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Comment by aurareturn | Hacker News Reader

An ok deal for TSMC, terrible deal for Taiwan.

Why?

TSMC was likely threatened by Trump to invest in America. TSMC likely didn't want to do this. However, because they will have more fabs in the US, they'll likely avoid the tariffs as part of the deal. Further more, TSMC will still make chips in case of of a China take over. The risk here is that the US will simply confiscate TSMC's fabs if China uses military action on Taiwan based on security measures. That's the worst case scenario for TSMC.

For Taiwan, it's a terrible deal because the money is not invested in Taiwan and the island becomes less important in the world. The "silicon shield" would also be broken and the Taiwanese government has zero control over fabs in the US.

It remains to be seen if this will truly happen. Perhaps TSMC will always keep its most cutting edge node in Taiwan. Perhaps they'll drag this out over the next 4 years in hopes that Trump's party gets voted out.

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My European gut feeling for a few years now is that Taiwan will be given...cought....sold to China, once all critical stuff is made on USA soil.

Why won't European or Canada or Australia defend democracy and provide Taiwan security guarantees and protection?

Because "defending democracy" is propaganda for the common people. It's always economics. The US/Europe will support or even install a dictator if the government is pro-western.

Yep, spreading democracy and freedom is PR. I think there's a historical preference to installing or supporting a dictator rather than a messy democracy. There's several cases where democratic elections delivered a government the US didn't agree with, so they orchestrated regime change.

Exactly. Even in Ukraine, Yanukovych was democratically elected [1] and US was potentially involved in overthrowing him [2]

[1] https://www.oscepa.org/en/news-a-media/press-releases/press-...

[2] https://www.bbc.com/news/world-europe-26079957

Because there's a big difference between the situations and you can't really judge a theoretical situation against an ongoing reality. Ukraine is an active war whereas Taiwan is a stalemate of sabre rattling and diplomatic posing. We don't know what each country will do if China invades Taiwan and this is part of what stops it happening.

The security guarantees for Ukraine stem from a 1994 agreement that assured some ex-USSR countries that they could safely give up their nuclear stockpile in return for guarantees that their sovereignty would be protected.

Europe supports Ukraine because it is in Europe, European countries were part of that agreement and European countries do not trust Russia. Not counting Belarus, there's 7 countries with direct borders to Russia, 4 of which used to be part of the USSR, 1 of which is being invaded and the other 3 wonder if they're next.

Whereas Taiwan is not in Europe and doesn't have any historical agreements with European countries.

Canada & Australia have cultural, racial and historical ties to Europe, so it is understandable they often align with Europe.

I wonder if they don’t really believe we’d come to defend them regardless of the incentives, at this point. In that case, might as well try to avoid the tariffs.

If they send enough engineers over, we won’t actually learn how to make the chips. Then when the next election happens they can re-evaluate.

If China invades in the next four years, I guess… I dunno, at least they’ll have gotten some people out. It is a pretty bad situation, I guess they are just doing what they can.

  I wonder if they don’t really believe we’d come to defend them regardless of the incentives, at this point. In that case, might as well try to avoid the tariffs.

I think the Ukraine situation already signaled that to Taiwan.

Ultimately, China won't invade as long as Taiwan plays its cards right. China wants to retake Taiwan without firing a single shot and then quickly re-integrate Taiwan. As long as Taiwan doesn't do anything to provoke China like inviting Nancy Pelosi or voting in more pro-independence politicians.

I actually think these events decreases the chance of a Chinese invasion but increases the chance of a peaceful reunification because the Taiwanese government will look to rely less on the US and positive impression of the US is decreasing in Taiwan.

> China wants to retake Taiwan

Take. They can’t “retake” something they never had.

The island of Taiwan belonged to China at some point. No political statement needed and no need to rewrite history on HN comments.

  Historically, Taiwan was governed by Chinese administrations for a significant period. In 1683, after defeating the Ming loyalists in Taiwan, the Qing dynasty extended its rule over the island, eventually incorporating it as part of its empire. By 1887, Taiwan was officially designated a province of China under Qing rule. However, following the First Sino-Japanese War, Taiwan was ceded to Japan in 1895. After World War II, Taiwan was placed under the administrative control of the Republic of China. Today, its status remains politically and historically complex, with ongoing debates over sovereignty.

Taiwan is under the administration of the government which ruled China then — and has continued to rule Taiwan since before the revolution led by the CCP. That’s why their official name is the “Republic of China”.

https://en.wikipedia.org/wiki/Republic_of_China_(1912%E2%80%...

The CCP never controlled Taiwan: it remained independent and under the previous regime. So the CCP would need to take Taiwan as their regime never controlled it.

You’re the one rewriting history.

> Taiwan is under the administration of the government which ruled China

Both consider themselves the temporarily embarrassed rightful heir to the centuries old concept of China.

The distinction between take/retake in this scenario is a shallow attempt to peacock your political opinion for everyone to see.

> Both consider themselves the temporarily embarrassed rightful heir to the centuries old concept of China.

