18 ms·

If that is the cost of keeping the value within the western economies, we should pay. Plain and simple. I'd even argue it's cheap.

fishsticks89 1y ago
If something happens to Taiwan, we won't regret being able to produce these chips domestically. If AI keeps growing like it does, it might even trigger a conflict.
- kulahan 1y ago
  Ah yes, Taiwán - that famously stable nation with no existential threats to its very existence. I don’t think this is an “if” situation, but rather a “when”. There is no question in my mind - it’s simply too attractive to China. It may not come through all out war, but they will eventually claim what they feel is theirs. They operate on much more manageable time scales.
  - Gee101 1y ago
    What is interesting is if the world is not that reliant on Taiwan chips anymore would China really care that much about Taiwan?
    - Zaiberia 1y ago
      Yes, they would. However, if Taiwan wasn’t as important to the world because of their chips then the world would probably not care as much about what communist China wants to do to them.
    - kortilla 1y ago
      Probably, my understanding is that the primary reason China cares about Taiwan is internal pressure about the separatism. The power Taiwan has is the only reason they haven’t acted.
    - 2muchcoffeeman 1y ago
      China is not interested in Taiwan for the chips. They want it back since they believe Taiwan is part of China.
      - owebmaster 1y ago
        Taiwan also believes they are (part of) China
        curseofcasandra 1y ago
        Or more accurately, the Taiwanese government also believes that mainland China and Taiwan should be unified (ie. a One-China Interpretation). But that this One-China should be under the rule of the Taiwanese government and not the CCP, which they considered an illegitimate government, up until the 1992 Consensus. After the 1992 Consensus [1], the Taiwanese government still considered the Mainland its territory (again under a One-China Interpretation), but also acknowledges the CCP's interpretation of One-China. In practice, this meant they officially abandoned plans to re-take the Mainland, and focus on maintaining the status quo of peace and stability. Interestingly, the Taiwanese government also used to lay claim to Mongolia in addition to the Chinese Mainland.[2] [1]https://en.wikipedia.org/wiki/1992_Consensus https://en.wikipedia.org/wiki/1992_Consensus [2]https://www.taipeitimes.com/News/feat/archives/2024/08/25/2003822726 https://www.taipeitimes.com/News/feat/archives/2024/08/25/20...
        sarchertech 1y ago
        Almost no one in Taiwan still believes that though. But China has made it clear that they will invade if the Taiwanese government changes their official stance to be that they’re an independent country.
        ergocoder 1y ago
        The unification isn't the issue. It's whose government will get to run the whole thing.
        jdietrich 1y ago
    - usefulcat 1y ago
      Wasn't China already pissed about Taiwan long before Taiwan was doing a lot of semiconductor manufacturing?
    - johanyc 1y ago
      They would. The main reason has always been the location. It’s right at the doorstep of China. It’s the same reason when Russia tried to install missile in Cuba, Americans dont like that. Cuba “crisis” is actually a US centric term. Also on east coast of Taiwan, theres a deep waters, submarines can enter pacific ocean much more stealthily. Everything else is just bonus to them. Semiconductors, supporting nationalism, you name it.
      - IncreasePosts 1y ago
        South Korea and Japan/Okinawa seem either just as good or better if the US wants to have bases near China. And the US already has 80k troops there
        laborcontract 1y ago
        You have to take a look at a map to really understand Taiwan's importance. Taiwan isn't about military proximity. It's about access shipping access. Try open up a map. Despite China having a vast coastline, they do not have access to the open seas. Every one of their shipping lanes requires passage through another nation's waters. If a heavy conflict were to erupt, China's supply chains would be cut off via naval blockade. It's a huge risk to China, and one they've attempted to ameliorate via the Belt and Road Initiative. That changes if they acquire Taiwan. Taiwan's importance is not of offensive, but defensive primacy.
        15155 1y ago
        > If a heavy conflict were to erupt, China's supply chains would be cut off via naval blockade Or possibly the 30+ fast attack submarines sinking every military or resupply vessel in the region, augmented by a colossal amount of rapidly-deployed naval mines. Taiwan doesn't buy them much in this regard. Why would China be permitted to use sea freight at all in a "heavy conflict" scenario? Why not just sink these vessels near their origin - why allow Brazilian soybeans to even make it out of the hemisphere?
        anon7725 1y ago
    - kelnos 1y ago
      China has wanted Taiwan long before they fabbed semiconductors. It's a matter of ego and nationalism, not economics. It's also political: China hates that there's a Western-style democracy full of "Chinese rebels" on an island 80 miles from their doorstep. They also don't like the cozy relationship between the Taiwanese and US militaries.
  - modzu 1y ago
    when? 1945 was a long time ago
    - jiggawatts 1y ago
      Ukraine split from the Soviet Union in 1991 and then 31 years later Russia invaded to take it back.
  - chronci300 1y ago
    > Ah yes, Taiwán If you’re going to use accents, technically it’s Táiwān (ㄊㄞˊㄨㄢ)
    - kulahan 1y ago
      It was autocorrect - I have no idea why it’s in there to be honest. Neat to know the right way to write it though - thanks
  - iammrpayments 1y ago
    What is so attractive to attempt the greatest amphibious assault in human history just to get an island with a bunch of people who will hate you and have nowhere to run away.
    - Lu2025 1y ago
      The thing about autocracies, there is nobody to stop an obviously wrong decision (for example, Russian invasion of Ukraine).
      - basilgohar 1y ago
        Yes, because in Western democracies we were very successful at stopping invasions such as Iraq x2, Afghanistan, Vietnam, Korea, etc.
        necovek 1y ago
        There is nobody to admit a bad decision and reverse course on it?
        jopsen 1y ago
        Think of all the wars we didn't have :) Democracies aren't perfect, but they can change, admit mistakes and adapt.
        blackoil 1y ago
        I think it is other way round. In a democracy ideas are ingrained in public psyche for support. Be it Muslims/Jews/Christians good/bad, immigrants evil, abortion bad all become part of a large percentage of people's belief and changing that requires equally herculean efforts. In autocracy, people are generally kept aloof of such decisions so you can always switch enemies from Eurasia to Eastasia and no one cares. In case of China, the value of Taiwan/Arunachal/... is mostly egoistical, based on some notion that Qing China boundaries must be restored. If tomorrow a new leadership comes and makes EU kind of setup with Taiwan, people will have no say and most won't care.
