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Comment by ineedasername | Hacker News Reader

I found the geopolitical portion to be the most important aspect here. China has shown a willingness to flex its muscles on enforcing its values beyond their borders. China is smart, and plays a long game. We don't want to wake up one day and find they've flexed their muscles on their regional neighbors similar to their rare earths strong-arming from 2010-2014 and not have fab capabilities to fall back on in the West.

(For that matter, I'm astounded that after 2014 the status quo returned on rare earths with very little state-level strategy or subsidy to address the risk there.)

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Ben missed an important part of the geopolitical difference between TSMC and Intel: Taiwan is much more invested in TSMC's success than America is in Intel's.

Taiwan's share of the semiconductor industry is 66% and TSMC is the leader of that industry. Semiconductors helps keep Taiwan from China's encroachment because it buys them protection from allies like the US and Europe, whose economies heavily rely on them.

To Taiwan, semiconductor leadership is an existential question. To America, semiconductors are just business.

This means Taiwan is also likely to do more politically to keep TSMC competitive, much like Korea with Samsung.

> Semiconductors helps keep Taiwan from China's encroachment because it buys them protection from allies like the US and Europe, whose economies heavily rely on them.

Are there any signed agreements that would enforce this? If China one day suddenly decides to take Taiwan, would the US or Europe step in with military forces?

The closest I've found is this: https://en.wikipedia.org/wiki/Taiwan_Relations_Act

Not guaranteed "mutual defense" of any sort, but the US at least has committed itself to helping Taiwan protect itself with military aid. The section on "Military provisions" is probably most helpful.

There are no official agreements since neither US nor any major European countries recognize Taiwan/ROC but US has declared multiple times that they would defend Taiwan (see ‘ Taiwan Relations Act’ & Six Assurances’)

https://en.wikipedia.org/wiki/Taiwan_Relations_Act

> The Taiwan Relations Act does not guarantee the USA will intervene militarily if the PRC attacks or invades Taiwan

It would not be wise to commit to intervene in all circumstances. Similarly, also the NATO treaties do not specify in detail how the allies have to react in case of an attack.

Not an agreement, but the US stance towards the defense of Taiwan (ROC) was recently declassified early: https://www.realcleardefense.com/articles/2021/01/15/declass...

China's GDP is projected to surpass the US GDP in 2026 [1]. After that it won't be long until the Chinese defense spending will surpass the US one. And after that, it won't be long until the US and its allies will realize it will be healthy for them to mind their own business when China takes over Taiwan.

[1] https://fortune.com/2021/01/18/chinas-2020-gdp-world-no-1-ec...

Taiwan nor TSMC cannot produce the key tool to make this all work: The photolithography device itself.

Only ASML currently has that technology.

And it turns out, the photolithography device isn’t really a plug and play device. It’s very fussy. It breaks often. And it requires an army of engineers (as cheap as possible), to man the devices, and to produce the required yield, in order to make the whole operation profitable.

This is the Achilles’ Heel of the whole operation.

I suspect that China is researching and producing their own photolithography devices, independent of American, or western technology. And when they crack it, then they will recapture the entire Chinese market for themselves. And TSMC will become irrelevant to any strategic or tactical plans for them.

>I'm astounded

Our political system and over financialized economy seem to suffer from same hyper short term focus that many corporations chasing quarterly returns run in to. No long term planning or focus, and perpetual "election season" thrashing one way or another while nothing is followed through with.

Plus, in 2, 4 or 8 years many of the leaders are gone and making money in lobbying or corporate positions. No possibly short-term-painful but long term beneficial policy gets enacted, etc.

And many still uphold our "values" and our system as the ideal, and question any that would look towards the Chinese model as providing something to learn from. So, I anticipate this trend will continue.

It appears the Republicans are all-in on the anti-China bandwagon. Now you just have to convince the Democrats.

I don't think this will be hard. Anyone with a brain looking at the situation realizes we're setting ourselves up for a bleak future by continuing the present course.

The globalists can focus on elevating our international partners to distribute manufacturing: Vietnam, Mexico, Africa.

