TSMC to make 4nm chips in Arizona for Apple, AMD, Nvidia
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In fact, when taking apart China-made, China-designed products, I am frequently very impressed at cost-cutting measures that are taken with minimal impact on the functionality of the product.
If Taiwan stopped making those tools you would be impacted. The world overall... not so much.
TSMC’s revenue is less than a tenth of Taiwan’s total export revenue. They might be the most profitable of Taiwan’s companies, but Taiwan has a huge economy.
And it terms of impact on the world economy, Hon Hai precision, better known in the west as Foxconn, would like to say hi.
Anyhow, the U.S. has no need nor desire to establish a presence on Taiwan. Okinawa and Korea are more than close enough for its purposes, peaceful or otherwise. And if the U.S. were to try to establish a presence, you can be sure China's invasion fleet would reach Taiwan before any significant U.S. materiel could make it ashore.
In fact, I wouldn't be surprised if making Taiwan globally less economically relevant is core to their strategy for reunification. While the US is dependent on Taiwan for chips, Taiwan has a very important defense partner that China can't really compete with. But China has a way better chance of securing Taiwan if the rest of the global community only cares for ideological reasons.
My initial thoughts on this came the from the opposite side in terms of Taiwans security.
One of the major bounties for invading Taiwan would be in the acquisition and control of their chip manufacturing. Which - as you mention, the entire tech world is dependant on.
By moving some of that capability offshore, that incentive is gone.
Though I can see it from both sides.
PRC wants Taiwan regardless of its production value (geopolitical & PRC narrative) though I'm sure they would like the control of chip manufacturing. However if the US did move all of its strategic production off island there would be less value accrued to defending outside that said keeping a close presence on China expansion is important to the US. So it would still have value maybe a bit less so.
Please excuse the human aspect of the population as we are separating that part of the discussion.
The US has taken steps recently to reduce china's ability to make chips domestically. See - https://www.seattletimes.com/business/chip-gear-maker-asml-a...
The equivalent of popping out the Intel/AMD/ARM CPU to disable a computer, and leaving the motherboard, RAM etc.
Why would you expect the US military to care about children or try to evacuate them?
This deal is in US and TW best interest. TW is still valuable as cutting edge is still made on island. So production and economics so benefit them. US still provides military protection / defense. They are still long term partners will aligned goals. And if China does invade TW, US can continue a long fight and win by falling back only a generation or two to is smaller but important domestic production to continue supporting its defense technology needs.
I can't speak for them, but I have to assume RW also sees its best interests if China invades to lose TSMC plants but US win the war and they maintain democracy, rather than keep TSMC plants but controlled by China and US lose the war and go under full control of mainland rule.
Plants can be rebuilt, just like Marshall plan or what will happen in Ukraine. TW wants long term freedom from China - strengthening US defense's tech position helps this the most.
The obvious option in event of PRC control is everyone deferring to mutual leverage, where US controls fab inputs, TW controls outputs, PRC negotiating access to % of high end production by controlling island. Meanwhile buys both US and PRC time to secure independant semi chain, TW gets to still profit off semi, much like pre techwar arrangment. That's the strategically rare win-win-win scenario where everyone gains / avoids loss vs having accessible leading edge setback 20 years. Of course PRC wins most in this arrangment, and US/TW relatively loses, but if PRC wins in TW scenario vs US, that's going to be least of worries / concessions. The least obvious option is US deciding to scorch earth tech that supports their most competitive high tech industries, responsible for huge % of competitive advantage, especially if that leaves PRC the biggest producer of mature nodes (where things are trending). Even less sensible considering long term timeline after which experts believes PRC can reach semblance of semi parity.
This is short/medium term balance / interest calculation irrespective of the deal - which I didn't comment on - substantial capacity won't shift off TW in the timelines US forecast PRC will make move. Leading edge isn't particularly relelvant to defense hardware ends which use mature nodes, nor does anyone project long fight with how irreplaceable modern platforms are. It's why PRC (and chip partners US is trying to coerce into export controls) views Oct chip curbs as attack on their commercial sector, not military since PRC also have small batch 7nm production capability.
> TW also sees its best interests
It's also obvious "best" TW interest is to hedge having continued leverage over being leading ledge supplier regardless of who wins. There is no scenario where giving away their silicon dominance makes sense, unless coerced to, which is why US had to unilaterally announce export controls - because CHIPS4 partners weren't biting and actively pushing back. Least of all because no one is sure TW can win local war against PRC. Wealthy TW industrialist/elites/chip talent would rather be wealthy under PRC control after war then be fruit farmers because their industry got glassed. Read between line of Morris Chang stating US efforts to reshore chips manufacturing doomed to fail - it's not commentary on US talent - but TW isn't ceding industry to be Americanized. IMO don't expect these plants to launch without hitch. Prolonged war is probably least in TW interests because island simply can't sustain past a few months on domestic resources. There's reason TW defense posture is not prepping for prolonged war like US wants, deep down leadership and industry knows best interest for TW is to survive short/sharp war as developed economy and work with whoever wins.
> strengthening US defense's tech position
Except, again, TW offshoring leading edge fabs doesn't substantively strengthen US defense indy that depend on mature nodes with respect to PRC war. As stated, US fabs will STILL depend on TW inputs for forseeable future - it's not just ASML that's bottle neck - niche suppliers and expertise will be stuck on TW long term. Also consider "partners" pushing back on unilateral US curbs or SKR, JP building out their own indigenous defense industry - very few are actually interested in giving/strengthining US further leverage especially at their cost. And let's be real, fabs aren't going to be rebuilt on TW if they get leveled when they can be reconstructed in more secure locations.
Seems unlikely? Right now Russian gas goes through pipeline in Ukraine to Europe. Either side miraculously avoided disabling it through entire war.
Both sides don't want China to take over the technology to produce state of the art chips and control the distribution of those chips. And in case of a war, no way is china continuing to sell those chips to the US defense dept. The profit is negligible compared to their strategic value. Different goals will produce a different result.
That's not the point though. Who runs those facilities now? TSMC aka Taiwan aka a western ally. Who stands to lose the most from TSMC facilities being burned to the ground? Taiwan (obviously) and the west.
As a layman with no background in international relations, to me it seems like TSMC is simply an extra bargaining chip for the Chinese government. Which is why I am all about the idea of building more TSMC facilities in places that are less susceptible to being invaded. And yes, the Arizona plant is just a drop in the bucket compared to their facilities in Taiwan, but you gotta start somewhere, and something is better than nothing in this case imo.
No it isn't. China under the Communist Party has never ruled or controlled Taiwan (since 1949). Taiwan democratized, developed, and got wealthy first, completely independently of China. Taiwan has never in modern history been an integral part of China.
Taiwan and China being one nation is the policy of the governments of both China and Taiwan.
Of course Taiwanese nationalism is it's own thing now, but the Taiwanese people seeing themselves as not Chinese is a relatively recent phenomenon - it's been functionally independent for less than 100 years, and before that it was a Japanese colony like several others that have since been reabsorbed by China.
I'm not supporting Chineses irredentism, and I don't think the parent comment was either. Taiwan should remain independent. What the parent was explaining is why China would want Taiwan no matter what - it's a historical part of China that is relatively recently separated, so they want it for purely nationalistic reasons. It's no different from Serbia and Kosovo, or Russia and swaths of Ukraine. The economics don't matter if all you care about is your wounded national pride.
No one in Taiwan and not even the current government consider China/Taiwan together. When KMT fled and created the constitution they claim China. Taiwan is now stuck in limbo because the people just want to live their lives in peace and already consider themselves Taiwanese and independent. But if they change the constitution then China will consider it a formal act of independence and use it as an excuse.
I'm not sure if that incentive was significant enough. In my eyes, PRC's interest in Taiwan is at best orthogonal with TSMC's manufacturing capabilities.
To say this would make the world worse off is a drastic understatement.
TSMC would be rendered "not operable," TSMC Chair Mark Liu said.
China's main motivation isn't about controlling TSMC, that's just a useful side-objective if it comes to pass. Their main motivations are:
1) break the first island chain barrier and gain a naval base with unhindered access to the Pacific, and
2) shut down a high-functioning Chinese democracy that is a constant reminder to the people of mainland China that democracy works for Chinese people and that they don't actually need the CCP.
These are also the reasons the US and Taiwan's other allies like Japan will continue to defend the country even if it moves some chip production to safer locales.
