I see the point being made here, and yeah 5%-20% extra for what amounts to insurance against geopolitics isn't too bad, but doesn't this all fall apart when China catches up?
That 5%-20% is worth it now because no one else can fabricate competing chips. In a competitive market, 5%-20% can be the difference between having the price edge or not. I understand why the USA wants TSMC to manufacture outside of Taiwan, but perhaps it makes sense to move it not the USA but, say, Mexico?
Chinese car companies seem to be slowly but surely rolling American car companies in international markets with great value at low prices. The move in this market evidently isn't to move manufacturing away from Mexico at a 5%-20% increase in price.
In the chip market there's less immediate competition, but I can only imagine it'll come. Hopefully economies of scale would have removed this extra 5%-20% by the time China catches up?
> I see the point being made here, and yeah 5%-20% extra for what amounts to insurance against geopolitics isn't too bad
Well that is an insurance only for the US. As a european, I feel safer, or at best neutral, knowing my ships are made in the Taiwan rather than the US, so having them more 5-20% more expensive is not competitive.
With all their antagonizing of allies, and predatory privacy laws, and repeated espionage on allies, the US has disintegrated any trust other parties have to buy things made there.
As a European I would like geographically and politically dispersed production lines for one of the most important products of the 21 century. Domestic production would be idal, but whatever we can get is a plus.
Because Taiwan is a small, earthquake prone island perpetually on the brink of invasion of a superpower 180 kilometers away. And antagonizing, predatory privacy laws and espionage is also an issue with CCP, however we still import a lot of electronics and semiconductors from there.
What are you going to do when China invades Taiwan, though?
If rumors are to be believed, TSMC will scuttle their fabs before they fall into Chinese hands. Even if they don't, or fail to execute, Taiwan-based chip production will be disrupted for years.
Bet you'll be happy that TSMC has fabs in the US, despite your understandable misgivings.
Credit where credit is due: Australia, UK, New Zealand and Canada are all doing their major parts in espionage on each other and everyone else as a service as part of Five Eyes.
As a European myself, I am pretty miffed that my fellow Europeans keep acting like we're not leading the charge when it comes to spying on each other.
With China, the issue isn't really the quality of the product. It's the geopolitical issues.
Japan, Korea, Taiwan, and other countries even Philippines and Vietnam don't want to depend too much on China. A lot of island disputes and so on and so forth.
My guess right now is that China will never catch up because Europe, US, Australia, and many other developing countries will avoid depending on China critically. This doesn't mean 0% would buy from China but it'll never become a critical dependency.
It's a real shame that the U.S is alienating it's allies through aggressive economic policy. Maybe we'll find ourselves on the wrong side of that economically resilient policy.
> My guess right now is that China will never catch up because [..]
The problem China is big enough to catch up just by it depending on itself + some cheap mass consumer market outlets to even further scale production.
Like they have 1408 Million people ~3times the US and their education system tries (at least of paper) to give everyone a chance to reach silence excellence iff (and only iff) they are noticeable above average (but also due to the form of their education system for people which certain kinds of approaches to thinking which is a major handicap they gave themself accidentally). Like either way with that population size, priority on catching up on chip production, willingness to steal science (through it's not like the US doesn't have a habit for that, too) it's just a matter of time until they have some truly genius people put into the right kind of position with the right kind of resources which will close the gap step by step.
Oh they will catch up as TSMC amd Samsung are running out of steam and Intel is imploding. There's nothing better than motivating China to take on this monumental effort than thd tariffs and export controls.
That 5%-20% is worth it now because no one else can fabricate competing chips. In a competitive market, 5%-20% can be the difference between having the price edge or not. I understand why the USA wants TSMC to manufacture outside of Taiwan, but perhaps it makes sense to move it not the USA but, say, Mexico?
Chinese car companies seem to be slowly but surely rolling American car companies in international markets with great value at low prices. The move in this market evidently isn't to move manufacturing away from Mexico at a 5%-20% increase in price.
In the chip market there's less immediate competition, but I can only imagine it'll come. Hopefully economies of scale would have removed this extra 5%-20% by the time China catches up?