  - victorbjorklund 1y ago
    The upside isnt huge to China. It is mostly their pride. The downside if not everything goes to plan is huge. Could end the communist party in China. I think it is a really though decision for the communist party if they should go all-in or not.
- amelius 1y ago
  This is still TSMC's plant. I bet Taiwan has tight control over it.
  - patmcc 1y ago
    I think the risk here is Taiwan being invaded by China, in which case having some US-based production helps a lot.
    - jeremyjh 1y ago
      It would mean TSMC would basically become a US company, right?
      - nine_k 1y ago
        I suppose they have a US branch / subsidiary anyway?
        jeremyjh 1y ago
        Yes, every company that operates in the US and many that only import have US subsidiaries. This is true of all companies pretty much everywhere in the world. The government must have an entity it can tax, and a throat it can choke, but the subsidiary is answering to a parent and that is I think what would change if TSMC could no longer operate in Taiwan or was taken over by the party.
    - amelius 1y ago
      But do you think Taiwan will let the US get away with not helping them?
- guywithahat 1y ago
  Ironically my only opposition to US chips is that we’re less liable to protect Taiwan if China invades
  - zarzavat 1y ago
    It's probably the opposite. I very much doubt that the factory would continue to operate if the US refused to defend Taiwan. The factory gives Taiwan a huge amount of leverage.
    - seanmcdirmid 1y ago
      The supply chains for chip production terminate in Asia but there aren’t many inputs that originate there (which is by design). The real value to be lost are the Taiwanese engineers themselves.
      - vasco 1y ago
        How can you design where natural resources exist?
        bloppe 1y ago
        He's probably talking about ASML
    - daneel_w 1y ago
      Of course it would continue to operate. The Chinese division of Arm went rogue and basically captured the entire operation from within. USA has both the engineering expertise and the incentive to do the same with an entire chip fab, if push came to shove. https://semianalysis.com/2021/08/27/the-semiconductor-heist-of-the-century/ https://semianalysis.com/2021/08/27/the-semiconductor-heist-...
      - Mountain_Skies 1y ago
        For how much longer will the United States have that expertise? Both major political parties seem intent on becoming completely reliant on importing labor, both blue collar and white collar, while giving domestic labor the finger. Boomers are already retiring by the millions and Gen-X aren't all that far behind. Outsource mania and its cheap visa labor twin had been growing since the 1990s so the younger generations have been shaped in that environment. Does the United States really have that expertise or does it simply have a bunch of guests with that expertise? Should a country have to hope that it can pander to those guests enough for them to stay and be loyal (and possibly disloyal to their homelands)? Doesn't seem very stable in the long run.
- irjustin 1y ago
  Is something the gov should subsidize or at least organize competitors to act like a cartel[0]? Such that the market forces don't push pricing that the plant would naturally die. [0] https://en.wikipedia.org/wiki/Phoebus_cartel https://en.wikipedia.org/wiki/Phoebus_cartel
  - Qwertious 1y ago
    The phoebus cartel whine is bullshit - incandescent light bulbs should be limited to 1000 hours because 1) the cost of electricity used by the bulb is easily as much as the replacement bulb (in the 1920s/1930s), and running the bulb hotter makes it more energy-efficient, and 2) because running incandescents cold makes the light look sickly and awful. Light bulbs were mostly being sold by electric companies at the time, so trading one for the other didn't matter to them. Planned obsolescence does happen, but the phoebus cartel is the worst 'example' of it.
    - xmprt 1y ago
      > the cost of electricity used by the bulb is easily as much as the replacement bulb This point is only relevant if 1000 hour old bulbs cost more electricity to run than new bulbs. Maybe I don't understand how old bulbs worked but why couldn't they invent ways to make bulbs run hot which also last longer than 1000 hours.
      - ahartmetz 1y ago
        Light bulbs die because the filament slowly evaporates. If you increase the filament temperature just a little, efficiency increases quickly and life expectancy decreases quickly. They were already using the most heat-resistant metals, too. It's not sabotage, it's physics.
    - irjustin 1y ago
      It's fine to complain it's a bad example of "planned obsolescence", but I hope you didn't downvote me for that (i got a few downs). I was just talking about organization of competitive companies for price manipulation, but specifically controlled for the benefit of the public - such that we don't lose the US plant due to natural market forces. It's why ULA is still in business despite SpaceX being significantly cheaper.
- zer00eyz 1y ago
  > If something happens to Taiwan, This isn't really a workable argument any more. As examples: https://apnews.com/article/north-carolina-quartz-hurricane-57153eaba12ba9dcb87bf618d72364ec https://apnews.com/article/north-carolina-quartz-hurricane-5... https://archive.is/sM16Y https://archive.is/sM16Y The global supply chain is now so deeply interwoven that a large geopolitical disruption is nearly impossible. It took explosives for the EU to curtail its Russian natural gas use. And there is still stiff trade with Russia today (not as much as pre war) and lots of folks exploiting the gaps in that system (Turkey, India, china). If you have never read it I highly recommend I, Pencil: https://oll.libertyfund.org/titles/read-i-pencil-my-family-tree-as-told-to-leonard-e-read-dec-1958 https://oll.libertyfund.org/titles/read-i-pencil-my-family-t...
  - pyrale 1y ago
    > It took explosives for the EU to curtail its Russian natural gas use. Assuming you refer to NS2 blowup, it was unused when it got sabotaged.
    - marsven_422 1y ago
      [dead]
    - zer00eyz 1y ago
      https://en.wikipedia.org/wiki/Nord_Stream_pipelines_sabotage https://en.wikipedia.org/wiki/Nord_Stream_pipelines_sabotage NS1 was hit at the same time as well. NS2 had not been activated and NS1 was undergoing work at the time.
- tarkin2 1y ago
  If something happens to Taiwan, the USA will have given a huge military advantage to its biggest adversary. It's going to take decades for the USA to catch up with Taiwan, and once China has its grip on the fabs they'll only further advance them. In an existential crisis, the chances of Taiwan's leadership doing a deal with China when it's military protector retreats from its former declarations is in no way low. It'll be the end of American military dominance but in fitting with the US's repeated isolationist trajectory.
