TSMC faces tough choices amid rumors for Intel foundry collaboration
techsoda.substack.com
techsoda.substack.com
They made about 25% from this in 3 days. Easiest money from a rumor.
No wait that was a couple months ago.
I think the OpenAI's non-profit to profit transition would have warranted a looking into by any administration, I suspect there will be additional personal animus driving this specific set of players.
So update your bio with a MAGA photo and something racist.
Coinflips for everyone!
Saddam Hussein's capture caused oil industrial stock to climb because of the association between oil and the Middle East. After people realized that Saddam Hussein actually had no relevance to the price of oil or the product, the socks fell back down.
Stock market is quite often pushed emotion and asinine assumptions versus logic and reasoning. Enough social media echo cambers can easily sway stock prices momentary to make a quick buck.
The second one sounds like the worst possible result I can Imagine.
Stablishing the packaging plant in the US sounds like the best option. The US would be copying what China does, but much better than partnering with a US company in the fab space. Technology transfer is unacceptable for Taiwan's survival (geopolitics)
https://www.counterpointresearch.com/insight/infographic-q1-...
[1] https://en.m.wikipedia.org/wiki/Cross-Strait_Service_Trade_A...
Even if the US "guarantees" Taiwan security, the current administrations "guarantees" are not worth the even hot air they are made of.
I'm not sure if you were joking, but it would be 100% justified, especially if the "negotiation" with Russia over Ukraine are correctly reported.
South Korea and Japan are in basically identical places, FWIW. The only reason we haven't seen a north-east Asia nuclear arms race, so far, is that several countries relied on their presence inside the US Nuclear arms umbrella. With that looking more questionable, I think the next four years are likely to see widespread nuclear weapons proliferation. Certainly the example of Iran, where the US negotiated an excellent treaty and then unilaterally pulled out of it and started violating the treaty whole-sale under Trump's last time as president, and the fate of Ukraine, who were invaded by a much larger, nuclear armed neighbor, should encourage all three of those countries to make nuclear weapons faster.
The only reason any of them might not is domestic political response, which loom biggest for Japan, but I doubt that would stop any of those countries.
If I were them, I would try the Israel approach of very carefully refusing to admit whether they do or do not actually have 127 bombs that can reach Beijing.
Oh.. why 127? No specific reason… don’t worry about it…
If US lets Taiwan (or even Korea/Japan) into the nuclear club, then what is stopping nuclear proliferation to Iran? Venezuela? Cuba? There are negative externalities to US allowing it's allies to have nukes.
Taiwan doesn't want nukes according to the past Presidents.
ROC not having nukes is obviously also a policy choice by their leaders, not just a decision made in Washington DC, but if what is happening in Washington DC is different, I suspect that it will change the calculations in Taipei, Seoul, and Tokyo by a lot as well.
I think that a lot of baseline assumptions about how the world works are going to be proved invalid over the next four years, and I think the world will be worse off for it, but we're where we are now.
As for past President's statements, no one openly wants nuclear weapons until they have them. If you don't have any, then your public statements are that they are horrible, brutal devices of no value or use and you don't need them. Once you have them, they are vital to your national security. Citation: Every nation after the first one to get nuclear weapons(1).
1: Except South Africa, which never acknowledged them, and destroyed their weapons and the entire program rather than hand them over to Nelson Mandela. But that's a special case.
WTF does that achieve? TSMC fabs all the advanced chips and Intel becomes just a packager? Window dressing.
https://news.skhynix.com/semiconductor-back-end-process-epis...
> 2. TSMC joining other firms as investors in Intel Foundry Services (IFS), a division being spun off from Intel, with TSMC transferring its technology as part of its shareholder role.
> On the other hand, if TSMC rejects the proposals, the U.S. government could impose a 100% tariff on chips made in Taiwan
When US can't compete, they have to blackmail/steal/sanction to rescue their failed corporations. The same stealing accusation they level at China.
