, disruption is lessened.
  - LegitShady 4y ago
    the issue is "is it healthy for the country" which being taken over by china is not, so you aren't really addressing either the question I was responding to, or my question.
    - yucky 4y ago
      Well that's debatable. It depends entirely on how you define "healthy". We tend to look at things from a Western perspective, but that's rather presumptive isn't it?
      - LegitShady 4y ago
        What's presumptive is to call something debateable without making a persuasive or even barely logical argument, throwing in a random jab at perspective without offering any opinion to talk about, and then calling your opponent presumptive. Basically you have no argument and no position except to be rude.

deltaseventhree 4y ago

It is categorically NOT a huge win for the stock. This is all happening because of US subsidies. The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. The subsidies only make this a viable option for political reasons. The decision to create a fab in Arizona is strictly speaking unprofitable and essentially a economically irrational move for the company. It is ONLY being done because of US demand and political tension from China. For a shareholder this move is not good when looking at it in terms of profit. I know this is a hard pill to swallow but it's true. Don't joke about Europe. The best place for tsmc to expand is actually china. But this won't happen for various reasons that we all know about.

mixmastamyk 4y ago
Short-sighted comment. You know how you develop expertise? That’s right, you invest in it.
- deltaseventhree 4y ago
  Long sigted. The investment starts from scratch. Why not invest in some places cheaper? Why not invest in a place that has better expertise? Overall the long term vision is to wrestle some control away from China. That is the long term bet the US and tsmc are ultimately making and what's driving the decision. But economically this is a bad bet.
  - mixmastamyk 4y ago
    The why is obvious. Not having vital infra solely in the hands of a potential enemy is strategy 101. Economics are but one factor of many.
    - deltaseventhree 4y ago
    - deleted 4y ago
      [deleted]

CoolGuySteve 4y ago

By the time the fab comes online in 2024 (which seems optimistic), 4nm should be a half-step generation or so behind. TSMC also has a dozen or so fabs in Asia, so it's not clear how the single plant in Arizona is going to meet capacity requirements or how often that plant will be retrofitted with newer equipment. This plant and the federal subsidies backing it seem more like a way for defense contractors to domestically source relatively recent fab processes over the next couple decades rather than something intended solely for consumer products. The fact that consumer facing companies are interested in using the fab when it comes online doesn't necessarily mean they'll still be using it 10 years from now unless TSMC keeps it up to date.

NeverFade 4y ago
TSMC expects to begin mass production of 3nm chips in its Taiwan fabs by 2023 Q4: https://seekingalpha.com/article/4546779-tsmc-no-3nm-soon https://seekingalpha.com/article/4546779-tsmc-no-3nm-soon This isn't my field, but I'm not sure what's the excitement about an Arizona plant that will optimistically start production a year later with an older process.
- tnel77 4y ago
  Indeed. There are zero domestic use cases for that ancient 4nm tech…
  - 0cf8612b2e1e 4y ago
    How many consumers or even servers are running latest generation? 4nm indeed seems like it would have legs for a long time.
    - tnel77 4y ago
      Exactly. I get how having the latest and greatest would be ideal, but scoffing at 4nm seems silly to me.
- metalliqaz 4y ago

ksec 4y ago

I don't see anything changing yet in terms of Global Influence. TSMC will still have their leading edge, state of art, and majority of capacity in Taiwan for the foreseeable future. The 4nm US Fab, based on N5, will be two years behind in 2024, where TSMC will be producing N3 class in volume and N2 in 2025. Given the N3 Class are long node before moving to something more exotic and expensive N2 with GAFFET. I would expect the US Fab to be upgraded and start producing N3 in 2026 on US Soil.

chaosbolt 4y ago

Chip manufacturing is both the reason everyone is protecting them and also why China wants them so bad.

andy_ppp 4y ago
No the reason they want to invade is to project power into the wider pacific, nationalism, imperialism and the people and human capital not just limited to semi conductors. The factories will be destroyed in any invasion, the US will guarantee it, I promise.
- amelius 4y ago
  > The factories will be destroyed in any invasion, the US will guarantee it I promise. Maybe the place isn't so safe after all.
- bpanon 4y ago
  On what basis do you predict the US will destroy the factories?
  - arghnoname 4y ago
    I doubt the parent has access to American war plans, but it's reasonable to guess that the US would prefer for China not to have intact TSMC plants because it provides enormous leverage. It's the same as blowing up Nordstream II. This is standard war stuff, and if the US is at war with China, heavy sanctions, etc, we wouldn't be able to buy the chips anyway. Why not drop a cruise missile on it? Personally I hope such a thing doesn't happen. If I had to guess, Taiwan will eventually come under mainland China's control, but I hope this is done very slowly and in a bloodless way following a referendum by the Taiwanese themselves (e.g., only after certain guarantees of autonomy are made and the Taiwanese opt for the 'easy route'). I doubt mainland China will accept this thorn in their side indefinitely.
    - riversflow 4y ago
      > e.g., only after certain guarantees of autonomy are made and the Taiwanese opt for the 'easy route' Is that really so plausible after what happened in Hong Kong?