  - Mountain_Skies 1y ago
    How did that come to be? The US used to be the world leader in chip manufacturing and that wasn't all that long ago. Why was something so critical given away so freely?
    - xadhominemx 1y ago
      It was not given away - it was won by the Taiwanese, who bet on the fabless-foundry business model and executed magnificently.
    - SJC_Hacker 1y ago
      I’m no expert but I believe it’s because Taiwan bet heavily on a process known as Extreme Ultraviolet (EUV). The US companies cough Intel cough did not. Which is part of the reason they are laying off workers
- blitzar 1y ago
  If something happens to the US, we won't regret being able to produce these chips domestically. For the rest of the world, Taiwan with a "China Risk" looks like a safer bet than the USA.
  - Mountain_Skies 1y ago
    Until the rest of the world actually stops using the US Dollar as their reserve currency instead of endlessly talking about it but never actually do more than some token local trades, I don't believe the rest of the world prefers Mainland China invading Taiwan over dealing with the US. People (and countries) love to bluster but their actions are far more indicative of their outlook than posturing is.
  - azernik 1y ago
    The way to reduce the risk is to diversify. Taiwan with a China risk and the US with a "US risk" is much safer than either alone.
    - redleader55 1y ago
      In a world of US and China being at odds with each other and controlling a GPU factory each, AI for Europe, Japan, Australia, etc becomes a game of who can kiss ass better and hoping the master doesn't change the rules further. There should be more places that can produce enough energy and have AI leverage.
      - eli_gottlieb 1y ago
        There should. I wish the Netherlands the best in further building out the industry in the EU!
    - motorest 1y ago
      > The way to reduce the risk is to diversify. Taiwan with a China risk and the US with a "US risk" is much safer than either alone. Not really. Taiwan with a China risk means China has pressure to not change the status quo. US with a US risk means they have a vested interest to facilitate China's imperialistic agenda to try dethrone Taiwan as a competitor in the chip market. That, coupled with the imbecile tariff war, underlines the unacceptable risk presented by the "US risk".
internet2000 1y ago
No, I am absolutely not going to pay a 20% premium on the market. I’m sorry but I won’t. If this is really crucial to national security then the government can subsidize the premium. And I know I’m not alone, price speaks louder.
- EA-3167 1y ago
  The government doesn't pay for things, we do through our taxes that they spend. So... instead of paying a markup on just your own consumption, you want to be taxed to pay for the subsidy on EVERYONE'S consumption?
  - kulahan 1y ago
    Surely we could just move a subsidy around. Do we really need ALL of those corn fields? It’s not even a particularly nutritious crop.
    - fc417fc802 1y ago
      It's calorie dense and exceedingly easy to store for long periods, providing us with an extremely high degree of food security. That said I agree with the sentiment that farm subsidies could probably use some improvement.
      - kulahan 1y ago
        Americans are not in need of high calorie density, and 90% of this corn isn't being eaten anyways. Rice is easier to grow, eaten readily by more of the world, easier to store, easier to transport, etc. - there really isn't a great argument for corn.
        fc417fc802 1y ago
        > 90% of this corn isn't being eaten anyways But it could be. I don't have to consume the canned food in my basement for it to provide food security in the event of a natural disaster. I'm finding exact numbers difficult to come by but rice requires noticeably more water to grow. Dried corn kernels are approximately equivalent to dried rice when it comes to storage and transport. There really isn't any sensible argument for switching from corn to rice in the US midwest.
jongjong 1y ago
Yes and surely it's a cost which can be reduced over time by improving automation and/or by cutting back on regulations.
- brikym 1y ago
  The US also needs to build up more talent which will come over the years.
- jychang 1y ago
  I doubt that, unless you're willing to pay USA workers Taiwan salaries.
  - jay_kyburz 1y ago
    err.. its not crazy after a few years of recession, or even pressure on the workforce from AI.
  - acchow 1y ago
    USA workers will not accept Taiwan salaries. Numbeo shows the cost of living (including rent) is 45% higher in Phoenix than in Hsinchu (where TSMC's 2N is) Rent is 176% higher.
    - frollogaston 1y ago
      Given this, I'm surprised they're only looking at a 5%-20% cost increase.
      - SecretDreams 1y ago
        It just gives a hint of how much salaries play into opex for TSMC: not a lot, apparently.
- mrexroad 1y ago
  Yeah, especially cheaper if we get rid those EPA ones. /s Ffs, take a look at how many superfund sites Silicon Valley has, from back when we manufactured semiconductors.
wg0 1y ago
American. Not Western. West and America are drifting apart.
- Icathian 1y ago
  I think you're mistaking the name of a cardinal direction for a cohesive set of political ideologies.
  - wg0 1y ago
    OP is. Otherwise there's always a west to any west.
    - BLKNSLVR 1y ago
      Not if the earth is flat!
      - Nevermark 1y ago
        Have you played Asteroids lately? Finite and flat, but unbounded!
        Biganon 1y ago
        Asteroids exists on a torus, therefore it's not flat
        Nevermark 1y ago
        That is not true. A topological taurus can be flat or not. A physical taurus embedded in our 3D universe, i.e. a donut, cannot be flat. Which may be the confusion. But video game spaces are neither logically embedded or restricted by our 3D space. All its physics, including its spacial topology and geometry, flat or otherwise, were completely up to the game designers. And the Asteroid game designers chose a flat space. • Two parallel line segments stay parallel, no matter how long you extend them. Or how many times they wrap around the Asteroid space. (They also never intersect, but can overlap, just as in any flat 2D space.) • Any number and distance of moves in any two perpendicular directions, are commutative. I.e. you can change the order of the moves, and you will still end up at the same spot. • The three angles of any triangle in Asteroid space adds up to 180 degrees. None of which applies to the surface of a donut.
tcdent 1y ago
Almost like tariffs support this cause, too.
- inamberclad 1y ago
  Except when tarrifs make western industry so expensive that it is no longer competitive whatsoever...