Not that it is the only or even the most powerful leverage China has over the west, but it is still a massive one, and it has quite a lot of second-order effects.
They'll never control TSMC by invading Taiwan. TSMC will sabotage their equipment if it looks like a CCP invasion is about to succeed. CCP knows that, it's not their main reason for wanting Taiwan.
But if they're entirely dependent on the US for defense in case of PRC invasion, is that healthy for the country?
Basically you have no argument and no position except to be rude.
Technically, since Taiwan isn’t recognised as a country they can’t be a signatory of the nuclear non-proliferation treaty. They only thing stopping them developing nuclear weapons is political pressure.
The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan.
The subsidies only make this a viable option for political reasons. The decision to create a fab in Arizona is strictly speaking unprofitable and essentially a economically irrational move for the company.
It is ONLY being done because of US demand and political tension from China. For a shareholder this move is not good when looking at it in terms of profit.
I know this is a hard pill to swallow but it's true.
Don't joke about Europe. The best place for tsmc to expand is actually china. But this won't happen for various reasons that we all know about.
I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech.
The main reason is the looming threat of invasion of Taiwan from China. Such an action is catastrophic for Taiwan and the US. I thought this was obvious. Guess not.
The US is an easier espionage point for the US to steal technology from Taiwan. Most likely it will happen. But simple espionage isn't enough for this technology to fully transfer. The expertise and knowhow is just too challenging.
Do not let your patriotism blind you from the moral grayness that operates within the US as well.
So maybe read my comment in context instead of implying racism right off the bat SMH.
Also you missed that the closer you get to the consumer, the more units you sell. There's less purchasers of tools than consumers.
For a US company, probably. They seem to pick up Chinese Ph.D.s with ease.
Your post looks like a rationalization of your own purchasing decisions. If this is a correct observation I would self reflect on your own biases.
If you ran TSMC and you wanted to be sure no single disaster or war destroyed your whole manufacturing capability, where would you put the fabs? China's coast seems too close disaster wise and the same war that would dust your TW masks might destroy those too. Middle east maybe for climate and shipping logistics? Then one in the EU, perhaps spain? North america is probably third choice, and between climate and cartels that probably means the US. If third pick is paying you to go there, maybe it does make good sense.
GMAFB. Intel has several of their fabs in the Phoenix metro area, they’re another 3-5 major players in the area, and there’s a talent pipeline from the local University into these companies.
Intel’s problems aren’t an inability to fab, it’s an inability to translate their design language into the new, smaller process.
It's not just about intels capabilities. It's about economic wage standards. The cost is just too high in the US.
That being said tsmc workers in Taiwan are by far more capable then Intel this is proven by the 3nm process of which Intel is completely incapable of achieving.
> The material is just silicon.
No, a lot of chemicals are required as well.
Yes, Obviously there's a lot that goes on in this process, more then "just" silicon. But if you want a summary, then cost expertise and knowhow, eclipses actual process. In a sense it is just "silicon" when measured relative to the ability and knowledge required to transform that material.
Not to mention the lack of seismic activity and humidity that AZ offers.
The west had a lead, but 'we' trained Asians at our top institutions and worked closely with Asian manufacturers so that they can make our most sophisticated products more cheaply. There are a lot more people in Asia, and high relative poverty and cultural practices encourage a higher degree of scholastic achievement. Of course they're beating us now.
Outside of a very explicit and intense effort to develop domestic talent and retain foreign talent (or bloody wars), the west probably won't ever really lead ever again. This was the obvious outcome decades ago, but these things take time. The gap will grow and will extend up the value chain--western nations will do protectionism to try to slow this (e.g., Huawei, current chip restrictions), but cat's out of the bag.
I don't think it's a good or a bad thing from a global perspective. It just is. The great power competition that may result, wars, etc, is a very bad thing. The US in particular should compete as best it can, but it's best for everyone if we learn to live in a multipolar world.
People in grad school tend to be hard working and smart, that’s how they got there. Hypothesis: foreign nationals have to be even smarter and harder-working to secure places in US universities, hence the stereotype.
What was noticeable is that there were a lot of these students and to the extent that the US does not retain them, we are training the workforce of our competitors. To the extent we do retain them, we are poaching the talent of our competitors. My guess is this is tough to balance and where we're at now is making total global innovation higher but lowering the proportion of the pie over which the US has dominion.
You said elsewhere "things change" regarding labor force quality. They do. Asian labor across the board, but especially in China, has been rapidly increasing in cost while for example USA labor is stagnant in overall cost. Apple is medium-term going to be priced out of China just by labor costs. It is actually smart in a real-politik sense (and a business sense you deny) for labor sourcing to start looking a lot more broadly at different countries on a cost basis. USA is rich in some measures, but in terms of purchasing power and compensation of much of working class, it no longer is.
As for the quality of USA workers you've commented on a lot, I'll give you there is a serious decline in education. Saying they are slow or lazy shows you don't know anything about USA. The vast majority of the country is working itself to death and the life expectancy is cratering. As sad and reprehensible as it is, from the kind of logic you're using, a desperate and broken workforce is a GREAT business opportunity.
There is something beyond "American Exceptionalism" and "Asian Exceptionalism" and I think you really need to find it.
Overall the long term vision is to wrestle some control away from China. That is the long term bet the US and tsmc are ultimately making and what's driving the decision. But economically this is a bad bet.
Economics are but one factor of many.
Putting the rest of your statement aside, this is a very silly thing to say. The United States invented the IC and started silicon age. Integrated circuits made in Silicon Valley were literally on the moon at the same time that Taiwan was still an incredibly poor country living under martial law.
Maybe today there aren't the exact people in the US to compete with Taiwan on this chipmaking process, but that doesn't mean the US lacks the ability to compete. It's not about general country-wide work ethic. If the right person to get the job done is a one-in-a-million person... well the US has 330 of them vs 23 in Taiwan.
In the past the US could compete, but that doesn't speak to the status quo.
In the future the US may change but this is unknown. It may very well be the US will never recover. This is a realistic possibility.
Either way the status quo is that the US is currently inferior to Asia in terms of semiconductors.
Your posts suggest that the US should just give up and let Asia -- more specifically China -- dominate semiconductors forever because US workers are lazy, fat, and stupid. Am I characterizing your position correctly?
I am simply stating the truth. It is from the perspective of a tsmc shareholder not a patriotic American who wants to beat china for no other reason then being the best.
As a tsmc shareholder one part of your post is correct. US workers are unfortunately lazier and slower and more expensive. Not necessarily stupider. You characterized this part of my position partially correctly.
As for what the US should or should not do, I never commented on that. Your patriotism and defensiveness specifically injected rivalry into your response. I literally have no opinion on what Taiwan or China or the US should do. I am neutral on that front.
Wow. At least you aren't hiding your nationalistic bias.
I guess we just kinda stumbled into being one of the wealthiest and most developed countries in the world while having the lazier/slowest/most expensive workforce.
The idea that tsmc and Samsung can fab better then the US is unequivocally true.
Asian labor may be cheaper and better, but relying on resources with precarious ties to authoritarian regimes has its own cost.
Sometimes 'best' encompasses more than just bottom-line and functional metrics.
The chinese are vastly worse at fab than americans. Why do you point out that american workers are worse than TW, but neglect to mention that Chinese are even worse?
Not trying to make a judgment about people from USA, CN, TW as a whole - mostly just a function of experience.
Because they're not. PRC has worst fabs due to equipment sanctions, and now expertise sanctions (first by TW, then US). But said sanctions were placed at all because the cost and quality (east asian work ethic etc) of PRC semi workers weren't in question. Versus US workers being described as "group of giant babies" by TSMC employees ranting on PPT about doing more work for less pay than Americans in Arizona. Experience doesn't matter if you don't work hard enough. It's precisely because PRC workers, who can keep up with TSMC "military" pace, have demonstrated potential to run great fabs that led to companies like TSMC expanding in PRC in the first place, and why US had to do export controls, and do massive CHIPs subsidy to get fabs on US soil.
TSMC also has a dozen or so fabs in Asia, so it's not clear how the single plant in Arizona is going to meet capacity requirements or how often that plant will be retrofitted with newer equipment.
This plant and the federal subsidies backing it seem more like a way for defense contractors to domestically source relatively recent fab processes over the next couple decades rather than something intended solely for consumer products.
The fact that consumer facing companies are interested in using the fab when it comes online doesn't necessarily mean they'll still be using it 10 years from now unless TSMC keeps it up to date.
