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US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

• duxup 1y ago
  This whole economy by corruption and coercion is not going to work out.
  • FirmwareBurner 1y ago
    I don't see how it can't work at least short term, when the US is by a long margin the world leading military and economic power. Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove? I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely. UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together? What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
    • nemomarx 1y ago
      China seems to be working on catching up, and if you remove all of your soft power maybe they look more attractive?
      • exasperaited 1y ago
        Oh and TSMC is on an island they claim is their own. Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
        • dismalaf 1y ago
          > Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department. They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
      • notahacker 1y ago
        Absolutely. Everything the OP mentions as a reason to continue trading with the US is also a reason for Europe to trade more with China. Historically the argument for not doing that is "look at their very different values and how they bully and threaten their neighbours, and remember that if you do business there their government will happily crush you with its arbitrary power as soon as you step out of line and even at the import/export any trade deals they do make will be them openly trying to screw you" The US isn't exactly in a strong position to continue making those arguments about why the world's other superpower is different with a straight face. The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
        • SpicyLemonZest 1y ago
          More than what? Europe trades a tremendous amount with China in the status quo. The argument you mentioned is real, but the EU never subscribed to it in the first place; they've consistently stated (e.g. https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_23_6409 https://ec.europa.eu/commission/presscorner/detail/en/STATEM...) that trade with China is very important and they have no interest in decoupling, although they'd like to lower the trade deficit.
    • vkou 1y ago
      It won't work out because the people in charge are the dumbest motherfuckers imaginable. They are utterly convinced that every one of their stupid ideas is brilliant, that they know everything, and that the way forward is to liquidate anyone who has the audacity to say 'no' or 'you're wrong' to them. That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing. The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
      • AnimalMuppet 1y ago
        I'm not sure they're convinced that every idea is brilliant. They're convinced that they have to convince everyone else that every idea is brilliant, because if they don't, everyone else will wake up and realize that many of their ideas are in fact not all that bright.
        • vkou 1y ago
          I don't think at this point it's safe to say that they are actually playing 3-dimensional chess. There is plenty of evidence that indicates that they are stupid enough to believe their own bullshit.
          • wrs 1y ago
            It seems like the tariffs are at least one-dimensional chess. The supposed rationale for the numbers was widely ridiculed, but now it’s clear that the numbers didn’t matter as long as they’re large. The tariffs have no rational basis as tariffs, they’re just a convenient stick for extortionate demands like this one.
    • A_D_E_P_T 1y ago
      > I don't see how it can't work at least short term, when the US is by a long margin the world military and economic power. The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
      • neves 1y ago
        USA spends more in their military than the rest of the world combined. Also the only country which used nuclear weapons of mass destruction. You must fear them.
        • alfiedotwtf 1y ago
          [flagged]
          • couscouspie 1y ago
            > Europe’s trade negotiators will outclass Trump’s B-Team Hardly matters. As long as von-der-Leyen remains head of commission the European Union stays devoted to the US no matter the consensus of commission, parliament, national governments or the people.
          • FirmwareBurner 1y ago
            >Europe’s trade negotiators will outclass Trump’s B-Team Eu has no leverage over the US in such neoglaciations, especially with Russia next door. That's why Ursula folded like a deck chair to Trump otherwise Trump's tariffs would have tanked EU manufacturing sector.
        • Tadpole9181 1y ago
          The US spends more on everything, those numbers need to be cost adjusted for "cost of a rifle for America v cost of a rifle for China", but never are.
      • FirmwareBurner 1y ago
        >The 90s were ~30 years ago. American economic and military capacity ain't what they used to be You're totally wrong about this when you look at the numbers. EU's economy was on par with the US about 20 years ago. Now it's only half the size of the US.
    • duxup 1y ago
      No magic that keeps your businesses efficient or running if the government is picking winners and using tariffs. Quite the opposite.
    • exasperaited 1y ago
      It will not work out over the long run. This is corruption; it breeds corruption, and corruption creates victims. Victims don't put up with it forever and as the old cold case appeal spiel goes, "alliances shift over time". More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right? Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere? If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables. Not least because acquiescing even to buying 49% paints a target on my back. Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
      • paganel 1y ago
        TSMC is not going to get over the 50% threshold because it has no free will in this whole matter, as the very existence of Taiwan, and hence of TSMC, depends on the political will of the US. Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
        • exasperaited 1y ago
          But they have to try, right? Otherwise as you say, they are essentially operating under Rubio and Trump's control as a tool of the State Department. The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest? Trump has created a powerful victim here.
        • HarHarVeryFunny 1y ago
    • ben_w 1y ago
      The US margin on economic power isn't all that great, by GDP/PPP it's a long way behind China. Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry. > Ally with China, Iran and Russia to fight the US? Replace Iran with the EU, and yes, some or all of them. > EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia, Urgent, but affordable. > no cheap energy, no tech industry, Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale > ageing population, economic stagnation or even decline, Like everyone else, including the USA > collapsing welfare system News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power? But also, not a unified welfare system over all member nations of the EU. > illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship. Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
      • neves 1y ago
        US is a lot richer than China. GDP/PPP does not count the number of citizens.