  - mensetmanusman 1y ago
    The tariff income can subsidize those cases?
airocker 1y ago
This is not an easy inference. For this inference to be true , you have to know how much of the expense goes to salaries . Also, you have to give credit to tsmc to be world class which enables them to control prices, it may not translate across industries
- deelowe 1y ago
  Its a pretty easy inference for anyone who has mfg experience. The amount you pay per worker versus the quality of work you get back is STARKLY different between US and Taiwanese companies.
  - simgt 1y ago
    As in better or worse? The Taiwanese have been making most of our chips for quite a while. Americans are not naturally more gifted individuals, most manufacturing skills are transmitted from one worker to the next.
    - NonHyloMorph 1y ago
      I believe they meant that taiwanese manufacturing is superior to american..
bamboozled 1y ago
Haven't most things been like this for a very long time? I remember when Chinese tools showed up on the shelves, people will almost always by cheaper, however with tools, there is actually a cost to cheap tools (they suck), with semi-conductors, the cheaper version works just as good in the case of TSMC.
neon_me 1y ago
Cheap? 20% increase in cost of BoM equals at least ~100% increase for customer. Would you pay twice for AMD components? What would market do?
- aoeusnth1 1y ago
  Does a 20% decrease result in a -50% discount? Why would it be nonlinear?
  - bloppe 1y ago
    20% decrease would be only 80% price rise for the customer
- sneak 1y ago
  Presumably they would also accept a lower margin on these, so maybe not 100%.
- yard2010 1y ago
  What is the alternative?
- kelnos 1y ago
  Companies charge what the market can bear, not based on their costs. Certainly they will often use some multiplier of their costs as a starting point, and they can't sustainably charge below their costs. But if they double the price of the product and lose more than half of their customers, that's a failure to set pricing properly. Consider the reverse direction: if a company can decrease costs, they will usually pocket the extra profit, not reduce the price they charge. Price cuts usually only happen for one of two reasons: 1) to avoid losing customers to another company that is charging less (or to entice customers of another company that's charging the same), or 2) to capture more profit if they'll earn more customers at a lower price than they'll lose due to the lower per-unit profit. (Yes, there are other reasons, but these seem to be the main ones. For goods that are not essential to life, prices are set based on what people are willing to pay vs. how many units can be sold at that price, with the cost as a floor (absent a policy of using a product as a loss leader).
michaelsshaw 1y ago
What special quality do "western" countries have that makes it a moral obligation to purchase from them over others? Why is it a moral good to keep value from the others?
- deleted 1y ago
  [deleted]
- cs02rm0 1y ago
  Trust.
  - michaelsshaw 1y ago
    Care to elaborate?
  - waffleiron 1y ago
    After the Snowden disclosures, not sure about that.
- kelnos 1y ago
  For all their flaws (including those plaguing the US right now), I would still much rather live under a Western-style democracy than an autocracy. Purchasing products made under autocratic regimes strengthens those regimes and gives them more power on the world stage. I think "moral obligation" (a phrase the GP did not use, for the record) is a bit over the top, though.
  - skeezyboy 1y ago
    > Purchasing products made under autocratic regimes strengthens those regimes and gives them more power on the world stage. you wouldnt be able to export anything if other people took this stance, so how would anyone make any money?
  - keybored 1y ago
    The West lives under semi-democracy (partial oligarchy) and exports autocracy.[1] It’s fine for us to prefer to live here (I do; well it’s what I know) but we can’t claim the moral highground (not that anyone in this thread has done that necessarily). [1]: Why are these countries “autocracies”? To better resist foreign intervention.
karel-3d 1y ago
Yeah customers won't pay more willingly for something this abstract. You can use tariffs but then everyone pays more.
Theodores 1y ago
Except that it will just be for the US, not Europe or even Canada necessarily. In Europe nobody is going to pay extra for a gadget that comes with an American chip inside it, they will just buy Chinese. The result will be like automotive with the Chicken Tax, with Americans having pickup trucks and the rest of the world having crossover SUVs.
skeezyboy 1y ago
pointless when the rest of the supply chain is still outside the US
motorest 1y ago
> If that is the cost of keeping the value within the western economies, we should pay. Plain and simple. I'd even argue it's cheap. No, that is not the cost of keeping "the value" within western economies. It would be the cost of granting the US a leverage against the collective west. The US proved to be a very unreliable and outright hostile partner. At this point, it is not clear whether the US is more hostile to the collective west than the likes of China.
- ksec 1y ago
  US has been a reliable partner post WWII for 95%+ of the time. Making Trump administration representing 100+ years of US history isn't exactly a fair comparison.
  - speeder 1y ago
    If you consider all US "friends", that is NOT the case. And not a Trump thing either, or even a Republican thing. USA is quite happy in screwing with "friends", if it will benefit some random lobby. There is a quite long history of USA doing coups, sabotage, and so on, against its own "friends".
  - ezst 1y ago
    Yeah, that ship sailed the second time Americans voted for him.
    - maxdo 1y ago
      Sure , trump administration trying to protect associate members of eu is not as good partner as China who directly support Russia , Iran and other country trying to wipe west, very logical
      - rob_c 1y ago
        Don't worry they're just upset that the cheap toys from foxcon suicide plants are going to get out of reach. Once everything dies down the people complaining will find something else to moan about. Prices will normalise regardless of where things are manufactured that's the result of supply and demand. If people aren't willing to pay a bit extra maybe they never really needed luxury good X. Ofc there's fools who over optimized their supply chain in the name of "modern economics of growth" and they'll get a wake-up call about stability and not bowing to shareholders. It's just a shame for most that that lesson will be in the form of layoffs and bankruptcy vs a CEO digging deep and personally reinvesting back in the company they're supposed to believe in.
notepad0x90 1y ago
who is we? should tax payers foot the difference? Innovation follows the money, not patriotism.
ashoeafoot 1y ago
But taiwan is part of the west?