This isn't my field, but I'm not sure what's the excitement about an Arizona plant that will optimistically start production a year later with an older process.
A good example is the automotive industry. It doesn't typically move quickly or frequently onto newer generation processes as that requires R&D time and other expenses. However, these have been some of the worst shortages, with auto manufacturers still impacted by lead times (although, this is starting to clearing up fwiu).
Targeting the current-best process, rather than the next generation, alleviates some compounding of risk that would be incurred by logistics concerns of turning up a new site and putting that new site on a process that they don't yet have full confidence in because it's not seen production yet.
The chip shortage in products like cars has been for much simpler chips, AFAIK.
The article says Apple, AMD, and Nvidia are looking to source from the new plant. Aren't they canonical examples of companies that are always looking for the latest and greatest? Why would they be interested in an prev-gen chip?
Defense also uses older chips. Don't ask what kind of chips are in Amraam missiles or the F-35 -- although the F-35 is getting a technology refresh now (after a 14 year production run).
Only in bleeding edge consumer devices does it make sense to keep changing chips. In other systems, production runs can last 20 years and the life of the asset can be 40 years or more, and you want the same spare parts available throughout the entire expected life of all assets produced. And then when you look at fixed assets, such as thermal power stations, then you are looking at even longer time horizons.
1. What's so exciting about a prev-gen fab possibly being completed in 2024?
2. Who will buy the chips produced by the 4nm Arizona fab, and why?
The only plausible answer offered for 1 in this thread has been that it's too difficult to jump straight into the bleeding edge, and this is the most the US can do to lay the foundation for an eventual catch-up with the state of the art in chip fabrication.
My guess is that the decision to build fabs in the U.S. was the result of geopolitical strong-arming by the U.S., but TSMC will still find buyers and that the fab will at least pay for itself.
Intel has sinking in at least technical leadership for a long time. It's obviously a priority a need for the us to on-shore more chip prod.
CPUs and GPUs get all the press, but there are dozens of other chips used in even the latest models that use older technology. For all we know Apple could be buying those chips for USB cables, or pencils.
From a strategic perspective, it is absolutely important that you have the capability to build chips in your country, of a reasonably modern node size. You need this for weapons manufacturing, for a working government apparatus (governments use computers now), for sending messages to your population. And if China bombs Taiwan, then this fab will become the cutting edge, instead of you having zero chip manufacturing capabilities.
The 4nm US Fab, based on N5, will be two years behind in 2024, where TSMC will be producing N3 class in volume and N2 in 2025. Given the N3 Class are long node before moving to something more exotic and expensive N2 with GAFFET. I would expect the US Fab to be upgraded and start producing N3 in 2026 on US Soil.
Maybe the place isn't so safe after all.
Personally I hope such a thing doesn't happen. If I had to guess, Taiwan will eventually come under mainland China's control, but I hope this is done very slowly and in a bloodless way following a referendum by the Taiwanese themselves (e.g., only after certain guarantees of autonomy are made and the Taiwanese opt for the 'easy route'). I doubt mainland China will accept this thorn in their side indefinitely.
Is that really so plausible after what happened in Hong Kong?
China doesn't want this to be like the Ukraine conflict either. I don't know if and how guarantees of some autonomy can be made that carry some significant degree of trust, but it's the least bad solution for all parties to make that happen.
Personally, I would be shocked if the US military doesn't also have a plan to "relocate" strategic personnel to the US in the event of invasion by China.
Yeah, they're behind now, but given it's now strategically important both economically and militarily, can that be expected to last forever?
It appears the West is slowly untangling their economies from Chinese dependency and about 1/3 of stuff is made there today. With zero covid making them an unreliable manufacturing partner I doubt this will increase in the short term. I am pretty sure high end fabs will be returning to the west very soon and America could not have a better competitor than China to push them forward to new heights. I would bet on free countries producing most on the innovation over the next 20 years.
What greater example is there of the abject failure of Chinas communist rule?
This narrative is echoed around the internet, but if you study the actual history of the Taiwan Strait Crises (which started before the semiconductor was invented), it never comes up in official discussion or analysis. See Kissinger, for example.
Cynically, this narrative was possibly promoted by the USG/Taiwan-lobby to put lipstick on what has always been a naked display of power politics. Washington wants its First Island Chain to contain China [1], and Beijing doesn't want Washington to have it.
I also suspect this narrative is at the very least supported if not conceived by Taiwan as propaganda. But we don't need to be cynical. What this narrative does is establish in the minds of Americans a shared interest in Taiwan and, arguably, even a shared identity. That's not intrinsically bad, malicious, nor even disingenuous on the part of the Taiwanese. Especially for a country as large and resource rich (in every meaning of the term) as the United States, all overseas interests and identities are built principally on fictions; some built very deliberately, but many which grew organically. IMO, the high technology dependency narrative fits comfortably between pure ideology (democratic solidarity!) and pure real politick, e.g. oil. Unlike the case with oil interests, the narrative speaks to a coevolution of our industrial and economic bases on equal terms in tandem with political ideology, and thus posits a shared future. And given how quickly and easily the narrative has spread, it has a strong organic character to it--even if Taiwanese political strategists planted the seeds, the soil was more than accommodating.
Such a crafted narrative to me seems more like an invitation than manipulation. (Either way, admittedly such characterizations are dependent on one's chosen perspective.) Nonetheless, it should be recognized for what it is; taken literally it leads to erroneous conclusions. If the U.S. aggressively defends Taiwan in an invasion attempt, it won't be because of TSMC and fears of a chip shortage; it'll be because the American public has become invested in the idea of a free and democratic Taiwan, and willing to believe and accept that the US's long-term self-interests are furthered by putting itself and its citizens in the way of considerable, even existential harm. The story of TSMC would just be one of many--albeit an important one--along the road which brought the nation to that state of mind.
That, and the concern about China’s long-term ambitions, and what sort of precedent letting them take Taiwan unchecked would set.
However for this, japan and s Korea would be in play. They have to submit to the power that control the sea or 1/2 of Pacific Ocean down to Australia (with a base in South Pacific say).
Sometimes, real life feels like a game of Command and Conquer or Risk, when you zoom back out and boil things down to their most simple form.
"One of the most important deterrents to war is Taiwan’s role in producing semiconductors. Seventy per cent of the world’s most advanced chips are manufactured there, many of them at the Taiwanese Semiconductor Manufacturing Company. [...] China is similarly reliant on the highest-end chips produced in Taiwan; it doesn’t have the equipment or the expertise to manufacture them. If China seized control of Taiwan’s semiconductor factories, it could conceivably force local workers to run them. But the factories depend on a constant flow of Western material, software, expertise, and engineers, without which production would cease in a matter of weeks. Pottinger told me, “If the Chinese took the factories, there’s no way the West would help run them.”"
[1] https://www.newyorker.com/magazine/2022/11/21/a-dangerous-ga...
Doubtful. This is obviously in exchange for continued military support from America. Protection from the world's greatest Navy is well worth a single chip plant.
Great for Arizona. Hope it brings them jobs.
And water!
https://www.azcentral.com/in-depth/news/local/arizona-enviro...
Naive question, can we relocate the people of Taiwan?
(And they have in fact just voted in a more pro-China government, so the comment may have a short shelf life).
And not speaking to you directly, but contributing to the general discussion - US opposes China taking over Taiwan using force specifically. If Taiwan were to willingly join with China, one can imagine some conspiracy scenarios, but setting conspiracies aside, there isn’t anything anyone can and will do to prevent it.
Relocating entire populations is considered a crime against humanity.
That's a very cynical view.
What exactly does Ukraine produce that's so important for the West?
> WASHINGTON, March 11 (Reuters) - Ukraine's two leading suppliers of neon, which produce about half the world's supply of the key ingredient for making chips, have halted their operations as Moscow has sharpened its attack on the country, threatening to raise prices and aggravate the semiconductor shortage.
The US has given Ukraine more than 50 billion in military aid. That’s more than double the annual neon gas market … every single day.
[1] https://www.industryarc.com/Research/Neon-Gas-Market-Researc...
Sure, and it's also 10 dead Ukrainian soldiers that will never return to their families, and a few thousand people living an extra day in war, and a few hundred more Ukrainian refugees that must be subsidized in Europe, a few dead Ukrainian civilians that die of Russian shelling, and a few dead Ukrainian civilians in Donbas that die of Ukrainian shelling, and the further demilitarization of both NATO and the US as they run out of munitions and equipment to send (and lack the industrial base to make up for the shortfall). It is also a few more percent lopped off of European GDP as the continent plunges into a steep recession due to the energy crisis.
