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An ok deal for TSMC, terrible deal for Taiwan. Why? TSMC was likely threatened by Trump to invest in America. TSMC likely didn't want to do this. However, bec
by aurareturn 2y ago
An ok deal for TSMC, terrible deal for Taiwan.
Why?
TSMC was likely threatened by Trump to invest in America. TSMC likely didn't want to do this. However, because they will have more fabs in the US, they'll likely avoid the tariffs as part of the deal. Further more, TSMC will still make chips in case of of a China take over. The risk here is that the US will simply confiscate TSMC's fabs if China uses military action on Taiwan based on security measures. That's the worst case scenario for TSMC.
For Taiwan, it's a terrible deal because the money is not invested in Taiwan and the island becomes less important in the world. The "silicon shield" would also be broken and the Taiwanese government has zero control over fabs in the US.
It remains to be seen if this will truly happen. Perhaps TSMC will always keep its most cutting edge node in Taiwan. Perhaps they'll drag this out over the next 4 years in hopes that Trump's party gets voted out.
- FpUser 2y agoMaybe TSMC has big influence over Taiwan's government or just outright owns key politicians under the table. When / if TSMC secures that all lifecycle for advanced large scale chip manufacturing is in the US, Taiwan might find themselves in very iffy waters.
- aurareturn 2y agoI'm sure TSMC has a lot of influence over the Taiwanese government. However, the people of Taiwan aren't stupid in all of this. They know this is a horrible deal for them and would make sure their politicians hear about it.
- koolba 2y agoThey must have a massive influence. I think its gross revenue is something like 10% of the GDP of the whole country.
- simondotau 2y agoEven that understates things. TSMC is Taiwan’s singular Trump card in geopolitical negotiations. Now that righteousness and moral high grounds don’t matter any more, it’s the only thing keeping Taiwan safe.
- aurareturn 2y agoNow that righteousness and moral high grounds don’t matter any more, it’s the only thing keeping Taiwan safe. It's not the only thing because if China controls Taiwan, they'll eventually control SK, Japan, and PH as well.
- wordofx 2y agoTaiwan government is the biggest shareholder of TSMC…
- FpUser 2y agoDoes not exclude my point of view. If things go sour they most likely be on the first plane to the US.
- wordofx 2y agoYou stated: > Maybe TSMC has big influence over Taiwan's government or just outright owns key politicians under the table. I’m pointing out this is just plain Wrong. TSMC was created by the government and invested in by the people.
- bee_rider 2y agoI wonder if they don’t really believe we’d come to defend them regardless of the incentives, at this point. In that case, might as well try to avoid the tariffs. If they send enough engineers over, we won’t actually learn how to make the chips. Then when the next election happens they can re-evaluate. If China invades in the next four years, I guess… I dunno, at least they’ll have gotten some people out. It is a pretty bad situation, I guess they are just doing what they can.
- aurareturn 2y agoI wonder if they don’t really believe we’d come to defend them regardless of the incentives, at this point. In that case, might as well try to avoid the tariffs. I think the Ukraine situation already signaled that to Taiwan. Ultimately, China won't invade as long as Taiwan plays its cards right. China wants to retake Taiwan without firing a single shot and then quickly re-integrate Taiwan. As long as Taiwan doesn't do anything to provoke China like inviting Nancy Pelosi or voting in more pro-independence politicians. I actually think these events decreases the chance of a Chinese invasion but increases the chance of a peaceful reunification because the Taiwanese government will look to rely less on the US and positive impression of the US is decreasing in Taiwan.
- wordofx 2y ago> China wants to retake Taiwan Take. They can’t “retake” something they never had.
- aurareturn 2y agoThe island of Taiwan belonged to China at some point. No political statement needed and no need to rewrite history on HN comments. Historically, Taiwan was governed by Chinese administrations for a significant period. In 1683, after defeating the Ming loyalists in Taiwan, the Qing dynasty extended its rule over the island, eventually incorporating it as part of its empire. By 1887, Taiwan was officially designated a province of China under Qing rule. However, following the First Sino-Japanese War, Taiwan was ceded to Japan in 1895. After World War II, Taiwan was placed under the administrative control of the Republic of China. Today, its status remains politically and historically complex, with ongoing debates over sovereignty.
- puppymaster 2y agoIt's not just the cutting edge node. Arizona chips will still be shipped back to Taiwan because TSMC only do Fan-out PoP packaging there. This will unlikely change for the next 5 factories. This is a good win win for everyone. Trump gets to parrot jobs back in america slogan, TSMC gets some extra money to scale out production to 64% of their revenue customer (US based) and Taiwan gets to keep what is really, really important.
- frankacter 2y agoThis new deal is 3 factories an two packaging facilities.
- imhoguy 2y agoMy European gut feeling for a few years now is that Taiwan will be given...cought....sold to China, once all critical stuff is made on USA soil.
- drstewart 2y agoWhy won't European or Canada or Australia defend democracy and provide Taiwan security guarantees and protection?
- aurareturn 2y agoBecause "defending democracy" is propaganda for the common people. It's always economics. The US/Europe will support or even install a dictator if the government is pro-western.
- altacc 2y agoYep, spreading democracy and freedom is PR. I think there's a historical preference to installing or supporting a dictator rather than a messy democracy. There's several cases where democratic elections delivered a government the US didn't agree with, so they orchestrated regime change.
- arandomusername 2y agoExactly. Even in Ukraine, Yanukovych was democratically elected [1] and US was potentially involved in overthrowing him [2] [1] https://www.oscepa.org/en/news-a-media/press-releases/press-2010/international-observers-say-ukrainian-election-was-free-and-fair#:~:text=International%20monitors,of%20irregularities. https://www.oscepa.org/en/news-a-media/press-releases/press-... [2] https://www.bbc.com/news/world-europe-26079957 https://www.bbc.com/news/world-europe-26079957
- altacc 2y agoBecause there's a big difference between the situations and you can't really judge a theoretical situation against an ongoing reality. Ukraine is an active war whereas Taiwan is a stalemate of sabre rattling and diplomatic posing. We don't know what each country will do if China invades Taiwan and this is part of what stops it happening. The security guarantees for Ukraine stem from a 1994 agreement that assured some ex-USSR countries that they could safely give up their nuclear stockpile in return for guarantees that their sovereignty would be protected. Europe supports Ukraine because it is in Europe, European countries were part of that agreement and European countries do not trust Russia. Not counting Belarus, there's 7 countries with direct borders to Russia, 4 of which used to be part of the USSR, 1 of which is being invaded and the other 3 wonder if they're next. Whereas Taiwan is not in Europe and doesn't have any historical agreements with European countries. Canada & Australia have cultural, racial and historical ties to Europe, so it is understandable they often align with Europe.