        • ben_w 1y ago
          If per capita was what mattered, the US would be kowtowing to each of Luxembourg, Singapore, and Ireland. The US does not, because "per capita" isn't as important as "per government". The mean wealth/income per person in the USA is indeed higher than China. So what?
    • oezi 1y ago
      When all your military spending can't help you win against a third-world country (USA in Afghanistan) or a single country 1/3 your size (Russia in Ukraine), it really makes you wonder if all that spending is justified to uphold one big bluff.
      • vaidhy 1y ago
        Winning is different from taking over.. Russia wants to rule over Ukraine, not destroy it. US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
        • duxup 1y ago
          I'll nitpick here and say that Russia's plan was more likely to topple the government and put a puppet in place and then leave, but they botched that.
        • lostlogin 1y ago
          > Russia wants to rule over Ukraine, not destroy it. Can’t it be both? It’s hard to argue they aren’t trying to destroy it. It has been attempted in the past during the Holodomor. https://en.m.wikipedia.org/wiki/Holodomor https://en.m.wikipedia.org/wiki/Holodomor
          • vkou 1y ago
            The context of post-civil war stalinism and food/industrial policy was a little different from modern Russian empire-building. Russia's end goal here is a cultural genocide.
            • deleted 1y ago
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        • watwut 1y ago
          Russia destroys its colonies. It wants to destroy ukraine. And it wants cultural genocide.
    • deleted 1y ago
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    • csomar 1y ago
      The Soviet Union overspent on military, so much that lots of its military equipment is still present today: https://en.wikipedia.org/wiki/List_of_main_battle_tanks_by_country https://en.wikipedia.org/wiki/List_of_main_battle_tanks_by_c... If anything, it shows the opposite of what you are saying.
    • bigyabai 1y ago
      [flagged]
    • Marsymars 1y ago
      > What can they do now, when the US holds all the cards? Negotiate and follow through in bad faith, because there's no upside to acting in good faith when the opposing party is pursuing a lose-lose agenda.
  • fooker 1y ago
    It has historically worked pretty well, for several centuries at a time. Are you saying there’s something different this time ?
    • duxup 1y ago
      I don't know what you're thinking of.
      • exasperaited 1y ago
        Well, I am British and have studied a tiny bit of my own country's history... so I do. But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen. The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
        • ben_w 1y ago
          > and retail prices can be cut by more than 100% and remain positive. I've missed this story. Can you elaborate?
          • nemomarx 1y ago
            It's not much of anything - Trump said he would get pharma prices down 500 percent or such.
            • exasperaited 1y ago
              He said it more than once on more than one occasion though. Which, as with all these things, means either: - this is his wonky understanding (and he is pretty famously innumerate) - he's saying it as a power game despite the pushback because people around him feel they have to smile, agree and retcon stuff to make it believable Or indeed both.
  • xyst 1y ago
    The economy of "corruption" and "coercion" is Neoliberal Economics 101. Send your regards to pseudo economic theory from the Chicago School of Economics (ie, Milton Friedman); and to Reaganomics/trickle down economics.
    • olalonde 1y ago
      Both Friedman[0] and Reagan[1] were strongly opposed to tariffs and most forms of government intervention in the economy. Hard to imagine either of them supporting the current administration's policies. [0] https://www.youtube.com/watch?v=zv5SiQpG6sg https://www.youtube.com/watch?v=zv5SiQpG6sg [1] https://www.youtube.com/watch?v=gFMyB8WMuDU https://www.youtube.com/watch?v=gFMyB8WMuDU
    • HDThoreaun 1y ago
      Literally the opposite of reality. Not sure how it’s possible to get this so backwards
  • coreyh14444 1y ago
    [flagged]
    • duxup 1y ago
      [flagged]
      • saalweachter 1y ago
        ... is that not a thing that already happens?
        • davidw 1y ago
          Mostly not, because they are all 100% on board. They have shown cabinet meetings where they all take turns effusively praising him in the most sickeningly sycophantic way, though.
          • quesera 1y ago
            Wait, are we still talking about North Korea?
          • saalweachter 1y ago
            He went through a half dozen attorneys general, because they wouldn't do what he wanted, and the thing driving the stock market crazy lately is the persistent rumor he's about to fire the chair of the Fed, whom he appointed.
      • deleted 1y ago
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      • neves 1y ago
        [flagged]
        • tremon 1y ago
          Like he tried to do with Zelensky?
  • slt2021 1y ago
    [flagged]
    • sdsd 1y ago
      The Roman Empire began with a corrupt Senate murdering Caesar for being a dictator. Based on Rome's history, the surest sign would be for JD Vance to murder Trump, declare democracy saved, and then Trump Jr to become emperor of NATO.
