10 ms·

TSMC to charge premium for making chips outside of Taiwan, including its US fabs

32 points by hunglee2 3y ago

wutwutwat 3y ago
Complying with OSHA ain’t cheap folks, and lol if you think they will absorb those costs. Now you’re incentivized to continue sending your business overseas where taxes, if any, and jobs, continue to foster the growth of another economy, while their fab locations here give them a US legal presence, and all the advantages that having a physical presence affords. You can also choose to willingly pay more to have your roof replaced if you don’t want to run a free advertisement sign for the roofing company. Nobody is going to choose to spend more money for the same exact outcome, especially not corporations beholden to shareholders, whose bonus checks are based on profits. Will these fabs see use? Sure, but I bet only when other fabs are booked or some other fulfillment or capacity issue prevents the Taiwan fabs from being used and the extra cost is the lesser of two evils vs not producing anything at all
- phantomathkg 3y ago
  Not to mention the salary in Taiwan is cheaper than the US.
- aftbit 3y ago
  I wonder if we'll see some companies prefer the shorter supply chain over the lower price. Surely there will be enough business cycles for the memories from COVID to fade soon, but perhaps at least some of the military-industrial complex companies will prefer Made in USA if just for politics.
  - novia 3y ago
    There is actually phrasing in a lot of government funding terms and conditions which obligate the receiver to buy things Made in America. The place I saw it was in the SBA loans that were given out during COVID.
- outside1234 3y ago
  So we slap an OSHA and pollution tariff on chips made outside the US.
  - jakogut 3y ago
    It seems that likely that would further exacerbate the inflation we've been seeing for years now.
    - ericmay 3y ago
      Probably, but the goal isn't consumerism and lowest possible price at all costs.
      - chasil 3y ago
        Remember that these costs are passed down to you.
        ericmay 2y ago
        Generally speaking higher costs are probably a good thing. It depends on what you value. If all we cared about were lower costs we would enslave people and make them make things cheaper and we would pollute the environment without any consideration. Conversely we may have more expensive products but be able to avoid or minimize some of these awful things.
- deeviant 3y ago
  You seem completely oblivious of the high likelihood of China invading Taiwan in the next 5 years. That will make the covid chip supply disruptions look like a supply chain nirvana in comparison. Any large corporation with more than 2 braincells at the helm is going to want to hedge against Total Supply Annihilation.
  - exe34 3y ago
    I wonder if they'd consider sabotage of these fabs first, to wean us off their chips and then invade further down the line.
    - wutwutwat 3y ago
      Idk but we should probably preemptively strike to ensure no such thing happens, what do you say? /s I hope you aren’t really this paranoid and distrusting of other humans. Man, folks don’t realize how indoctrinated they are into this bullshit. Nobody has done anything, but look at what you’re talking about.
      - exe34 3y ago
        I really am this paranoid, which is why I believe we should have self-sufficiency in fundamental industries like fabs, steel, energy and food production. > Nobody has done anything, but look at what you’re talking about. Isn't that the same bullshit that moved Germany off nuclear and onto Russian gas? I wonder if anything happened because of that....
        exe34 3y ago
        Ps: it's not paranoia if they're out to get you!
  - wnevets 3y ago
    > You seem completely oblivious of the high likelihood of China invading Taiwan in the next 5 years. I get that there is a lot of saber-rattling taking place but that isn't going to happen.
gradientsrneat 3y ago
Doesn't seem malicious given higher cost of living in, for example, Arizona vs Taiwan. Labor unions pushing for American labor are to be expected, and likely in line with usgov's stated goals for CHIPS act.
deleted 3y ago
[deleted]
maxglute 3y ago
So whose going to pay the premium except military? Even then, would they have the demand to pack the fabs and keep it viable? Especially during next cycle of overcapcity. Are we going to have North American skus of graphics card that comes at premium? TW not going to be happy if commerical goods shift away from TW fabs that keep TWnese employed.
chasil 3y ago
This seems completely reasonable, from what is said in this interview. "We all take two years to develop one generation, how come you guys can do it in one or one-and-a-half year?" And they asked if some of your customer transfer technology to you or what not? And I told him, "No," I told him that, "That's not true." I think he probably implied we steal technology from customer, the way he talk. And I say, "I'll tell you why." I said that, "When we develop one node, basically you have some learning cycles. First, you do some simulation. And you have some idea, then you run wafers to prove that. So, you run a group of wafers according to simulation and you have some splits. The wafer runs through the fab, they come out and you measure them, you analyze them, and you try to improve and you run this again. This again, you run. So, this is learning cycle." At that time, "It takes about six learning cycle , roughly, to complete one generation." Of course, you had some short loops and not just one. I said that, "My R&D wafer in the fab run much faster than yours, because my R&D engineer works three shifts and you only work one shift. So, your R&D wafer move eight hours a day, my work/move 24-hours a day. So, my wafers go three times faster, even if you are twice smarter than me, I still beat you up." <laughter> . . . And what interesting at that time, the board member from Motorola, I just remember, his name was Bill Walker. . . Bill Walker. He's a big, big guy. Later on, I found he used to be a Marine. I knew that later. . . Because he was one of my very large customers, I usually visit him once a year. I went over with our sales manager and the two of us usually went to his office. And he had one of his Supply Chain Manager - four of us sit-down. Usually Bill would give us a lecture telling us what we did wrong and how bad we behaved. I took notes. The meeting lasts an hour. Next time I visit him, they took me to a different room. I found it a little bit different. When they opened the door, there were about 20 people around the table. He was in charge of R&D and the manufacturing for Motorola Semiconductor Worldwide. He said, "These are my R&D and the fab managers in the entire world. I got them together. I want you to tell the same story to them." <laughter> So, that was what I always told them but they didn’t listen. https://www.computerhistory.org/collections/catalog/102792671 https://www.computerhistory.org/collections/catalog/10279267...
ChrisArchitect 3y ago
[dupe] Discussion: https://news.ycombinator.com/item?id=40078065 https://news.ycombinator.com/item?id=40078065
torpfactory 3y ago
Back when I was in semiconductors in the US (worked for a prominent wafer fab equipment vendor), there was a push to improve efficiency by logging all your hours, describing the projects you were doing, and giving them subjective importance scores. My manager was like- "Don't waste your time on that, its worthless. Everyone ends up reporting they are working 110% on the most important projects if you ask them." Anyways the fabs in the US always had lower employee efficiency because the Taiwanese and Korean fabs would always show their employees managing to get installs or maintenance done in record time without any using any overtime. What was happening was simple wage theft: employees were expected to complete unpaid overtime. That was the culture, which rolled downhill from the TSMC and Samsung fab managers: your teams either work unpaid overtime or they find another job. Occasionally US based personnel would go over to help if there was a big install effort or something. The local account teams didn't like doing this because the US guys wouldn't work unpaid. Thus the install hours would start creeping up and it made them look bad.

