[HN Gopher] TSMC head says drive to onshore chip supply chain is...
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TSMC head says drive to onshore chip supply chain is 'unrealistic'
Author : walterbell
Score : 147 points
Date : 2022-04-21 16:11 UTC (6 hours ago)
(HTM) web link (asia.nikkei.com)
(TXT) w3m dump (asia.nikkei.com)
| powerslacker wrote:
| > to bring a full supply chain back and try to be fully self-
| reliant is totally not efficient. ... At the end of the day, that
| additional capacity could become non-profitable capacity."
|
| It doesn't matter if it isn't profitable, because if cars,
| trains, and computers go offline because of chip production
| supply chain issues then a huge portion of the workforce can't
| participate. If regional war blocks trade from Taiwan we will be
| hosed within a matter of years.
| jscipione wrote:
| I'm all due respect to TSMC, Taiwan may be 'unrealistic' pretty
| soon.
| foolfoolz wrote:
| the pandemic and its effects showed that the cost benefits of
| globalization are beaten by the national security benefits of
| onshoring. i think we will see more critical manufacturing, even
| at great expense, move back to the u. s.
| joe_the_user wrote:
| _The pandemic and its effects showed that the cost benefits of
| globalization are beaten by the national security benefits of
| onshoring._
|
| That doesn't seem like the way to put it. What you seem to mean
| is "the pandemic showed serious downsides to globalization and
| I imagine onshoring would work better".
|
| The thing is, the pandemic indeed showed downsides to
| globalization, financialization and extreme capitalization of
| industries (though with chip manufacture, that's hard to
| avoid). But a significant part of this involves companies
| having no interest in abandoning or modifying their approaches
| even when it had horrible consequences - because usually it
| didn't having horrible consequences for the company in
| particular. Hospitals still only entered into multi-year supply
| contracts with factories even if, in the case of PPEs, it their
| workers and patients were dying of covid, 'cause emergency
| acquisition sets a bad precedent. Etc.
|
| States could ameliorate some of these problems with simple
| regulations but that didn't happen and seems unlikely now
| 'cause profits matter.
|
| I can imagine some gestures to onshoring 'cause that's extra
| money that can thrown at companies but it seems pretty certain
| the mechanisms of "globalization" will continue.
| alooPotato wrote:
| One thing I'm curious about is how you define "critical
| manufacturing"? Manufacturing seems like a directed graph where
| each node is a product or material and the edges are
| dependencies or inputs to that product.
|
| So if you want to onshore manufacturing of a particular
| product, you need to also onshore all of its dependencies. My
| contention is that the graph is so densely connected that you
| end up having to bring entire supply chains onshore and this
| effectively means every country needs to manufacture
| everything.
| SkyMarshal wrote:
| Not necessarily, if you find a way to restrict supply chains
| to allied nations only that you don't have risk of war with.
| alooPotato wrote:
| so cut out china? now bring onshore everything to allied
| countries.... still seems like a large portion of the
| graph..
| SkyMarshal wrote:
| It's a huge proportion of the graph, it would be like an
| economic Manhattan project, but 10x bigger. But if things
| continue on the current trajectory with China's rapid
| military build-up, base-building around the SCS,
| threatening Taiwan and the other Asian nations, it may
| become necessary.
| samus wrote:
| Some dependencies are fine to leave off-shore if there is a
| diverse set of suppliers or if they are located in safe and
| friendly countries.
| jl6 wrote:
| > One thing I'm curious about is how you define "critical
| manufacturing"?
|
| It's a good question. For me, critical means you can't walk
| away from a deal because you need the product, meaning you
| end up being extorted. Food and energy meet this criteria. Do
| chips? Maybe. And if so, then yes, you're absolutely right
| that you would need to secure the supply chain/graph too.
| Maybe not the whole graph if you work back to the point where
| there is a diversity of competitive sources.
| kansface wrote:
| Some manufacturing can presumably be spun up with not too
| much effort if you have other heavy industry around and
| access to raw materials. Chip fabs require way more than
| retooling a line. We could quantify the problem as the amount
| of time it would take to bootstrap a domestic industry if the
| current suppliers turned off the spigot.
| alooPotato wrote:
| Ahh this makes a lot of sense. So you rank each node in the
| graph by how many other nodes depend on it PLUS how hard
| it'd be to spin up that industry if we need to - then
| tackle the high value ones
| sigstoat wrote:
| > this effectively means every country needs to manufacture
| everything.
|
| depending on your exact goals, it could be worthwhile to
| bring a little bit of every node on the graph onshore. you
| retain critical experience, and have at least some hope of
| ramping up. getting a bunch of functioning, complicated
| businesses to expand is way easier than creating them from
| scratch.
| alooPotato wrote:
| oh that's interesting. You maintain a skeleton crew of an
| industry as a hedge in case you need to ramp it up....
