I just want to add the term "ADVANCED" in terms of foundry node now has an official meaning anything sub 7nm. With specific rules in place in terms of export especially to China. This was a reference from ASML presentation not so long ago.
It is also important to point out, the achievement here is how fast TSMC manage to set things up and running even without the home ground advantage. Intel couldn't even replicate this time frame if it was their Intel 7nm Fab. And of course the greatest record was that with enough planning and permission done before hand TSMC manage to have the fab built and running within 18 months in Taiwan. ( Arguably closer to 12 months )
This also means unless a miracle happen or US Gov being unfair with certain things the chances of Intel catching up with its current team, management, board members and investors, against TSMC in terms of capacity, price, and lead time as a foundry is close to zero. ( I am sorry but I lost all faith and hope now Pat Gelsinger is out. )
Once TSMC 2nm hits the ground later this year, TSMC US will also start their 3nm work if they haven't started now.
It’s about demand isn’t it? TSMC have red hot demand, it’s not hard to understand their urgency in setting up new fabs, wherever they may be. Intel don’t have the same incentive - their incentive is to take the money (because, why wouldn’t you), build newer fabs and hope for some breakthrough in demand. The urgency is not there: being complete before there is demand could be detrimental
Yes. There used to be a saying the most expensive Fab ( or factory ) isn't the most advance Fab, but an empty Fab.
You cant built without first ensuring you can fill it, you cant fill it without first ensuring you can deliver. And Intel has failed to deliver twice with their custom foundry. Both times with Nokia and Ericsson. How the two fall for it twice is completely beyond me, but then Intel are known to have very good sales teams.
Intel will need another Apple moment that has huge demand, little margin, but willing to pay up front. On the assumption that Intel is even price competitive. The Apple modem may be it. But given the current situation with Intel as they want to lower Capital spending I am not even sure if betting on Intel is a risk Apple is willing to make. Comparing to a stable consistent relationship with TSMC.
Then Intel is going to have to wait for a very long time. At best, China is currently in a scenario similar to Japan's lost decade of 30 years or US's Great Depression. At worst, China's current deflation + massive debt seems eerily similar to Weimar Germany's early internal devaluation. China is pretty fucked.
US fully recovered from Great Depression in 1939, 2 years before entering ww2. Weimar Germany started in 1918 and ended in 1933 at the beginning of nazi Germany, 15 years later.
You can't start a war when you are truly broke, much like China is today. And China is aging super fast, unlike Germany or US during the 30s.
Being in spiraling deflation while the rest of the world suffers from inflation is a big sign of being broke.
Having debt to GDP ratio of 310% and local governments being unable to pay out salaries for many months is a big sign of being broke. (google or chatgpt the salary news, they are everywhere)
Consumer spending dropping 20% y/y in November in Beijing and Shanghai is a sign of being broke.
52,000 EV-related companies shut down in China in 2023 and an increase of 90% on the year before, where most EV companies were the targets of government subsidies, is a sign of being broke.
30% drop in revenues from land sales in 2024, which the local government derive most of its revenue on, is a sign of being broke.
China is not self sufficient; it imports 80% of consumed soybeans and other food products, and 90% of semiconductor equipments. Nor is it even remotely at the same level as Japan when Japan entered the lost decades. 600M Chinese citizens earned less than $100/month as of 2020. Recently, a scholar reported 900M Chinese citizens earned less than $400/month.
> Being in spiraling deflation while the rest of the world suffers from inflation is a big sign of being broke.
How would you handle the eloquent counterargument that spiraling deflation is not a sign of being broke? Deflation doesn't, in and of itself, signal anything except that the real value of a currency is going up.
China is one of the worlds largest creditors [0]. They may have a lot of organisational problems - I'd go as far as saying they are guaranteed to given they are quite authoritarian. But they aren't broke.
None of those metrics signal problems in and of themselves, and when put together ... they still don't. The consumer spending drop is the closest to something that might be a problem but it needs some supporting data to make a case.
Deflation by itself, sure. Deflation when coupled with huge and increasing debt to service, then you have a crippling problem. That means your ability to pay off your debt gets harder and harder as time goes on, and most of your income goes to service debt principal and interest, and not on actual income growth. China plans a record $411 billion special treatment treasury bond next year, for example, but most if not all of that is just helping local governments pay off debts.
China being the largest creditor doesn't mean much when a lot of their debt is issued to belt and road countries that can never be paid back, and will be written off in the future. It does have a large US debt holdings, but that has shrank from 1.27T (2013) to 772B (2024), and a large part of that being used for cross border transactions.
> Deflation when coupled with huge and increasing debt to service, then you have a crippling problem.
Individuals have a problem. Corporations have a problem. China may or may not have a problem. It depends on how reasonable their bankruptcy laws are. Cleaning out the system of people who aren't using capital effectively is a healthy thing to do.