32 points by hunglee2 3y ago

Complying with OSHA ain’t cheap folks, and lol if you think they will absorb those costs. Now you’re incentivized to continue sending your business overseas where taxes, if any, and jobs, continue to foster the growth of another economy, while their fab locations here give them a US legal presence, and all the advantages that having a physical presence affords. You can also choose to willingly pay more to have your roof replaced if you don’t want to run a free advertisement sign for the roofing company. Nobody is going to choose to spend more money for the same exact outcome, especially not corporations beholden to shareholders, whose bonus checks are based on profits. Will these fabs see use? Sure, but I bet only when other fabs are booked or some other fulfillment or capacity issue prevents the Taiwan fabs from being used and the extra cost is the lesser of two evils vs not producing anything at all

phantomathkg 3y ago
Not to mention the salary in Taiwan is cheaper than the US.
aftbit 3y ago
I wonder if we'll see some companies prefer the shorter supply chain over the lower price. Surely there will be enough business cycles for the memories from COVID to fade soon, but perhaps at least some of the military-industrial complex companies will prefer Made in USA if just for politics.
- novia 3y ago
  There is actually phrasing in a lot of government funding terms and conditions which obligate the receiver to buy things Made in America. The place I saw it was in the SBA loans that were given out during COVID.
outside1234 3y ago
So we slap an OSHA and pollution tariff on chips made outside the US.
- jakogut 3y ago
  It seems that likely that would further exacerbate the inflation we've been seeing for years now.
  - ericmay 3y ago
    Probably, but the goal isn't consumerism and lowest possible price at all costs.
    - chasil 3y ago
      Remember that these costs are passed down to you.
      - ericmay 2y ago
        Generally speaking higher costs are probably a good thing. It depends on what you value. If all we cared about were lower costs we would enslave people and make them make things cheaper and we would pollute the environment without any consideration. Conversely we may have more expensive products but be able to avoid or minimize some of these awful things.
deeviant 3y ago
You seem completely oblivious of the high likelihood of China invading Taiwan in the next 5 years. That will make the covid chip supply disruptions look like a supply chain nirvana in comparison. Any large corporation with more than 2 braincells at the helm is going to want to hedge against Total Supply Annihilation.
- exe34 3y ago
  I wonder if they'd consider sabotage of these fabs first, to wean us off their chips and then invade further down the line.
  - wutwutwat 3y ago
    Idk but we should probably preemptively strike to ensure no such thing happens, what do you say? /s I hope you aren’t really this paranoid and distrusting of other humans. Man, folks don’t realize how indoctrinated they are into this bullshit. Nobody has done anything, but look at what you’re talking about.
    - exe34 3y ago
      I really am this paranoid, which is why I believe we should have self-sufficiency in fundamental industries like fabs, steel, energy and food production. > Nobody has done anything, but look at what you’re talking about. Isn't that the same bullshit that moved Germany off nuclear and onto Russian gas? I wonder if anything happened because of that....
      - exe34 3y ago
        Ps: it's not paranoia if they're out to get you!
- wnevets 3y ago
  > You seem completely oblivious of the high likelihood of China invading Taiwan in the next 5 years. I get that there is a lot of saber-rattling taking place but that isn't going to happen.