fishsticks89 1y ago

If something happens to Taiwan, we won't regret being able to produce these chips domestically. If AI keeps growing like it does, it might even trigger a conflict.

kulahan 1y ago
Ah yes, Taiwán - that famously stable nation with no existential threats to its very existence. I don’t think this is an “if” situation, but rather a “when”. There is no question in my mind - it’s simply too attractive to China. It may not come through all out war, but they will eventually claim what they feel is theirs. They operate on much more manageable time scales.
- Gee101 1y ago
  What is interesting is if the world is not that reliant on Taiwan chips anymore would China really care that much about Taiwan?
  - Zaiberia 1y ago
    Yes, they would. However, if Taiwan wasn’t as important to the world because of their chips then the world would probably not care as much about what communist China wants to do to them.
  - kortilla 1y ago
    Probably, my understanding is that the primary reason China cares about Taiwan is internal pressure about the separatism. The power Taiwan has is the only reason they haven’t acted.
  - 2muchcoffeeman 1y ago
    China is not interested in Taiwan for the chips. They want it back since they believe Taiwan is part of China.
    - owebmaster 1y ago
      Taiwan also believes they are (part of) China
      - curseofcasandra 1y ago
        Or more accurately, the Taiwanese government also believes that mainland China and Taiwan should be unified (ie. a One-China Interpretation). But that this One-China should be under the rule of the Taiwanese government and not the CCP, which they considered an illegitimate government, up until the 1992 Consensus. After the 1992 Consensus [1], the Taiwanese government still considered the Mainland its territory (again under a One-China Interpretation), but also acknowledges the CCP's interpretation of One-China. In practice, this meant they officially abandoned plans to re-take the Mainland, and focus on maintaining the status quo of peace and stability. Interestingly, the Taiwanese government also used to lay claim to Mongolia in addition to the Chinese Mainland.[2] [1]https://en.wikipedia.org/wiki/1992_Consensus https://en.wikipedia.org/wiki/1992_Consensus [2]https://www.taipeitimes.com/News/feat/archives/2024/08/25/2003822726 https://www.taipeitimes.com/News/feat/archives/2024/08/25/20...
        sarchertech 1y ago
        Almost no one in Taiwan still believes that though. But China has made it clear that they will invade if the Taiwanese government changes their official stance to be that they’re an independent country.
        ergocoder 1y ago
        The unification isn't the issue. It's whose government will get to run the whole thing.
        jdietrich 1y ago
  - usefulcat 1y ago
    Wasn't China already pissed about Taiwan long before Taiwan was doing a lot of semiconductor manufacturing?
  - johanyc 1y ago
    They would. The main reason has always been the location. It’s right at the doorstep of China. It’s the same reason when Russia tried to install missile in Cuba, Americans dont like that. Cuba “crisis” is actually a US centric term. Also on east coast of Taiwan, theres a deep waters, submarines can enter pacific ocean much more stealthily. Everything else is just bonus to them. Semiconductors, supporting nationalism, you name it.
    - IncreasePosts 1y ago
      South Korea and Japan/Okinawa seem either just as good or better if the US wants to have bases near China. And the US already has 80k troops there
      - laborcontract 1y ago
        You have to take a look at a map to really understand Taiwan's importance. Taiwan isn't about military proximity. It's about access shipping access. Try open up a map. Despite China having a vast coastline, they do not have access to the open seas. Every one of their shipping lanes requires passage through another nation's waters. If a heavy conflict were to erupt, China's supply chains would be cut off via naval blockade. It's a huge risk to China, and one they've attempted to ameliorate via the Belt and Road Initiative. That changes if they acquire Taiwan. Taiwan's importance is not of offensive, but defensive primacy.
        15155 1y ago
        > If a heavy conflict were to erupt, China's supply chains would be cut off via naval blockade Or possibly the 30+ fast attack submarines sinking every military or resupply vessel in the region, augmented by a colossal amount of rapidly-deployed naval mines. Taiwan doesn't buy them much in this regard. Why would China be permitted to use sea freight at all in a "heavy conflict" scenario? Why not just sink these vessels near their origin - why allow Brazilian soybeans to even make it out of the hemisphere?
        anon7725 1y ago
  - kelnos 1y ago
    China has wanted Taiwan long before they fabbed semiconductors. It's a matter of ego and nationalism, not economics. It's also political: China hates that there's a Western-style democracy full of "Chinese rebels" on an island 80 miles from their doorstep. They also don't like the cozy relationship between the Taiwanese and US militaries.
- modzu 1y ago
  when? 1945 was a long time ago
  - jiggawatts 1y ago
    Ukraine split from the Soviet Union in 1991 and then 31 years later Russia invaded to take it back.
- chronci300 1y ago
  > Ah yes, Taiwán If you’re going to use accents, technically it’s Táiwān (ㄊㄞˊㄨㄢ)
  - kulahan 1y ago
    It was autocorrect - I have no idea why it’s in there to be honest. Neat to know the right way to write it though - thanks
- iammrpayments 1y ago
  What is so attractive to attempt the greatest amphibious assault in human history just to get an island with a bunch of people who will hate you and have nowhere to run away.
  - Lu2025 1y ago
    The thing about autocracies, there is nobody to stop an obviously wrong decision (for example, Russian invasion of Ukraine).
    - basilgohar 1y ago
      Yes, because in Western democracies we were very successful at stopping invasions such as Iraq x2, Afghanistan, Vietnam, Korea, etc.
      - necovek 1y ago
        There is nobody to admit a bad decision and reverse course on it?
      - jopsen 1y ago
        Think of all the wars we didn't have :) Democracies aren't perfect, but they can change, admit mistakes and adapt.
        blackoil 1y ago
        I think it is other way round. In a democracy ideas are ingrained in public psyche for support. Be it Muslims/Jews/Christians good/bad, immigrants evil, abortion bad all become part of a large percentage of people's belief and changing that requires equally herculean efforts. In autocracy, people are generally kept aloof of such decisions so you can always switch enemies from Eurasia to Eastasia and no one cares. In case of China, the value of Taiwan/Arunachal/... is mostly egoistical, based on some notion that Qing China boundaries must be restored. If tomorrow a new leadership comes and makes EU kind of setup with Taiwan, people will have no say and most won't care.
- victorbjorklund 1y ago
  The upside isnt huge to China. It is mostly their pride. The downside if not everything goes to plan is huge. Could end the communist party in China. I think it is a really though decision for the communist party if they should go all-in or not.
amelius 1y ago
This is still TSMC's plant. I bet Taiwan has tight control over it.
- patmcc 1y ago
  I think the risk here is Taiwan being invaded by China, in which case having some US-based production helps a lot.
  - jeremyjh 1y ago
    It would mean TSMC would basically become a US company, right?
    - nine_k 1y ago
      I suppose they have a US branch / subsidiary anyway?
      - jeremyjh 1y ago
        Yes, every company that operates in the US and many that only import have US subsidiaries. This is true of all companies pretty much everywhere in the world. The government must have an entity it can tax, and a throat it can choke, but the subsidiary is answering to a parent and that is I think what would change if TSMC could no longer operate in Taiwan or was taken over by the party.
  - amelius 1y ago