Intel is absolutely lobbying for this to hamper TSMC, but Taiwan's industrial policy ain't a saint either. At least this spurs some amount of Capex spending in the US.
A lot of the "ministerial advice" story (the uber powerful ITRI, METI, etc) is to a certain extent a rewriting of history. A major reason why these bureaucratic orgs were so successful in Asian countries was explicitly because of the revolving door - after your 20 year stint at ITRI or METI, you'd join as an advisor for one of the affected companies or start your own consultancy.
This isn't to say that they made bad choices (they didn't), but it absolutely was done due to collusion between regulators and businesses.
The Trump-era "politician aligned businessman" model is the norm across Asia - it's a major reason why Morris Chang lobbied against the CHIPS act, Hyundai lobbied against easing automotive tariffs, Tata lobbied for 5% sales tax on EVs but 25% sales tax on Hybrids and 50% on ICE, etc.
The Asian Model of Development is predicated on "Access Money" to use Yuen Yuen Ang's typography of corruption.
Could you provide citations for some of the above? I’m interested in reading more about them.
Sure. These are some off the top of my head, but I can get some more substantive stuff later
Morris Chang - https://www.politico.com/news/2023/02/14/taiwan-tech-king-pe...
The development of Korea's Automotive Industry - https://www.washingtonpost.com/archive/business/1984/10/07/s...
Tata's lobbying - https://www.reuters.com/business/autos-transportation/tata-m...
If I were Taiwan, I’d say “give us nukes and a couple subs, then you get our best factories”. The US nuclear umbrella is now less of a guarantee and countries need to own their security.
Immediately after break up from USSR they had 50+ million population, strong army, industry, tech, great location as a transit hub, agriculture, resources etc. and their fucking corrupt "leaders" pissed it all away an had turned their country into an easy prey and a shadow of its former self.
It's going to be a costly, painful lesson for everybody involved, but it could be a salvatory action that helps slow-down the frightening nonsense building up in the US.
The states still maintain their own military forces in the form of the National Guard, but in times of war these units can be activated by the federal government to support the US military. So they do maintain some sovereignty in the sense that they have their own military forces, but nowhere near to the extent that the federal government asserts sovereignty here.
You can't really call any state in the US "Sovereign" when the federal government has the power that it does. But also it's nice to be able to travel to Arkansas and not have to worry about your actions that are legal in Washington being used to prosecute you in Arkansas.
The people who will be controlling the direction of the country will be empathizing the states over the people.
Regardless of the state of elections, we’ll have a deeply conservative or reactionary judiciary for a generation to come. Elections have consequences.
That's all of the countries.
EDIT:
Downvote me all you want, I can pull plenty of examples. Nothing pisses off a voting constituency more than a major regional employer shuttering, so governments do something about it. That, or the government wants to build/maintain a hegemony, so they float companies to outlast competition.
However in none of those countries but USA will you see in almost any published text or discussion thread a lot of people weeping that the competitors from China are too strong only because their government either subsidizes them or forces foreign companies to transfer IP, or they do not enforce the environmental regulations.
The contrast between these continuous complaints of the US citizens and what the US government really does, by subsidizing all significant private investments with tax breaks and by blackmailing foreign companies to give various advantages to US companies is funny.
Go back far enough and everyone will have done this with their nascent industries.
And that’s arguably a core job of any elected government. It’s not to promote external commerce or industry. That’s just a positive side effect of equitable bilateral deals. The primary economic and security responsibility is to your own people.
Is the "free trade" mask completely off now? Good.
There are other examples for both Europe and other regions, but that's what instantly pops into my mind.
Seems like a bluff... at least taken literally. Is the US really going to put a 100% tax on the core component of the computing industry?
If this actually played out it would be pretty bad for the US economy.
I suppose the unstated implication us that the US could just take the IP by force.
Isn’t that what China’s stated plan is?
In general, they make a huge effort not to talk about their plans vis-a-vis Taiwan at all. They just keep repeating that Taiwan is part of China.