| javajosh wrote:
| This is, in fact, why I think its great people still have
| an interest in low-tech methods for doing and making. In
| a Carrington Event[0] we will need people with that
| knowledge. Those without it will be much worse off.
|
| [0] https://en.wikipedia.org/wiki/Carrington_Event
| JamesBarney wrote:
| I don't think this is true.
|
| You really only have to focus on parts of the supply chain
| that are required to produce, fuel, food, medical, and
| military equipment that also are not produced anywhere in the
| world except by a potential a adversary or next to a
| potential adversary.
|
| It's a big undertaking sure, but it's really only onshoring
| pieces that are produced exclusively in China or next to it.
| alooPotato wrote:
| "fuel, food, medical, and military equipment" and
| "exclusively in China" seems like it'd literally bring in
| the entire dependency graph.
| kube-system wrote:
| I can't think of much now that the US relies on for fuel,
| food, medical, and military equipment that is exclusively
| made in China. _Especially_ the latter.
| rgrieselhuber wrote:
| For countries that want to maintain a high degree of
| sovereignty and have the resources to do so, it's probably
| the way to go. 100% is impossible of course but directionally
| the smart move.
| alooPotato wrote:
| I think what I'm getting at is that unless you do 100% of
| the graph (at least with your allies) you're eventually
| going to be dependent on an adversary. Like you might not
| solve anything by bringing chips onshore if your only
| supply of silicon for those chips is offshore. So you're
| just pushing the problem down the stack...
| samus wrote:
| Silicon is one of the most common minerals on Earth. Rare
| metals are a different story.
| alooPotato wrote:
| ok that was a bad example but the point still stands
| jimmaswell wrote:
| If we can at least make sure "the west" has it covered that's
| a great start, and the US is definitely capable if the will
| is there. Probably unrealistic for every tiny South American
| or European country to do literally everything.
| javajosh wrote:
| *> ...how you define "critical manufacturing"?
|
| This is a good question, and IMHO it's about threat-
| modelling. Three events come to mind: pandemic, war with
| China, and a Carrington Event[1]. The last one is interesting
| because it would destroy most electrical infrastructure, and
| it's not clear that the US retains the ability to manufacture
| those components. I'm not sure, but I don't think huge
| transformers have a ton of components, so your other (valid)
| concern about dependencies wouldn't apply in that case. Fabs
| are at least somewhat similar in that they don't recombine a
| huge variety of components in different ratios like Shenzen
| does.
|
| [1] https://en.wikipedia.org/wiki/Carrington_Event
| jdrc wrote:
| well. thanks to china not being under lockdown for long there
| were no shortages of goods.
|
| globalization is a good thing, we shouldn't want to end it.
| 'when goods don't cross borders, soldiers do' etc
| ketzo wrote:
| To be more accurate, the pandemic showed that onshoring beats
| globalization... _in a pandemic_.
|
| The cost benefits were wildly outstripping the national
| security benefits before 2020! That's why globalization has
| thrived!
|
| I know that's the point, and I'm sort of willfully
| misinterpreting what you're saying. But the cost benefits of
| globalization aren't going away, and people's fears of the
| pandemic and supply-chain disruption will fade with time.
|
| Critical manufacturing simply will not be onshored by
| participants in capital markets if it costs more. It's the kind
| of thing that only a government can really make happen, and the
| U.S. government does not seem willing to impose massive costs
| on ~all of its largest industries.
|
| Semiconductors -- maybe. There's a lot of focus on this
| particular industry right now, and Intel + the CHIPS Act might
| be able to make waves in the U.S.
|
| But I think it's incredibly unrealistic to expect any
| significant share of global manufacturing to move back out of
| Shenzhen any time soon.
| svachalek wrote:
| I don't think it's fair to say the national security benefits
| were tested before 2020. Risks are rarely considered until
| after they are exploited; everything that happens in an
| airport security line is based on something that actually
| happened before they added that requirement.
| ketzo wrote:
| No, I know -- that's my point. They hadn't reaaaally been
| tested before, and they probably won't be tested again for
| a long while.
|
| Regardless of whether it is _correct_ to account for the
| risks of globalization, it 's very unlikely that people
| _will_ -- again, particularly when those people are
| participants in market economies -- because the risks are
| so infrequent, unpredictable, and catastrophic that people
| just don 't like to think about them.
| UnpossibleJim wrote:
| I think this type of thinking, while relevant, ignores other
| hidden costs associated with off-shoring the majority of our
| manufacturing.
|
| 1. The environmental costs are not insignificant with both
| the lack of environmental regulation and added ocean shipping
| (yes, I know people are tired of hearing about environmental
| impact)
|
| 2. The humanitarian cost of offshoring our manufacturing is
| not insignificant. We may not have the _best_ humanitarian
| track record in the world, but we aren 't setting up suicide
| netting or sending manufacturing to Uyghur prison camps.
