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>I think the TSMC restrictions on China is really bad for Taiwan in the next few years. First, it’s a huge revenue loss for Taiwan. TSMC sells more than it is

>I think the TSMC restrictions on China is really bad for Taiwan in the next few years. First, it’s a huge revenue loss for Taiwan. TSMC sells more than it is capable of producing. This will likely continue to be a limiter for the foreseeable future. No revenue is being lost as a result of limiting export to China. >Second, it creates a scenario in which China would take military action on Taiwan if they fall behind too far in AI due to the lack of the most advanced chips. China's interest in Taiwan existed long before TSMC, it is ideological, not economical. >If I’m a Taiwan citizen, I would clamor for the government to negotiate with the US and Chinese government to allow Chinese companies to use TSMC fabs. It’s one sure way to delay military action. I am a Taiwan citizen and the majority of us don't want this, evident by the results of our recent election. That said, see prior point.

aurareturn 2y ago
TSMC sells more than it is capable of producing. This will likely continue to be a limiter for the foreseeable future. No revenue is being lost as a result of limiting export to China. First, TSMC's capacity isn't full right now. Second, if China relies on TSMC, they'd expand by building more fabs. Third, with more competition from China, they can increase the price of their nodes for all their customers. Fourth, China pushing harder to compete directly against TSMC because of this ban. China's interest in Taiwan existed long before TSMC, it is ideological, not economical. Agreed. I think China is willing to destroy the entire island to bring it back into control, which is not what's best for Taiwan people. I am a Taiwan citizen and the majority of us don't want this, evident by the results of our recent election. That said, see prior point. I guess there is a difference between what you want as a Taiwan resident and what I personally think is best for the island. I think Taiwan is being put as a sacrificial lamb almost by the US and I think it's in Taiwan's best interest to play to both sides more.
- frankacter 2y ago
  >First, TSMC's capacity isn't full right now. Taiwan fabrication labs, where the most cutting edge tech is produced, are above capacity. This is the core of this discussion. They are building new fabs inside and outside of Taiwan to catch up to demand, but as of now those are one or more generations behind. To the rest of your initial statement, it starts with a flawed premise so not worth responding. >I think Taiwan is being put as a sacrificial lamb almost by the US and I think it's in Taiwan's best interest to play to both sides more. I am citizen, not a resident. Taiwan's position as the first chain island is it's primary strategic advantage to both US as well as other Asian neighboring countries in the region. Taiwan follows international law in effort to maintain and regain it's international standing. Taiwan maintains diplomatic and trade relations with China,but recognize that China is actively taking direct actions to limit Taiwan's political and economical relations and growth. Reliance on a hostile neighbor that continually reminds you they will force unification by military action if necessary is a losing game, and trusting carrots like "one nation, two systems" lost all credibility with the downfall of Hong Kong.
  - aurareturn 2y ago
    >Taiwan fabrication labs, where the most cutting edge tech is produced, are above capacity. This is the core of this discussion. Total TSMC capacity is at around 70-80%. During covid, it was peak at near 100%. I mean, the fact that you think having Chinese customers freely bid on TSMC wafers does not increase TSMC revenue is silly. Basic economics. More demand you have, more revenue. >Reliance on a hostile neighbor that continually reminds you they will force unification by military action if necessary is a losing game, and trusting carrots like "one nation, two systems" lost all credibility with the downfall of Hong Kong. I'm in Hong Kong right now. I don't consider it a downfall. In fact, Hong Kong is wealthy BECAUSE of China. Taiwan is also wealthy because of trade with China. My point is that Taiwan should play both sides more instead of just one.
    - frankacter 2y ago
      >Total TSMC capacity is at around 70-80%. I specifically distinguished Taiwan on island capacity vs TSMC global capacity in my prior reply. Taiwan TSMC fabs producing cutting edge fabrication is at 100% capacity. Taiwan is the specific topic of this post which is why I offer the differentiation. As for the rest of your reply, we can agree to disagree. Have a good day.
      - aurareturn 2y ago
        I specifically distinguished Taiwan on island capacity vs TSMC global capacity in my prior reply. Taiwan TSMC fabs producing cutting edge fabrication is at 100% capacity. Taiwan is the specific topic of this post which is why I offer the differentiation. Well yea, the most cutting edge node such as N3 are pre-sold and in high demand. It doesn't make your statement about banning Chinese companies from using TSMC fabs having no effect on revenue right. That's just divorced from basic supply and demand economics.
        frankacter 2y ago
        >That's just divorced from basic supply and demand economics. Myopic views of demand assuming unlimited supply and no consideration to political and long term economical independence from a neighboring authoritarian communist regime pointing nuclear weapons at you threatening forced unification is divorced from reality. Short term sales never negate long term consequences of golden handcuffs at the cost of freedom and democracy.

