4 ms·

Because without it they will build somewhere cheaper to operate and then U.S. doesn’t have a fab if/when China absorbs Taiwan. It’s not that difficult of a con

Because without it they will build somewhere cheaper to operate and then U.S. doesn’t have a fab if/when China absorbs Taiwan. It’s not that difficult of a concept. And no, like others will inevitably suggest you can’t just legislate a multinational company to build its facilities onshore because you need them to. If you need something from a company you make it worthwhile, which is what’s happening here.

anonymousDan 3y ago
I mean, you quite clearly can legislate that. Whether it's a good idea or nonis a separate question.
- transcriptase 3y ago
  True. It comes down to whether or not it will cost more than $8 billion to attempt. And what would the enforcement mechanism be? “Sorry Intel, if you’re not going to play along with our attempt to coerce you into making sure we have a supply of chips then we’re not going to allow you to sell chips here.” Seems a bit self-defeating.
  - ethanbond 3y ago
    It has worked just splendidly before: https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nationalization https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nation...
eecc 3y ago
Well, no? You can always target the company wirh crippling import tariffs unless it gets onto a roadmap to re-shore the strategic production you want them to. Of course, whether it works or not depends on your leverage as a country: the US should easily pull it off, it's the legislator that doesn't want to play that card for political positioning reasons.
- transcriptase 3y ago
  Crippling tariffs on the thing you’re trying to secure access to. And what happens when China says to Intel “here’s 60 billion a year, don’t worry about America just keep doing what you do best”?
  - ethanbond 3y ago
    Easy: https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nationalization https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nation...
ejb999 3y ago
tariffs and or new taxes on the chips imported from other countries would have served that same purpose - without the need for more billions of corporate welfare.
justin66 3y ago
> And no, like others will inevitably suggest you can’t just legislate a multinational company to build its facilities onshore because you need them to. It’s weird that people have forgotten this is a thing the government can do.
- transcriptase 3y ago
  Even weirder that people have forgotten about the concept of second order effects. Which would cost the nation more? a) Setting a modern precedent that any company doing business in the U.S. can suddenly be treated as if they’re somehow owned by the U.S. government and forced to make capital expenditures against their will. b) A $8 billion subsidy that will eventually be recouped or at least offset by economic benefits.
  - justin66 3y ago
    I was just pointing out the silliness of acting as if a possible thing that’s been done before is impossible. I wasn’t advocating a course of action. Pretty much every time we arrange things to favor or necessitate domestic production in an industry, it’s done in the name of security (defense contracting and agriculture come to mind). Including semiconductors in that category is not crazy, and there is certainly more than one way to bring about those incentives.
  - pjc50 3y ago
    > Setting a modern precedent that any company doing business in the U.S. can suddenly be treated as if they’re somehow owned by the U.S. government and forced to make capital expenditures against their will. It's amazing how many people on here seem to think that the first response to China should be to turn the US into China and start doing state-directed capitalism. Maybe "disappear" a few dissident CEOs.
    - transcriptase 3y ago
      No kidding. I never thought I would see a thread on here polluted with people saying the United States should start behaving like an authoritarian communist apparatus and nationalize or arbitrarily coerce corporations versus coming to a mutually beneficial financial arrangement.
lancesells 3y ago
I'm not advocating or endorsing China invading Taiwan here but would that mean chips stop coming? Or is the fear they get backdoored? Would $8B be better used for a startup instead of IBM? Or is $8B far too low for a new company.
- pjc50 3y ago
  Capturing TSMC intact by force is .. unlikely. Assuming it survives the fighting, there's definitely both Taiwanese and US factions advocating for blowing it up. https://press.armywarcollege.edu/cgi/viewcontent.cgi?article=3089&context=parameters https://press.armywarcollege.edu/cgi/viewcontent.cgi?article... ; all it would take is one patriotic officer in the retreat to decide to deny it to the enemy by chucking a grenade in the clean room, and the equipment is toast. Russia burnt down Moscow to deny it to Napoleon, and Hitler ordered that the same be done to Paris (but in that case the officers decided not to obey). A more likely scenario is simply that threats and internal political pressure cause Taiwan to ""voluntarily"" unify with the mainland. $8bn buys you about one (1) fab, but you also need the staff and institutional knowledge to run it, so realistically it has to go to some company that is already operating a similar fab.
constantcrying 3y ago
>And no, like others will inevitably suggest you can’t just legislate a multinational company to build its facilities onshore because you need them to. Of course you can. But if you do, you have to accept the consequences. Again and again people here pretend that just becythe government does it there will be no consequences.

