TSMC in Japan: Things to know about its chip factory plans
asia.nikkei.com
asia.nikkei.com
What I do wonder though, given ASML is a Dutch company, why no European governments are cooperating to start a new, European-owned chip foundry on European soil when the equipment is to a large degree manufactured in Europe. Something similar to Airbus/EADS in terms of setup.
Yes, there are GlobalFoundries and Bosch investing in "Silicon Saxony" aka Dresden, but the former is a US company owned by Emirati oil money and the latter is targeted to produce automotive chips. Europe needs independence from the US and security from China going full bonkers regarding Taiwan.
Bosch is investing in automotive as Europe has plenty of world leading car companies.
What world leading mass-market hardware tech companies does Europe have, which would warrant domestic chip production?
Not sure if it would be true tough.
AMD actually used to have a fab in Dresden, they spun it off to GlobalFoundries in 2012.
Europe as a market of about 450M people should have enough demand to saturate a fab with GPUs and CPUs.
There are already loads of plants serving the domestic electronics industry? ST? Siemens? NXP? Infineon?
https://www.ft.com/content/f946703e-5d1e-4328-bd54-63f30ff49...
why Westerners always thinking about aggressive increase price? it may give you a short term profit but in the long run. your customers will start to look else where and try new technology to by pass you.
Apple stop paying Intel's tax. Apple stop paying Qualcomm's tax. Apple stop paying Samsung's tax.
i just don't understand why you want to kill your golden goose and its not like TSMC doesn't raise price. (they increase it by 20% during covid shortage). why create a lose-lose situation instead a win-win for everyone.
TSMC did hike prices the moment they were able. If they can maintain and extend their lead, they will hike them further. Because they can.
I am sure they will frame this as a win-win. Victors always do.
Seems pretty clear to me that the comment you're replying to is talking about short-term profit maximization, and not "profit seeking" in general.
The argument is that excessive short-term profit maximization hurts you in the long run by driving your customers to look for alternatives. Which you'll notice only makes sense as an argument if you do care about profits.
And I agree that it's debatable whether this is specifically a Western failing or not, but it's sure become a common approach over at least the last few decades in the US of A.
Increasing prices seems fairly safe for TSMC though as long as they keep their technological edge and are ready to lower prices again once a viable competitor emerges.
Why do you unironically use the word westerner? that's like generalizing all of east asia
The moment TSMC can say "our node makes the king -- start bidding" their margins will expand exactly as you describe. They got close. Very close. Desperate, extreme action by the other players prevented them from fully capitalizing on the trophy. This time.
In truth, the 20% price ramp still reflects a partial victory.
Perhaps you mean Samsung (which also uses ASML).
And no, Intel didn't "strike back". They forced an existing manufacturing technology to run even hotter and still manage to work.
Yes, Intel did "strike back" -- they shipped competitive products and earned money. Like NVidia on Samsung 8nm, they had to punch up.
Once TSMC is a kingmaker, they will charge a king's ransom -- but they aren't. Not yet. Competitors are still holding on, though they certainly have the disadvantage at the moment. The 20% price hikes (which are actually more than 20%) reflect this dynamic almost exactly: TSMC is the champ, but not the undisputed champ, so they can start hiking prices but they can't actually squeeze out their customers' margins yet.
The problem is that the German automotive industry has only China as market to grow (Europe/US/Canada are saturated, South America, most of Asia and Africa don't have enough rich elites, Arabia wants ultra-luxury/sports cars), and the automotive industry is extremely well connected to our politics - even if the CDU/CSU aren't in government any more, liberal FDP now is, and they'll bow to the whims of the industry... meaning Germany will not consent to anything that threatens the automotive industry. Italy and Greece have been forced to sell off harbors, airports and other infrastructure to China as a consequence of the 2008ff crises, Croatia has sold a large and important bridge project to China, and Hungary's Orban is effectively China's puppet.
The result of that, combined with the 100% consensus requirement on European foreign policy decisions, is why Europe will likely rather stand aside than show China the well-deserved boot. Especially disgusting given that the European Union's foundation was the lessons-learned of the NS dictatorship and we all swore "never again" - and now we're staying silent as China is building concentration camps for Uyghurs and Tibetans.
It's no big deal to bomb someone like Ghaddafi's Libya to hell and back... China will fuck over your entire economy if you dare to establish relations with Taiwan, such as Lithuania currently experiences.