      • slt2021 1y ago
        I have a feeling that Barron will be the one running, when his time comes, not jr
  • araes 1y ago
    The article pretty much says it right in the opening section > investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.) Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme. Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad. [1] https://en.wikipedia.org/wiki/TSMC https://en.wikipedia.org/wiki/TSMC [2] https://www.nasdaq.com/market-activity/stocks/intc/institutional-holdings https://www.nasdaq.com/market-activity/stocks/intc/instituti... [3] https://www.nasdaq.com/market-activity/stocks/intc https://www.nasdaq.com/market-activity/stocks/intc
    • csomar 1y ago
      They are $50bn in debt.
    • j_walter 1y ago
      What part of any plan they have had tells you they are likely to stop losing money any time soon? They are basically selling for asset price right now...because the market doesn't believe they are worth more than their assets.
      • Gud 1y ago
        No plan, but wouldn’t be the first time a juggernaut is turned around.
        • j_walter 1y ago
          Wouldn't be the first time they became obsolete either...and I think even with the US governments help they are too far down the drain to come back.
  • newsclues 1y ago
    Been working for a long time just like that though.
    • duxup 1y ago
      The amount matters a great deal IMO.
      • newsclues 1y ago
        Visibility is the difference. It happened before, and perhaps even worse (more competent people were corrupt). Now, people are just making it public.
        • duxup 1y ago
          The existence of any corruption really has nothing to do with the amount. The amount matters.
          • newsclues 1y ago
            Not all corruption is visible or known. If suddenly corruption is done in the open, you see it more, and think it may be because the total amount is greater, but it is only more visible. We don't know how much historical corruption was invisible, thus it is hard to accurately say there is more.
  • lazyeye 1y ago
    This is how China has been operating since forever. They don't seem to be doing too badly.
    • duxup 1y ago
      This is one of those situations where much like manufacturing jobs in the us ... that's not what I want. I don't think most people want that. I don't think becoming China would be a success.
    • rchaud 1y ago
      Who knew "Running America like a business" had so much in common with the Chinese Communist Party? Banning books, blocking access to websites and apps, protectionist tariffs to support local business and now forcing foreign competitors into joint ventures with failing local companies.
      • ModernMech 1y ago
        The through line is authoritarianism. Whether it’s Chinese communist authoritarians or American fascist authoritarians, the result is corruption.
    • seanmcdirmid 1y ago
      China forced 49-51 JVs. But Intel is a public company, not a JV.
    • deleted 1y ago
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    • deleted 1y ago
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    • tsol 1y ago
      Are they? But Silicon Valley is in the USA and not China. I would imagine the legal and business environment has something to do with that.
  • Waterluvian 1y ago
    I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like). I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
    • exasperaited 1y ago
      > I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like). It feels to me like it's more like the beginning of an empire, in the sense of existing under an emperor. > I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class. I think it very interesting that one of the things the USA is going to have to grapple with, in the middle of the most contentious presidency in its history, is the semiquincentennial of independence itself. The bicentennial of independence in 1976 was I think largely an uncontentious thing even though the Vietnam conflict had ended only a couple of years beforehand and the presidency was in the hands of a guy who had taken over the job from, and pardoned, a crook who was forced to resign. Internationally people were pretty kind and generous to the USA. I don't think anyone, anywhere on the planet, is prepared diplomatically for how it will play out this time. Next year is going to be a heck of a year.
      • nosignono 1y ago
        The US president has been an emperor in all but title for generations at least.
        • exasperaited 1y ago
          I think this will have been news to Biden and especially to Obama, who didn't even get the deference about the new suit.
          • nosignono 1y ago
  • cyphertruck 1y ago
    This isn't corruption or coercion. This is a deal. These are terms being offered. They can say no, or counter. But these terms benefit all parties-- TSMC can eventually buy out intel, get lots of top end fabs, bring their superior processes to those fabs and meet the huge demand in AI chips-- that they currently can't grow fast enough to cover. ASML machines take years to build... a better TSMC process on existing ASML machines in Intel fabs is an easy %30 win for the entire world. Plus, china kept at bay, peace increased, intel's bad management gets to bail out saving face, TSMC gets rewarded for their hard work, Trump gets a win, Intel's employees get better management, and get rich from their stock options winning hugely.... Capitalism is where everyone wins like this. Even china, because china loses if it goes to war, but china feels it has to go to war.
• ldoughty 1y ago
  I'm kinda of shocked that chip & many tech companies play ball.. They are a required / no alternatives industry by so much of the USA, with limited alternatives. Is it really more cost-effective for each of these companies to spend hundreds of billions of dollars to avoid tariffs when they could easily pass on these costs because we have no alternatives?
  • assword 1y ago
    > they could easily pass on these costs because we have no alternatives Now imagine the same scenario, but one side is willing to destroy themselves as collateral if they don’t get the result they want.