And I have to say, this idea that we should focus on China's debts and dismiss their credits is suspect. I mean sure, if we ignore all the assets and income streams then they do have a problem. But that isn't reasonable. You can't ignore the strengths to make an argument they are weak.
Let me put it in another way; it's similar to the US banks during 2008, when they appeared to be healthy, holding lots of subprime loans on their books.
If we are talking about China's credit, China has a lot of subprime loans to belt and road countries that have very little income, and lot of subprime loans to their citizens, which recently a scholar reported that 900M of them make less than $400/month.
Possibly. But if the US system was a wealth-producing engine like China's has been in recent history 2008 wouldn't have been all that big a deal. They'd have bounced back in a year or two. Instead in 2008 the US made decisive moves to preserve a system that isn't generating much wealth for the US, and over the course of around 20 years they've arguably managed to give up their position as #1 global economy and are packing stadiums full of people chanting "We love Trump. We love Trump". Looks to me like it is going down in history as a major turning point for the worse.
If China has to take decisive steps to preserve whatever craziness is going on in the mainland, they're going to be preserving a system that has at least 10x-ed their wealth over the last 30 years while producing vast amounts of real capital that has catapulted their living standards up to a much more reasonable standard.
I wouldn't necessarily gamble on China because the system doing well looks unstable and could veer to disaster at any moment the central bureaucracy does something stupid. But we don't have strong evidence of a problem yet. We've got strong evidence they aren't acting like the US, but the US hasn't been setting an inspiring example in decades. As with a lot of economic problems, most of the damage from 2007 was doubling down on failing strategy rather than taking the hint that something needed to change.
And I'm not seeing evidence here that China is broke. They might muck this up, always an option, but they have all the tools they need to succeed in principle.
Tiresome take that's been repeated time and time again. China has problems like any other country larger than Luxemburg. But the conclusion that "china is fucked" sounds more like a wish than anything else to my ears. The Chinese economy is growing ~5% per year. It's got one of the worlds most well educated workforces. It's manufacturing everything from basics to high tech and very little indicates that's about to change anytime soon.
The chip technology sanctions might slow development in that area in China, but I wouldn't count on it.
It's pretty tiring responding to folks who just parrot Chinese government's official 5% numbers and never bothered look into the actual details. Like its well educated workforces being laid off at age 35, and 80% of recent graduates are unemployed or driving didi or delivering food. Or China's low end manufacturing shutting down or moving to Southeast Asia, and high end manufacturing being tariffed/sanctioned.
> On the assumption that Intel is even price competitive. The Apple modem may be it.
Which is super interesting/ironic with the entire reason for an “apple modem” is due to Intels failure there a decade ago. Bonus irony for the subsequent acquisition.
Intel wasn't able to ship a competitive modem to Qualcomm and the whole point of the acquisition was to get rid of Qualcomm and even apple hasn't gotten a shipping version of a 5g modem for six years since the first intel modem started in 2018. This was really to vertically integrate the modem in all of the relevant Apple Silicon devices and it keeps going on...
No, you have to read more of the thread to understand why I asked it.
> TSMC have red hot demand, it’s not hard to understand their urgency in setting up new fabs, wherever they may be. Intel don’t have the same incentive (...)
There was some discussion awhile back about Intel potentially fabbing ARM chips (or any other custom non-x86 chip) as a viable business in the future. I don’t know how serious they were but it sounded plausible when you think about how important it is to have an American leading edge fab, independent of the market future of the x86 ISA.
Basically what would it take for Intel to still have Apple as a customer even if Apple made their own ARM designs…
They feed into each other especially for anything that isn't a vanilla gate. Got a deeply ported SRAM with bypasses? That might fail synthesis if it is too choked by wire rules for the size of the cells so now it's banking time.
I think realistically you wouldn't port the exact same design between manufacturers. That would be a waste of money unless one manufacturer is really rinsing you.
More likely you'd switch manufacturers when you planned to switch process nodes anyway, in which case the increase in workload probably wouldn't be too bad.
I thought Xnm was just a marketing term and not related to any physical measurements? How are they going to legally enforce this if foundries can just change the naming convention?
Subjective enforcement is a great tool in cases like these. Not necessarily what’ll happen, but unclear criteria allows politicians to dictate what is “advanced”.
The measurement is roughly equivalent to the density that feature size would allow in previous generations. Intel ditched the number anyway.
If you believe you can consistently predict future like that, it should clearly guide your investment in stocks.
However, just like how quickly and suddenly Intel lost the lead, things may turn around for TSMC too: at some point, their research hits a dead end and somebody overtakes them too.
>If you believe you can consistently predict future like that, it should clearly guide your investment in stocks.