trompetenaccoun 4y ago

They're not closing shop in Taiwan, rather manufacturers are shifting away from China and the US government is probably encouraging/subsidizing new plants there. So this is overall a good healthy development that should have happened many years ago.

pphysch 4y ago

> TSMC with its global influence has been a huge factor for guaranteeing safety of the island and peace in the Taiwan strait. This narrative is echoed around the internet, but if you study the actual history of the Taiwan Strait Crises (which started before the semiconductor was invented), it never comes up in official discussion or analysis. See Kissinger, for example. Cynically, this narrative was possibly promoted by the USG/Taiwan-lobby to put lipstick on what has always been a naked display of power politics. Washington wants its First Island Chain to contain China [1], and Beijing doesn't want Washington to have it. [1] - https://en.wikipedia.org/wiki/Island_chain_strategy https://en.wikipedia.org/wiki/Island_chain_strategy

sopchi 4y ago
I was very surprised to find in the recent New Yorker long article about Chinese-Taiwanese Relations [1] that TSMC was only mentioned at the very end. I was expecting this to be central to the story. I recommend reading the whole thing to anyone who has an hour to spare. "One of the most important deterrents to war is Taiwan’s role in producing semiconductors. Seventy per cent of the world’s most advanced chips are manufactured there, many of them at the Taiwanese Semiconductor Manufacturing Company. [...] China is similarly reliant on the highest-end chips produced in Taiwan; it doesn’t have the equipment or the expertise to manufacture them. If China seized control of Taiwan’s semiconductor factories, it could conceivably force local workers to run them. But the factories depend on a constant flow of Western material, software, expertise, and engineers, without which production would cease in a matter of weeks. Pottinger told me, “If the Chinese took the factories, there’s no way the West would help run them.”" [1] https://www.newyorker.com/magazine/2022/11/21/a-dangerous-game-over-taiwan https://www.newyorker.com/magazine/2022/11/21/a-dangerous-ga...
wahern 4y ago
> Cynically, this narrative was possibly promoted by the USG/Taiwan-lobby to put lipstick on what has always been a naked display of power politics. I also suspect this narrative is at the very least supported if not conceived by Taiwan as propaganda. But we don't need to be cynical. What this narrative does is establish in the minds of Americans a shared interest in Taiwan and, arguably, even a shared identity. That's not intrinsically bad, malicious, nor even disingenuous on the part of the Taiwanese. Especially for a country as large and resource rich (in every meaning of the term) as the United States, all overseas interests and identities are built principally on fictions; some built very deliberately, but many which grew organically. IMO, the high technology dependency narrative fits comfortably between pure ideology (democratic solidarity!) and pure real politick, e.g. oil. Unlike the case with oil interests, the narrative speaks to a coevolution of our industrial and economic bases on equal terms in tandem with political ideology, and thus posits a shared future. And given how quickly and easily the narrative has spread, it has a strong organic character to it--even if Taiwanese political strategists planted the seeds, the soil was more than accommodating. Such a crafted narrative to me seems more like an invitation than manipulation. (Either way, admittedly such characterizations are dependent on one's chosen perspective.) Nonetheless, it should be recognized for what it is; taken literally it leads to erroneous conclusions. If the U.S. aggressively defends Taiwan in an invasion attempt, it won't be because of TSMC and fears of a chip shortage; it'll be because the American public has become invested in the idea of a free and democratic Taiwan, and willing to believe and accept that the US's long-term self-interests are furthered by putting itself and its citizens in the way of considerable, even existential harm. The story of TSMC would just be one of many--albeit an important one--along the road which brought the nation to that state of mind.

wnevets 4y ago

> Not so good news for Taiwan. Doubtful. This is obviously in exchange for continued military support from America. Protection from the world's greatest Navy is well worth a single chip plant.

TEP_Kim_Il_Sung 4y ago

*China (Best China, not to be confused with West China) Great for Arizona. Hope it brings them jobs.