|
| 3. NAFTA has increased income inequality https://www.epi.org/
| publication/briefingpapers_bp147/#:~:tex....
|
| 4. The Trans-Pacific Partnership weakened intellectual
| protections, food safety regulations and helped destabilize
| the U.S. economy - creating even more "bubble and bursts"
| https://inthesetimes.com/article/tpp-free-trade-
| globalizatio...
|
| Don't get me wrong, I think a certain amount of global trade
| is not only necessary but healthy. It strengthens treaties
| and national ties. This reduces war risk and national
| coalitions... all good things. But a certain amount of self
| interest and a healthy middle class bolster our own country.
| We have lost our ability to stand on our own two feet for any
| amount of time.
| potta_coffee wrote:
| Environmental impact is a really important concern. But
| aren't we just deciding _where_ that impact will occur? I
| don't think environmental damage in China is inherently
| superior to environmental damage in America; not for any
| reason other than, "I live in America, so of course I want
| America to be have a clean environment." I think the
| environmental impact of these industries could be reduced
| but profit overrules all other considerations.
| ketzo wrote:
| Well, there's environmental damage incurred by going
| _back and forth_ between China and the U.S., which could
| be reduced /eliminated.
| ketzo wrote:
| Good point, and I think assembling all these reasons
| _alongside_ national security risks is our best shot at
| actually convincing our governments to enforce some amount
| of change.
| erdos4d wrote:
| Honest question, what would be the outcome in terms of chip
| manufacturing ability if China didn't invade Taiwan, but just
| decided to level the whole island with an eye towards
| repopulating later with Chinese nationals? Have Chinese fabs come
| along enough to allow them to just destroy Taiwan instead of
| mounting a costly invasion?
| ed25519FUUU wrote:
| Who cares if it's not profitable? Who's trying to onshore chips
| because it's cheaper?
|
| We're bringing chips back home for security and resiliency
| reasons.
| kadoban wrote:
| civilized wrote:
| > It makes sense that all the major economies hope to bring the
| chips for infrastructure or defense uses onshore, but to bring a
| full supply chain back and try to be fully self-reliant is
| totally not efficient
|
| Unfortunately, sometimes you've got to trade efficiency for
| robustness. Taiwan has China dangling over its head like the
| Sword of Damocles.
| trrb wrote:
| adamsmith143 wrote:
| Head of Monopoly says attempts to break monopoly are pointless.
| In other news water is wet.
| api wrote:
| TSMC is in part a Taiwanese defense asset. They don't want
| anything moved because right now having so much supply chain in
| Taiwan chains the rest of the world to Taiwan's security against
| the PRC.
| pphysch wrote:
| This is an oft-repeated meme that doesn't align with the
| historical facts. TSMC is a distant secondary factor in the
| geopolitical competition over Taiwan, which is a continuation
| of the Chinese civil war that started in 1927 and has never
| officially ended.
|
| If TSMC didn't exist, or was located in e.g. Vietnam, Taiwan
| would _still_ be a vital strategic asset in Washington 's
| stated policy to contain Communist China (as part of the "first
| island chain" [1]). There would still be a geopolitical
| competition without TSMC.
|
| [1] - https://en.wikipedia.org/wiki/First_island_chain
| flyinglizard wrote:
| Vague geopolitical considerations are very secondary and
| policy dependent compared to the real and abrupt chaos which
| will ensue if TSMC is taken out.
| [deleted]
| pavon wrote:
| On the other hand, if China assumes control of Taiwan and
| TSMC with it, that need not have any impact on the rest of
| the world. Rather, it would provide a strong financial
| incentive _not_ to push back as hard on China as we have on
| Russia.
|
| In other words, part of the desire to onshore chip
| fabrication (and other manufacturing) is in part so we can
| sanction China harder if need be. Dependence on TSMC
| weakens our resolve to defend Taiwan for political reasons,
| it doesn't strengthen it.
| etiam wrote:
| "Taiwan should destroy TSMC if invaded, suggests US
| military paper"
|
| https://news.ycombinator.com/item?id=31012442
| pphysch wrote:
| On the contrary, techbros not getting their new overpowered
| MacBook or gamer rig or drone is very secondary to hard
| security concerns.
| jaywalk wrote:
| This is exactly correct. If China took out TSMC, we would
| have an unimaginable global catastrophe on our hands that
| would make Covid look like nothing. There are _far_ too
| many eggs in that basket.
| samus wrote:
| This won't happen because China would also take a hit.
| TSMC is safe as long as China doesn't have a cutting-edge
| semiconductor industry that can replace the lost output
| from the latest nodes.
| pphysch wrote:
| This is absurd. No, we definitely wouldn't. Most people
| wouldn't notice if TSMC disappeared.
|
| In a couple years they might go, hey, why isn't my iPhone
| 42 any faster than my iPhone 35.