Perhaps I should have written with Disclosures. For the record I did invest in AMD when it was below $3 and TSMC at below $400TWD. None of these are investment advices so take it what you will. ( You get much better return with Tesla and Nvidia in the same period of time but then investment isn't always about best returns. ) And I was waiting to invest into Intel, unfortunately Pat is gone. To my words I said this in April 2023 [1]
"I am just worried if Stock price continue to fall, Pat may be forced out again by those stupid Board. And if Pat is out, I won’t invest in Intel at all."
As you will read in my reply below, I have a very negative view on Intel's board for a very very long time.
>However, just like how quickly and suddenly Intel lost the lead
It wasn't quick or even sudden. I wrote about it in 2014 and got a death threat from Intel Fan boys then. I have been questioning about Intel's management on GPU, Fab capacity allocation, CapEX, dividends etc for a very long time. For another point, TSMC never wanted to be the most advance manufacturing Fab. Them having leading node is purely accidental and Intel's slip up. They have been doing Intel -1 node for most of their history and are doing just fine. Providing Pure Play Foundry Services with Industry wide support on Tools at a reasonable / acceptable price for Fabless players. And right now, they are firing on all cylinders.
Again. None of these are investment advices and personal opinion only.
"Sudden" with big enterprises is still a span of multiple years: probably iX-4 series CPUs hit the wall on performance, with power efficiency continuing improvements into 2017 with iX-8*U CPUs — so 2013 and 2017. And as soon as their first Tick-Tock blip hit, it was clear to everyone that they don't have a clear path forward.
In that sense, I fully expect the incumbent top fab to maintain the lead for a number of years even when a "sudden" competitor enters the market with clearer path forward.
What really baffles me is how Taiwans leadership can’t see the US endgame with the CHIPs act and the Chinese sanctions. The US government wants to steal TSMC by using subterfuge, sheer force and malice, while making Taiwan paying for it by refusing the revenue of selling advanced chips to China.
Not even TSMC should feel safe even if they successfully relocate themselves to the US.
Buccaneering has a long tradition in Anglo-Saxon countries and as TikTok shows the US has no qualms in preaching free commerce, stable legal rules and all that bullshit to everyone else, while doing the most egregious mercantilist stuff without even an once of shame.
It’s the hypocrisy that bothers me personally. They force other countries to have maximally free trade with the world bank/IMF, then abandon those ideals the moment they aren’t convenient for the US. I think it’s reasonable for the US to act in their interest, but it should also be reasonable for every other nation to do the same, even if it means not having the same property laws as the US wants
Wikipedia lists Intel 3 is roughly the same tech level as TSMC 3nm [1], but without listing transistor density. Intel is producing the Xeon 6 using Intel 3 [2]. So arguably Intel has a more advanced process in the USA than TSMC, which is doing 4nm in the USA next year. Intel's production is probably not very high.
Wikichip is my go to (which is down right now for me unfortunately). It’s important to look at the latest data because Intel’s internal nodes real specs have not met the stated expectations recently
I'm not refuting the statement, only pointing out that density is not the only factor.
Unfortunately, these numbers are arbitrary and companies are guessing what performs about like what based on numerous factors. Often wrongly - Samsung's equivalents were so bad Qualcomm pretty much abandoned them, and for good reason. Anyone who used an Exynos or SD888 understands why.
I feel like we should have landed on a better tracking system now, like perf/watt, but here we are.
That was before Intel renamed their process nodes. They went from being 1 node more dense to being 1 node less dense with their new naming scheme. You need Intel 4 to match TSMC 5nm.
But for those living close to the plant, I'm not so sure:
"Environmental, and public health groups, including the Sierra Club, are urging President Joe Biden to veto a controversial bill that exempts most semiconductor companies applying for federal CHIPS Act funding from having to complete essential environmental reviews, as required by the National Environmental Policy Act, or NEPA."
“Exempting the semiconductor industry from NEPA is completely unwarranted, especially considering the projected significant increase use of PFAS and other toxic chemicals by the industry and their track record of releasing these dangerous chemicals into the air and water surrounding the facilities,” said Tom Fox, Senior Legislative Counsel at the Center for Environmental Health"
Having lived next to the Motorola EPA superfund site, and more recently closer to the TSMC site, I find no consolation in your reply. The lack of transparency and accountability is too great.
This proves that with sufficient political and military pressure and
the ability to give away nearly unlimited amounts of money
you can get production moved to the US in a way that works,
(Any deals the US has with Taiwan, will always have a military
backdrop, they just recently took deliver of some nice new
military hardware). Stuff you will never see in Ukraine. )
But not 2 nm node (N2{,P,X}) until about 2028. The delay is still indicative of protectionism. Until the US has a (or preferably more) American company with 2 nm capabilities with the whole process including diffusion and packaging, there's no real native, strategic capability.
What American company would even attempt this aside from Intel? IBM still does the relevant research, but quit the business of actually using it. They licensed their 2nm process technology research to Japan’s Rapidus if I recall. I cannot think of anyone else in the US that would be willing to take the risk of trying to start a 2nm foundry service.