The closest they come to stating that they plan to use force is that they'll sometimes say that they won't reject the use of force.
Given that nobody has proposed a scenario where China actually could do something like "take the IP by force" (since the IP would be gone if they ever tried to invade) and we can generally see that the Chinese leaders aren't complete idiots, it seems highly unlikely that they're planning an invasion any time soon.
The chinese want to invade Taiwan because they think it's a rebel province, their only consideration is whether the US will oppose them militarily if they do.
IIRC, the US's wargaming shows that if it tries to intervene, it will lose. Taiwan is too far from the US and too close to China.
The US has unrivaled force projection capabilities; half the worlds carrier fleets, the largest navy by tonnage, and the technology to execute unprecedented combined arms maneuvers.
China has insane defense-in-depth; more missiles than you can shake a stick at, the largest navy by number of ships, a vast arsenal of countermeasures, and a 4:1 population advantage.
China can't stand toe-to-toe with the US anywhere except the immediate vicinity of China. In that vicinity, nobody can get close if China doesn't want them to.
I think you have a typo there.
Personally, I think if the US wants to defend Taiwan from invasion, it needs to stock them up with a massive amounts of missile/artillery/whatever systems and ammunition, and that needs to be distributed all over the island so there's no concentrated stockpile to attack.
But the US cupboard is bare, and Ukraine made it barer. IIRC, in an all-out war the US itself will run out of missiles in a few days or weeks, and lacks the capacity to replenish them at a reasonable rate.
There are many disincentives. The biggest one is that China is confident that they'll get full control of Taiwan without violence.
They believe that the US is in a state of terminal decline and Europe will never overcome centuries of infighting. A significant portion of the population of Taiwan wants to reunify. They fully expect that they can just continue to nurture supporters within Taiwan and wait out the West and Taiwan will just fall into their lap.
Why would they go to war when they think they can get everything they want without war?
That hurts the US access to chips, short term. But then who is going to fill the demand and where will the talent migrate, and who else is going to build the capacity ($$$)?
Have people suddenly forgotten that markets and enterprises exist, and are quite good at making products. Chips are not minerals. The state department isn't a tool for this job.
In any case, TSMC is currently within the US sphere. Nvidia makes most of the capital gains. US government gets to deny China. US companies get good chips. Where's the upside in blowing all this up?
Perhaps pulling the security guarantee and greenlighting reunification under PRC is the destination, and onshoaring Taiwan's critical industries is deemed prudent in advance of this.
Obsolete framing. This would be happening even if Intel were competitive. We’re shifting into a nationalist (possibly kleptocratic) economic footing. Previously, we were friendshoring. This administration doesn’t discriminate between friend and foe.
It's a framing that doesn't let the American public distance themselves from their own elected officials. He is your president.
This is the mistake. This isn’t industrial strategy. It’s part messaging tantrum part pursuit of autarky.
America could have been winning, and in some domains it is, but that doesn’t matter because the political question is how those gains are divided inside America.
> a framing that doesn't let the American public distance themselves from their own elected officials
Nobody is doing that. The point is America is grabbing irrespective of whether it’s winning, and without any particular coherence.
I didn't vote for him. With the way our electoral college works I didn't really even have a voice in this election.
He's The President the people of PA, MI, and GA wanted tho.
So no, he's not "my President".
Most of us really didn't. Some of us, for the first time in our lives, made substantial personal campaign contributions to the other side because the nationalist leader looked really dangerous for US economics and international relations.
It's too bad for those people that the other side they supported was so stupid they lost anyway.
I wrote that side some angry letters over the years. For a long time, there were strong signals they arrogantly thought that "nationalist leader [who] looked really dangerous" was actually an opportunity for them to win on an unpopular platform that appealed to their elites. They did some really stupid shit that undermined their credibility.
Turns out leftist anarcho-liberal movements mean they simultaneously fuel the right, but ultimately fail due to lack of organization and platform coherence.