gradientsrneat 3y ago

Doesn't seem malicious given higher cost of living in, for example, Arizona vs Taiwan. Labor unions pushing for American labor are to be expected, and likely in line with usgov's stated goals for CHIPS act.

deleted 3y ago

[deleted]

maxglute 3y ago

So whose going to pay the premium except military? Even then, would they have the demand to pack the fabs and keep it viable? Especially during next cycle of overcapcity. Are we going to have North American skus of graphics card that comes at premium? TW not going to be happy if commerical goods shift away from TW fabs that keep TWnese employed.

chasil 3y ago

This seems completely reasonable, from what is said in this interview. "We all take two years to develop one generation, how come you guys can do it in one or one-and-a-half year?" And they asked if some of your customer transfer technology to you or what not? And I told him, "No," I told him that, "That's not true." I think he probably implied we steal technology from customer, the way he talk. And I say, "I'll tell you why." I said that, "When we develop one node, basically you have some learning cycles. First, you do some simulation. And you have some idea, then you run wafers to prove that. So, you run a group of wafers according to simulation and you have some splits. The wafer runs through the fab, they come out and you measure them, you analyze them, and you try to improve and you run this again. This again, you run. So, this is learning cycle." At that time, "It takes about six learning cycle , roughly, to complete one generation." Of course, you had some short loops and not just one. I said that, "My R&D wafer in the fab run much faster than yours, because my R&D engineer works three shifts and you only work one shift. So, your R&D wafer move eight hours a day, my work/move 24-hours a day. So, my wafers go three times faster, even if you are twice smarter than me, I still beat you up." <laughter> . . . And what interesting at that time, the board member from Motorola, I just remember, his name was Bill Walker. . . Bill Walker. He's a big, big guy. Later on, I found he used to be a Marine. I knew that later. . . Because he was one of my very large customers, I usually visit him once a year. I went over with our sales manager and the two of us usually went to his office. And he had one of his Supply Chain Manager - four of us sit-down. Usually Bill would give us a lecture telling us what we did wrong and how bad we behaved. I took notes. The meeting lasts an hour. Next time I visit him, they took me to a different room. I found it a little bit different. When they opened the door, there were about 20 people around the table. He was in charge of R&D and the manufacturing for Motorola Semiconductor Worldwide. He said, "These are my R&D and the fab managers in the entire world. I got them together. I want you to tell the same story to them." <laughter> So, that was what I always told them but they didn’t listen. https://www.computerhistory.org/collections/catalog/102792671 https://www.computerhistory.org/collections/catalog/10279267...

ChrisArchitect 3y ago

[dupe] Discussion: https://news.ycombinator.com/item?id=40078065 https://news.ycombinator.com/item?id=40078065

torpfactory 3y ago

Back when I was in semiconductors in the US (worked for a prominent wafer fab equipment vendor), there was a push to improve efficiency by logging all your hours, describing the projects you were doing, and giving them subjective importance scores. My manager was like- "Don't waste your time on that, its worthless. Everyone ends up reporting they are working 110% on the most important projects if you ask them." Anyways the fabs in the US always had lower employee efficiency because the Taiwanese and Korean fabs would always show their employees managing to get installs or maintenance done in record time without any using any overtime. What was happening was simple wage theft: employees were expected to complete unpaid overtime. That was the culture, which rolled downhill from the TSMC and Samsung fab managers: your teams either work unpaid overtime or they find another job. Occasionally US based personnel would go over to help if there was a big install effort or something. The local account teams didn't like doing this because the US guys wouldn't work unpaid. Thus the install hours would start creeping up and it made them look bad.