I've read in the interview below that all attempts to implement IBM's copper interconnects failed, except for TSMC.
At least for this particular technology, IBM did not deliver everything needed to do this.
"So, when we went to .13u, .13u the people began to change from aluminum to copper. And IBM was the leader for the copper metal. They had the longest history of developing copper technology. They worked for more than ten years on copper. TSMC didn't have any experience in copper at all. So, when we decided we need to adopt copper, okay. So, the copper is one story and low-k material is another one. IBM decided kind of low-k material is a spin-on material called SILK. IBM had a Research Consortium that IBM-- Samsung joined them, I think, ST Micro joined them. Several companies joined the Consortium.
"And UMC joined them. But we didn't join them. They all used that spin-on low-K material. But we decided to use CVD - instead of flourine-doped it's a carbon-doped made by Applied Materials. They're called Black Diamond. So, we choose Black Diamond. The reason we chose Black Diamond was very simple, because I suffer at .18 with a spin-on. I wouldn't touch spin-on again. <laughter> But they didn't go through that. So, we were very, very lucky. TSMC became the first company in the world which was able to ship a manufacturing wafers with the copper and low-k, because IBM failed... Later on they found reliability the problem."
Spin in is an interesting tech history. As for cvd low-k, it is mostly how much C is in your silicon, and likewise how you setup the damascene etch stop. Intel was low-ish k in about 2002 on 130nm.
I am not so sure tsm was first. Depends on how you define lowk.
That is what Intel 18A is, no? In some ways it’s worse than N2, and in some ways it’s better. Overall seems comparable to me, and apparently it’s still on track for next year.
It's an awesome contingency. If the island falls, they can destroy/impair the local infrastructure, and reconstitute it in the US. Destroy in this context does not mean mass physical destruction. It is a combination of removal of keys and select components. The message being you can have the island but not the business.
And? Advanced nodes aren't really relevant to subtracting where it is from where it isn't. China is ideologically motivated to conquer Taiwan not economically.
In any event it appears that reunification is essentially inevitable and the only question is when. China doesn’t appear to feel especial urgency about it.
Doesn't this remove the incentive for the US to protect Taiwan then?
I'm speculating, but if China invades Taiwan, it's cheaper for the US to bomb the fab in Taiwan to not let it get into Chinese hands in case of an invasion. They could additionally offer generous asylums to Taiwaneese researchers and engineers. Then whatever happens to Taiwan happens?
I think you meant "less than one generation behind." Or as the article you linked to says:
"Taiwanese law limits domestic chipmakers to producing chips abroad that are at least one generation less advanced than their fabs at home"
I wonder how the economics will end up – sure, American fabs won't have cutting-edge processes, but in the end there's a stable market for older processes that are critical to industrial capability (e.g. automotive and sensing, high-reliability processors, etc.) One node behind still remains very good value without the visicssitudes of relying on the unstable market for leading-edge products.
As I post every time this question gets asked: no. ASML build fancy printers. Buy an ASML machine and you can now etch nanometer-scale features into something. That’s a great party trick. You still need to know what features to print and how to make the materials you print your design on. The ASML part (lithography) is a hard part but it’s not even close to the biggest hard part. Thus, why semiconductor processes are differentiated in the first place.
Other US agencies that regulate exports (quoted from the "exceptions" section of the above wikipedia article):
>The Department of State: the ITAR administered by the Directorate of Defense Trade Controls relate to defense articles and defense services on the US Munitions List and section 38 of the Arms Export Control Act
>The Office of Foreign Assets Control (OFAC)
>The Nuclear Regulatory Commission (NRC), which controls the export and re-export of commodities related to nuclear reactor vessels, per the Atomic Energy Act of 1954
The Department of Energy (DOE), which controls the export and re-export of technology related to the production of special nuclear materials, per the Atomic Energy Act of 1954
>The Department of Defense (DoD) and Department of State Foreign Military Sales (FMS) program: items that are sold, leased, or loaned by the DoD to a foreign country or international organization under the FMS program are subject to the Arms Export Control Act instead of the EAR.
Semiconductor fabrication was viewed as a commodified cost center until COVID related supply chain instability.
Furthermore, packaging and testing was largely outsourced and the domestic semiconductor industry imploded in the 2010s with IBM Micro and AMD's failures.
The same thing happened to Japan when they began offshoring Memory Fabrication to South Korea and Taiwan in the 1990s-2000s.
That said, from a NatSec perspective legacy processes (28nm, 48nm) and compound semiconductors would be much more critical (and a significant amount of funding has been devoted to that).
Japan is trying to rebuild its leading edge capability with Rapidus using IBM technology. Interestingly, IBM still does the research needed to make a fabrication plant. They just don’t want to assume the risks from deploying it in production anymore as far as I can tell.