Democracy by itself is meaningless and valueless. It becomes useful or not based on the systems, institutions, expectations it mediates.
I think that with the advent of digital media, many parts of the system have (specifically parts of the electorate) been rendered non-functional by overload. With a firehose of issues, there is insufficient time for organization, solution seeking, and consensus building.
So yes, slow down the signal, but also prioritize to prevent political and cultural DDOS.
From that point of view, it is probably in TSMC's best interest to not hand over their IP..
Absolutely not. TSMC, ironically, can outlast Trump. Unfortunately, Taipei may not be able to.
In a world where TSMC supplied China, at least the PRC would suffer economically from the US/ROC bombing the fabs. With the PRC forced to mainland its own fabs, that leverage goes away.
Forcing China to develop domestic production makes invasion more likely.
Of all the places to "friendshore," Taiwan is probably the worst due to its location and vulnerability.
Perhaps we need to learn the value of strategic depth the hard way. Rome had to be sacked, in the 5th century BCE, to become strong. And this time, most of us can fly out while the violence settles.
Is it America First or America Alone?
Name a country where this doesn't occur. The US is not the only country in the world by a long shot that doesn't take measures to protect their failing corporations or export products.
> The same stealing accusation they level at China.
Well they've leveled the accusation against China and nothing changed. So what should the United States do? Continue to let it happen or do something about it? Unfortunately global fair/free trade requires all participants to participate in good faith. If the second largest economy is going to actively undermine that system it just won't work.
Oh wait, that's what the AI diffusion rules do.
TSMC - "You don't need to manage your own fabs. Let us do it for you and just focus on what you do best."
Intel kept its fabs, which certainly gave it many advantages, until Intel's tick-tock model failed. Now, America is crying about its own failures and wants to punish others for their success.
It makes America look bitter.
Where did the billions they racked-up in the past decades go to..?
If you cant beat 'em join 'em. Makes sense to me.
I'm glad the US is learning some positive lessons here. China has shown that joint ventures and forced technology transfers are the way to go, and the US has shown that an uncritical embrace of the free market/free trade sets you up on a glide path to national vulnerability and eventual irrelevance (while a few dudes get very rich in the process).
The free trade era is definitely ending. I though Zeihan was nuts saying piracy and sea security would degrade back to mercantilist/privateer days, but it does appear that will happen especially with the Ukraine war showing littoral theater dominance of cheap drones.
Also, free trade and free seas was predicated on the US needing oil. With shale oil, alt energy, and the rise of the EV, the strategic significance of oil will plummet over the next decade. Why have a dozen carrier groups? Why have three?
"Disappeared for decades" is pushing it, but I'd give you "reduced in prominence for a decade" (e.g. since Trump's rise).
That said, "an uncritical embrace of the free market/free trade" is still a pretty common stance on HN.
I think it died in the Bush years when there was oodles of money being spent on two wars and PartD medicare and the new Homeland Defense boondoggle.
There was a lot of money to be made off of the government in those days.
It’s a Cold War.
The main difference is that a lot of the hardball tactics flew under the radar during the Biden admin.
Also, Taiwan ain't China.
Small countries better join something like the eu and nato because they cannot ro alone.
The chips being used in weapons systems are largely fabbed on legacy nodes (28nm/48nm) or 14nm at the latest.
You don't need much more than a mid-2010s comparable Intel i5 or Nvidia Maxwell for most defense or weapons systems applications.
The same mindset you are describing is a major reason why Deepseek was able to "disrupt" the ML space.
At some point, just throwing more and more compute becomes a waste.
When building weapons systems, what matters is low unit costs and ease of replaceablity. This is the a major reason why most Defense (as well as Aerospace and Automotive) buyers tend to consolidate on older, cheaper, and more commodified processes
There are significant usecases for bleeding edge compute such as in Simulations (heavily used in Nuclear Research and Jet Engine design), but you can fight using legacy compute at scale and still turn the tides. Look at both Russia and Ukraine for example.
