TSMC announces US semiconductor fab plans (May 2020)

If one looks through a short term lens, sure. 10, 20 years. The issue is Taiwan has not much else going for it in reality (meaning, what do other countries need). Natural resources, democracy, love, peace etc. No global entity cares about this, at least not in any meaningful way, until its too late. The USA is famous for this, not caring until too late or just “caring” to get global strategic footholds on resources. Taiwan is meaningless. Labor is expensive here now, thus why most manufacturing here is going away. Only high tech is managing here in a very important way. What does Taiwan have to offer the world? If you just use the TSMC story, let’s use 50 years as a rough number. Is everyone sure the US, or other countries, cannot compete with tsmc in a half century timeline? How about a full century? I feel this is naive, and the future apologies about why the predictions were wrkng dont actually matter because Taiwan will be gobbled up by China by then, without intervention.

The real issue is this is actually existential for Taiwan. It isn’t existential for the USA. If people don’t get that point, they wont understand how retarded a move this really is. The key point being, NOW is the time taiwan is good at it (well, we should have negotiated better theast dew dexades as well, but here we are…) not 50 years later. Thus, NOW, is the time to negotiate proper protection, security, alliances and etc whilst we still have cards to play. Meanwhile we are losing diplomatic relationships, even those we lay for, and maintain the tiniest and, sadly, the most useless, ties. All the countries that claim they hold the same beliefs, ethics etc and have strong economic ties with Taiwan sell their souls for communist China and the country that constantly threatens war. The irony is great, trumped knly perhaps by greed. It wont be forgotten.

When we lose these cards (variou tech superiority), what will we have to negotiate with? Truthfully, and historically, when has the tiny land mass with more morals ever won against the protection over the the ones that control the supply chain? Who protected them? It’s almost always a: let’s be greedy for as long as possible then when shit gets too real have a massive war and reset the clock. It’s what **doesn’t ** set us apart from the basic biological norms that exist everywhere.

It’s time to be real fucking pragmatic before we waste away into 3rd worldism and lose our only strategic advantage. The usa has not commited anything on paper to tonprotect Taiwan from chjna post abandoning Taiwan. They don’t seem to have any plans to commit to security. They rely on ambiguity, which kight be better than nothing. But somethings also better than nothing. It’s bonkers. It boggles my mind how so many argue against this objective reality when its on display and i writing/recorded video everywhere. The US also had the nads to tell Taiwan what weapons they xan evolo, without promise of protection against China. And now we are stuck following their will…or else…

We need tonuse our leverage hard, now, while we still have any. We will lose this leverage soon, (few decades), then what???

What am I missing?

That we are not too dissimilar from Zelensky. We have what we have because US allowed access to their latest tech. Without them we have nothing. I could see the point being made that we should get something out of this. But it won’t be a security deal, at best it’d be an FTA or something similar.

And while we will definitely eventually lose this card, and we might be at the peak of our significance, China is in a similar situation. China is a peer power now but it soon it will start losing ground. I can see some scenarios where Taiwan maintains its influence but can’t see any for China short of collapse of the Western civilization at which point whats the point of their military backing?

Absolutely 1000% this. We are at the most critical juncture in Taiwan’s existence and it’s handing its most valuable asset to a country that doesn’t give two fucks about it and has promised nothing in return. The DPP is a huge danger to this country now, it’s ridiculous that they’re still of the mindset that Taiwan should be buddy buddy with the US and nasty nasty with China.

Realistically at this point, everyone must know there Taiwan is going to become part of China at some point now. Without solid US backing, it is happening, sooner or later. Taiwan needs to use the cards it has to de-escalate it’s relationship with China, hold onto status quo while it can, and be prepared to use chips as leverage for a better one party two systems deal.

What Taiwan is doing at the moment is absolute pure madness.

So what? Taiwan should give the US it’s leverage because they helped us in the past, even though they will fuck us in the future?

You keep stating the problem and no solutions. What’s the solution then? I’d take anything that isn’t a Zelensky style proud moment followed by immediate groveling. We just don’t have a good choice, having been stuck between a rock and a hard place. Investing in old node fabs in another country is the least bad choice I can see.

