Then in 2022, TSMC invested another $18B and received $6.6B from the CHIPS act.
My bet, is TSMC was given a “you build in the US or we wont give you defense contract work” in 2018-2020 timeframe lol
My bet is that TSMC recognizes they are a crazy geopolitical pawn. And is frankly playing their part.
Once China develops chip production abilities similar (but not necessarily better) to TSMC, they’re free to destroy Taiwan. Then they’ll be the sole cutting-edge producer, meaning that everyone will continue to do business with them despite their behavior.
TSMC and the US recognize this. If TSMC bring their tech to America, they’ll at least be safe to continue manufacturing (“for the shareholders”). It also is self-serving because it changes the geopolitical game. It increases the risks to China of an invasion, and favors to the US increase the odds of US intervention (good for their patriotism).
Finally, it’s pretty well established that the US defense industry prefers local factories for security purposes. They’re obviously interested in preserving this ability domestically, and most companies recognize that and accommodate.
TSMC is in an extremely precarious geopolitical situation; China's hardball is a lot scarier than Trump's. Expanding their geographical redundancy through billions in handouts is pretty appealing to investors.
1. China is less likely to secure a semiconductor advantage over the West, if TSMC has a US location. Instead, China is likely to take out the nearby, high quality fab, and whatever they are left with domestically is more likely to be inferior to distant capabilities.
2. Because of #1, China is less likely to secure a massive advantage over the US by invading Taiwan; as a result the US may feel it less likely to support Taiwan.
I'm inclined to think #1 is the more important one. #1 makes the risk of an invasion much higher. #2 makes the reward for an intervention somewhat lower, but I don't think it changes China's calculation of how likely the US is to intervene that much.
> > China is likely to take out the nearby, high quality fab
Yes.
If China's domestic fabs are second best or close --- and China may manage to crawl into this position --- destroying the best fab increases their relative standing and significantly hurts Western security. Whatever crumbs they get from Taiwan (the proportion of expertise that decides to roll over and help, and whatever capital equipment survives to be reverse engineered) are just a bonus.
If China's domestic fabs are not --- because there's a fab tied for first place in North America-- destroying the neighboring fab that they benefit from clearly doesn't benefit them.