    But do you think Taiwan will let the US get away with not helping them?
guywithahat 1y ago
Ironically my only opposition to US chips is that we’re less liable to protect Taiwan if China invades
- zarzavat 1y ago
  It's probably the opposite. I very much doubt that the factory would continue to operate if the US refused to defend Taiwan. The factory gives Taiwan a huge amount of leverage.
  - seanmcdirmid 1y ago
    The supply chains for chip production terminate in Asia but there aren’t many inputs that originate there (which is by design). The real value to be lost are the Taiwanese engineers themselves.
    - vasco 1y ago
      How can you design where natural resources exist?
      - bloppe 1y ago
        He's probably talking about ASML
  - daneel_w 1y ago
    Of course it would continue to operate. The Chinese division of Arm went rogue and basically captured the entire operation from within. USA has both the engineering expertise and the incentive to do the same with an entire chip fab, if push came to shove. https://semianalysis.com/2021/08/27/the-semiconductor-heist-of-the-century/ https://semianalysis.com/2021/08/27/the-semiconductor-heist-...
    - Mountain_Skies 1y ago
      For how much longer will the United States have that expertise? Both major political parties seem intent on becoming completely reliant on importing labor, both blue collar and white collar, while giving domestic labor the finger. Boomers are already retiring by the millions and Gen-X aren't all that far behind. Outsource mania and its cheap visa labor twin had been growing since the 1990s so the younger generations have been shaped in that environment. Does the United States really have that expertise or does it simply have a bunch of guests with that expertise? Should a country have to hope that it can pander to those guests enough for them to stay and be loyal (and possibly disloyal to their homelands)? Doesn't seem very stable in the long run.
irjustin 1y ago
Is something the gov should subsidize or at least organize competitors to act like a cartel[0]? Such that the market forces don't push pricing that the plant would naturally die. [0] https://en.wikipedia.org/wiki/Phoebus_cartel https://en.wikipedia.org/wiki/Phoebus_cartel
- Qwertious 1y ago
  The phoebus cartel whine is bullshit - incandescent light bulbs should be limited to 1000 hours because 1) the cost of electricity used by the bulb is easily as much as the replacement bulb (in the 1920s/1930s), and running the bulb hotter makes it more energy-efficient, and 2) because running incandescents cold makes the light look sickly and awful. Light bulbs were mostly being sold by electric companies at the time, so trading one for the other didn't matter to them. Planned obsolescence does happen, but the phoebus cartel is the worst 'example' of it.
  - xmprt 1y ago
    > the cost of electricity used by the bulb is easily as much as the replacement bulb This point is only relevant if 1000 hour old bulbs cost more electricity to run than new bulbs. Maybe I don't understand how old bulbs worked but why couldn't they invent ways to make bulbs run hot which also last longer than 1000 hours.
    - ahartmetz 1y ago
      Light bulbs die because the filament slowly evaporates. If you increase the filament temperature just a little, efficiency increases quickly and life expectancy decreases quickly. They were already using the most heat-resistant metals, too. It's not sabotage, it's physics.
  - irjustin 1y ago
    It's fine to complain it's a bad example of "planned obsolescence", but I hope you didn't downvote me for that (i got a few downs). I was just talking about organization of competitive companies for price manipulation, but specifically controlled for the benefit of the public - such that we don't lose the US plant due to natural market forces. It's why ULA is still in business despite SpaceX being significantly cheaper.
zer00eyz 1y ago
> If something happens to Taiwan, This isn't really a workable argument any more. As examples: https://apnews.com/article/north-carolina-quartz-hurricane-57153eaba12ba9dcb87bf618d72364ec https://apnews.com/article/north-carolina-quartz-hurricane-5... https://archive.is/sM16Y https://archive.is/sM16Y The global supply chain is now so deeply interwoven that a large geopolitical disruption is nearly impossible. It took explosives for the EU to curtail its Russian natural gas use. And there is still stiff trade with Russia today (not as much as pre war) and lots of folks exploiting the gaps in that system (Turkey, India, china). If you have never read it I highly recommend I, Pencil: https://oll.libertyfund.org/titles/read-i-pencil-my-family-tree-as-told-to-leonard-e-read-dec-1958 https://oll.libertyfund.org/titles/read-i-pencil-my-family-t...
- pyrale 1y ago
  > It took explosives for the EU to curtail its Russian natural gas use. Assuming you refer to NS2 blowup, it was unused when it got sabotaged.
  - marsven_422 1y ago
    [dead]
  - zer00eyz 1y ago
    https://en.wikipedia.org/wiki/Nord_Stream_pipelines_sabotage https://en.wikipedia.org/wiki/Nord_Stream_pipelines_sabotage NS1 was hit at the same time as well. NS2 had not been activated and NS1 was undergoing work at the time.
tarkin2 1y ago
If something happens to Taiwan, the USA will have given a huge military advantage to its biggest adversary. It's going to take decades for the USA to catch up with Taiwan, and once China has its grip on the fabs they'll only further advance them. In an existential crisis, the chances of Taiwan's leadership doing a deal with China when it's military protector retreats from its former declarations is in no way low. It'll be the end of American military dominance but in fitting with the US's repeated isolationist trajectory.
- Mountain_Skies 1y ago
  How did that come to be? The US used to be the world leader in chip manufacturing and that wasn't all that long ago. Why was something so critical given away so freely?
  - xadhominemx 1y ago
    It was not given away - it was won by the Taiwanese, who bet on the fabless-foundry business model and executed magnificently.
  - SJC_Hacker 1y ago
    I’m no expert but I believe it’s because Taiwan bet heavily on a process known as Extreme Ultraviolet (EUV). The US companies cough Intel cough did not. Which is part of the reason they are laying off workers
blitzar 1y ago
If something happens to the US, we won't regret being able to produce these chips domestically. For the rest of the world, Taiwan with a "China Risk" looks like a safer bet than the USA.
- Mountain_Skies 1y ago
  Until the rest of the world actually stops using the US Dollar as their reserve currency instead of endlessly talking about it but never actually do more than some token local trades, I don't believe the rest of the world prefers Mainland China invading Taiwan over dealing with the US. People (and countries) love to bluster but their actions are far more indicative of their outlook than posturing is.
- azernik 1y ago
  The way to reduce the risk is to diversify. Taiwan with a China risk and the US with a "US risk" is much safer than either alone.
  - redleader55 1y ago
    In a world of US and China being at odds with each other and controlling a GPU factory each, AI for Europe, Japan, Australia, etc becomes a game of who can kiss ass better and hoping the master doesn't change the rules further. There should be more places that can produce enough energy and have AI leverage.
    - eli_gottlieb 1y ago
      There should. I wish the Netherlands the best in further building out the industry in the EU!
  - motorest 1y ago
    > The way to reduce the risk is to diversify. Taiwan with a China risk and the US with a "US risk" is much safer than either alone. Not really. Taiwan with a China risk means China has pressure to not change the status quo. US with a US risk means they have a vested interest to facilitate China's imperialistic agenda to try dethrone Taiwan as a competitor in the chip market. That, coupled with the imbecile tariff war, underlines the unacceptable risk presented by the "US risk".