Pointing out a hole in the ship doesn’t mean I need to have the patch. Regardless, I have actually highlighted the potential solutions here just two posts up:

Which will be 2 or 3 gens behind their state of the art at that point? If all goes well, they’ll have N2P, A16, and A14 at that point.

Ok my bad, I missed that. But how is just giving up the best option? Just be like HK? Lose everything slowly? Economy, identity and freedoms? If we join China half of our GDP evaporates over night. TSMC cannot afford to lose access to EDAs, material or equipment vendors. And that’s just the tip of the iceberg, every step of Taiwanese high margin tech industry depends on Western tech.

No the best path is to buy time and dominate the industry even more. Once Intel and Samsung are truly defeated without any hope of fighting back then we we will better leverage.

Given that there’s still no commitment to bring their most advanced processes to the US, that scenario might make Samsung the leader in chip processes.

(and while Intel has been struggling mightily, 18A might turn the ship around for them a bit if they can get their yields up in a decent timeframe)

If their advanced processes aren’t in the US, what leverage are they giving away? It’s not like Intel can’t make chips, they’re just a bit behind. The processes that TSM has committed to bringing to AZ in the plants currently being stood up is on par with what Intel has now, and by the time N2 shows up in the US in 2028, it should (hopefully, for Intel) be behind what intel can do (Intel 18A, broadly comparable to N2, is hoping to enter mass production later this year (but intel being intel, there is skepticism and rumors of delays)).

I wouldn’t call it the best option, it’s a very shit one, but it may end up being the least calamitous option given the dangerous predicament Taiwan is now in.

Doesn’t make sense to me. Dominating the industry while moving more and more into America is no protection for Taiwan.

@Brianjones already said it here:

Just because it’s not the most advanced doesn’t mean it’s not important. It’s giving America the ability to make things they’re otherwise unable to make. Very important things that are vital to them. And getting absolutely nothing positive in return, literally zero, while reducing leverage and reducing the need to protect Taiwan.

It’s not like Intel can’t make chips, they’re just a bit behind.

If it was that simple then why are they bothering so much with TSMC. It’s clearly not.

Wow such fancy corporate words but missing the point.

Still amounts to forced technology transfer. The usa does not have the ability to make 2nm chips, but now they will courtesy of a lazy 160 billion from tsmc. Not sure why that is so difficult for you to comprehend lol.

Next thing you know the the us will demand tsmc “partner” with Intel.

Based on my experience working here in Taiwan in tech since 1997 I’m 95% certain TSMC is going to outwit Trump in the end.

I dunno, i worry that once tsmc has spent all that money to setup in Arizona, sunk cost theory means they will be at the mercy of whatever whim trump decides.

Trump could then demand anything really, demand a us company buy the factories, shut them down, or nationalize on national security grounds.

Oh, I thought he was making the case for why handing the chips to the US is a terrible idea lol. Because all the things he listed are all the things the US gets a much greater handle on when fabs are built in America.

I don’t see it. I potentially see them thinking they can, but it backfiring. This TSMC investment has David Sacks overseeing it. He’s an utterly ruthless apex predator when it comes to business, in the worst way possible - completely lacking in morals or ethics, but very effective at what he does. I really don’t think TSMC is going to get away with slow-walking this. Sacks, Trump and Co will be cattle-prodding them every step of the way to get the factories up and running quickly. And then they’ll ask for more.

What does it give us the ability to make we otherwise couldn’t make? Intel’s current processes are competitive with TSM’s not state of the art processes.

They bother with TSM’s advanced (N3) processes while they (hopefully) get their house in order with 18A (they screwed the pooch with 20A and cancelled it to refocus on 18A)

If that was the case why is the deal happening?! The US wouldn’t be strong-arming Taiwan over something it can already do.

Fixed it for you

Of course it is. If TSMC has no real rivals then we can dictate the terms. Right now TSMC is ahead but not irreversibly so. The gap needs to be bigger, big enough that they can’t dream of catching up by punishing TSMC.

They did and TSMC said no. You’re assuming them having too little agency. Taiwan is saturated, they have to build overseas. I’m sure they’d rather do it in Japan but whatever, it’s the cost of business. This would have a negligible effect on their bottom lines, maybe 1-2%.