4 ms·

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 alternative

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.
- Matticus_Rex 1y ago
  If it were a win-win relative to their other options, they wouldn't have to be forced into it. They may have been able to make the best of it, but let's not pretend value is being created.
- ldoughty 1y ago
  But the US government has proven to be unreliable in maintaining commitments -- even words on paper are meaningless as it doesn't seem to stop them from changing the deal later and demanding more ("I have change the terms of our agreement, pray I do not alter them further"), and then another request demanding more. Would TSMC be doing the government a favor and gaining protection, or are they being extorted? ("would sure be a shame if we doubled your tariffs again...")
  - throwup238 1y ago
    Does it really matter? Does TSMC have a choice either way? They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
    - phkahler 1y ago
      >> Does it really matter? Does TSMC have a choice either way? Sure. Go home and make chips. Pass the tarrif costs on to customers. Would US customers have a choice?
      - seanmcdirmid 1y ago
        Taiwan is too dependent on the USA ATM to make that choice. If they were to go it without the USA, the only choice would be to become an actual bonafide province of China, they aren't going to exist on their own. Almost everyone else outside of eastern Asia, however, can make a different choice.
      - 1y ago
CGMthrowaway 1y ago
>I'm kinda of shocked that chip & many tech companies play ball.. Have you heard of this story? https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished-qwest-refusing-participate-illegal-surveillance-pre-9-11 https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished... The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy. Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.
- sleepyguy 1y ago
  Bernie died in prison because he didn't want to give them access to Worldcom so the story goes.
  - seanmcdirmid 1y ago
    Bernie was released a month before dying. Don't ask me how I had this fact in the back of my head (I looked at Worldcom and Enron a few weeks ago for another HN story).
    - athriren 1y ago
      madoff died in custody at FMC Butner. he was not released before he died.
      - seanmcdirmid 1y ago
        I think you are confusing Bernie Ebbers (Worldcom founder/CEO in Clinton Mississippi) with Bernie Madoff (big ponzy scam in NYC)? Yes, they are both named Bernie.
        athriren 1y ago
        you are right, i did conflate the two. apologies.
duped 1y ago
[flagged]
tick_tock_tick 1y ago
> when they could easily pass on these costs because we have no alternatives The administration has made it clear they will take such actions personally. The USA by and large figuratively controls the world. All of Europe is one step away from a protectorate and if Taiwan doesn't want to conquered by China they need the USA in the way. If the USA ever sours on the relationship it means China will take Taiwan so they do whatever they need to do to appease the USA.
platevoltage 1y ago
After pretty much every company with a public profile threw money at Trump's inauguration fund, this doesn't surprise me at all.

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.

Matticus_Rex 1y ago
If it were a win-win relative to their other options, they wouldn't have to be forced into it. They may have been able to make the best of it, but let's not pretend value is being created.
ldoughty 1y ago
But the US government has proven to be unreliable in maintaining commitments -- even words on paper are meaningless as it doesn't seem to stop them from changing the deal later and demanding more ("I have change the terms of our agreement, pray I do not alter them further"), and then another request demanding more. Would TSMC be doing the government a favor and gaining protection, or are they being extorted? ("would sure be a shame if we doubled your tariffs again...")
- throwup238 1y ago
  Does it really matter? Does TSMC have a choice either way? They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
  - phkahler 1y ago
    >> Does it really matter? Does TSMC have a choice either way? Sure. Go home and make chips. Pass the tarrif costs on to customers. Would US customers have a choice?
    - seanmcdirmid 1y ago
      Taiwan is too dependent on the USA ATM to make that choice. If they were to go it without the USA, the only choice would be to become an actual bonafide province of China, they aren't going to exist on their own. Almost everyone else outside of eastern Asia, however, can make a different choice.
    - 1y ago

CGMthrowaway 1y ago

>I'm kinda of shocked that chip & many tech companies play ball.. Have you heard of this story? https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished-qwest-refusing-participate-illegal-surveillance-pre-9-11 https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished... The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy. Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.

sleepyguy 1y ago
Bernie died in prison because he didn't want to give them access to Worldcom so the story goes.
- seanmcdirmid 1y ago
  Bernie was released a month before dying. Don't ask me how I had this fact in the back of my head (I looked at Worldcom and Enron a few weeks ago for another HN story).
  - athriren 1y ago
    madoff died in custody at FMC Butner. he was not released before he died.
    - seanmcdirmid 1y ago
      I think you are confusing Bernie Ebbers (Worldcom founder/CEO in Clinton Mississippi) with Bernie Madoff (big ponzy scam in NYC)? Yes, they are both named Bernie.
      - athriren 1y ago
        you are right, i did conflate the two. apologies.

duped 1y ago

[flagged]

tick_tock_tick 1y ago

> when they could easily pass on these costs because we have no alternatives The administration has made it clear they will take such actions personally. The USA by and large figuratively controls the world. All of Europe is one step away from a protectorate and if Taiwan doesn't want to conquered by China they need the USA in the way. If the USA ever sours on the relationship it means China will take Taiwan so they do whatever they need to do to appease the USA.

platevoltage 1y ago

After pretty much every company with a public profile threw money at Trump's inauguration fund, this doesn't surprise me at all.