It is only by weighing of the lives of the people in the conflict at zero that the U.S. justifies prolonging this proxy war and continuing to arm and subsidize Ukraine.
It is truly willing to fight Russia until the last Ukrainian, and until Europe is completely de-industrialized.
Ukraine is literally fighting for their sovereignty, America is helping them push the Russians, who are raping and torturing citizens out of the occupied territories.
Every weapon to Ukraine is time less under Russian occupation, which is a good thing.
So please stop with this new found interest in the "sovereignty" of US client states. We have tape recordings of US state department officials deciding who will be in the Ukrainian cabinet and who wont, of what their policies can and can't be. One phone call from Washington and there is a third coup in Ukraine with Zelensky out the door and another US puppet installed. So Ukraine has zero sovereignty, and that's true regardless of what happens in this war. The only question is whether it will continue to be ruled from Washington or whether it will be ruled from Moscow. That is why this is a US-Russia proxy war, with Ukraine stuck in the middle.
If you could provide a source for this, that’d great.
> One phone call from Washington and there is a third coup in Ukraine with Zelensky out the door and another US puppet installed.
Zelensky was elected in an election, I know you likely don’t know this so I just thought you should know.
> So Ukraine has zero sovereignty, and that's true regardless of what happens in this war.
It’s actually not true and patently false.
> The only question is whether it will continue to be ruled from Washington or whether it will be ruled from Moscow.
Even if these were the options (and they aren’t cause Americas not looking to rule Ukraine). The choice is clear, being ruled by Moscow which leads to the rape and torture of your civilians(including children), or being ruled by America which leads to not that.
> That is why this is a US-Russia proxy war, with Ukraine stuck in the middle.
Russia keeps changing the reasons they invaded the current reasons have nothing to with America but I’m sure they will change next week.
Knowing stuff like this is table stakes for participating in the discussion. See, for example, https://www.reuters.com/article/us-usa-ukraine-tape/leaked-a...
> Zelensky was elected in an election, I know you likely don’t know this so I just thought you should know.
In an environment in which rival political parties were banned, torture centers were established, death squads were roaming the streets arresting dissidents, etc, and there was strict control of media.
But in some sense elections in client states don't matter. Zelensky was elected on a peace platform and immediately was forced to abandon his stance on implementing Minsk 2 when he got into power - 70% of the population wanted it implemented. Minsk 2 was the agreement Ukraine signed with Russia to avoid war. Minsk 2, which was brokered by the EU after the violent anti-Russian Maidan coup. It called on Ukraine to grant autonomy to Donbas and to respect the rights of the Russians living there. It also called on Ukraine to recognize Russian control over Crimea. In return, the Donbas provinces would return to Ukraine and Russia would recognize the coup government, and there would be no war. Poroshenko stated he had no intention of ever implementing Minsk 2, but signed it to buy time for Ukraine to arm itself to fight a war with Russia. US Senators McCain and Lindsey Graham visited Ukraine and urged them to defeat Russia in the war. This was 2015. The US was clear that Minsk 2 would never be implemented by Ukraine and that it was just a lie to buy time as they geared up for war.
So in a place like Ukraine, it doesn't matter who is elected as long as the US controls the country. Zelensky was elected on a peace platform and pro-Minsk 2 platform, and immediately changed his position after the election. This is something you should also research if you want to be informed.
> The choice is clear, being ruled by Moscow which leads to the rape and torture of your civilians(including children), or being ruled by America which leads to not that.
No, it is the Maidan regime that set up SBU torture centers, burned people alive, buried people alive, funded various Neo-Nazi groups like Aidar, Right Sektor, Azov, banned the use of Russian language, disappeared pro-Russian citizens, banned pro-Russian parties, banned pro-Hungarian parties, etc, and they were committing and continue to commit mass atrocities. There were many articles by Amnesty International and other human rights groups about this.
> Russia keeps changing the reasons they invaded the current reasons have nothing to with America but I’m sure they will change next week.
This is just made up nonsense. Putin gave a speech explaining the reasons for the invasion - the liberation of pro-Russian Donbas region, preventing Ukraine from hosting NATO troops/bases, and the denazification of the country. These were the three reasons. You can try listening to this speech rather than making up your own reasons, and then listening to his other speeches across time (he gives many speeches about Ukraine), and seeing if there is a change. He has been fairly consistent -- much to the anger of the Russian population which wants a far more hardline position on Ukraine, particularly in light of all the ethnic cleansing and atrocities committed by this US client regime. I would say, however, that as the war drags on, there is a real chance that Ukraine will end up partitioned into nothing, which is an object lesson to other regimes that wish to be U.S. clients. This is probably why Taiwan kicked out the pro-US party in the recent elections -- they don't want to be a battering ram the US uses against China and then discards when their powerful neighbor attacks them. Again, in all of this, it is Ukrainian people that suffer, whether they be of Russian, Hungarian, Polish, or Ukrainian ethnicity. The US doesn't treat its client states very humanely.
But I take it that now we agree on the larger point that this proxy war has nothing to do with "sovereignty".
This does not claim at all what you think it does.
> In an environment in which rival political parties were banned, torture centers were established, death squads were roaming the streets arresting dissidents, etc, and there was strict control of media.
What?, Zelensky was elected in 2019, 5 years after the Maiden revolution you know that right?. Do you have _any_ proof at all, that isn't thinly veiled Russian propaganda?.
> So in a place like Ukraine, it doesn't matter who is elected as long as the US controls the country. Zelensky was elected on a peace platform and pro-Minsk 2 platform, and immediately changed his position after the election. This is something you should also research if you want to be informed.
Theres literally zero proof the US controls the country, the Ukrainian government didn't even believe the Russians were going to invade. Probably because the Russians themselves continued to say they wouldn't and the Ukrainians put misplaced trust or maybe misguided hope in the words of the Russians.
> No, it is the Maidan regime that set up SBU torture centers, burned people alive, buried people alive, funded various Neo-Nazi groups like Aidar, Right Sektor, Azov, banned the use of Russian language, disappeared pro-Russian citizens, banned pro-Russian parties, banned pro-Hungarian parties, etc, and they were committing and continue to commit mass atrocities. There were many articles by Amnesty International and other human rights groups about this.
We literally have videos of the Russians committing war crimes against Ukrainian civilians, including execution and castration and we have many many many independent reports of torture and sex crimes including against children.
It would be nice if you source any of what you say, your stream of conscientious is not really a source.
> preventing Ukraine from hosting NATO troops/bases
aka, preventing Ukraine from protecting itself from future Russian attacks.
> much to the anger of the Russian population which wants a far more hardline position on Ukraine, particularly in light of all the ethnic cleansing and atrocities committed by this US client regime.
This is literally fake news, there is no proof at all that isn't just straight Russian propaganda of any 'genocide' in Ukraine outside of the one that Russia is committing.
> I would say, however, that as the war drags on, there is a real chance that Ukraine will end up partitioned into nothing, which is an object lesson to other regimes that wish to be U.S. clients.
I dunno, Russia is currently sending out under equipped mobilised citizens with T-62s and keeps recruiting from prisons whilst Ukraine is still fielding T-64s and better equipped and trained soldiers. Russia keeps getting more and more desperate every week, their army has been largely reduced to a pathetic bunch of barely trained cannon fodder lately.
I see the Russian army collapsing before Ukraine gets 'partitioned' by some mythical boogey man that doesn't exist.
> But I take it that now we agree on the larger point that this proxy war has nothing to do with "sovereignty".
This war has everything to do with Ukrainian natural resources and sovereignty, the Russians don't see the Ukrainians as a seperate people or as a real country and feel their position as the worlds gas station is threatened by the natural resources in Ukraine.
on Minsk-2 why would anyone believe what Russia says in any international agreement they already promised to not invade Ukraine or even threaten there sovereignty under the Budapest Memorandum?.
[citation needed]
> We currently have troops in Syria extracting oil
We have a few troops in Syria, but while the Syrian regime and its allies continue to claim the thing about stealing oil, no evidence of any kind has been offered to support that that has been happening since Biden ended the Trump policy around oil extraction.
> We just tried to overthrew the government of Ethopia by backing the Tigray rebels.