aurareturn 2y ago

TSMC sells more than it is capable of producing. This will likely continue to be a limiter for the foreseeable future. No revenue is being lost as a result of limiting export to China. First, TSMC's capacity isn't full right now. Second, if China relies on TSMC, they'd expand by building more fabs. Third, with more competition from China, they can increase the price of their nodes for all their customers. Fourth, China pushing harder to compete directly against TSMC because of this ban. China's interest in Taiwan existed long before TSMC, it is ideological, not economical. Agreed. I think China is willing to destroy the entire island to bring it back into control, which is not what's best for Taiwan people. I am a Taiwan citizen and the majority of us don't want this, evident by the results of our recent election. That said, see prior point. I guess there is a difference between what you want as a Taiwan resident and what I personally think is best for the island. I think Taiwan is being put as a sacrificial lamb almost by the US and I think it's in Taiwan's best interest to play to both sides more.

frankacter 2y ago
>First, TSMC's capacity isn't full right now. Taiwan fabrication labs, where the most cutting edge tech is produced, are above capacity. This is the core of this discussion. They are building new fabs inside and outside of Taiwan to catch up to demand, but as of now those are one or more generations behind. To the rest of your initial statement, it starts with a flawed premise so not worth responding. >I think Taiwan is being put as a sacrificial lamb almost by the US and I think it's in Taiwan's best interest to play to both sides more. I am citizen, not a resident. Taiwan's position as the first chain island is it's primary strategic advantage to both US as well as other Asian neighboring countries in the region. Taiwan follows international law in effort to maintain and regain it's international standing. Taiwan maintains diplomatic and trade relations with China,but recognize that China is actively taking direct actions to limit Taiwan's political and economical relations and growth. Reliance on a hostile neighbor that continually reminds you they will force unification by military action if necessary is a losing game, and trusting carrots like "one nation, two systems" lost all credibility with the downfall of Hong Kong.
- aurareturn 2y ago
  >Taiwan fabrication labs, where the most cutting edge tech is produced, are above capacity. This is the core of this discussion. Total TSMC capacity is at around 70-80%. During covid, it was peak at near 100%. I mean, the fact that you think having Chinese customers freely bid on TSMC wafers does not increase TSMC revenue is silly. Basic economics. More demand you have, more revenue. >Reliance on a hostile neighbor that continually reminds you they will force unification by military action if necessary is a losing game, and trusting carrots like "one nation, two systems" lost all credibility with the downfall of Hong Kong. I'm in Hong Kong right now. I don't consider it a downfall. In fact, Hong Kong is wealthy BECAUSE of China. Taiwan is also wealthy because of trade with China. My point is that Taiwan should play both sides more instead of just one.
  - frankacter 2y ago
    >Total TSMC capacity is at around 70-80%. I specifically distinguished Taiwan on island capacity vs TSMC global capacity in my prior reply. Taiwan TSMC fabs producing cutting edge fabrication is at 100% capacity. Taiwan is the specific topic of this post which is why I offer the differentiation. As for the rest of your reply, we can agree to disagree. Have a good day.
    - aurareturn 2y ago
      I specifically distinguished Taiwan on island capacity vs TSMC global capacity in my prior reply. Taiwan TSMC fabs producing cutting edge fabrication is at 100% capacity. Taiwan is the specific topic of this post which is why I offer the differentiation. Well yea, the most cutting edge node such as N3 are pre-sold and in high demand. It doesn't make your statement about banning Chinese companies from using TSMC fabs having no effect on revenue right. That's just divorced from basic supply and demand economics.
      - frankacter 2y ago
        >That's just divorced from basic supply and demand economics. Myopic views of demand assuming unlimited supply and no consideration to political and long term economical independence from a neighboring authoritarian communist regime pointing nuclear weapons at you threatening forced unification is divorced from reality. Short term sales never negate long term consequences of golden handcuffs at the cost of freedom and democracy.