  • duxup 1y ago
    I think people in power are pretty fond of non democratic systems, they like them. They make friends and get favors. Far easier than competing. And what's the alternative for many of them? Lawsuits? SCOTUS has quit doing their job. The checks and balances are out the window. There is no leadership / anyone in power at the national level when it comes to democracy in the US at this time.
    • pjc50 1y ago
      SCOTUS was stuffed with political appointees to give the results the Republican party wanted. Overturning Roe v. Wade was just the start of that.
  • dismalaf 1y ago
    Honestly, this is a win-win for TSMC. Intel isn't dead. They've made some bad choices and investments but they're still huge. They have $30 billion in gross profit per year on an utterly boring, non-hype based business model. Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is. On top of it already being a shrewd business deal, doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
• oldpersonintx2 1y ago
  [dead]
• melling 1y ago
  Intel only up 4%. Seems unlikely.
• brokencode 1y ago
  Fortunately for TSMC, Intel really isn’t worth that much anymore. $50B doesn’t seem so bad, and maybe it could lead to a deep partnership and sharing of tech and factories.
• analog31 1y ago
  It seems like we're forcing the rest of the world to print dollars.
  • herbst 1y ago
    A swiss news paper wrote something along "so far the main effects seem to be the rising prices of Swiss goods in America, not really a falling market" He is threating Switzerland with 250% tariffs on meds while his people still suffer under horrendous health care prices. That man is beyond crazy
    • throwclown 1y ago
      [dead]
    • croemer 1y ago
      For drugs that are monopolies, tariffs actually don't impact the end price and hit the producer. In the short term, for drugs that are already on the market. In the long run, it reduces incentives to develop drugs. Tariffs are a tax on consumers for commodities but not for monopoly products.
      • herbst 1y ago
        So the assumption is they take the hit of 250% and just keep providing the US with these unique drugs when the US is "only" at max 20% of the total market? Afaik even less the more specialized drugs get. Edit:// it's not just me. Swiss media does barely seem to understand anything anymore either
        • croemer 1y ago
          A monopolists can set prices however they want (in contrast to competitive supplier of commodities where there's a market price). They want to maximize profits and if marginal cost of sale is negligible (as is the case for patented drugs) the optimal price is determined by the demand curve. The demand curve depends on the price the buyer sees including tariffs. So the price post tariff is the same as the price without tariff. The monopolist absorbs the tariff, customer pays the same. Yes, monopolist will still want to sell because they still make profit. They don't take a hit of 250%, their profits are just reduced by ~2.5x. US has famously high drug prices due so cutting edge pharma makes much of its profits there. This is all standard 101 International Economics, Paul Krugman has written the standard textbook for it, it's a fun read.
• nly 1y ago
  If tariffs really raised money in the way Trump pretends then the US government could surely just grant Intel a direct share of all tarrif revenue raised from sales in to the US from Tawain? Of course the reality is you're just taxing Americans to subsidise Intel at that point, since tarrifs are a tax on Americans and not foreigners.
  • hearsathought 1y ago
    > since tarrifs are a tax on Americans So it really does raise money like trump "pretends"? Unless global trade ends, those tariffs will raise lots of money for the government. Even if it is the american consumer who ultimately pays the tariff.
• catlikesshrimp 1y ago
  Taiwan is under a tremendous pull by China, both non violent and violent. Any push by the US is a push towards China. Trump has no idea what he is doing. HE can not replace Brazilian coffee, but at least it is "only" coffee. Not being able to replace a fab is a precarious situation. Is he imagining invading Taiwan? China would consider that an invasion to its territory.
  • duxup 1y ago
    I don't think Trump cares if it "works" economically long term. He cares about what he can extract personally and what he got upset about on twitter when he woke up. That's it ... He was quoted regarding environmental concerns something to the effect of "I'll be dead by then". I think that's really his POV. If you plan to live longer than Trump, he's really not for you.
• taylodl 1y ago
  I'd tell the bully "no deal" if I don't get controlling interest, and thus full control of the board.
  • CoastalCoder 1y ago
    As much as I'd like to see bullying firmly rebuked, I'm not sure that approach would work here. Because even if TSMC managed to get that initial deal, they'd still be at risk of Trump revisiting it.
    • MrMorden 1y ago
      Whatever he agrees to today, he'll do something different tomorrow. You can either tell him where to put it or not.
  • jimbob45 1y ago
    I'm not sure anyone but Intel is against that. Both US parties are most likely furious that the CHIPS act was a massive waste of money. TSMC would love to outright buy a massive US presence with valuable IP. The US desperately needs Intel to turn things around to remain a strategic advantage. Only Intel in their cesspool of hubris would want to keep the status quo of mediocrity. But TSMC, please please please, get Intel out of Oregon. I'm so tired of that loser state holding back companies from reaching their true potential.