The nationalists can focus on domestic jobs programs and factories. Eventually it will become clear that we're going to staff them up with immigrant workers and provide a path to citizenship. We need a larger population of workers anyway.

My impression was that Republicans were only half-hearted about China as that issue made it's way through President Trump's administration. The general tone I felt was that things like tariffs were tolerated in support of their party's leader, not the tariffs themselves. And the backtracking on sanctions on specific Chinese firms indicated there was little/no significant GOP support pushing President Trump to follow through. The requirement that TikTok sell off its US operations was watered down into a nice lucrative contract for Oracle, though all that's in limbo and the whole issue has lost steam, its fate possibly resting in the courts, or with a new administration that will be dealing with many larger issues.

The molehill -> mountain issue of Hunter Biden's association with a Chinese private equity fund will raise lots of loud rhetoric, but more for partisan in-fighting than action against China.

Meanwhile the US, the West, Corporations will pay lip service to decrying human rights violations and labor conditions. China will accept this as the need to save face, while any stronger action will be avoided to prevent China from flexing its economic muscles against the corporations or countries that rely on their exports. No company wants to be the next hotel chain forced to temporarily take down their website & issue an embarrassing apology. No country wants to be the next Japan, cut off from rare earth exports.

Just look at Hong Kong: Sure the US has receded from such issues in the last 4 years, but it's not like any other country did anything more than express their displeasure in various diplomatically acceptable ways.

Hong Kong was a lost cause to begin with. With China having full sovereignity over Hong Kong and the Sino-British Joint Declaration being useless (not enforceable in practice and not even violated, at least on paper), the West could do little more about Hong Kong than about Xinjiang or Tibet.

Trump was all in on the anti-China bandwagon. The traditional Republicans were just tolerating Trump long enough to get their agenda passed - conservative judges and tax cuts. Republicans traditionally have been about free trade.

> [...] and not have fab capabilities to fall back on in the West.

I'm not too concerned:

- There are still a number of foundries in western countries that produce chips which are good enough for "military equipment".

- Companies like TSMC are reliant on imports of specialized chemicals and tools mostly from Japan/USA/Europe.

- Any move from China against Taiwan would likely be followed by significant emigration/"brain drain".

The issue isn't just military equipment though. When your entire economy is reliant on electronic chips, it's untenable for all of those chips to come from a geopolitical opponent. That gives them a lot of influence over business and politics without having to impact military equipment.

National security doesn't just extend to direct military applications. Pretty much every industry and piece of critical infrastructure comes into play here. It won't matter if western fabs can produce something "good enough" if every piece of technological infrastructure from the past 5 years was built with something better.

As for moves again at Taiwan, China hasn't given up that prize. Brain drain would be moot if China simply prevented emigration. I view Hong Kong right now as China testing the waters for future actions of that sort.

Happily though I also view TSMC's pending build of a fab in Arizona as exactly that sort of geographical diversification of industrial and human resources necessary. We just need more of it.

>As for moves again at Taiwan, China hasn't given up that prize.

CCP hasn't give up since KMT high-tailed to Taiwan. for more than 40+ yrs American cozy up with the Chinese govrt and doing business with China.

American told Taiwan govrt not to "make trouble" but we all know China is the one who make all the troubles with military threat and flying aircraft over Taiwan, day in and day out.

Taiwan have build up a impressive defensives from buying weapon (US) to develop its own. yes, China can take Taiwan. that's 100% but at what price.

that's what Taiwanese is betting on, China will think twice about invading.

I bet TSMC has a number of bombs planted around the most critical machines, much like Switzerland has bombs planted around most critical tunnels and bridges.

Trying to grab Taiwan with force alone, even if formally successful, would mean losing its crown jewels forever.

The bombs have been removed some years ago in Switzerland as the risk of them going off was deemed greater than the risk of sudden invasion.

Just to nitpick, your point absolutely stands

TSMC is not really that important. It’s currently only useful for the cutting edge of CPUs, and especially for mobile phones, that can get the battery boost from using a more efficient processor.