No, we didn’t. In fact, the US government has condemned abuses by all sides, including the TPLF, and sanctioned actors on all sides, including in the TPLF, for abuses in the conflict.
> We overthrew the government of Ukraine twice, in 2004 and 2013.
We didn’t overthrow the government of Ukraine at all. The main organized, non-grassroots actor in the overthrow of the regime that stole the 2004 election appears to have been the Ukrainian security services.
> We overthrew the government of Iraq
The first not-lie in your entire recitation.
> and are financing violent rebels to overthrow the government of Myanmar.
Myanmar has…quite a variety of different internal conflicts and rebellions, but while a number of actors have urged the US to back forces working against the regime that recently seized power in a coup, it is not doing so.
> Only strong, large nations that can stand up to the US and other rival great powers have any hope of achieving sovereignty. Ukraine has never had it.
I dunno, Ukraine’s doing a pretty good job of standing up to a supposed great power right now (and its only getting substantial Western aid in doing that now because it initially did much better than anyone expected without it.)
> The only question is whether it will continue to be ruled from Washington or whether it will be ruled from Moscow.
No, the only question is whether the Putin regime will give up its imperial ambitions before it collapses, or because it collapses.
Is it possible part of why China wants control of China is to control these factories, so if they move production to America paired with demanding existing diplomatic agreements be honored, China will be less obsessed with seizing, for lack of better phrasing, a unique resource?
But then again, the amount of lawns and greenways in Phoenix compared to a place like Tucson, it’s pretty clear most folks in Phoenix don’t much care about water conservation.
https://www.globalwaterintel.com/news/2022/44/tsmc-leans-mor...
There was a great ArsTechnica article and subsequent comment section where many of the water questions are addressed: https://arstechnica.com/gadgets/2021/06/why-do-chip-makers-k...
Inevitably I come to a conclusion that is very similar to yours. Arizona is pretty low on priority for water from the Colorado River and does a great job with water reclamation.
That being said, I worry if I'm just believing what I want to hear
https://www.intel.com/content/www/us/en/newsroom/news/water-...
It's funny to think that the supply chain gurus at Apple & NVIDIA may be doing the work of geopolitics in the service of just defending their bottom line from disruption.
I wonder to what extent you can get subsidies from both acts. I assume it shouldn't be a problem.
The choice was made decades ago on the alter of faux environmentalism to export the environmental cost of energy production to another nation so the EU could claim moral superiority in the climate change battle. Completely decimating domestic energy sources.
Well that is simply false.
Having morals and accepting hardship for standing up for them is not stupid. It's a principled stance most Europeans agree with. Governments need to step in and help whenever needed (with price caps for consumers, advantageous loans to businesses) to smooth it out, but it was that or appeasement, and we all know very well it doesn't work.
As if the US would have just kept buying 40% of its imported gas from Russia, were the roles reversed.
And they did that too: https://www.apple.com/environment/
I don't understand the fixation on this. Share buybacks strengthen the stock price of the company, which the company can leverage in the future to raise more capital if needed (by re-releasing new shares to the market). From that perspective, they are better than dividends.
Besides, right now, Apple isn't strapped for cash as they have around ~50 billion on-hand and could raise more if they wanted to. So Apple can still invest more in fab processes if that's what they want.
You are confused. A 100 dollar company with 100 shares outstanding, each worth 1 dollar, is not better able to raise capital than a 100 dollar company with 50 shares outstanding, each worth 2 dollars.
And even if it were a reverse stock split can convert the former to the latter.
"The most liquid stocks tend to be those with a great deal of interest from various market actors and a lot of daily transaction volume. Such stocks will also attract a larger number of market makers who maintain a tighter two-sided market."
https://www.investopedia.com/terms/l/liquidity.asp
In other words the more appetite for the stock, the more liquid the stock, and therefore the easier it is for a buyer to acquire the stock. This is presumably because stock market indexes will refuse to include an illiquid stock, meaning there will be less demand for the stock, and the stock price will drop.
Apple did a 4 for 1 stock split in 2020. Do you really think they screwed over their investors because you know something they don't about how stocks are valued?
This is kinda circular when you think about it. 'Strengthening the stock price' is just artificial scarcity, and incentivizes further financialization (by incentivizing borrowing with the stock as collateral) rather than simply distributing the profit or reinvesting it.
The data says their approach was correct.
I guess that was before supply-chain security became important and the only consequence was the people that dont matter losing their jobs.
I find it unfortunate that we are going back into a partitioned world but let's hope it brings competing ideas at least. I'm even a bit excited about it, as long as it stays a cold war and doesn't turn into WW3 and stays as a competition in everything like during the cold war.
That’s a bad read of the situation. It’s not like no one makes chips.
The reasons people cite for why manufacturers don’t come to America are largely political. The reality is that manufacturing is alive and well but those with industry knowledge aren’t American, and America has most left low margin and high labor manufacturing not all manufacturing. In this case, America is literally paying the Taiwanese to bring their knowledge to America.
Is the world collapsing? No one knows but this can be more easily seen as “vertical integration” of a national economy. No one said Samsung was doomed when apple made their own mobile chips, and there’s no reason that the global economy is doomed just because the richest and most powerful economy in the world wanted a strategically important, high margin business.
Tsmc is not coming here because it's an economically wise move. They are coming here knowing it's an economically irrational move.
Politics is the reason for this move. It is not a clear cut win.
Your post has the aroma of patriotism. Patriotism blinds us to harsh truths. Why do you love how people were wrong when they said we can't make chips in the US anymore? You shouldn't feel love or hate for any of these statements.
Taiwan subsidized tsmc for tech. Once the tech was established the subsidy ended.
Right now the US is subsidizing tsmc for simply switching locations. Once the location is switched the economic output of this plant will be negative so the subsidies have to remain.
The US chip market is not capable of making competitive chips. Not without economic assistance. This is categoric fact.
No, it's an economically wise move because of the politics. This plant allows TSMC to gets the CHIPS subsidy, but maybe more importantly it allows them to become part of the military industrial complex which requires that products are made domestically. This fab will print money.
You are definitive about defense spending in a recession. This is wrong. Aspects of the government will begin pulling back. We do not know how this will effect tsmc.
This move from a profitablity standpoint is break even as far as we know. It makes no economic sense.
Btw. This isn't something I'm making up. The CEO of tsmc mark liu stated this to Nancy pelosi during her visit. Also her husband is dumping tsmc stocks for unknown reasons.
Defense spending never goes down. It's a key way the government injects money into the economy during recessions.
> The CEO of tsmc mark liu stated this to Nancy pelosi during her visit
Every CEO tells politicians to give them more money, that isn't evidence of shit other than being competent.
Interest rates will increase spending will be pulled back to stop inflation. A recession is the tool being used to stop inflation.
The CEO did not ask for money. The money was already given. The CEO was simply stating the status quo. Helping her come to terms realistically with what is truly going on with the Arizona plant. Look it up.
It's not useless, it's all about power projection. When you go to rob a bank and take a gun with you that you will never use then you don't call that gun useless because thanks to projecting your deadly power with it you were able to successfully rob the bank.
The United States has had around 20 years of peace since the Declaration of Independence was signed in 1776.
- TSMC will never build-out in the US
- And if they do it will only be older nodes
- And if it's not just old nodes then it's only because subsidies.
Now that it's actually happening we see cop outs, like "yeah but ?nm will be obsolete by the time it's built."
I am so happy to see more super high tech manufacturing happening back to my country. While I am in general a fan of globalization, I also believe that for resiliency every country should maintain their own unique cultures as well as have some independence so that with a reduction of life style they are still be able to survive independently from the rest of the world.
The commitment to additionally making an N3 line, and for it to make a significant amount of wafers for customers other than the DoD is big news.
Surprisingly, the area is also one of the largest Taiwanese communities in the U.S., which is a bonus for the engineers and their families who will be relocated from the "mothership".
Also, it's actually quite common for high-level Intel staff to fly back and forth from Portland and Phoenix. I am not sure if the same would be said about Taiwan and Arizona, but if they have staff in SV it wouldn't be too far-fetched.
A quick Google[0] suggests that they've only started doing this heavily pretty recently, but I'm guessing new fabs in Arizona will implement state of the art water-recycling.
That said, the numbers in this article suggest that 98% recycling would drop usage to the equivalent of ~6000 homes, which still feels significant.
Low seismic activity is the benefit of Arizona that I've seen cited in the past, which I'd guess outweighs the water sourcing issues.