|
| But most devices and datacenters would keep running for
| literally years. Occasionally there would be a disaster
| that is hard to recover from due to missing supplier
| inventory. The average warranty on such devices is like 3
| years, and many can perform long beyond that.
|
| This should be compared with critical commodities like
| oil. The oil produced yesterday will not last anywhere
| close to 3 years. Mass starvation would happen within
| weeks if the oil supply was cut off.
|
| Not to mention a lot of critical technology doesn't need
| <10nm chips, and can use less advanced chips manufactured
| outside of TSMC.
| AdamH12113 wrote:
| TSMC makes a lot more than iPhone CPUs. A _lot_ more. And
| they do a lot more than cutting-edge process nodes --
| they have active 180nm fabs. Microcontrollers, ADCs,
| DACs, ASICs... almost anything you can buy that contains
| electronics can have ICs manufactured by TSMC.
|
| Now think about all the non-consumer equipment with
| embedded electronics -- trucks, trains, container ships,
| industrial equipment, medical equipment. Suddenly there
| are no spare parts available. It takes months to redesign
| and re-manufacture new electronics, and the supply of
| non-TSMC components will be unpredictable as everyone
| rushes to change all at once.
|
| On top of that, other foundries in Taiwan (like UMC)
| would go down, we'd be cut off from all the fabs in
| China, and if the war expands China might target fabs in
| South Korea and Japan. It wouldn't be mass starvation in
| weeks, but it might only be a few steps removed from
| that.
| pphysch wrote:
| Yes, TSMC is a _very_ important corporation.
|
| No, their (improbable) destruction would not cause an
| "unimaginable" global economic catastrophe as the
| previous commentator implied.
| hackernewds wrote:
| This seems like an exaggeration. What are the resulting
| catastrophe?
| samus wrote:
| The semiconductor industry would be set back a few
| decades because the main production facilities for the
| current node and many previous nodes would be gone. It's
| not just the equipment, but also the institutional
| knowledge about how to operate it best.
| WillPostForFood wrote:
| If China invaded Taiwan, and the world response was
| something like the response to Russia's invasion of
| Ukraine (economic isolation), it would mean losing 500
| billion dollars of imported products, and an uncountable
| loss of products that are dependent of that 500 billion.
| Look at what a small kink in chip supply is doing to car
| pricing and supply. Imagine instead of a kink in the
| supply chain, the supply goes to zero for several years.
| Now imagine that affecting thousands of products that are
| either wholly manufactured in China and Taiwan, or
| dependent on components made in China and Taiwan.
| jaywalk wrote:
| The number of chips within a five foot radius of you at
| this very moment that were manufactured by TSMC could
| easily be in the double digits. So imagine that all of
| the devices containing those chips are no longer able to
| be produced because nobody else can make the necessary
| chips.
| samus wrote:
| A long-term geopolitical goal of the PRC is to challenge
| the hegemony of the US blue-water navy over the oceans, or
| at least of the immediate surroundings of East Asia. Having
| US-friendly regimes on Taiwan, the Philippines and Japan
| would make it difficult for the Chinese Navy to operate
| outside of that island chain in a conflict.
| themgt wrote:
| The problem is TSMC points a gun back at us. Look at the
| Ukraine playbook: "ok Russia go ahead and try to invade,
| we'll turn it into a bloodbath for you while we cut you off
| from as much of the global economy as possible"
|
| The threat to wreck China's economy if they invade becomes a
| lot less credible when we'll be cutting the legs of the
| entire global economy in the bargain. It becomes more of a
| mutual suicide pact and gives China reason to think we'd cut
| a deal if it came down to it.
| pphysch wrote:
| Again, this narrative doesn't align with the facts.
|
| Suppose TSMC never existed. USA would _still_ be totally
| economically dependent on China in 2022. If USA declares
| war on China, USA will have an acute economic crisis within
| weeks due to half a trillion $ in missing imports. This has
| nothing to do with chips from TSMC.
|
| The geopolitical leverage of TSMC is vastly overstated by
| people who get their geopolitics from geopolitical non-
| experts like Zeihan and Stratechery.
| bombcar wrote:
| And he's saying it wouldn't be "profitable" because they'd have
| overcapacity.
|
| But countries wanting to bring it in-house may not care about
| that, or be willing to pay for that.
|
| Ignoring shortages, Russia would be much happier right now to
| be oversupplied with the chips they need than having to get
| them through China. And lots of other countries are now re-
| evaluating what risks may be inherent in their supply chains.
| ltbarcly3 wrote:
| So TMSC would also stop being profitable by that logic I
| think, unless there is some structural advantage they have?
| bombcar wrote:
| That's likely why they're trying to dissuade people from
| doing it; also if you DO bring something in-house you're
| likely to bring in the _highest margin_ chips, which of
| course affects TMSC 's bottom line.