    • andrekandre 1y ago
      > CHIPS act was a massive waste of money interesting, i haven't heard much directly about the results, but in what ways has it been a waste?
• throwawayoldie 1y ago
  "If we pay the Dane, certainly he won't ever come back for more Danegeld."
• cherryteastain 1y ago
  Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something. Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly. What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical conclusion is that American consumers will end up paying the tariffs.
  • xyst 1y ago
    > ... American consumers will end up paying the tariffs This has always been the case. I have never heard of a company absorbing tariffs on behalf of consumers in the day and age of "trickle down economics".
    • duxup 1y ago
      So far indications are many companies are eating the tariffs, for now. Even making them visible has drawn the ire of Trump a few times already. But I generally agree that it can't go on forever / not how it works historically.
      • asadotzler 1y ago
        Eating the tariffs by firing workers means more out of work with less purchasing power and prices are going up too. It's fail all the way down.
      • snarf21 1y ago
        A lot of them are "eating" them in the margins of the unreasonable "inflation" increases they used to see how much the public was willing to pay for their products. (Normally, this would be okay in a functioning capitalist market except we've let way to many companies gain a monopolistic position with no real market competition to force a reasonable middle ground between profit and elastic demand.)
      • cnst 1y ago
        I'm actually surprised that some prices are even lower now than they've previously been. I don't think most people actually have a solid understanding of what is and is not affected by which tariffs. If I understand correctly, most of the tech stuff is effectively exempt; and Canada/Mexico tariffs don't apply to most items that are covered under "the rules of origin" certifications under USMCA (the successor to NAFTA). I think the biggest hit has been the elimination of the de minimis rule, which now makes it difficult and/or impossible to get anything directly from China by USPS, be that cheap clothing or small electronics.
• hunglee2 1y ago
  Unprecedented rapacity by the United States - not only forced tech transfer, and then having to pay for the privilege of being robbed; the hegemon is consuming its vassals, as it withdraws from its commitments.
  • phkahler 1y ago
    Well China has been forcing tech transfer for 30 years now.
    • cmdli 1y ago
      And China is becoming increasingly isolated from the rest of the Western world. I'm amazed that the US is following suit.
      • tonyhart7 1y ago
        why you acting like this is bad thing????
        • const_cast 1y ago
          Because nobody can explain why its a good thing????
          • phkahler 1y ago
            Trade deficits are bad. See Greece a while back.
    • Herring 1y ago
      Look at Intel's history. Concentration of power (monopoly) generally leads to corruption/abuse and stifled innovation. It's bad even for the monopolist. The second China becomes powerful enough to throw their military around like the US is when I start supporting tech transfers the other way. A more distributed power structure is much better for overall progress.
• OutOfHere 1y ago
  This is setting up TSMC to also fail. As for Intel, it still will fail anyway.
• tonyhart7 1y ago
  isn't that just monopoly??? idk how we got to do this, like single producent of high end chips is not good for everyone
• phkahler 1y ago
  On the surface, buying 49 percent of Intel wouldn't infuse the company with any capital. It would just bail out investors.
  • fuzzylightbulb 1y ago
    [flagged]
    • deleted 1y ago
      [deleted]
    • downrightmike 1y ago
      It will be a heck of a RICO case
    • themafia 1y ago
      [flagged]
    • CogitoCogito 1y ago
      Why would this post be flagged? It could of course just be automatic due to disingenuous flagging by users, but any administrator could see there is no reason to flag this and then unflag it afterwards.
  • cyphertruck 1y ago
    It actually wouldn't. The sale price will be pretty close to the current market price, maybe %10 more. If the Government kicks in funds to underwrite the deal (say a loan to TSMC) then the deal would likely happen exactly at market price. That means investors who sell are getting the current low market price or a little bit higher--- they will still be down the massive amount. This is really bailing out current management-- letting them be replaced by the more capable TSMC people and getting an attaboy for helping the US government strengthen the alliance with Taiwan, keeping peace in the region.
    • delfinom 1y ago
• xyst 1y ago
  If US steps in to buy a troubled asset such as Intel after failing to convince TSMC to buy, this country is cooked. Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
  • duxup 1y ago
    I think 2008 showed ... how it works. The unfortunate part is that the GOP has now repealed whatever protections were put in place on banks after that.
    • WorldPeas 1y ago
      when I read "how it works" I assume you mean that it was a success? bailing out GM in the way they did pushed their novel vehicle platform technologies to fall to the wayside and for them to refocus on combustion. New brands were on the horizon, there was a hope for a new modern vehicular order but the midrange of the market was squatted by GM's insufficient vehicles. I don't think 2008's bailout worked, at all.
      • nemomarx 1y ago
        It worked for GM, and therefore for the politicians who got favors and influence from doing it, etc. A particular sense of "worked".
  • leptons 1y ago
    >Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail. 2025 says "hold my beer"
    • antonvs 1y ago
      If by "we" you mean anyone in the current administration, the answer is an obvious no. Learning is not their thing.