> Interestingly, IBM still does the research needed to make a fabrication plant
Yep. They still own the IP from the IBM Microelectronics days.
Much of the breakthroughs in EUV were done in Upstate NY (especially at SUNY Albany, SUNY Polytechnic, and RPI), and a lot of that was co-owned by IBM, ASML, and TEL.
> They just don’t want to assume the risks
The capex - and pretty much.
Semiconductor Fabrication is high cost, low margins, so it's difficult to spin up without industrial policy.
Yep! I lay the blame squarely on the failed NY Nanotechnology Initiative which turned a massive head start in fabrication R&D into corrupt pork barrel politics.
and not going to be our problem for much longer, 2028-2030 can’t come fast enough
the US is selectively getting involved in worldwide conflicts to deter China from invading China, and its awkward, with arduous contrived rationales to maintain its people’s support
and once we get stateside semiconductors at low enough nanometers we wont have to do any of that any more
I cant wait
good thing there are 185 other countries that could care if they really did. this wont be controversial to point out, in the future. it will be a time period that made little sense.
I am not sure if it is worth answering but here it goes anyway:
1. Taiwan is not China, any more than Ukraine is Russia, except if you believe all the propaganda coming from the mainland (or Russia). Ask any Taiwanese, and while many consider and appreciate a solid Chinese cultural heritage, they consider themselves independent and want nothing to do with China (except business). Newer generations of Taiwanese are even more independently-minded and consider themselves even more Taiwanese than the previous generations.
2. Even if for some reason you truly think that it is the same country or should be the same country, it is immoral to wish that a peaceful, independent, democratic, and open society like Taiwan's should be brutally attacked and absorbed by a war-mongering, authoritarian/dictatorial, opaque country. (Things could be different if mainland China was democratic, but it isn't, and won't be for a long time.)
3. Even if for some reason you are ok with the above, odds are that the difficulty and complexity of an attack on Taiwan would end up being extraordinarily costly for China (and Taiwan of course). It could lead to all sorts of escalations in the region, sanctions, the collapse of trade with China from the US and other countries, nuclear proliferation (see Ukraine considering developing nuclear weapons if they don't get security guarantees), and who knows what else.
I’m aware, both entities have claims to the whole mainland and still have China in their name, and are branches from the same common ancestor in dispute
both entities would have territorial disputes with other neighboring regions, that we don't agree with, since we care about those region’s self determination too
some parts of the ROC have dropped claims to the mainland
and its all so hilarious that it reminds me how we, the US, shouldn't be involved, and wont be after the semiconductor problem is hedged
There is absolutely nothing hilarious about any aspect of it whatsoever. We are talking about peace, justice, human freedom and suffering - all values on which the US was founded, by the way.
Whether the US should be involved or not is a valid question: moral, practical, diplomatic. A very recent parallel is that of the war in Ukraine: should the US be involved and be isolationist, or not? I for one think that a more than fair case can be made that holding the moral high ground will also, coincidentally, lead to more stability and more economic rewards. So it's a no-brainer and I don't share your isolationist view.
You should, incidentally, remember that US support for Taiwan goes back to a time when Taiwan didn't even have a semiconductor industry. It's unclear that US support would cease entirely if the US was fully independent in that industry, and it's also unclear whether that will happen in any short-term horizon, or at all.
Ukraine is one of our selective conflicts, partially responded to in order to continue deterring China from invading China
Do you even realize that there are many other conflicts that also involve American values that we aren’t involved in?
Its hard to tell. Its a very selective morality as I already mentioned.
Regarding conflicts you care about subsidizing, there are 185 other countries that could as well. Go ask them and see how absurd it sounds, because the same standard actually applies to the US, you just aren't willing to see that.
And yes, the China situation is a mockery of the nation state concept and is hilarious to me and many others. What is happening in the east should be ignored until a nation state concept emerges that we can relate to.
Let me rephrase: thats whats going to happen after the semiconductor situation is hedged. Everyone knows it, TSMC knows it. Thats why TSMC drags its feet with many excuses about talent because they need to delay as well, for the current personnel’s entire lifespan to be honest.
Taiwan might be considered a de facto independent country, but according to most institutions it's officially part of China.
1. Taiwan's official name is Republic of China (ROC): it regards itself as part of China, and the sole legitimate seat of China's government. It's true however that "it has not formally renounced its claim to the mainland, but ROC government publications have increasingly downplayed this historical claim". [1]
2. In 1971, the UN General Assembly Resolution 2758 "recognized the People's Republic of China (PRC) as 'the only legitimate representative of China to the United Nations'". [2]
3. Only 11 (tiny) countries officially recognize Taiwan as an independent country, i.e. maintain full diplomatic relations. [3]
4. The U.S. official position is that "The United States has a longstanding one China policy", and "we not support Taiwan independence". [4]
1. How the PRC (mainland China) regards Taiwan (or ROC).
2. How Taiwan regards itself. This has changed over time.
3. How third-parties play that situation.
Since Nixon's visit to China in the 1970s, the world recognized that it was pointless to deny that the CCP (Chinese Communist Party) ruled mainland China for good. From there, the PRC progressively got official recognition in institutions like the UN. In order not to inflame the PRC's leadership and keep access to mainland China, many countries state that they do not recognize or encourage Taiwan's independence. But note that they also maintain de facto diplomatic relationships, being careful not to use the name "embassy" or "consulate".