The reason the Chinese government is uninterested with the "bad press" around repression of minorities in their country is because the know corporations will always take profit over ethics, and will happily contract Chinese factories in the name of being "competitive" -- which boils down to bigger payouts for the executive class.
> According to the European Commission work programme for 2022, released on 19 October 2021,
> a proposal on a European chips act will be published in Q2 2022.
The disaster of Flamanville is projected to cost 13 billion euros. Even TSMCs biggest projects are smaller than that in numbers.
> Whatever this European company is, they'd likely need to sell at a massive loss for a generation or 2, just to prove they can do it, and then hope to win some of the profitable contracts from an Apple or Samsung or Nvidia.
Samsung, NVIDIA and AMD are currently blocked by the limitations of TSMC which is mostly caused by Apple paying upfront to reserve all of TSMCs 3nm output [1]. If Europe were to say "okay, we're putting up a 3nm fab and we will not sell to Apple at all" you can bet they would instantly join in to the collaboration, alone to have an alternative to a bidding war with Apple's unfathomably large war chest.
[1]: https://www.heise.de/news/Bericht-Apple-schnappt-sich-komple...
A modern society cannot accept a single company gobbling up the entire supply of a constrained resource simply because it can. This stifles innovation.
Isn't this where gov't subsidies can help? Not only can gov't wave taxes which helps, but they can also just flat out buy the chips. Or they can add incentives to companies for buying these chips. Either way, it helps ease the transitional pains.
If a plan like the above goes through EU governments will likely subsidize the likes of Siemens and Philips with 10s of billions of €.
It costs TSMC $12b to build their fab. It will cost a United European government a lot more money and a lot of time to even develop the tech and by that time semiconductors will have moved on.
ASML creates the technology that TSMC uses.
It should be remembered that they have an international supply chain, including lots of stuff out of the US. If the US wanted to, they could basically prevent ASML from shipping finished products.
Not only is ASML a one-of-a-kind company, but so are a lot of their suppliers/partners.
The Odd Lots podcast had a good episode on this for a general audience (click Manage Cookies > Reject all to get to the article):
* https://www.bloomberg.com/news/articles/2021-11-15/asml-the-...
An earlier episode featured TSMC.
The boring answer is that EU governments are generally banned from subisising businesses, and the EU as a whole is very slow to move. https://www.reuters.com/world/europe/eu-could-clear-state-ai...
Edit: India has announced $10 billion package for semiconductor/display, which is lot of money. There will definitely companies investing, big or small.
Unless India only wants to attract low end, mature node Foundry capacity. $10B is absolutely peanuts for anything that is mainstream or leading edge. Especially for India when they have very little infrastructure and Foundry Ecosystem.
And this is something I notice with India. They dont seems to have a long term strategic plan with anything. It would be much better if it was $50B over 10 years.
I don't think this is a good "leapfrog" opportunity. Start with a larger node, sell a bunch of commodity parts, develop some expertise (and business and physical) infrastructure. This is the path Japan and China followed.
> And this is something I notice with India. They dont seems to have a long term strategic plan with anything.
This has frustrated me for decades.
USSR had enormous growth in the early years (well, after adopting the NEP) all through the rural electrification period and were favorably contrasted with the 1930s depression in the west. It didn’t work out though in the long term.
You trade stability for flexibility. It takes time to steer a big ship, even if your current plan has clearly extremely negative effects (e.g. killing all the sparrows resulting in a locust population boom during the Great Leap Forward). A command economy is about as big as a ship can get.
But one thing to keep in mind.
China has almost 13 times more people than Japan had at its peak.
China is 30 times bigger than Japan.
If China reaches Japan's level of development, its GDP will be ~56tn. For comparison, the US GDP is ~21tn.
India is looking to subsidize fabs, so that might be 10% off ten fabs.
Similarly, it would be foolish to go for high end fabs, assuming they want them for security and supply chain security.
That said: I have stopped trying to think any COVID timeline is too long. Shit's wack. Shit will continue to stay wack for a while. Maybe a very long while.
That's incredible. Judging by my primitive 2013 truck, the onboard computer is probably >100nm.
https://www.economist.com/business/2021/10/21/samsung-electr...