internet2000 1y ago

No, I am absolutely not going to pay a 20% premium on the market. I’m sorry but I won’t. If this is really crucial to national security then the government can subsidize the premium. And I know I’m not alone, price speaks louder.

EA-3167 1y ago
The government doesn't pay for things, we do through our taxes that they spend. So... instead of paying a markup on just your own consumption, you want to be taxed to pay for the subsidy on EVERYONE'S consumption?
- kulahan 1y ago
  Surely we could just move a subsidy around. Do we really need ALL of those corn fields? It’s not even a particularly nutritious crop.
  - fc417fc802 1y ago
    It's calorie dense and exceedingly easy to store for long periods, providing us with an extremely high degree of food security. That said I agree with the sentiment that farm subsidies could probably use some improvement.
    - kulahan 1y ago
      Americans are not in need of high calorie density, and 90% of this corn isn't being eaten anyways. Rice is easier to grow, eaten readily by more of the world, easier to store, easier to transport, etc. - there really isn't a great argument for corn.
      - fc417fc802 1y ago
        > 90% of this corn isn't being eaten anyways But it could be. I don't have to consume the canned food in my basement for it to provide food security in the event of a natural disaster. I'm finding exact numbers difficult to come by but rice requires noticeably more water to grow. Dried corn kernels are approximately equivalent to dried rice when it comes to storage and transport. There really isn't any sensible argument for switching from corn to rice in the US midwest.

jongjong 1y ago

Yes and surely it's a cost which can be reduced over time by improving automation and/or by cutting back on regulations.

brikym 1y ago
The US also needs to build up more talent which will come over the years.
jychang 1y ago
I doubt that, unless you're willing to pay USA workers Taiwan salaries.
- jay_kyburz 1y ago
  err.. its not crazy after a few years of recession, or even pressure on the workforce from AI.
- acchow 1y ago
  USA workers will not accept Taiwan salaries. Numbeo shows the cost of living (including rent) is 45% higher in Phoenix than in Hsinchu (where TSMC's 2N is) Rent is 176% higher.
  - frollogaston 1y ago
    Given this, I'm surprised they're only looking at a 5%-20% cost increase.
    - SecretDreams 1y ago
      It just gives a hint of how much salaries play into opex for TSMC: not a lot, apparently.
mrexroad 1y ago
Yeah, especially cheaper if we get rid those EPA ones. /s Ffs, take a look at how many superfund sites Silicon Valley has, from back when we manufactured semiconductors.

wg0 1y ago

American. Not Western. West and America are drifting apart.

Icathian 1y ago
I think you're mistaking the name of a cardinal direction for a cohesive set of political ideologies.
- wg0 1y ago
  OP is. Otherwise there's always a west to any west.
  - BLKNSLVR 1y ago
    Not if the earth is flat!
    - Nevermark 1y ago
      Have you played Asteroids lately? Finite and flat, but unbounded!
      - Biganon 1y ago
        Asteroids exists on a torus, therefore it's not flat
        Nevermark 1y ago
        That is not true. A topological taurus can be flat or not. A physical taurus embedded in our 3D universe, i.e. a donut, cannot be flat. Which may be the confusion. But video game spaces are neither logically embedded or restricted by our 3D space. All its physics, including its spacial topology and geometry, flat or otherwise, were completely up to the game designers. And the Asteroid game designers chose a flat space. • Two parallel line segments stay parallel, no matter how long you extend them. Or how many times they wrap around the Asteroid space. (They also never intersect, but can overlap, just as in any flat 2D space.) • Any number and distance of moves in any two perpendicular directions, are commutative. I.e. you can change the order of the moves, and you will still end up at the same spot. • The three angles of any triangle in Asteroid space adds up to 180 degrees. None of which applies to the surface of a donut.