And now there’s BYD, which, as I understand it:
- Uses a highly integrated drive system that does not have any particular resemblance to Tesla’s
- Uses prismatic LFP cells. Those cells and battery packs are very different from what Tesla uses, at least in the US. And Tesla has never actually been a heavyweight in the battery tech space despite periodic PR pieces from management.
The rest is … just a car?
What did BYD steal from Tesla exactly, other than market share?
Before you go “well how could two people cause all of this”, it’s the two people we heard about.
There’s no suing in China to protect your shit.
Having said that, yeah, it's not too hard to see a future where asian nations begin to see a lot more possibilities in cooperation than they see in competition with each other.
Just as they have a right to develop their strategic postures, we, also, have a right to adjust our posture to serve us best in the largest possible number of future outcomes.
Until the day China finally invades Taiwan and stablishes its laws there.
I think this is wrong? Both PRC and ROC claim ownership of all of China, including Taiwan. The PRC calling Taiwan a rouge territory and the ROC claiming to be a government in exile.
The ROC has never denied otherwise as claiming to be sovereign would upset the balancing act they play.
To sum it up, I would say the official position of Taiwan is that it is China.
Whatever your own position on this matter may be, it is important that we factually describe the positions of the parties directly involved.
Hopefully we can use this as an opportunity to spread a more accurate description of the dynamics at play.
For reference, here is a speech by William 賴清德 (https://en.wikipedia.org/wiki/Lai_Ching-te) outlining the position under which he operates. The phrasing he uses is one that is consistent across all of his public remarks; consistent with remarks by Louise 蕭美琴(https://en.wikipedia.org/wiki/Hsiao_Bi-khim) and other close associates of William 賴清德; consistent with remarks made by 蔡英文 (https://en.wikipedia.org/wiki/Tsai_Ing-wen); and consistent with how the structures in Taiwan have operated over at least the last decade.
《賴清德就職演說：兩岸「互不隸屬」》: https://youtu.be/oLO5bYF8lDs?t=139
The relevant remark is: 「由此可見，中華民國與中華人民共和國『戶不隸屬』」
Here is my (manual) translation: “From this it can be seen that the Republic of China and the People's Republic of China are ‘not subordinate to each other.’”
Here is a Whisper-generated transcript of the entire speech, with an OpenAI generated translation inline. I skimmed the translation, and it adequately conveys the speaker's meaning and intention. (It does fail to convey the delicacy, careful phrasing, and specific rhetorical choices made by the speaker that are extremely clearly visible in the Chinese. However, this aspects are harder to convey if you don't have minimal prior knowledge on this topic.) https://pastebin.com/fGxHUpXN
It is true that there are historical positions, (historical) on-paper claims, and even a variety of differing positions and lively debate on this issue across all of the populations involved. But the conclusion one might draw from the comment above is wholly incorrect. It simply isn't the framing within which William 賴清德 and associated parties are actually navigating this issue.
The reason you don’t consider it theft is because we’re into deep level treachery here where right and wrong are beyond blurred.
Just to add a slight bit of friction to all of this, I’ll just note that money and profit is involved. Lots of it.
But when I said I don’t know, I really meant it. It seems obvious to me, but how could it be that obvious? I must be going crazy.
It's more like DeepSeek legally bought OpenAI's public product, tore it apart and successfully RE'd it / used it to bootstrap their own thing. Like many other innovators and tinkerers.
China bought its way into batteries by buying our bankrupt A123 [1]. We weren’t fleeced, we gave it away.
> It’s a Cold War
It’s a stupid Cold War. Literally search public property records for mortgage liens and join to senior people who have just been fired. Offer them a consulting contract so they don’t even know they’re an intelligence asset.
Yeah. Short of nuking themselves, the US couldn't really be trying harder to lose in every possible aspect right now.
Is this a failure of industrial policy where USA would be the leader if we just pumped enough money in it, or was the outcome based on fundamental comparative advantage.