If the measure of good education policy is higher test scores, in a world where the tests are updated at regular intervals (and they have to be, because in a changing world the things you need to learn will change), just win by changing the tests. That's the problem with people who try to reduce everything to maximizing a utility function. Each side can drop or add things to the tests based on what they consider to be important.
that is so fishy
the perfect place to build such factories in EASTERN/CENTRAL EUROPE
Investment? i agree, you need some investment to build things
Wich begs the question: why would anyone decide to invest there? if not to waste money, or perhaps get easy government's money?
A way to inflate prices perhaps?
https://www.fierceelectronics.com/electronics/chip-plants-ha...
As pointed out, Japan has lots of fabs and top-rate high tech companies.
It matters to have a pipeline of high-skill workers and access to high-tech industries for a business like this.
Said talent might have been born on that island, have their family on that island, and speak that island's native language which is not used anywhere else in the world.
Not wise considering such investment is supposed to counter the current chip shortage
Fighting chip shortage with more chip shortage? hmm not wise, nor is a future proof investment..
The US needs fabs on-shore.
In various other locations in the world, too, but also in Japan.
edit: I think I may be missing your point.
Guess its my job to remind someone that the Earth is round. ;-)
Go to Japan on your favourite map website, zoom out, and take a look to the right.
It will be abrupt and bloody. The ROC knows these strategies, the only way it will fall is by force and hopefully the US and other sovereign countries stand up and help against that when the day comes.
It seems that the CCPs plan is to whittle away support from all of the ROC's allies first, then crush them.
Genuine question, what do you think that help would look like? Because every time I try and game out scenarios for China re-absorbing Taiwan by force I come to the conclusion it would essentially be an unwinnable 'war' by western nations and likely a further erosion of the United State's position as the global military superpower (on the back of the Afghan pullout). China can afford to play the long, slow game when it comes to their proximity and civilian toll in/around Taiwan, much of the West can not.
Second, I would assume heavy heavy sanctions, no western nation to deal with China at all. Military force if foreign troops stationed in Taiwan were injured or killed.
The West can play the slow game with Taiwan because it's solely the CCP's problem and the current status quo is what the West wants.
https://www.theepochtimes.com/ccp-at-100-years-a-century-of-...
But please, continue to shill for the murderous authoritarian regime with your whataboutism.
But please, continue to shill for the murderous American regime with your whataboutism.
The Land Reform, The Great Leap Forward, Tiananmen Square Massacre, Hong Kong.
The persecution and genocide of Uyghurs / Tibetans / Falun Gong.
Intel, GlobalFoundries, TSMC and Samsung all have fabs in the US.
TSMC have a fab at WA and building one in AZ.
Samsung have a fab at TX
US have plenty
But if I were in charge, I'd try to put some fabs as close to the Northeast megalopolis as possible while still being cheap. So probably like... Pennsylvania? Upstate NY? Hell, why not Maine? Better weather in the NE (which isn't much of a statement, Arizona is barely human habitable) and it might be interesting to experiment with some alternative tech culture to Silicon Valley's (more down to Earth, IMO).
Think about it. They’re building a massive plant. This is a basic input factor. What model of the world reconciles the idea that these guys are very good at making semiconductors for decades but unable to model changes in the input factors over that period? Does that model sound like the highest probability model to explain their behavior?
https://arstechnica.com/gadgets/2021/06/why-do-chip-makers-k...
"Counterintuitively, the famously thirsty industry can even improve the local water supply due to a focus on reclamation and purification—Intel has funded 15 water restoration projects in the Grand Canyon State with a goal of restoring 937 million gallons per year, and it expects to reach net positive water use once the projects are completed."
reclaim the water is the key
Exactly! Fabs use lots of hazardous chemicals, it's not like they can just dump the water contaminated with these into the next river. And if they clean it, why not clean it a little more and reuse it?
"Counterintuitively, the famously thirsty industry can even improve the local water supply due to a focus on reclamation and purification—Intel has funded 15 water restoration projects in the Grand Canyon State with a goal of restoring 937 million gallons per year, and it expects to reach net positive water use once the projects are completed."
"What Arizona lacks in water, it makes up for with overall stability—the state is very seismically stable and does not suffer from hurricanes, with low risks of other natural disasters such as tornadoes to boot. Building chip fabs without such guarantees is possible—for example, Intel has a large presence in Oregon—but chip fabricators on the West Coast must take extreme isolation measures, which Arizona plants don't require."
The major reason for them being in AZ is constant(ish) weather, cheap land, workforce, and cheap power.
> Primarily to serve Sony and other Japanese clients.