tcdent 1y ago

Almost like tariffs support this cause, too.

inamberclad 1y ago
Except when tarrifs make western industry so expensive that it is no longer competitive whatsoever...
- mensetmanusman 1y ago
  The tariff income can subsidize those cases?

airocker 1y ago

This is not an easy inference. For this inference to be true , you have to know how much of the expense goes to salaries . Also, you have to give credit to tsmc to be world class which enables them to control prices, it may not translate across industries

deelowe 1y ago
Its a pretty easy inference for anyone who has mfg experience. The amount you pay per worker versus the quality of work you get back is STARKLY different between US and Taiwanese companies.
- simgt 1y ago
  As in better or worse? The Taiwanese have been making most of our chips for quite a while. Americans are not naturally more gifted individuals, most manufacturing skills are transmitted from one worker to the next.
  - NonHyloMorph 1y ago
    I believe they meant that taiwanese manufacturing is superior to american..

bamboozled 1y ago

Haven't most things been like this for a very long time? I remember when Chinese tools showed up on the shelves, people will almost always by cheaper, however with tools, there is actually a cost to cheap tools (they suck), with semi-conductors, the cheaper version works just as good in the case of TSMC.

neon_me 1y ago

Cheap? 20% increase in cost of BoM equals at least ~100% increase for customer. Would you pay twice for AMD components? What would market do?

aoeusnth1 1y ago
Does a 20% decrease result in a -50% discount? Why would it be nonlinear?
- bloppe 1y ago
  20% decrease would be only 80% price rise for the customer
sneak 1y ago
Presumably they would also accept a lower margin on these, so maybe not 100%.
yard2010 1y ago
What is the alternative?
kelnos 1y ago
Companies charge what the market can bear, not based on their costs. Certainly they will often use some multiplier of their costs as a starting point, and they can't sustainably charge below their costs. But if they double the price of the product and lose more than half of their customers, that's a failure to set pricing properly. Consider the reverse direction: if a company can decrease costs, they will usually pocket the extra profit, not reduce the price they charge. Price cuts usually only happen for one of two reasons: 1) to avoid losing customers to another company that is charging less (or to entice customers of another company that's charging the same), or 2) to capture more profit if they'll earn more customers at a lower price than they'll lose due to the lower per-unit profit. (Yes, there are other reasons, but these seem to be the main ones. For goods that are not essential to life, prices are set based on what people are willing to pay vs. how many units can be sold at that price, with the cost as a floor (absent a policy of using a product as a loss leader).

michaelsshaw 1y ago

What special quality do "western" countries have that makes it a moral obligation to purchase from them over others? Why is it a moral good to keep value from the others?

deleted 1y ago
[deleted]
cs02rm0 1y ago
Trust.
- michaelsshaw 1y ago
  Care to elaborate?
- waffleiron 1y ago
  After the Snowden disclosures, not sure about that.
kelnos 1y ago
For all their flaws (including those plaguing the US right now), I would still much rather live under a Western-style democracy than an autocracy. Purchasing products made under autocratic regimes strengthens those regimes and gives them more power on the world stage. I think "moral obligation" (a phrase the GP did not use, for the record) is a bit over the top, though.
- skeezyboy 1y ago
  > Purchasing products made under autocratic regimes strengthens those regimes and gives them more power on the world stage. you wouldnt be able to export anything if other people took this stance, so how would anyone make any money?
- keybored 1y ago
  The West lives under semi-democracy (partial oligarchy) and exports autocracy.[1] It’s fine for us to prefer to live here (I do; well it’s what I know) but we can’t claim the moral highground (not that anyone in this thread has done that necessarily). [1]: Why are these countries “autocracies”? To better resist foreign intervention.

karel-3d 1y ago

Yeah customers won't pay more willingly for something this abstract. You can use tariffs but then everyone pays more.

Theodores 1y ago

Except that it will just be for the US, not Europe or even Canada necessarily. In Europe nobody is going to pay extra for a gadget that comes with an American chip inside it, they will just buy Chinese. The result will be like automotive with the Chicken Tax, with Americans having pickup trucks and the rest of the world having crossover SUVs.

skeezyboy 1y ago

pointless when the rest of the supply chain is still outside the US

motorest 1y ago

> If that is the cost of keeping the value within the western economies, we should pay. Plain and simple. I'd even argue it's cheap. No, that is not the cost of keeping "the value" within western economies. It would be the cost of granting the US a leverage against the collective west. The US proved to be a very unreliable and outright hostile partner. At this point, it is not clear whether the US is more hostile to the collective west than the likes of China.

ksec 1y ago
US has been a reliable partner post WWII for 95%+ of the time. Making Trump administration representing 100+ years of US history isn't exactly a fair comparison.
- speeder 1y ago
  If you consider all US "friends", that is NOT the case. And not a Trump thing either, or even a Republican thing. USA is quite happy in screwing with "friends", if it will benefit some random lobby. There is a quite long history of USA doing coups, sabotage, and so on, against its own "friends".
- ezst 1y ago
  Yeah, that ship sailed the second time Americans voted for him.
  - maxdo 1y ago
    Sure , trump administration trying to protect associate members of eu is not as good partner as China who directly support Russia , Iran and other country trying to wipe west, very logical
    - rob_c 1y ago
      Don't worry they're just upset that the cheap toys from foxcon suicide plants are going to get out of reach. Once everything dies down the people complaining will find something else to moan about. Prices will normalise regardless of where things are manufactured that's the result of supply and demand. If people aren't willing to pay a bit extra maybe they never really needed luxury good X. Ofc there's fools who over optimized their supply chain in the name of "modern economics of growth" and they'll get a wake-up call about stability and not bowing to shareholders. It's just a shame for most that that lesson will be in the form of layoffs and bankruptcy vs a CEO digging deep and personally reinvesting back in the company they're supposed to believe in.

notepad0x90 1y ago

who is we? should tax payers foot the difference? Innovation follows the money, not patriotism.

ashoeafoot 1y ago

But taiwan is part of the west?