In reality, Taiwan has been absolutely independent since the 1950s. It's just that it's not officially recognized by most institutions and countries for diplomatic reasons.
I'll add that the "one China policy" is ambiguous by design. It doesn't mean that it must happen in the foreseeable future. It also doesn't mean that the PRC should be allowed to take over Taiwan through military might.
In the end, no matter what the various parties' policies are, almost nobody in Taiwan at this point believes that a peaceful so-called "reunification" is desirable or possible. I put the word "reunification" in quotes in particular because the CCP never controlled Taiwan, and also because in general the historical argument doesn't make any sense. Personally, I think that the principle of self-determination is what should apply here, for moral reasons. [1]
What you say is true, and I agree on self-determination in the abstract. But I simply can't believe the U.S. is in Taiwan to defend its people, rather than contain and weaken mainland China. The U.S. has demonstrated time and again it will gladly throw an ally under the bus in order to weaken an adversary ("it may be dangerous to be America's enemy, but to be America's friend is fatal"). To go back to the OP, moving TSMC to the U.S. looks a lot like preparation for scorched earth in Taiwan. [1]
I presume you are aware that Taiwan is in fact occupied by China now?
The Chinese who ran from the communist revolution, invaded Taiwan,
setup their own military dictatorship, and they were extremely
brutal to the natives Taiwanese. (Sadly this has been their lot
through several occupations by different entities.)
During more recently history they have been polishing more democratic
values and life for the natives has improved.
But for Taiwan to be free, in any proper sense, the Chinese occupiers
must leave.
Saying "Taiwan is in fact occupied by China" is at best a gross misrepresentation. It's like saying "North America is in fact occupied by Europe now [...] for North America to be free, in any proper sense, the European occupiers must leave." Well, maybe, from a certain point of view? But kind of pointless in terms of a realistic path forward.
We are not talking about remaking history here. We are talking about the present and the future of Taiwan. Its population and culture are what they are now.
Chiang Kai-shek's move to Taiwan and subsequent rule was indeed at times brutal, and the immigration massive in relative terms. But that move took place in the 1950s, and since that time amends have been made. You will see monuments and remembrance days related to those events. Taiwan is now a thriving (if at times feisty) democracy where minorities are protected.
During my last trip to Taiwan, I revisited the Chiang Kai-shek Memorial Hall.[1] What struck me is the museum underneath. Here, for all to contemplate, is a documentation of Chiang Kai-shek's life and rule. The striking part is that the errors and brutality of his rule are also well-documented and preserved, officially accessible to all. Try to find anything like this kind of recognition of past mistakes in mainland China (hint: you won't find it).
Per your argument this is so far in the past that
the invasion and occupation doesnt matter anymore
To the winner goes the spols right.
The rights of the natives are well past their sell buy date.
How many years do you count from an occupation begins
until it does not matter anymore how or what the nation
was has no meaning anymore?
20 years? 40 years?
Do you care to then apply your time of expiration of a nation
and its peoples to other conflicts we have had have had
in the world?
China is in the beginning of a 30 year Great Depression, in no shape to invade Taiwan. Consumer spending in Beijing and Shanghai fell 20% y/y in November. Real estate prices have collapsed 50%, even in some parts of Beijing and Shanghai. Trump has filled the cabinet with mostly anti-China hawks, indicating large tariffs coming next year. Capital outflow from China increased to $45B in November, largest monthly deficit ever. China is pretty fucked.
That does sound like a fabulous time to start a jingoistic war to flame the nationalistic sentiments and declare any dissenters traitors to the nation.
Free market doctrine, plus the investor class wanting to be able to reap the benefits of outsourcing without being concerned about strategic issues. Occasional proposals to this effect have historically been denounced as protectionism, industrial policy (practically socialism!) and 'picking winners and losers'. I am surprised you're unaware of this.
Japan itself largely began offshoring fabrication in the 1990s.
It was Japanese OSAT players like Hitachi that sparked the Penang packaging cluster in Malaysia in the 70s-90s and Japanese Memory firms like NEC+Hitachi that started South Korea and Taiwan's fabrication industries.
Taiwan didn't truly become a leader in the cutting edge fab space until the 2010s when US, SK, and Japanese players dropped the ball, and Apple chose TSMC in the 2010s due to their patent litigation with Samsung (nixing South Korea).