| MR4D wrote:
| > the rush by major economies to onshore semiconductor production
| is "unrealistic" and that expanding capacity would not help
| alleviate the global chip shortage.
|
| OR, maybe the countries are just using that as pretense because
| they think the CCP will make a move on Taiwan, and it's easier to
| say this than say that out loud.
| dwighttk wrote:
| Wolf says shepherds should leave sheep alone
| amelius wrote:
| And I thought having less salty air makes it easier to build a
| fab ...
| [deleted]
| topspin wrote:
| At some point in the next 10 years Taiwan will be surrounded by
| half a dozen Chinese aircraft carriers[1].
|
| The rest of the world knows that continuing to rely so heavily on
| Taiwan for crucial components is not viable.
|
| [1] https://www.cnn.com/2021/11/09/china/china-aircraft-
| carrier-...
| mjevans wrote:
| I suspect that outside of... 'mainland China' (I'll phrase it
| for clarity) and the island just off the coast of 'mainland
| China'; the rest of the world really just wants stability in
| the region and no further conflict. Generally the status quo is
| OK for the rest of the planet, and the other nations would be
| happy to call 'mainland China' China and the island off of that
| recognized as the sovereign nation of 'Taiwan' (or something
| else other than China, since the name's already taken by a
| larger military power).
|
| I wonder what it would take to get that to stick until we grow
| up enough as a species to cease having countries and instead
| have a united single government like Star Trek.
| throw8383833jj wrote:
| >> grow up enough as a species to cease having countries and
| instead have a united single government like Star Trek.
|
| This would require everyone to think very alike which we will
| never be. there's simply too much diversity.
|
| why not aim for more of a everyone have it their own way kind
| of model where more of the power is sent to local
| governments? this way there would be less conflict and more
| happy people, rather than only one way for everyone (one size
| does not fit all)
| alfalfasprout wrote:
| The fact China hasn't already invaded makes this doubtful. More
| likely is trying to install a pro-CCP politicians and pursuing
| annexation politically.
|
| The US has had a very close relationship w/ Taiwan for decades
| including military training and access to newer military
| hardware.
|
| Also discussions about china attacking a US ship are rather
| silly since that would be an outright declaration of war. The
| amount of firepower available to the US would level mainland
| cities.
|
| Too much to lose for them to make an invasion likely.
| tomatowurst wrote:
| I doubt this. you'd need to continue having a thriving economy,
| not only that for an aircraft carrier group to be effective
| you'd need quality fighter jets that can take off with equal or
| more payload than the US (which does not use a ski ramp for
| this reason) and compete with it's 5th or 6th generation
| planes. In addition you would need adequate defense fleet,
| especially submarines quiet enough and capable of detecting
| threats and countermeasures.
|
| Even the Taiwanese F-16V will be able to obtain air superiority
| in the present, 10 years is awfully short for it to master jet
| engine manufacturing.
|
| In 10 years it would be lucky if CCP survives internal issues
| due to a dwindling economy and inability to service and
| maintain much of its core infrastructure rather than an
| external one.
|
| I could definitely see Xi taking some of the islets close to
| its coast line but doing so would give the US justification to
| station its airbase permanently and start a Russian style
| sanction.
| iooi wrote:
| You're assuming that the US would go to war with China over
| Taiwan. That's not a given -- by a long shot.
|
| > and start a Russian style sanction
|
| Unlike the Russian sanctions, a broad sanction on the Chinese
| economy would deeply impact the US economy. It's not a viable
| strategy.
| rdtwo wrote:
| Yeah Russia sanctions mostly just affect Europe
| tomatowurst wrote:
| > US would go to war with China over Taiwan
|
| They've repeatedly signaled and backed this up with a _real
| aircraft carrier_ that sails between the straits. They aren
| 't doing this just for show. The ball is in CCP's court, if
| they venture too far past their coastline they are going to
| face USN + JSDF.
|
| Again, Taiwan is NOT ukraine. It's semiconductor supply is
| critical to national security and the economy.
|
| US also signaled they would hit China with sanctions and I
| don't think it's a bluff. China needs US more than US needs
| it.
| dirtyid wrote:
| > real aircraft carrier
|
| USN hasn't had the balls to sail carriers through the
| strait in 20+ years even under Mike Pompeo at the nadir
| of US/PRC relations since Nixon. Clinton sent 2 during
| last TW strait crisis for shits and giggles. Strait
| transits are down to DDGs and coast guard vessels now.
|
| PRC doesn't even need Navy to venture outside the first
| island chain to destroy East Asia semi, or conduct
| massive crippling cyber warefare on CONUS. Reality is US
| has very limited options protecting East Asia interests
| and US is now existentially vulnerable in multiple
| domains that can't be solved with biggest military budget
| and 20 aircraft carriers.
|
| PRC is moving to sanction proof economy and decoupling
| anyway, eating sanctions for taking back TW is built into
| the equation.