So 2% of that is maybe around enough water for 5k people. Arizona has 7 million people. And residential doesn't even use most of Arizona's water.
It's fine.
They have been building it for about a year now. Other than the possible water use, other's have stated why it is here.
So this factory will be a generation behind once it opens.
But there are 100s of media headlines basically implying that by listing high profile customers and not mentioning the date of opening. Those customers will for the most part be using this factory for auxiliary chips.
Now why they just keep massively increasing power as efficiency goes up is beyond me......I think a lot of people would love a new iPhone with a processor a bit faster than your old iPhone 6 but with insane battery life.
Cars from 2012 didn’t have modern safety features, backup cameras, weren’t electric, the radios were 1-line LCDs, etc.
Here we’re debating over an announcement of a promise to build something.
Concern over "China" has nothing to do with ethnicity, it's a geopolitical fight with the government of the People's Republic of China, which does not[2] rule Taiwan.
[1] To be clear: there are also descendants of indigenous "Taiwanese" living there, who are austronesian and not Han. Ethnicity is complicated and everywhere is a melting pot.
[2] In practice. Obviously "legally" both Taiwan and the PRC consider themselves the true government of the other's territory.
As stated, ethnicity is complicated and people everywhere want to have fights over these subjects. I won't engage, that's pointless.
If you read what I wrote.
> Most people in Taiwan don’t identify as Han.
Asianometry on Youtube has a lot of interesting info about fabs.
US foreign policy agreements (-> no machines to China) and very long waiting lists, mostly, AFAIK. My source is Asianometry. Great channel.
A lot of water is required to start but a huge majority is recycled. Heat can be a problem in the summer but it's extremely predictable and commonly dealt with.
Anyway, they’re starting on 1nm now so it’s not dead yet.
Patriotism is blindness. If you hold no loyalties to even the country you are born in it's easier to see the truth.
Disclosure: 100% long USA.
So you could do 12h shifts 3/4 days a week and/or have extra days off
Though, there's weekly hourly limits and limits on how many consecutive days you can have 12h shifts.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3786347/
Table 1 (n = 5,831) shows that 80% of the ICU nurses reported that their last shift was 12-13 hours. Another 5% reported a >13 hour sift.
Note: I'm not commenting on the suitability of the practice, just on the fact that it's not unique to certain countries in Asia.
It makes sense. ASML are in the Netherlands, as are NXP. ST are in France. Germany has quite a bit of semiconductor production for the automotive industry.
It'll be slow and expensive to get there though. There's not many places in the EU where you could simply drop a Shenzen in, demolishing historic buildings and natural environment along the way.
There are plenty of industrial parks available near transportation, water, and electricity in Europe to build this out. This also aligns with how the modern chip ecosystem works where the fab components are coming from Europe, the advanced chips are coming from Taiwan, other chips are coming from across SEA, and final assembly is happening in China. What I suspect will happen is that Europe will start printing advanced chips and most of them will be shipped to China for integration. If a conflict/dispute breaks out, switching to European assemblers will be expensive but totally doable with a short-term investment (2-3 years??)
Semiconductor manufacturing is dirty business. I live in the EU next to one such fab and whenever local environmental concerns are raised about the fab, since nasty chemicals are sometimes found in the river the plant uses, the official response is always "the exact process is confidential, we cannot allow external inspectors inside, but we can pinky swear we conform to all regulations via self audits" and the government rolls with that as the unofficial response is "stop bothering us about the environment or we relocate production to Asia and you're left with a bunch of unemployed engineers and tax hole in your city coffers".
Yeah, about that:
"STMicroelectronics N.V. commonly referred as ST or STMicro is a Dutch multinational corporation and technology company of French-Italian origin headquartered in Plan-les-Ouates near Geneva, Switzerland"
The lengths French and Italian corporations will go to to avoid taxes and red tape in their home countries, it's almost poetic. Even Airbus is now headquartered in Leiden, Netherlands instead of it's original place of Blagnac, France.
Without the skilled workforce or infrastructure the company will for sure not be competitive.
What most big companies are now doing to get insanely wealthy is have most governments foot the bill for the infrastructure, protection, and education of their workforce, while all the profits from the fruit of their labor go directly to shareholders and the governments don't see a dime in taxes so stuff like education, healthcare and infrastructure is falling apart while corporate profits have never been higher.
You are mixing chicken and eggs here. We had education and skilled people before huge governments stealing massive amounts of taxes from people existed. The disposable income from the population gave rise to bureaucrats who love to tax everything under and pretend that they world cannot run without them. That's pure twisted logic.
[1] https://www.intel.co.uk/content/www/uk/en/newsroom/news/eu-n... [2] https://ec.europa.eu/commission/presscorner/detail/en/ip_22_...
It's clear that EU did what US wanted instead of what would be in its interest.
20B in Ohio: https://www.intel.com/content/www/us/en/newsroom/news/intel-...
20B in Arizona: https://www.intel.com/content/www/us/en/newsroom/news/intel-...
Who said they're not good enough? They're slightly worse than TSMC, but still put out competitive chips for desktops, laptops and servers. Slightly more expensive, slightly higher power consumption but still, perfectly acceptable and still the market leader in some areas.
> It's clear that EU did what US wanted instead of what would be in its interest.
No, it's not clear. Why would the EU do that? They did the best they could given the very limited choice present.
The blast-radius for non-intel chip fabricators is much wider and impactful for the economy
While TSMC will be on what, 1nm by then?
Intel's PR link doesn't go into details on this.
have looked at perf per W?
It really depends on the model. I see, for example, Kaby Lake Y models with a TDP of 4.5W . Though, in general, yes, many report that Intel is not taking power consumption as a priority (which does not mean that they do not offer niche "ultra/extremely-low power" products).
That said, it's all a moving target, and anyone who thinks Intel isn't producing good parts today is wrong -- they are.
I don't know: if you check graphs such as
https://www.cpubenchmark.net/power_performance.html
there is intersuccession of Intel and AMD. AMD seems to offer more models, but a proper analysis of their stand-outs and similarities is required to get a proper picture.
In the current desktop generation AMD and Intel are much closer than in Intel 12th vs AMD Zen 3. That's mostly because 13th gen has pretty much the same limits as before, but is more efficient, while Zen 4 has massively increased the power targets throughout the stack - by 60 to 90 % - to keep up with Intel (plus the marketing advantage of getting through the 5 GHz wall)
E.g. a 5600X had a PPT of 76 W, a 7600X has a PPT of 142 W. A 5950X was 142 W, a 7950X is 230 W.
Though it’s impressive how much efficiency they’ve squeezed out of that node regardless.
But to say that TSMCs process doesn’t confer large advantages is silly. Intel even uses them for their new discrete graphics cards — they wouldn’t have been able to compete otherwise (among other less interesting business reasons)
[1] https://www.intel.com/content/www/us/en/newsroom/news/intel-...
[2] https://www.granitefirm.com/blog/us/2021/12/28/tsmc-process-...
TSMC -> US
Intel -> EU
Toyota -> US
Honda -> US
Ford -> MX / Canada
GM -> MX / Canada
For the current trend to move to the US. That has to be government funding. Luckily, fabs require large investments at the start which might break-even more expensive labor. Also, maybe some more automation in the fabs could also help in making the fabs cost competitive.
While a factor, labor costs alone are the primary reason. In reality is more about the wider regulatory burden on a company, including environmental controls
That said it does not explain why a Japan Company can make cars profitably in the US but a US Manufacturer can not.
If it was only labor why would Toyota not have a factory right next to GM's in Mexico and import cars from Mexico to the US?
I think making cars in Mexico for the US became less worthwhile when Trump pulled the US out of NAFTA.
lol, trump did not "pull the US Out of NAFTA" not only is that not with in the power of the president to do, it was never on the table, NATA was replaced with USMCA, and only made a few small changes, for Automotive that means 75% of the vehicle components must be made in MX, US, or Canada, up from 64% under NAFTA
Nothing in the law would impact making at car in the US vs MX, and was aimed at preventing increased parts from China or other non-north American nations, and all of the changes were passed by congress with wide bipartisan support
Both were proposed changes that were not adopted in the final version.
Interestingly enough the “Clean Energy for America” bill pushes for additional tax incentives on EV's built by companies using union labor:
More specifically, the proposal says that electric vehicles assembled in the United States would qualify for a $10,000 tax credit while EVs that are built at facilities whose production workers are members of, or represented by, a labor union would be eligible for the full $12,500 credit.