This is an outdated take that does not reflect the contemporary feelings of the Taiwanese people and at best only describes a facet of KMT party policy. Bear in mind the KMT does not hold a majority in the legislature - they had to form a coalition with a third party to do so - and the president is from the DPP, which explicitly considers Taiwan a sovereign nation and does not buy into the notion that Taiwan is secretly the real China.

So is the insistence on “retake”.

With the exception that “take” is technically correct, as the area in question is a remnant of the already existing government which has maintained independence in a cease fire. Both claim the other, but facts still matter. You don’t “retake” an area that was never under your control.

The RoC lost mainland China to the CCP, but the CCP was never the owner of Taiwan.

>but the CCP was never the owner of Taiwan.

I think his perspective is: "If the Qing were the Chinese Goverment and they had Taiwan, and the CCP is the Chinese Government does not have Taiwan, so they will be retaking the island".

His conviction speaks to the strength of the CCP narrative that they ARE China though.

CCP/PRC =! "China". It's a dynasty of China, one of many. Americans aren't generally familiar with the concept of dynasties, but the Europeans would be. When I was in France some years ago, I was told that France went through 2 kingdom phases and 5 republics in it's history, with the current iteration being the 5th Republic of France. The 5th Republic never owned a colony in what's now the US, but some previous iteration of "France" did, until they sold it to the US in the famous "Louisiana purchase". Thus, it is correct to say that "France" used to owned parts of what's now the US. Likewise, it is correct to say that "China" used to own Taiwan", even though the PRC/CCP never did.

Most MSM stories on Taiwan take pains to point out the PRC/CCP have never controlled Taiwan. That is technically correct but intentionally misleading, counting on the (mostly American) readers to not understand the difference between a government/dynasty/regime of a country and the country itself, which has histories extending back beyond the founding of its current regime.

The current demand of China to Taiwan, is that Taiwan must continue to claim itself as a rival regime to the PRC vying to control, and represent, all of China. What will trigger war is formal Taiwan "independence", defined as Taiwan rescinding claims on PRC territories and declaring itself a sovereign country independent from not just the PRC, but the ROC (Republic of China) or any other concept of "China" altogether

For 200 years China did nothing with Taiwan. The Ming dynasty called it a ball of mud in the water not worth the effort of the Chinese people. The Qing dynasty did not allow anyone to travel to Taiwan because it was too unsafe to travel. The few people in Taiwan were constantly fighting with the local population. They failed to rule or control Taiwan. For 7 years prior to Japan invading they decided to call it a province. Despite having no control over it. Japan even said they were not convinced Taiwan belonged to China because there was next to nothing there, they put up no fight, and fled before Japan arrived. The PRC also called Taiwan an independent nation and advocated for Taiwan independence until the 1940s when the ROC took control of the island as the request of the allied forces who requested ROC administer Taiwan until they decided what to do with the island, because no one was convinced it ever belonged to China to begin with.

I believe allowing China to seize Philippine islands without response was actually the appeasement which escalated the situation. (Along with raiding oil fields, etc of their other neighbors.)

> I wonder if they don’t really believe we’d come to defend them

I think every sensible ally of the US would now be developing (if they haven't already) contingency plans for any scenario in which they might get embroiled in that would (under previously agreed terms) require an ally to support them. Who can believe in an unconditional military alliance, when the US government is so nakedly prioritising economic transactionalism, even at the expense of their own long-term security (there's a reason countries get into alliances). This US government's handling of the Ukraine situation will undoubtedly turn out to have been the biggest geopolitical footgun for many a decade.

The US will NOT engage in a hot war against China for Taiwan, that's for certain, regardless of who is president at that time. Why would they risk nuclear war for a bunch of people who are really far away from the US continent?

It’s not so much the people or the land, but rather what they can build. It’s the whole essence of the article. Not sure how far behind the West would fall if TSMC was controlled by the CCP. 5 years? 10?

We’d blow up the fabs ourselves.

But it’s in Taiwans interest for us to continue to provide them arms, training, and build regional alliances to pressure China.

I’m also not as convinced the US wouldn’t respond, but it would depend on South Korea, Japan, the Philippines, and ASEAN nations to call for such action — if they felt threatened enough by China’s actions in taking Taiwan and Philippine islands to declare war themselves.

Edit:

Including article discussing blowing up fabs and Taiwanese response that cutting off ASML and similar would be just as effective.

https://www.businessinsider.com/us-would-destroy-taiwan-semi...

  We’d blow up the fabs ourselves.

Nah. You're not thinking this through. That'd start WW3. China considers Taiwan as a province of theirs. Bombing anything in Taiwan by the US would be the same as bombing China itself to the Chinese government. If the US bombs China, expect China to declare war on the US. Have fun getting drafted in the military.

Not to mention it's the quickest way for Taiwanese people to completely turn on the US.

Unless a series of unfortunate accidents occur at the TSMC fabs long before China can put them to use...

If the key thing is to avoid China getting access to TSMC plants, I'm sure there are ways to do it without risking US troops. The West would have to live with inferior Intel nodes for a while, but it would be better than anything China could produce.