| tomatowurst wrote:
| If there's a war in East Asia, I would bet against China.
| It should be clear that having the world's largest
| standing army don't really matter, we can see what a
| paper tiger Russia turned out to be and PLA has far worse
| corruption. Especially since the PLA only has had success
| fighting its own, it's lost every single war and hasn't
| fought a major war since losing to Vietnam in a quick
| war.
|
| The US + allies aren't exactly worried here. It possesses
| complete air superiority in the region as well as early
| warning radar.
|
| I mean if a small country like Taiwan could lodge
| missiles at the Three Gorges dam that would completely
| flood the mainland, think what Korea or Japan can do
| without even the US helping.
|
| The PLA is a paper tiger and this angers a great deal of
| PRC nationalists and sympathizers but its the truth.
| There's very little chance it could enter into a
| prolonged war with QUAD + South Korea, Taiwan.
|
| I don't know what this sanction proof economy is about
| but it clearly isn't working out for Russia with Ukraine.
| LAC-Tech wrote:
| Is it really "balls" to not sail an aircraft carrier?
|
| Last time it happened was during the Taiwan straight
| _crisis_ where the PRC fired missiles - which a defector
| in the PRC told Taiwan had no warheads - deliberately
| near Taiwanese cities.
|
| Why respond with a crisis level military show of force
| when - thankfully - there's no crisis?
| dirtyid wrote:
| PRC also unofficially communicated missiles drama weeks
| ahead to TW, so there wasn't any "crisis" either, but US
| sent 2 carriers as show of force because it could,
| knowing PRC had no capabilities to counter. Force balance
| is different now, and for all the US hyping about
| increased PLAF flights into TW ADIZ or clipping median
| line last year, basically another crisis brewing, USN
| still only sent DDGs for strait transits because they can
| no longer risk using CSG as show of force.
| LAC-Tech wrote:
| None of these issues constitute a crisis nearly as much
| as '96 - an alternate interpretation is that the PRC is
| still terrified of a CSG appearing in the strait so they
| deliberately do not cross US red lines, even when much
| closer US/Taiwan relations cross theirs.
| zie wrote:
| Assuming this is true, makes Taiwan even happier they hold TSMC
| in country, otherwise what incentives does the rest of the
| world have for helping Taiwan out, except the whole, we are the
| good guys stance? We know the we are the good guys message is
| only good so far.
| JumpCrisscross wrote:
| > _Taiwan will be surrounded by half a dozen Chinese aircraft
| carriers_
|
| Every time U.S. aircraft carriers enter a discussion, the reams
| of developments in anti-ship missile and swarming tactics with
| aerial or maritime drones (or fast boats) comes up.
| dragontamer wrote:
| That's because China can launch anti-ship missiles from any
| Chinese highway to threaten US Carriers.
|
| In contrast, the weapon-platforms of Taiwan / US Navy are
| simply more constrained. Sure, US Destroyers / Cruisers are
| good missile platforms and US Aircraft Carriers / F35
| fighters are also good delivery mechanisms for anti-ship
| missiles...
|
| But China has the advantage of land-based missiles, land-
| based air force, AND sea-based naval forces to triple-team up
| against the US Navy.
|
| -------
|
| Chinese Carriers hanging around the Straight of Taiwan and
| hugging their coastline (under protective cover of Chinese
| missile-forces / Chinese air-forces) is the expectation.
|
| We're not concerned about Chinese Carriers trying to say,
| attack Hawaii (which would be the opposite situation: US Air
| Force supporting US Navy in defense). The near-term threat is
| the gross geographical advantages of the China-Taiwan fight.
|
| There's a mild expectation that if a Chinese / Taiwan fight
| were to occur, US Marines might be forced to make landings in
| the Chinese mainland to destroy Chinese land-based missile
| forces and even the odds.
| jacobolus wrote:
| How useful are anti-ship missiles in Ishigaki Island
| (Japan), Batanes (Philippines), etc.?
|
| If Taiwan is loaded with anti-ship missiles, cruise
| missiles, naval mines, loitering munitions, artillery,
| modern fighter jets, etc., any Chinese invasion is at the
| very least going to come at very steep cost in
| life/military hardware.
|
| And then the economic costs (to everyone in the world) are
| going to be extreme.
| dragontamer wrote:
| > How useful are anti-ship missiles in Ishigaki Island
| (Japan), Batanes (Philippines), etc.?
|
| Better than nothing, but the Chinese mainland has literal
| highways and railroads to deliver more-and-more missiles.
|
| When all else is equal, the winner is decided by
| logistics. Who can "deliver" more missiles to a location
| first? I'm willing to bet that Chinese highways and
| Chinese railroads have superior logistics / delivery than
| Ishigaki Island or the Batanes.