So much of TSMC's dominance now is due to the influx of Apple cash in the 2010s boosting R&D spending, which in turn is because millenials bought a shit tonne of Apple devices because they were convinced by marketing.
TSMC's dominance is at least as much Intel's fault as it is Apple's. And even if Apple hadn't been funneling so much money to TSMC, the smartphone industry as a whole still would have been a cash cow for TSMC. Intel sure wasn't going to be in the running as a smartphone SoC designer or as a foundry for somebody else's smartphone SoCs. In an alternative history where Android thoroughly beat out iOS even for high-end/high-margin smartphones, Samsung's foundry business probably would have been a bit better off, but overall it would still be TSMC as the leading foundry, just with Qualcomm as the launch customer for new nodes rather than Apple.
> Intel sure wasn't going to be in the running as a smartphone SoC designer or as a foundry for somebody else's smartphone SoCs
Intel did try doing this in the 2000s, but couldn't justify the resourcing needed for this due to x86 as well as their restrictive licensing of Intel Atom.
Meanwhile, ARM was fabless and just licensed to anyone (a major reason why Chinese challenger brands exist in the Chips space today)
Fundamentally, you cannot be both an IP creator (eg. Design) and chip fabricator, as both functions have different economics and competitive structures, and one BU inevitabely holds the other back.
> Samsung's foundry business probably would have been a bit better off, but overall it would still be TSMC as the leading foundry
Samsung, SK Hynix, and other Korean players dropped the ball due to the Apple lawsuit as well as the 2016-17 SK-China trade war (impacted SK exports to China - including intermediate parts) and the 2019-23 SK-Japan trade war (a number of critical components in fabrication are supplied by Japanese firms like Tokyo Electron and Nikon and were impacted by mutual tariffs)
> Fundamentally, you cannot be both an IP creator (eg. Design) and chip fabricator, as both functions have different economics and competitive structures, and one BU inevitabely holds the other back.
Vertical integration can win too, it worked for Intel for decades.
Most players in the hardware industry try to specialize in one function and do that very well, as this builds your competitive advantage AND allows you to leverage partnerships to further enhance your moat by building an ecosystem.
For example, ARM is purely design driven - targeted specifically at low power compute usecases - and licensed it's IP out to just about any player, which allowed an ecosystem to develop.
Nvidia did the same thing by remaining fabless and only concentrating on GPUs.
TSMC concentrates only on fabrication and doesn't dare enter design because they know all their customers would leave overnight because they would not want to subsidize a potential competitor.
Intel was in too many segments, which meant it was inevitably competing with everybody, which forced everyone to leverage partnerships to challenge the big baddie.
A similar thing happened to Samsung to a certain extent as well.
Apple pays TSMC better than anyone else does since they want the best processes and are willing to pay a premium to cover much of the investment needed to achieve them. Losing them would really hurt TSMC. Not having them in the 10s would have slowed down TSMC’s development of new process technology.
No. TSMC's 4nm processes are part of the 5nm family. 3nm has been shipping for over a year, and is only fabbed in Taiwan for now and the next few years.
It's not on par with the best TSMC has in Taiwan, but most companies are still using 4nm. Yes, 3nm has been shipping for over a year - but only if your company is named Apple. Intel just launched a small portion of its products using 3nm two months ago.
I think realistically it'd be more fair to say that 3nm is coming in 2025 and there's a huge distance between 2025 and 2028 (when they'll start doing 3nm and 2nm in the US). Right now, AMD, Nvidia, and Qualcomm aren't doing 3nm. If the world lost 3nm today, it'd basically be Apple's products that would get hit. It'd definitely screw over Apple and it'd mess up the future plans for AMD, Nvidia, and Qualcomm, but it's not like the industry has been using 3nm for over a year. No, only Apple.
The big problem is that there's a big difference between "we'll be bringing 3nm to the US in early 2026" and "we'll be bringing 2nm and 3nm to the US in 2028". If they started making 3nm in the US in early 2026, that's going to be less than a year behind most companies using 3nm. Qualcomm and Nvidia will probably start shipping 3nm in February 2025 and AMD will probably start shipping 3nm in late 2025.
If TSMC's US fab were 12-18 months behind their Taiwan fabs, it wouldn't really be a problem, except for Apple. Everyone else is waiting 18 months for TSMC's latest gen stuff anyway.
The problem isn't that the US fab can't do 3nm today. TSMC's Taiwan fabs aren't doing 3nm at scale unless your name is Apple. The problem is that their US fabs won't be doing 3nm for around 3 years after the industry moves over to 3nm. If the US fab could satisfy 4nm demand and Taiwan disappeared today, it'd mostly hit Apple's product line. The issue is that in 2026 or 2027, every company will be relying on 3nm and if Taiwan disappeared then, it'd hit the whole industry's product lines.