It doesn't even make a lot of sense as an incentive to have workers unionize, since why would workers care what price what they're selling cars for. The law would only exist to benefit existing unions.
you dont pay tariffs if you produce locally. not hard to understand.
Good luck with that bet in the future.
I find it more odd to presume that corporations have some nationalistic competitive interest.
1. By operating a local subsidiary, you avoid unfavorable regulation and sometimes protectionism (Toyota/Honda/Intel).
2. Cost savings (transportation, labor, taxes, etc).
3.Proximity to customers.
It's incredibly provincial to think of multinational companies so simply.
I'm not sure we're learning, though.
At the moment, it seems that we are not only still buying the energy and resources from said warmongering criminal dictators (thus funding their war of aggression), but also setting up institutions to patrol gas pipelines, so that said dictator cannot blow them up as easily and so that we can buy even more resources from said dictator. You couldn't make this up.
In light of this, I have little hope for rational policy making regarding China and chip production, unfortunately.
I see this repeated as a matra, in a way of Carthago delenda est.
But it is not true. Said warmongering dictators do not need dollars or euros to wage any war. The entire chain of the war machine is in local currency, backed by local resources. They do not need anything there, that has to be bought for dollars or euros. They are not some third would countries that have to buy their weapons abroad.
By repeating this mantra, we are only lying to ourselves.
Not really. There are already signs that the Russian military industry is in hot water now because there are no Russian semiconductor fabs that can supply the type of chips needed for anything beyond dumb ballistic missiles [1]. And it's not just chips, but also other basic electronic components or modules whose manufacturing has long since gone to China and other countries, some of which are under the scope of international sanctions against Russia.
> They are not some third would countries that have to buy their weapons abroad.
They are buying a ton of drones from Iran, for example, or Soviet-era stocks of artillery munition from North Korea [2].
> Said warmongering dictators do not need dollars or euros to wage any war.
Oh yes they do. No country on this planet is self-sufficient, not even the US. And it's not just about military equipment, it's about basic necessities of life, especially medicine and food. Russia needs money to buy these abroad, and for that they need foreign currency.
[1] https://www.politico.eu/article/the-chips-are-down-russia-hu...
[2] https://www.nytimes.com/2022/09/05/us/politics/russia-north-...
Same goes for "iranian" drones. Iran would have no idea how to start integrating them with russian C4ISR (note how the "mopeds" are observed by lancet drones); non-integrated drones would be OK for tactical, but not operational level of war-waging.
Russia is closest thing to autarchy that you can find on this planet (US isn't even a player here, US deindustrialized itself in the name of cost cutting). The 2014 sanctions only helped in building such economy. Medicine is easy to clone, if you are not bothered with intellectual property (see also India) and they are net food exporter. Sure, some french cheese or wines could be missing, but they are not necessary for the war.
But back to our topic: none of this means that buying energy is financing the war. It is there for conditioning western population to get used to more expensive energy (basic economic theory: the supply was cut, demand was preserved, the equilibrium moves). The oligarchs are going be laughing all the way to the bank. It is just surprising that someone with intelligence to be discussing on HN would be taking part of such conditioning, without realizing it.
I don't know what your definition of «the type of chips needed for anything beyond dumb […]» is, but – if I were to infer – all chips manufactured for military needs are the dump chips, be it in China, or in Russia, or in South Korea, or in the US etc.
Military does not chase cutting-edge, smallest nanometer manufacturing facilities nor do they look for fancy 3D stacked L1 CPU caches and alike, the ones we encounter in consumer tailored microchips (MC's). MC's produced for the military sector 1) are always several generations behind the consumer counterparts; 2) are slower; 3) get subjected to extreme and very rigorous testing, e.g. getting baked in specially designed ovens; 4) they come with hardened shells to later get subjected to irradiation; 5) likely something else. Surviving specimens make it into missiles and elsewhere, for all is required for a missile is a chip that will be guaranteed to not have failed a mission.
Freescale (ex-Motorola) and Texas Instruments are two of the largest MC manufacturing contractors in the US. They have separate lines set up for consumer and military needs, with the military contracts taking a priority. I can't be bothered to check whether Intel or AMD have clandestine US DoD contracts but it is safe to assume so. When Motorola used to manufacture their own MC's, they also had two separate lines for the highly sought after DSP's, 56k and 96k series. There were two versions, a hardened one (prohibited for export out of the US), and the consumer version (with somewhat more relaxed export controls for the 56k series but not for the 96k series). Tolerance specs of the hardened version were classified at the time.
Back onto Russia. To cut it short, it is a case of hypocrisy on both sides as propaganda has been busy working on both sides. Soviet Union (and later, Russia) has been self-sustained, self-contained and has been manufacturing their own chips since late 1960s - early 1970s with always prioritising military needs over the consumer needs. They have never chased the latest designs or developments, but their stuff has been reliable where required.
It is not easy to assess their current situation due to the information disclosure suppresion and also due to prior reports of embezzlement on a unfathomable scale having taken place in Russia specifically when it comes to military contracts. What it is known with a fairly high degree of certainty is that Russia had commenced a 90 nm manufacturing facility as early as 2014[•]. There have also been sketchy reports that they have since moved on to a 28 nm process. Finding a reliable source is not easy, though.
Either way, chips that have been produced to a 90 (or 28 nm) process and have been subjected to hardcore testing requirements are good enough to drive missiles (likely, other military equipment too). Provided chip manufacturing facilities are still operating in Zelenograd, their output will be prioritised in the current political environment, and it will receive a priority funding in the local currency. One ought not to underestimate the adversary and ought to be wary of the creativity they may come up with once having been cornered.
Emperor Poo of All Russia has been demonstrating the world that he is willing to drive his never be, imaginary empire into the ground at any cost – in order to fulfil his ultimate wet dream of crowning himself as the first Galactic Emperor Poo, and, since Russia has been making their own silicon wafers, the MC manufacturing situation is not all that black or white – until more is known for sure.
And how do they pay for “things”?
Its not like those who are paid in roubles would have any use for any other currency. Everything they need can be paid for in roubles, turtles all the way down.
Sure, you won't get iphone, porsche or gucci wares for that, but those are not necessary to wage the war.
This is where your argument breaks down. Russia imports vast amounts of manufactured goods that it doesn't have the capacity to make itself, including basic military and basic consumer goods, and for which it needs something that their trade partners might conceivably want. Which ain't roubles, for the most part.
They do have capacity to fully cover their entire military needs.
For consumer goods, they are trading with China, India and other countries in a mix of currencies, that includes rouble.
The freezing of their USD and EUR assets was a huge mistake; it demonstrated to the world that such assets are not safe.
Cars and motors are dual use goods (so the collapse of Russian domestic manufacturing of them is militarily relevant), but even setting those aside and looking purely at single-use military goods, there's persuasive evidence that the Russian military is increasingly reliant on Iranian drones and equipment (https://www.al-monitor.com/originals/2022/10/russias-use-ira...). Vast numbers of Russian equipment have been confirmed destroyed or captured by observers such as Oryx, and those are just the visually confirmed losses you can check the evidence for yourself (https://www.oryxspioenkop.com/2022/02/attack-on-europe-docum...). No country would be able to replace those losses without switching to a full war economy, which Russia has not done (and which would only be a necessary but not sufficient condition for replenishing these kinds of losses).
they had their local currency forever. yet they developed very fast exactly at the same time as we started buying their goods. its not a coincidence. and yes China is a third world country by all metrics, its not because you have very modern centers like Shanghai, Beijing and more big cities like that that there is not utter misery in the countryside that would make you blush
Not to defend China, but the west loves their cheap manufacturing, ask Apple, to name one.
You can't blame them only when it suits you.
And that's without even mentioning that who knows which countries will be free and which will be dictatorships in 20-30 years.
Fun fact by the way, at some point Japan and Europe were very close in state-of-the-art semiconductor manufacturing while the US didn’t have the capabilities anymore because it was outcompeted by Japan. At that point, the US donated funds and 20 years of research to ASML since it was better than letting Japan win the race, according to Chip War by Chris Miller.
Or do we seriously expect that US companies will generate significant demand even though TSMC and Samsung are already building heavily subsidized fabs in the US?
Yes I think so, presuming that there is not an over-supply of capacity.
US companies would much rather rely on an EU country than one that is being threatened with invasion over a small gap of sea. US local supply will never be enough.