|
| That is: the winner will be decided by "number of missile
| deliveries to the Strait of Taiwan". (A lot of people get
| caught up in thinking about the "last mile" of delivery:
| F35 jets or Destroyers or MLRS systems. But the "first
| mile" of railroads / highways is just as important, and
| leans severely to a Chinese advantage)
|
| > If Taiwan is loaded with anti-ship missiles, loitering
| munitions, artillery, modern fighter jets, etc., any
| Chinese invasion is at the very least going to come at
| very steep cost in life/military hardware.
|
| Putin just proved to the world that "Just because its a
| bad idea" doesn't mean it won't stop the autocratic
| dictator from doing something stupid.
|
| China attacking the world-capital of semiconductor
| manufacturing would piss off the world for sure. But
| "pissing off the world" doesn't seem to enter into the
| calculus of these leaders. EDIT: I'm also willing to bet
| that Xi Jinping cares about Chinese soldier's life only a
| _little_ bit more than Putin cares about Russian soldier
| lives.
| JumpCrisscross wrote:
| > _When all else is equal, the winner is decided by
| logistics_
|
| Which is why it's almost public policy that the opening
| salvos of this war would involve raining down missile
| fire on those logistical chains.
| omgwtfbyobbq wrote:
| > When all else is equal, the winner is decided by
| logistics. Who can "deliver" more missiles to a location
| first? I'm willing to bet that Chinese highways and
| Chinese railroads have superior logistics / delivery than
| Ishigaki Island or the Batanes.
|
| That's an interesting point.
|
| One on hand, rail/highways are superior to anything
| ocean-going for transport, and cargo ships are easily
| taken out and would need extremely effective escorts.
|
| On the other hand, rail/highways are much harder to
| protect because of their length.
|
| If cargo ships could still reach Taiwan with escorts, I
| wonder if Taiwan could have enough supplies to deny China
| access to their rail/highway systems such that it negated
| their numerical advantages.
| meowfly wrote:
| I'm extremely skeptical of this Taiwan invasion scenario
| I see floated around quite a bit.
|
| 1. As you said, and China is aware, a war between Taiwan
| and China will harm both countries and strengthen the US.
|
| 2. The world would react extremely negatively (more so
| than the Ukraine response) if half the world's semi-
| conductors supply disappeared.
|
| 3. Taiwan has cruise missiles that can reach Shanghai,
| Wuhan, Shenzhen, etc. Most of China's development is in
| the East. [1]
|
| What I do believe might happen is China will reach the
| point that they can economically bully Taiwan until
| Taiwan decides it's best to play ball.
|
| 1. https://en.wikipedia.org/wiki/Hsiung_Feng_IIE
| JumpCrisscross wrote:
| > _China has the advantage of land-based missiles, land-
| based air force, AND sea-based naval forces to triple-team
| up against the US Navy_
|
| Point is if China leans into its fleet for fire support
| (it's currently not clear if they will do this or rely on
| land-based or aerial firing platforms), there are anti-ship
| missile systems Taiwan could be outfitted with to
| compensate for far cheaper than those ships cost.
| topspin wrote:
| > That's because China can launch anti-ship missiles from
| any Chinese highway to threaten US Carriers.
|
| The Chinese need not resort to mere land batteries. The
| Chinese have a fleet of well over 200 Xian H-6 strategic
| bombers to launch whatever anti-ship standoff PGM they can
| mount to the wings or fuselage. And the new H-6N is aerial
| refueled.
|
| A few years from now when these are operationally armed
| with sufficient quantities of
| supersonic/hypersonic/flocking/maneuvering/whatever anti-
| ship missiles China will have absolute control of the sea
| around Taiwan; foreign war ships, cargo ships and anything
| else that isn't a submarine will be _permitted_ to remain
| in the area at China 's pleasure.
|
| There is a reason that foundries are rapidly being built in
| the US, Europe, etc.: the shot callers at the top of these
| semiconductor manufacturers _know_ that one day in the not
| too distant future Taiwan will be blockaded in China 's
| play to reunify and there is nothing the West can do about
| it without risking the destruction of capital ships full of
| propulsion reactors.
| potta_coffee wrote:
| This is precisely why USMC infantry training pivoted back
| toward more traditional (for the Marines) landing tactics
| in the Pacific, away from desert operations.
| dahdum wrote:
| > There's a mild expectation that if a Chinese / Taiwan
| fight were to occur, US Marines might be forced to make
| landings in the Chinese mainland to destroy Chinese land-
| based missile forces and even the odds.
|
| That sounds remarkably unlikely and irrational. If China
| touched the US mainland it would mean immediate full-scale
| war, the opposite should be assumed.
| potta_coffee wrote:
| We've had two world wars that in retrospect seem
| remarkably unlikely and irrational, insane even.
| dragontamer wrote:
| > That sounds remarkably unlikely and irrational. If
| China touched the US mainland it would mean immediate
| full-scale war, the opposite should be assumed.