Military hardware uses CPU technology that’s 10+ years old, of which the Chinese are capable of fabricating themselves on the mainland. The stuff needs to be rugged, and likely, radiation-proofed.

And besides, isn’t it easier for Switzerland to just launch missiles at the bridges, instead of actively maintaining explosive devices on each bridge?

Maybe TSMC is not that important for making advanced weapons. It is still important for billion-dollar markets like cell phones, cloud servers, desktop and laptop computers, etc. For instance, Apple, which happens to somehow rack in money selling computing devices, is very dependent on TSMC, without a viable replacement available now.

Taiwan's defenses can hold up against minor probing from China, nothing truly sustained.

The true deterrent to China isn't any treaty agreement to protect Taiwan, which doesn't exist. It's the realpolitik of 30,000 US troops in Taiwan.

Any significant & sustained attack against Taiwan would harm US troops. They'd be little more than a speedbump for China if China acted quickly & in force, but that speedbump would require a significant-- and perhaps disproportionate-- response from the US.

> Taiwan's defenses can hold up against minor probing from China, nothing truly sustained.

It's the same for every small country bordering a potentially hostile much larger neighbor. Nobody excepts the small country to be able to withstand a full-scale invasion. The point is to make that invasion expensive enough to not be worth it.

You're not even wrong. With Taiwan being an island, any prospects of invasion are going to be bloody. Successful marine invasion are surprisingly rare in history. Usually, they are only successful because the defender could not set up a defense, or the attacker committed overwhelming resources. However, Taiwan's strategic position (it guards access to the mainland from the ocean) and the ideological accomplishment of having tied up this loose end might make it worth it. And in the event Taiwanese economy and its importance declines, it could become harder for the US to justify defending it.

>we all know China is the one who make all the troubles with military threat and flying aircraft over Taiwan, day in and day out.

As they are fully well allowed to as Taiwan is their own territory. You and I might disagree but out of the 195 countries on earth the only ones who recognize Taiwan is a country are these few:

Guatemala, Haiti, Honduras, Paraguay, Nicaragua, Belize, Saint Lucia, Saint Vincent And The Grenadines, Marshall Islands, Saint Kitts And Nevis, Palau, Tuvalu, Nauru, Vatican City.

Comparing that to the 139 countries that recognise the State of Palestine (where Israel can still do as they damn well please!) and it is quite easy to see that while some might pretend to care about Taiwan (like the US) all they really care about in the end is the money to be made from trading with/in PRC.

>China will think twice about invading.

PRC doesn't invade. It isn't the US. It gains influence in much more subtle and intelligent ways than bombing people but if they wanted to they could do to Taiwan what Israel does to Palestine and no one would do anything but talk talk talk.

> out of the 195 countries on earth the only ones who recognize Taiwan is a country are these few:

There would be a lot more if China wasn't so threatening about it.

The moment there is an opening or weakness, much more of the world will jump on board

>As they are fully well allowed to as Taiwan is their own territory.

Taiwan is a fully functional country. it doesn't pay taxes to China. its military is not under China. a lot of countries doesn't even have visa requirement for Taiwanese. Taiwanese passport is better than Chinese

>It isn't the US. It gains influence in much more subtle and intelligent ways than bombing people

LOL. China so intelligently gains influences(?). Taiwanese voted DPP's Tsai and gave her the largest votes in the history of Taiwan. Taiwanese have time and time again voted against China "influences"

Yeah, for some reason, I assumed that military equipment mostly used, like, low performance but reliable stuff. In-order processors, real time operating systems, EM-hardening. Probably made by some company like Texas Instruments, who will happily keep selling you the same chip for 30 years.

Well, I doubt the US military is too concerned with chasing the transistor density per cm^2, but there are cutting edge areas of military tech in the form of weapons guidance, fighter jet avionics & weapons systems, etc. that may require more advanced capabilities in components-- I don't know.

(As an aside, when we sell things like fighter jets to other countries, they do not get the same avionics & weapons/targeting systems that we use)

That’s a good comparison... CPUs are increasingly a commodity.

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