Agreed
> US local supply will never be enough.
But you won't just have US supply. You'll have US and Taiwanese supply, and I don't believe that Taiwan will happily let TSMC (the only cutting edge foundry left in the world, when you take Samsungs abysmal yields into account) build foundry redundancy in the western world.
But we'll see, you could definitely end up being right. I just hope we'll invest at least an equal amount of money into chip design.
Intel says they're going for two factories of 20 bln indeed [1], Samsung for 17 bln in Taylor, Texas [2], and Micron claims to go for 100 bln (over time) in Clay, New York [3].
> Why invest 20 billion dollars [...] to create supply without demand?
Why do we have to pay about 5 dollars per month for a VPS with only 1 vCPU, 1 GB RAM, and 10 GB storage? I'm certainly hoping these specs to all increase 10-fold over the next 10 years for the same price.
[1]: https://www.intel.com/content/www/us/en/newsroom/news/intel-...
[2]: https://news.samsung.com/global/samsung-electronics-announce...
[3]: https://investors.micron.com/news-releases/news-release-deta...
Look at the machine you can build for one months’ typical AWS cost for a medium size SaaS company.
Cloud also charges insanely high rates for bandwidth.
It's quite low, but the real costs are on datacenter space and connectivity anyway, I have no idea what their cost structure looks like.
I would expect any real user to switch into renting servers as soon as small VPSs aren't enough. (But yes, the fact that there is a market of large VPSs tells people don't to that. I don't think I will ever understand this, as I don't understand most people usage of AWS.)
Besides, the cost of designs pales in comparison to the cost of producing locally.
It's not necessarily about supply and demand. These past few years have shown what shortages of chips can do to the supply chain. It's a strategic vulnerability if Europe does not at least think about this.
On the other hand, if people are trying to build the cutting-edge, there might not be as much local demand since it is probably only needed for the latest IT equipment, most of which is built in the Far East.
Was austerity broad-based or specifically targeted toward industrial areas? I'd always assumed austerity meant cutting back on public benefits/pensions/etc. but not strategic areas like this which is why I'm curious.
Asianometry has a great video on YouTube detailing the creation of TSMC: https://www.youtube.com/watch?v=9fVrWDdll0g
_leading-edge chip manufacturing_ must be seen like "defence": making money out of it is optional, but it has to stay _really_ leading-edge and should be ready to produce at scale for other failing "friendly" part of the world. Since South-Korea and Taiwan did just that, and the others not, they are now alone on the global market.
To believe the "supply/demand" rule of the economy can magically make the money flow decently and properly is _REALLY_ dangerous, it cannot apply to everything.
It's tied into the culture, tbh, but you know, at least make it easier for someone to start, fail and start again.
Even forming a company is a major struggle compared to US, UK. Nevermind the insanity after a bankruptcy.
Sole proprietorship is still very common, and of course when you are in trouble with that, you are in trouble.
I am not trying to absolve Greece from its liabilities, just pointing out that Greece is a bad example for austerity not playing a significant role in slowing industrial development.
Source: I am Greek living in Greece.
Many, many Europeans do work in factories. Just ask the Germans.
What's wrong with working in chip factories anyway? They produce some of the highest margin products in the world and since they are highly automated, working in a chip factory requires certain knowledge and education on physics, quality assurance, automation, material science, and certainly give you experience that makes you a valuable worker with future perspects rather than a replaceable cog in a dead end job as is the case for the Europeans working in most other factories that are a few steps away from being off-shored to lower cost areas.
Regular users would generally stay for several hours to make it worth it. No break, water, toilet or food, probably come in with an empty bladder and empty stomach and stay the whole day.
From what I have read, it requires specialised training and intermediate if not advanced level skills and relatively high level of education. You work on the same machines for years and they pay is not necessarily that high compared to the trouble that you put in.
In fact, even in Taiwan the challenge is that people often switch to chip design or software instead. This definitely gets harder as people age.
Asia has what some would call almost slave labor and a complete lack of care for workers. Many countries don’t care about pollution either.
US and European countries will gladly clean up manufacturing at home while shifting to countries who could care less about employees or environmental impacts.
I could believe EU has some stricter environmental regulations than both, though
https://i.kym-cdn.com/photos/images/original/002/407/503/119...
For this industry, you want as many verticals as you can to ensure supply. Have the early parts of the chain is great, but producing the end product is necessary too.
You also see this problem the other way around, when a US company produces a chip design, but then actually gets it fabricated, packaged, integrated into a product, boxed, all in another country
wasn't really a "donation" it had strings attached which is why ASML wasn't allowed to export to China, the US has all the say at the end of the day
Thanks for the reference, just bought Chip War.
Sure! France is betting everything with investing for an Intel factory here, the non-fashionable manufacturer that is getting excluded of the market because their chip designs are outdated. If my tax revenue can be used to maintain old actors afloat and create jobs to teach the French how to do things that don’t perform, I’m more than happy.
[0] https://www.europarl.europa.eu/thinktank/en/document/EPRS_BR...
My read is that China is expansionistic, and military power is just one tool in their toolbox.
In my opinion, they should better give away some outdated technology like 45 or 65nm.
This reminds me of China which forced some Western manufacturers to transfer technology to them.
1) operating a large plant in US is much more expensive than in Taiwan and it will bring less profit. So it it not financially motivated decision.
2) US can restrict export of chips to other countries and TSMC will lose money in this case
3) US can copy the secrets, share them with Intel and AMD, and make chips without paying TSMC
So this looks like a risky and not profitable decision to me.
Ensuring availability of goods?
David Ricardo never said that England should depend on Portugal for wine, and Portugal on England for clothes.
Edit: apologies, I read the original point as referred to the USA as a decisor, not to Taiwan (as the poster intended). The former point remains, about the clear opportunity for strengthening ties.
With respect, this seems like a case in which credentials are important.
The geopolitical context involving the relevant actors brings a number of difficulties the knowledge of which must be assumed, and that even Mainland recognizes.
We need to implement some type of conditions for anyone seeking education here in the US especially in institutions that are backed by US tax dollars. We need to stop handing out education to the very people who are dead set on competing against our national interests. In other words, stop training the enemy.
For that matter, it is similarly "«comical»" that if one wanted lean modular furniture (and not even "scientifically" covering every reasonable need) one has to go to the Swedes
> training the enemy
That is much more complex than those terms. For one, knowledge is transversal ("zero" is not e.g. a "cultural appropriation", etc).
After which we bring in lower-paid people from overseas.
Seems a little harsh and nationalistic? Not an American so maybe I’m way off base here, but in a country where people already pay exorbitant prices for higher education, what would you propose?
Unless I misunderstood you, I don’t think banning foreigners will solve your problem.
I wonder how many days after the first successful batches of chips coming out of the Arizona fab will China invade Taiwan.
I do hope not, but realistically: with high-end chips being made on US soil, the US will have very little interest in protecting Taiwan, apart from maybe blocking China from also acquiring the tech.
As in: cost of a war with China vs. economic cost of China acquiring TSMC tech.
As long as a war is cheaper, the US is protecting Taiwan.
I'm no expert, but it usually comes down to something like this.
If it's about talent, it's a lot easier to quickly import people than to import a massive fab plant, and I assume we'll be building talent (either domestic or imported) as we build out the related infrastructure and industry.
It would certainly be disruptive, but I assume part of the US's drive is to reduce dependency on Taiwan, and consequently exposure to the threat of China.
If the US stops caring about Taiwan, it's both safer for China to invade Taiwan (less pushback from the US), and less geopolitically valuable (less damage to the US), but China's interests aren't focused entirely on the geopolitical when it comes to Taiwan.
The problem is TW compensation and work conditions are terrible. Many of them quit before completely their agreements, so they aren’t actually training that many Americans.
China may invade Taiwan within my lifetime, but it won't be triggered by anything to do with TSMC.
China and the US are both involved in the Taiwan conflict due to history, ideology, and current economic relationships. Nothing material about that changes with TSMC building facilities in the US. If anything US ties grow stronger.
TSMC is not something China can acquire with military power. It's not a building in a RTS game you can just take over and operate yourself. It's a huge number of engineers and a globe spanning high tech supply chain. All that grinds to a halt the moment missiles fly into Taiwan.
As if TSMC were not absolutely critical. Samsung declares "we'd like to be able to match their capabilities" in public statements.
You would need to develop more on the topic "a world without TSMC: solutions and fallbacks".