The U.S. absolutely defends Taiwan because losing it isn’t an option!

Taiwan currently produces over 85% of the world’s advanced semiconductors. Letting China take Taiwan would hand the CCP control over the global tech supply chain, crippling the U.S. economy and military. That’s a non starter.

No nation with anything to lose will be using nukes..EVER. The game has been understood for 75 years: mutual destruction means no winners. The U.S. has more nukes, better missiles, and full second-strike capability. China knows this, so nukes aren’t on the table.

The U.S. doesn’t need to invade just stop China’s invasion. Amphibious assaults are the hardest military operation, and China has zero real world experience in them or in fighting hot wars at all. We only need to sink their fleet or disrupt shipping to and from their ports. They know the risk, which is why they haven’t tried.

Now 5 years form now if we are much less dependent on them for semi-conductors that is a different story, but the realities of today. For now? Yeah, we throw down.

Also there is the scenario where China co-opts or influences Taiwans elections such that leadership moves back to a pro China stance. Not impossible, that would really put the US in a bind and I am not sure what would happen then but military engagements would seem much less likely.

Losing Taiwan is an option, and that's exactly the problem. It's not American territory, and China knows they can force America's hand by dominating their navy. If you can neutralize America's will to fight with DF-21s from standoff range, you can bring them to the table for negotiations. American troops have better things to die for than the supply chain of the iPhone 17.

To be honest this is a really immature depiction of the conflict, especially for a site like HN. China has demonstrated their willingness and capability to stage a credible naval assault, if you're still skeptical then I think you're blinded by jingoist ambition. Taiwan is a long ways from home, America can't deter China just with their surface fleet.

You don't risk nuclear war by shooting a few conventional missiles and establishing a blockade.

(A) China would suffer intensely under a blockade.

(B) A few missiles could ensure chip facilities are surrendered intact.

(C) Even a short conflict where a few missiles hits boats invading Taiwan would ensure the rest of the world never trades with China.

Point being: The US doesn't have to win, don't have to fight with everything, just make the invasion hard and isolate China in a new cold war.

I think establishing a blockade is generally considered an act of war. Possibly a war crime if the intent is to starve civilians? (Not sure, this is way outside my wheelhouse). I’d expect it to be about as escalatory as using US ships to attack the mainland, more or less.

Not a war crime, China has plenty of agriculture.

See the Cuban missile crisis. It is an act of war but certainly not as escalatory as direct attack.

Chinese agriculture is heavily dependent on fertilizer and energy imports. A blockade would easily result in famine.

In fact the history of China is just constant famines.

Is the history of China any more famine stricken than any other region if the world? In recent history (last two centuries) maybe, but before that? Typically you don't become the worlds most populous country by having frequent famines.

US action following a Taiwan invasion could be shoot a few missiles at the invasion fleet.

Declare all coastal areas around China a conflict zone.

Declare anyone trading with China can't trade with the US. If backed by allies, China could perhaps be boxed in.

But, hey, who knows. It's entirely unclear what is possible.

And much depends on whether Taiwan falls in 3 days, or stays in the fight for 3 years.

Or so one would assume.. current administration is proving that they'll abandon freedom at minimal cost.

I assumed deterrence was in place and the chance of a taiwan invasion was quite low. After this week the chance of a taiwan invasion seems quite likely.

Maybe TSMC has big influence over Taiwan's government or just outright owns key politicians under the table.

When / if TSMC secures that all lifecycle for advanced large scale chip manufacturing is in the US, Taiwan might find themselves in very iffy waters.

I'm sure TSMC has a lot of influence over the Taiwanese government. However, the people of Taiwan aren't stupid in all of this. They know this is a horrible deal for them and would make sure their politicians hear about it.

They must have a massive influence. I think its gross revenue is something like 10% of the GDP of the whole country.

Even that understates things. TSMC is Taiwan’s singular Trump card in geopolitical negotiations. Now that righteousness and moral high grounds don’t matter any more, it’s the only thing keeping Taiwan safe.

  Now that righteousness and moral high grounds don’t matter any more, it’s the only thing keeping Taiwan safe.

It's not the only thing because if China controls Taiwan, they'll eventually control SK, Japan, and PH as well.

Taiwan government is the biggest shareholder of TSMC…

Does not exclude my point of view. If things go sour they most likely be on the first plane to the US.

You stated:

> Maybe TSMC has big influence over Taiwan's government or just outright owns key politicians under the table.

I’m pointing out this is just plain Wrong. TSMC was created by the government and invested in by the people.

It's not just the cutting edge node. Arizona chips will still be shipped back to Taiwan because TSMC only do Fan-out PoP packaging there. This will unlikely change for the next 5 factories. This is a good win win for everyone. Trump gets to parrot jobs back in america slogan, TSMC gets some extra money to scale out production to 64% of their revenue customer (US based) and Taiwan gets to keep what is really, really important.

This new deal is 3 factories an two packaging facilities.

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