Maursault 4y ago
> Great for Arizona. Hope it brings them jobs. And water!
- TEP_Kim_Il_Sung 4y ago
  Arizona water is being used by U.S. subsidized foreign-owned farms. https://www.azcentral.com/in-depth/news/local/arizona-environment/2019/12/05/biggest-water-users-arizona-farms-keep-drilling-deeper/3937582002/ https://www.azcentral.com/in-depth/news/local/arizona-enviro...

hammock 4y ago

black_puppydog 4y ago
Think about that for a second: why would they want to be relocated? And when is the last time you can remember someone deciding "let's relocate these other people that I'm not part of" and that being okay? I mean, one of these relocations is literally called "march of tears".
- hammock 4y ago
  35 million or so Latin Americans have relocated themselves to the US, even piled into dark crowded trucks and given up their life savings to dangerous coyotes, to do so. I would imagine the the specter of Communist China knocking on your door and breathing down your neck would be a motivator for many Taiwanese. And there would be a great opportunity for the US to welcome them with open arms as allies
  - deleted 4y ago
    [deleted]
  - puffoflogic 4y ago
    You're assuming the population of Taiwan views itself in the same position vis a vis CCP as the government of Taiwan does, which is not a historically probable claim, for all that the situation is quite complex.
    - hammock 4y ago
      As far as I can see no one in this thread was taking about “the government of Taiwan” (a complicated term in itself), just the people of Taiwan.

anigbrowl 4y ago

Fair point, but the rest of the world will still be customers for chips made in Taiwan, and US defense promises to Taiwan are likely worth more if the economic flows are not just unidirectional.

credit_guy 4y ago

> The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. That's a very cynical view. What exactly does Ukraine produce that's so important for the West?

_kbh_ 4y ago
https://www.reuters.com/technology/exclusive-ukraine-halts-half-worlds-neon-output-chips-clouding-outlook-2022-03-11/ https://www.reuters.com/technology/exclusive-ukraine-halts-h... > WASHINGTON, March 11 (Reuters) - Ukraine's two leading suppliers of neon, which produce about half the world's supply of the key ingredient for making chips, have halted their operations as Moscow has sharpened its attack on the country, threatening to raise prices and aggravate the semiconductor shortage.
- credit_guy 4y ago
  “Neon Gas Market size is forecast to reach $61.46 million by 2025” [1]. The US has given Ukraine more than 50 billion in military aid. That’s more than double the annual neon gas market … every single day. [1] https://www.industryarc.com/Research/Neon-Gas-Market-Research-501412 https://www.industryarc.com/Research/Neon-Gas-Market-Researc...
philwelch 4y ago
Every Russian soldier, vehicle, or round of ammunition expended in Ukraine for increasingly diminishing returns is a Russian soldier, vehicle, or round of ammunition that will never harm a NATO member.
- rsj_hn 4y ago
  > Every Russian soldier, vehicle, or round of ammunition expended in Ukraine for increasingly diminishing returns is a Russian soldier, vehicle, or round of ammunition that will never harm a NATO member. Sure, and it's also 10 dead Ukrainian soldiers that will never return to their families, and a few thousand people living an extra day in war, and a few hundred more Ukrainian refugees that must be subsidized in Europe, a few dead Ukrainian civilians that die of Russian shelling, and a few dead Ukrainian civilians in Donbas that die of Ukrainian shelling, and the further demilitarization of both NATO and the US as they run out of munitions and equipment to send (and lack the industrial base to make up for the shortfall). It is also a few more percent lopped off of European GDP as the continent plunges into a steep recession due to the energy crisis. It is only by weighing of the lives of the people in the conflict at zero that the U.S. justifies prolonging this proxy war and continuing to arm and subsidize Ukraine. It is truly willing to fight Russia until the last Ukrainian, and until Europe is completely de-industrialized.

dontbenebby 4y ago

>Great news for the US. Great news for Apple, AMD, and Nvidia. Not so good news for Taiwan. The fact that the whole tech world is dependent on chips produced in Hsinchu is a huge advantage for the safety of Taiwan. Moving the fabs and talent further away from the island will not benefit the people of Taiwan at all. Is it possible part of why China wants control of China is to control these factories, so if they move production to America paired with demanding existing diplomatic agreements be honored, China will be less obsessed with seizing, for lack of better phrasing, a unique resource?

Der_Einzige 4y ago

The people of Taiwan appear to have decided that they support peaceful unification given how they voted for the KMT this election.

philwelch 4y ago

The CCP’s intensifying rhetoric about unification paired with Taiwan’s low level of military readiness is somewhat troubling and I’m not sure how much TSMC is going to help matters on its own. A lot of Taiwanese elites have vested interests on the mainland, and CCP subversion and espionage are reportedly rampant. At some point Taiwan is going to have to be willing to actually defend their sovereignty.