      • deleted 1y ago
• ujkhsjkdhf234 1y ago
  Trump's tariffs forced a historic trade deal between Japan, China, and Korea, three countries that historically hate each other. If Trump managed to accidentally force Taiwan and China to settle their differences, it might be a sign of the rapture.
• throwclown 1y ago
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• howmayiannoyyou 1y ago
  [flagged]
  • AnimalMuppet 1y ago
    Do I want the US defining the reality my children will inherit? Sure, especially compared to the alternatives you offered. Do I want Trump defining it? No way. Especially not the economic future. I don't trust his knowledge of economics as far as I could throw Trump Tower.
  • llm_nerd 1y ago
    > if you're an American think carefully about whom you want defining the economic & strategic reality your children will inherit. This is such an astonishing statement. US tech and industry have been enormous, outrageously successful at bringing wealth to the US. They have been welcomed with open arms worldwide, and have funnelled trillions into the US coffers. While Intel become a company of middle managers and suits, companies like TSMC filled the void and allowed Apple and nvidia, Qualcomm and Broadcom to become goliaths. Boo hoo. For someone to do this crybaby routine about how maligned it is...good god. The total and complete lack of self-awarenesss is extraordinary. The US has a monumental amount to fall, and idiotic, Stalinist actions like this are precisely how it can be rapidly sped up. > The USA competes against countries and companies that are state owned and/or state infiltrated Not only do US intelligence do economic espionage on behalf of US companies, the US government's enormous debt spend is a collosal socialist regime for US corporations. The US military has a $1T budget largely to dump into US firms (see the laughable recent billion dollars handed over to AI companies, though it's just a tiny sliver of the spend). Regardless, it's pretty astonishing seeing the same people who forever called everything socialist/communist suddenly the biggest advocates of a Stalinist/Maoist Trump and his central planned economy. Utterly bizarre. Almost like all of their words were just partisan rhetoric of zero substance or value.
  • tomhow 1y ago
    > So, to all the majority of haters in this thread (and all those who will soon downvote me) I say this... Please don't comment like this on HN. Sneers and swipes at others in the community are against the guidelines (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html) and drag down the standard of debate from what we're aiming for. We want HN to be a place where we can discuss difficult topics and hear different perspectives, but everyone needs to make an effort to express their positions without snark.
• Herring 1y ago
  [flagged]
  • 2OEH8eoCRo0 1y ago
    Post the rest of the quote
    • _t9ow 1y ago
      You were downvoted, but you were right in pointing out that the quote was taken out of context. Here's the full context: "Nixon should be told," Kissinger said, "that it is probably an objective of [Clark M. Clifford, the Secretary of Defense] to depose [Nguyen Van Thieu, the President of South Vietnam] before Nixon is inaugurated. Word should be gotten to Nixon that if Thieu meets the same fate as [Ngo Dinh Diem, a former President of South Vietnam whom the U.S. initially supported, but who was later murdered in a CIA-backed military coup], the word will go out to the nations of the world that it may be dangerous to be America's enemy, but to be America's friend is fatal." Kissinger was motivating why the U.S. should continue to support Nguyen Van Thieu, the dictator of South Vietnam; but today his words are frequently taken out of context to suggest a self-aware take of U.S. foreign policy.
      • Herring 1y ago
        Yes let’s discuss Kissinger’s intentions. That’s so much easier than discussing shitty US foreign policy.
• deleted 1y ago
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• throwclown 1y ago
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• StarterPro 1y ago
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• jokoon 1y ago
  China said they are going to invade in the next 5 years or so, so TSMC might agree to anything, but that goes a bit too far
• molticrystal 1y ago
  I understand the push to build fabs in the US to avoid tariffs, as the US likely sees this as a strategic hedge for the global chip supply in case China disrupts Taiwan or Japan, or some other rare catastrophic event occurs. Whether it is correct or not, Trump seems to view the US as a larger version of Mar-a-Lago, so he'll always feel he can charge a premium for access to its consumer base and market while offering discounts to those he sees as ingratiating themselves. But it is supposed to be a free market that should reward efficiency and competence, not prop up companies that don't have their act together. If the goal is domestic chip production, funneling funds to TSMC's proven fab operations and to build more US fabs makes more sense than bailing out Intel, regardless of whether it is improper to demand such concessions at all.
  • charlieyu1 1y ago
    TSMC tried to build fabs in US, it doesn’t work, turns out you can’t hire top PhDs and pay them 30k and tell them it’s a lot of money
    • jpalawaga 1y ago
      doesn't tsmc have a 4nm plant in arizona that is cranking out chips today?
      • JetSpiegel 1y ago
        No? Show me a GPU, or a CPU, or anything with a Made in America label.
