Article TSMC to Build Advanced Semiconductor Facility in Arizona

[uzzi38]

WSJ News Exclusive | Taiwan Firm to Build Chip Factory in U.S.

Taiwan Semiconductor Manufacturing, the world’s largest contract manufacturer of silicon chips, said it would spend $12 billion to build a chip factory in Arizona, as U.S. concerns grow about dependence on Asia for the technology.

www.wsj.com

Sorry about that, just posted the article without really thinking much at the time.

Anyway, this is a really drastic shift even to what TSMC were saying just days ago. Seems like the main node in question is N5 operational by the end of 2023, which is late for sure, but even still, a massive move. Especially considering they're starting off in Arizona, no doubt to they could potentially grab a hold over some workforce from a certain someone else in the area.

One more thing that makes this a huge move is TSMC's own wording on the node in question. They believe N5 is going to be one of their most long-lasting and popular nodes simply because the cost to go even smaller is so large most companies won't even try to develop silicon on a smaller node. Getting N5 operational and producing it there in a fab in the US is a move with rather long term effects.

 

[DrMrLordX]

@Arkaign

Foxconn is more of a beast in the supply chain arena. They have so many relationships and so many people working for them that they can turn around solutions very quickly. If you want a custom product done, they can do it, no matter what the application. x86 chipsets, mobile phones, etc. You name it, they can do it.

 

[moinmoin]

I thought KMT (ROC) was and still is anti CCP (PRC).

They are, same as Republicans and Democrats are anti-each other. KMT is a Mainland Chinese party that seeked refugium from the CCP on Formosa/Taiwan during the Chinese civil war. Didn't change anything about their stance of there only being one China, and that the KMT and not the CCP is the true ruling party of the united China. So both KMT and CCP agreed that there is only one China, and in its eternal stupidity KMT thus agreed leaving all the international organizations when Mainland China joined them during the 1970s. The DPP (the currently ruling Democratic Progressive Party of Taiwan) on the other hand considers Taiwan its own sovereignty with a history distinct from China and wants nothing to do with "one China".

 

[ThatBuzzkiller]

Thanks for the insights. I stand corrected. Obvously, I don't understand the inner working of Taiwanese companies or party alignment.

The Chinese Civil War has been an unresolved major political conflict for many decades now ...

As tensions between America and China rise so too does China's thirst for reunification. This will reverberate all of Taiwan including it's businesses. Some like TSMC will react by taking a protest against reunification by not cooperating in any part of the Chinese regime. Others like Foxconn sill want the status quo of being able to do business with China ...

Some Taiwanese might be extreme enough to want Chinese reunification ...

 

[moinmoin]

Some Taiwanese might be extreme enough to want Chinese reunification ...

That number is dwindling further and further, also thanks to China's tone deaf handling of Hong Kong.

 

[AkulaMD]

They are, same as Republicans and Democrats are anti-each other. KMT is a Mainland Chinese party that seeked refugium from the CCP on Formosa/Taiwan during the Chinese civil war. Didn't change anything about their stance of there only being one China, and that the KMT and not the CCP is the true ruling party of the united China. So both KMT and CCP agreed that there is only one China, and in its eternal stupidity KMT thus agreed leaving all the international organizations when Mainland China joined them during the 1970s. The DPP (the currently ruling Democratic Progressive Party of Taiwan) on the other hand considers Taiwan its own sovereignty with a history distinct from China and wants nothing to do with "one China".

I see. Thanks for a nice and concise explanation.

 

[Arkaign]

@Arkaign

Foxconn is more of a beast in the supply chain arena. They have so many relationships and so many people working for them that they can turn around solutions very quickly. If you want a custom product done, they can do it, no matter what the application. x86 chipsets, mobile phones, etc. You name it, they can do it.

Oh absolutely, 100% agreed with all of that in full.

My point was definitely not to trivialize what Foxconn is capable of and has done, but rather to differentiate the approximate difficulties that would emerge with a new cold war separating the industrial infrastructure should a replacement need to be built up (for either the CCP and their trading partners, or for the US and any others who might be split by a US v Soviet level of ignominy).

Replacing what Foxconn does would be a monumental undertaking, and would almost certainly entail a wider range of companies and at least for a number of years, less efficiency and higher cost, not to mention longer TTM for new designs. However, with enough economic demand and investment, it could be accomplished over time.

Replacing TSMC would be dramatically more difficult in any competitive sense of the word. There are a number of lesser fabs out there, but as noted not even Intel with perhaps the largest and longest pedigree of silicon fabrication experience on earth has been able to keep up 1:1 in recent times. Bootstrapping a TSMC replacement would be nearly unthinkable without years of effort, and perhaps turning Intel into a defacto military industrial complex facet.

 

[zinfamous]

But, but, but, you'll be preventing freshwater from reaching its traditional areas. Horror! Change must never happen.

eh, the very reason that NO has so many problems is because it exists at the mercy of the human-redesigned floodplain of the Mississip. For generations (eons, really), what is called New Orleans was a natural, constantly-resilted area. the natives never built there for good reason, because they understood how it worked. They deservedly mocked the european settlers that decided (And still seem to think) that they are smarter than nature.