anonymousDan 3y ago

I mean, you quite clearly can legislate that. Whether it's a good idea or nonis a separate question.

transcriptase 3y ago
True. It comes down to whether or not it will cost more than $8 billion to attempt. And what would the enforcement mechanism be? “Sorry Intel, if you’re not going to play along with our attempt to coerce you into making sure we have a supply of chips then we’re not going to allow you to sell chips here.” Seems a bit self-defeating.
- ethanbond 3y ago
  It has worked just splendidly before: https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nationalization https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nation...

eecc 3y ago

Well, no? You can always target the company wirh crippling import tariffs unless it gets onto a roadmap to re-shore the strategic production you want them to. Of course, whether it works or not depends on your leverage as a country: the US should easily pull it off, it's the legislator that doesn't want to play that card for political positioning reasons.

transcriptase 3y ago
Crippling tariffs on the thing you’re trying to secure access to. And what happens when China says to Intel “here’s 60 billion a year, don’t worry about America just keep doing what you do best”?
- ethanbond 3y ago
  Easy: https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nationalization https://en.wikipedia.org/wiki/Merck_&_Co.?wprov=sfti1#Nation...

ejb999 3y ago

tariffs and or new taxes on the chips imported from other countries would have served that same purpose - without the need for more billions of corporate welfare.

justin66 3y ago

> And no, like others will inevitably suggest you can’t just legislate a multinational company to build its facilities onshore because you need them to. It’s weird that people have forgotten this is a thing the government can do.

transcriptase 3y ago
Even weirder that people have forgotten about the concept of second order effects. Which would cost the nation more? a) Setting a modern precedent that any company doing business in the U.S. can suddenly be treated as if they’re somehow owned by the U.S. government and forced to make capital expenditures against their will. b) A $8 billion subsidy that will eventually be recouped or at least offset by economic benefits.
- justin66 3y ago
  I was just pointing out the silliness of acting as if a possible thing that’s been done before is impossible. I wasn’t advocating a course of action. Pretty much every time we arrange things to favor or necessitate domestic production in an industry, it’s done in the name of security (defense contracting and agriculture come to mind). Including semiconductors in that category is not crazy, and there is certainly more than one way to bring about those incentives.
- pjc50 3y ago
  > Setting a modern precedent that any company doing business in the U.S. can suddenly be treated as if they’re somehow owned by the U.S. government and forced to make capital expenditures against their will. It's amazing how many people on here seem to think that the first response to China should be to turn the US into China and start doing state-directed capitalism. Maybe "disappear" a few dissident CEOs.
  - transcriptase 3y ago
    No kidding. I never thought I would see a thread on here polluted with people saying the United States should start behaving like an authoritarian communist apparatus and nationalize or arbitrarily coerce corporations versus coming to a mutually beneficial financial arrangement.

lancesells 3y ago

I'm not advocating or endorsing China invading Taiwan here but would that mean chips stop coming? Or is the fear they get backdoored? Would $8B be better used for a startup instead of IBM? Or is $8B far too low for a new company.

pjc50 3y ago
Capturing TSMC intact by force is .. unlikely. Assuming it survives the fighting, there's definitely both Taiwanese and US factions advocating for blowing it up. https://press.armywarcollege.edu/cgi/viewcontent.cgi?article=3089&context=parameters https://press.armywarcollege.edu/cgi/viewcontent.cgi?article... ; all it would take is one patriotic officer in the retreat to decide to deny it to the enemy by chucking a grenade in the clean room, and the equipment is toast. Russia burnt down Moscow to deny it to Napoleon, and Hitler ordered that the same be done to Paris (but in that case the officers decided not to obey). A more likely scenario is simply that threats and internal political pressure cause Taiwan to ""voluntarily"" unify with the mainland. $8bn buys you about one (1) fab, but you also need the staff and institutional knowledge to run it, so realistically it has to go to some company that is already operating a similar fab.

constantcrying 3y ago

>And no, like others will inevitably suggest you can’t just legislate a multinational company to build its facilities onshore because you need them to. Of course you can. But if you do, you have to accept the consequences. Again and again people here pretend that just becythe government does it there will be no consequences.