    • delfinom 1y ago
      You got some wildly incomplete facts. https://fortune.com/2023/06/03/tsmc-arizona-plant-jobs-salary-culture-hiring/ https://fortune.com/2023/06/03/tsmc-arizona-plant-jobs-salar... >New engineering grads with a master’s degree earn on average $65,700 a year, while general full-time staff earn $32,800—compared to Taiwan’s average annual income of $21,700. $32.8k for full time salaries in Taiwan, which is more than the average. And this is _general_ staff. Not engineering staff my dude. >Another challenge is compensation. TSMC pays up to $160,000 annually “for Ph.D.s with some good experience,” says an Arizona-based CEO of a semiconductor recruitment firm hiring for TSMC. That same Ph.D. can earn some $30,000 more at Intel, according to Payscale, a website that tracks company salaries. And that's the real number for PhDs in the US. Quite frankly, though, they probably have less competition with Intel now that it's collasping ;) >TSMC’s American rivals, meanwhile, are defending against its recruiting onslaught. The recruitment firm CEO says candidates have gotten “counter-offers like we’ve never seen. Intel is… giving [people] $10,000 to $20,000 to stick around. We’ve lost people that way.” AND, if TSMC was really paying so low, their competition wouldn't be falling over themselves to pay retention bonuses. (I also think they are probably underpaid in their current jobs and don't know it)
• deleted 1y ago
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• Havoc 1y ago
  Someone with a gun to their head is the only party that would buy it. Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously: https://www.reddit.com/r/pcmasterrace/comments/1mfu3cq/this_is_a_bloodbath_mindfactory_july_cpu_sales/ https://www.reddit.com/r/pcmasterrace/comments/1mfu3cq/this_... And doesn't sound like their next or next next nodes are in good shape either
  • IshKebab 1y ago
    That's not how it works. The fact that Intel are doing abysmally is already priced in.
  • tester756 1y ago
    >Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously: That makes you think that this data is representative?
    • Havoc 1y ago
      Mindfactory is widely used as proxy because its pretty much the only public data source on this that publishes monthly If you have a better source I'm all ears
      • tester756 1y ago
        If we know that source is not representative, then why bother with drawing conclusions as extreme?
        • Havoc 1y ago
          >If we know that source is not representative Pray tell on what basis have you concluded this sales data is not representative? If you have better data that drives your apparent certainty that the mindfactory data isn't representative - feel free to share
  • bangaladore 1y ago
• cyphertruck 1y ago
  This is like an old fashioned Civilization game trade. Taiwan gets a significant ownership in a blue chip US company, TSMC should then take %51 control over intel, and turn it around. The US gets a stronger position with China such that china attacking Taiwan would be like bombing Apple or Google. The USA will go to war over that. Only the willingness to go to war, stops aggressors. War is terrible and economic competition is the path to peace, but if you can't defend yourself you will get destroyed.
  • Nevermark 1y ago
    > Taiwan gets a significant ownership in a blue chip US company Blue chip, Intel is not: > "[...] known for its stability, consistent earnings, sound financials, and long-standing reputation." [0] [0] https://www.investopedia.com/terms/b/bluechip.asp https://www.investopedia.com/terms/b/bluechip.asp
    • sethops1 1y ago
      15 years ago Intel was a bluechip company. Today it is circling the drain.
  • spangry 1y ago
    > The US gets a stronger position with China such that china attacking Taiwan would be like bombing Apple or Google. The USA will go to war over that. If TSMC has effectively transferred their technology to Intel, doesn't this remove a reason for the US to defend Taiwan?
    • codezero 1y ago
      having the tech doesn't build the actual fabs, and a two or three year halt in production or a transfer of that production from Taiwan to China while the US builds up its own production would be devastating for the US.
    • wat10000 1y ago
      The US has been defending Taiwan since before integrated circuits were invented. Supporting an ally and a democracy in a critical location is the only reason that matters. That doesn’t matter much to this administration, but it’s not like they’re going to care about TSMC either.
• estebarb 1y ago
  I don't get it. Isn't it like forcing the foreign competitor into buying your only chicken that produces golden eggs. I really don't understand the logic behind this.
  • msgilligan 1y ago
    Well, to be fair, Intel stopped laying golden eggs years ago.
  • spangry 1y ago
    Just spitballing - maybe if TSMC had a 49% stake in Intel they'd be incentivised to transfer their chip-making technologies and techniques to Intel, to maximise the value of their (forced) investment?
    • msgilligan 1y ago
      Good point. They'd get whatever profit they make from the sale of tech to Intel, plus half of whatever benefit Intel receives.
• nevi-me 1y ago
  There's going to be a lot of undoing actions that were taken because of an old bully who thinks the world is a celebrity game show. Surely tariffs for 3 more years are less damaging than buying a sinking ship? South African right wing farmers sold a story of a genocide and reverse racism, now they wish losing business because their exports are more expensive from the very tariffs that are a negotiation tactic to get their government to abolish or repel sine laws.