But it's possible that Intel's 18A will do amazing and Intel will be able to manufacture at scale and a lot of TSMC's business will move to Intel. Then the US (Intel) would be manufacturing more advanced chips than TSMC in Taiwan. TSMC isn't expected to make the move to High-NA EUV for a few more years so Intel has some time when it could overtake TSMC.
> Yes, 3nm has been shipping for over a year - but only if your company is named Apple. Intel just launched a small portion of its products using 3nm two months ago.
> I think realistically it'd be more fair to say that 3nm is coming in 2025
Almost everyone but Apple decided to skip N3B and wait for the later N3E. Intel decided to just be late with N3B, launching their laptop part in September and the desktop part in October. Apple, Qualcomm, and Mediatek all have N3E parts on shelves and in consumer's hands. 3nm is here, now. Two generations of TSMC 3nm have ramped to full production.
It may not seem like much since it's only Apple right now, but their 3nm SoCs are stunning. I can only imagine what the industry is going to look like when this tech becomes the standard. The miniaturization potential alone can transform many other technologies, let alone its value for low-power edge compute.
The difference isn't revolutionary, but noticeable. Whoever has it will have a competitive advantage.
> As more fabs open, the United States is also facing a shortage of engineers and technicians.
levels.fyi says principle level engineers are making $86,000 annually in Taiwan, with zero shares. $49,000 being the average for [software] engineers in Taiwan
there will be a shortage at that compensation range, which they can solve with higher cash and amplify with shares and a competitively short cliff like Meta and others have, of 3 months or less.
> Cost of Living Including Rent in Taipei is 59.0% lower than in San Francisco, CA
Salaries tend to scale with cost of living. The cost of living in Taiwan is lower than the US. The difference is particularly large if you compare Taipei, the capital where the cost of living is likely the highest, to San Francisco. Presumably, the salaries would be higher if they hire people from the US.
They don't have that many SWE...so be careful on your comparisons. 95% of their engineers are non-SWE...and those engineering disciplines do not make 4X those salaries listed above.
They are not solved with compensation...simply put Taiwanese in both the US or Taiwan will put in more hours and work harder regardless of pay. Will compensation get some US workers to work as hard...yes...but not enough for what is needed to expand the AZ plant and keep it running. The numbers in the OP are Taiwan salaries...AZ salaries are upwards of $140-150K (not including bonuses) for someone with <10 years experience. These are not SWE...these are mechanical, electrical and chemical engineers...not in competition with Google, Apple, Meta, etc.
Yep, not that many top-tier talent in the US willing to be in the factory for the graveyard shift under high pressure. The lines run 24/7 and if anything is slightly wrong techs need to be already on site to go fix it, because it's crap tons of money for every second of downtime. That leads to a corporate culture where even R&D has similar pressures from your boss (because essentially you're always racing with the competing fabs).
Ive never understood this culture. This kind of operation could be achieved by having several teams of folks working in shifts so noone is working crazy long, no? It seems like the company is unwilling to invest in the manpower required to achieve that SLA? fwiw ive heard similar things about the fruit company.
They have 24/7 people on site, 4 shifts that cover the work...but those are generally techs in the US, which have associate degrees or less. In Taiwan they are generally engineers that work the 24/7 shifts.
CHIPS and the Inflation Reduction Act are two of the most underrated domestic policy bills in recent American history. Conservative-driven contrarian politicking aren't doing the country any favors.
Off topic: the Biden administration also made a commitment to passenger rail, including high-speed rail, something the rest of the world has had for years. Unfortunately, the incoming administration will most likely kill all this.
As much as I dislike Biden from a leftist perspective, I must commend him for the inflation reduction act. Felt funny seeing a president actually, you know, improve the country
This is getting way off topic, but Biden is a centrist. The idea that he’s a lefty socialist is a political cudgel the right wing has swung at every Democratic prez candidate since 1988; it’s getting more traction in recent years as the media has been increasingly purchased by right wing billionaires. They called Obama a socialist even as he was praising Reagan and helping out the bankers who caused the 2008 economic meltdown.
Everything I’m saying here is a documented. Biden has been in public service since 1973; look up his Senate voting record. Look up the ownership and political stances thereof for any given traditional media outlet; newspapers, websites, etc.
It is also important to point out, the achievement here is how fast TSMC manage to set things up and running even without the home ground advantage. Intel couldn't even replicate this time frame if it was their Intel 7nm Fab. And of course the greatest record was that with enough planning and permission done before hand TSMC manage to have the fab built and running within 18 months in Taiwan. ( Arguably closer to 12 months )
This also means unless a miracle happen or US Gov being unfair with certain things the chances of Intel catching up with its current team, management, board members and investors, against TSMC in terms of capacity, price, and lead time as a foundry is close to zero. ( I am sorry but I lost all faith and hope now Pat Gelsinger is out. )
Once TSMC 2nm hits the ground later this year, TSMC US will also start their 3nm work if they haven't started now.