Now, so much of the natural barrier island land (sound and marsh) that is the bay down there has disappeared. I think NO and the area has lost something like 70% of its actual land mass over the last 100 years, expressly because of the thought that redirecting and controlling the flow was a good idea. The levees are never going to be a permanent, real solution.

Not that I'm saying that NO just needs to be abandoned at this point and let nature take over, but I often think about this preposterous situation when fire strikes CA, and you hear guffaws from people in that part of the country that mock Californians that have long-settled in the natural, annual fire prone areas of the state, where habitation, attempts to make it more friendly to humans, and long-misguided fire control measures have made the problems worse.

 

[Doug S]

Not every Taiwanese feels politically unified about their relations with either America or China. Foxconn's former Chairman, Terry Gou has been a KMT party loyalist for many years and Morris Chang who founded TSMC seems like one of those enlightened types you'd find at American east coast universities where he would probably lean with the DPP ...

TSMC figure heads aren't complying with US orders because they have to but it's because they want to send a political message that doing business with China is unacceptable even though they don't really have any valid reasons to follow US orders ...

Foxconn's leadership are as pro-Chinese as they possibly can get just short of acknowledging the "one-China policy" ...

14% of TSMC's sales are to HiSilicon/Huawei. If they were so happy to give that up to "send a political message" why haven't they done it before? They didn't need US politics to dictate to them to quit selling to Huawei.

I'm skeptical they have no worries giving up all that revenue, especially since it guarantees that China will throw dumptrucks of money at SMIC and make it a national priority to catch up in fab technology. Does TSMC's leadership really want a future where there is leading edge fab competition in China, competition that could easily undercut their pricing thanks to the state support and end up costing TSMC far more than just Huawei's 14% by the end of the decade?

I know nothing about Taiwan's politics but from a business perspective this is a stupid idea all the way around.

 

[ThatBuzzkiller]

I thought KMT (ROC) was and still is anti CCP (PRC).

I wonder what is the gain for TSMC by not doing business with China (PRC)? I thought they are doing everything they can to get an exemption so they can continue business with China

They are but the KMT are starting to show tolerance towards the CCP. In a lot of ways the KMT admires the CCP.

Both don't like power sharing, are Chinese nationalists, and are pro-industrialists ...

It's the DPP who could be argued to be the spiritual successor to the old KMT since they are the Taiwanese party who most resists China ...

That number is dwindling further and further, also thanks to China's tone deaf handling of Hong Kong.

Ah, even if Taiwan resists China can still decide to take them by force ...

Until Americans are willing to vote to sacrifice the lives of their soldiers to defend Taiwan then it's easy pickings for China

Americans had better make sure that Trump is in the oval office by next election if they know what's good for their friends overseas ...

14% of TSMC's sales are to HiSilicon/Huawei. If they were so happy to give that up to "send a political message" why haven't they done it before? They didn't need US politics to dictate to them to quit selling to Huawei.

I'm skeptical they have no worries giving up all that revenue, especially since it guarantees that China will throw dumptrucks of money at SMIC and make it a national priority to catch up in fab technology. Does TSMC's leadership really want a future where there is leading edge fab competition in China, competition that could easily undercut their pricing thanks to the state support and end up costing TSMC far more than just Huawei's 14% by the end of the decade?

I know nothing about Taiwan's politics but from a business perspective this is a stupid idea all the way around.

China's ultimate goal is technological independence regardless so in the long-term they don't plan on relying on TSMC ...

To them, doing business with TSMC is temporary until SMIC becomes good enough ...

As to why TSMC is now making a political message, I don't know all that much about their political make up but they must feel confident about the current American president ...

 

[NobleX13]

I'm a bit old for a career change but I'd love to move back to Arizona. It would be fun to work in a nice climate-controlled bunny suit loading dies into the cutting machine or something. And it's probably impossible to catch COVID-19 in that part of the fab due to the extreme levels of air filtration.

 

[moinmoin]

Until Americans are willing to vote to sacrifice the lives of their soldiers to defend Taiwan then it's easy pickings for China

Americans had better make sure that Trump is in the oval office by next election if they know what's good for their friends overseas ...

Until? You couldn't be more wrong, and it got nothing to do with Trump.

 

[ThatBuzzkiller]

Until? You couldn't be more wrong, and it got nothing to do with Trump.

Sadly for you that's a toothless law as Congress still has to invoke the declaration of war ...

Taiwan lost all hope when Nixon normalized relations with China while Clinton removed many of the trading restrictions/sanctions. Those were dark times until Trump came and restarted trade sanctions.

Trump losing the coming election would mean a dramatic reversal of these sanctions since his political opponent vows to remove them. If that happened then the American public and Congress will eventually forget the Hong Kong protests ever existed since the issue would blow down over time with the tensions lowering.

I guess democracy boils down to being fickle because voters have no coherent strategy. No guarantee that the US will see things all the way to the end if Vietnam was anything to go by so it's possibility the American public could ditch Taiwan as well ...