• deleted 1y ago
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• UncleOxidant 1y ago
  It seems like they're asking the wrong company to take a stake in Intel. It would make more sense to try to get companies like Apple & Nvidia to take stakes in Nvidia - US based companies that need the product that Intel can supply.
  • downrightmike 1y ago
    Honestly AMD makes the most sense, given they sold off the foundry stuff years ago, which is the part of the process Intel will be doing next. The board brought on a chop shop guy, you don't do that when there is a future, and TSMC would be smart to wait Intel out and pick it up cheap. The USA wouldn't last a month without TSMC chips, Tim Apple wouldn't let that happen. There is no way this demand has any teeth
    • nicman23 1y ago
      more sense for TSMC not for the US lol
    • UncleOxidant 1y ago
      I don't think AMD has enough cash to do that kind of deal. Nvidia and/or Apple certainly do.
  • ipnon 1y ago
    It’s a security deal. They are asking the Taiwan government to trade cutting edge semiconductor manufacturing for defense against invasion. You might call it a racket in other contexts. TSMC is already considered national security infrastructure under Taiwanese law.
  • aorloff 1y ago
    Apple or Nvidia could easily buy Intel. I would be surprised if either had not looked at it seriously (for patents alone). Apparently they don't need that kind of headache.
• NomDePlum 1y ago
  If 2008 didn't demonstrate that capitalism and market economics are a sham, then surely this type of market manipulation does.
• mulmen 1y ago
  How is this better? Smells like forcing Boeing to buy McDonnell Douglas.
• cncjchsue7 1y ago
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• deleted 1y ago
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• cookiengineer 1y ago
  - have most wanted product and fab pipeline of the century - be bullied by little Orange - ??? - no profit The US administration heavily underestimates how much every nation on the planet wants TSMC. This deal is so bad, just from a comparison point of view. It's not like the EU, India, and other nations don't want chips. That's what the egocentric US administration doesn't seem to understand. You can't bully nations into submission, at some point the winds will change. Guess what, that already happened. The media in the EU is making a joke out of US politics on a daily basis since the start of this term.
• cosmicgadget 1y ago
  This feels like the Foxconn deal from his first term.
• aurizon 1y ago
  Kick the Tariff dog too often and it will bite. Huge Aluminum/copper/wood tariffs have moved Canada to export diversely. These supplies are tight and this year's production has been purchased in Europe/Japan/Asia who are short. Since the USA can not plant magic 1 year wood seeds = new growth 10-20 years out. Houses use a lot of wood/copper/aluminum = a bad 2-3 years comes knocking. Plastic(PEX) can make pipes, but they are a lower quality. Bamboo grows fast and can be used for glued under pressure wood for most uses, but it is not cheap made in the USA
• thewileyone 1y ago
  This is just pure extortion and it's across the globe. It'll just drive more countries towards BRICS.
  • 93po 1y ago
    i mean what do you call the US domineering nearly the entire world's trade with its massive military for the past nearly 100 years?
    • thewileyone 1y ago
      True. At least Trump has exposed it.
• mrheosuper 1y ago
  What leverage do they have ? Not buying TSMC chip ?, lol
• burnt-resistor 1y ago
  Seems kind of fascistic and lacking in the free trade department to force a purchase to receive selective exceptions. This is picking winners and losers by extortion.
• phendrenad2 1y ago
  Makes me think of the Dollar Milkshake Theory. Taiwan is dependent on the US economy, so the US can and will use it's economy like a spending account.
• tsoukase 1y ago
  By corporate practices this is not a good thing. Companies buy companies if they are complementary to them (which Intel is not to TSMC) or competitors in order to extinguish them (which nobody wants for Intel). Government enforcement to buying a company leads to mutual hurting. So no option is left than to do nothing.
• amluto 1y ago
  Suppose this works: TSMC buys 49% of Intel and Intel remains competitive. Does the US really win? The US’s major fab owner ends up with close to or actual majority foreign ownership, actual competition in the market would be reduced, and there would probably be even more pressure for Intel to move operations out of the US or to consolidate such that it licensed TSMC IP instead of developing its own.
• fennecbutt 1y ago
  Why does the U.S. think they're so special? Imagine if Taiwan/TSMC or even ASML were acting this childish. Refuse to sell chips or modern chip making technology to American companies = America would probably go to war with Taiwan or the Netherlands lmao. One trick pony.
• Boston_Baz 1y ago
  Its nearly a guarantee TSMC was going to be exempt. The dismal performance of their AZ location and Samsung's TX location shows how the US wouldn't even be anywhere near 20% domestic manufacture by 2035. Capital≠Competency. The 70k staffing shortage, difference in culture is the real issue here. This tariff would have turned into a kamikaze maneuver had it not been for the carveouts. I was stunned when it was announced. I mean having contradicting tariffs and goals is one thing, but semis?! Wonder if this will finally get Intel their first Intl. buyer for their semis.