|
| Then your assumptions need to be set appropriately.
|
| That is: China will have its full set of highways and
| railroads in-tact to deliver missiles to the US Navy.
| That will be the US Navy fighting at a severe
| disadvantage.
|
| Furthermore, US Marines will largely be sitting around
| doing nothing. Having additional troops from a separate
| branch of the military doing __SOMETHING__ would at least
| help even the odds. (Marines do have some ships, but the
| Marines specialized in Sea vs Land situations, not sea vs
| sea kinds of battles)
|
| -------
|
| In any case, the Taiwan situation is a very difficult
| fight to think about. US Navy will be at a severe
| disadvantage in almost every concievable scenario, and
| its difficult to see how other branches (US Army, US Air
| Force, or US Marines) can help in a significant manner.
| (Sure, some islands here and there can station some US
| Air Force, US Army can also station some troops in
| Taiwan. But is it enough to make a big difference?)
| dahdum wrote:
| We have no defense pact with Taiwan, and are not
| obligated to engage. Our official stance is strategic
| ambiguity, but Ukraine has showed how unlikely we are to
| join the fight. We will try to follow much of the same
| sanctioning, intelligence, and providing arms playbook,
| but with less international support.
|
| Your scenario presumes we are in open conflict with
| Chinese troops, in which case landing marines is merely
| an escalation of a war that's already begun.
| kurupt213 wrote:
| Engaging a US carrier task force would mean immediate
| full-scale war with the US
| JumpCrisscross wrote:
| > _sounds remarkably unlikely and irrational. If China
| touched the US mainland it would mean immediate full-
| scale war, the opposite should be assumed._
|
| Agree landing marines is aggressive. But missiles strikes
| should be assumed.
|
| China would be the aggressor. And the things being
| attacked would be directly militarily relevant. If China
| retaliated by hitting Guam, I would call that fair play.
| (Hawai'i, for historical reasons, would be a stupid thing
| to hit.)
| dahdum wrote:
| > China would be the aggressor.
|
| Russia is currently the aggressor and Ukraine has far
| more Western support than Taiwan could reasonably expect.
| Still no Western countries are "closing the skies" or
| attacking Russian military assets. China is a far
| stronger opponent than Russia, so I don't see why that
| would change.
|
| The US would be going it comparatively alone against
| China in a Taiwan conflict. I believe the best way to
| protect them is helping them arm themselves to the teeth
| such that China sees only a brutally pyrrhic victory as a
| possibility.
| JumpCrisscross wrote:
| > _US would be going it comparatively alone against China
| in a Taiwan conflict_
|
| AUKUS and the Quad are explicitly aimed at changing this.
| dragonwriter wrote:
| > China is a far stronger opponent than Russia, so I
| don't see why that would change.
|
| China is a weaker _strategic_ threat despite being a
| stronger _local_ conventional threat. That would seem to
| me to make outside direct intervention more likely
| (though not necessarily more likely than not.)
|
| > The US would be going it comparatively alone against
| China in a Taiwan conflict
|
| There is nothing as centralized as NATO or the EU in the
| region, but there are numerous US bilateral and a few
| small multilateral security arrangements, and China is
| one of the main things motivating those arrangements.
| dahdum wrote:
| Why would China be a weaker strategic threat than Russia?
| They have 10 times the population and a massive
| industrial and technological base. Fewer nuclear weapons
| but more than enough to trigger the apocalypse. Much
| stronger trade relations, economic diversification, and
| growth.
|
| Kendall, Air Force Secretary, said "When you look at it
| objectively, China is a much greater strategic threat
| than Russia is".[1]
|
| 1. https://spacenews.com/air-force-secretary-were-
| worried-about...
| dragontamer wrote:
| No one would bat an eye if a Carrier Strike group
| launched F35 fighters to attack the Chinese mainland to
| disable missiles before they were used. In fact, this is
| 100% expected strategy for this situation.
|
| -----
|
| What about a Marine WASP-class assault ship launching
| helicopters to do the same thing (except cheaper)?
|
| ----
|
| What about a few Marine Special Ops units infiltrating
| the beaches under the cover of darkness to support those
| helicopters? If they're discovered, they could be
| "plausible deniability" units and arguably the USA never
| even landed in China.
|
| ----
|
| What about the regular Marine infantry establishing a
| beach-head to support those Special Ops units, but never
| advancing further than just the beach?
|
| Etc. etc. Its a smooth and slippery slope. Its not
| exactly clear where or how to draw a line. In any case,
| the Chinese missile forces are going to be a severe
| issue. I expect at a minimum, F35B fighters from Carriers
| to be utterly destroying any missile-site they discover.
| That absolutely means attacks on the Chinese mainland.
|
| Something like this is almost a necessity, so that US
| Marines could do "something" to support the US Navy. Its
| probably too much to ask the US Navy to solo all of China
| by themselves.
| dahdum wrote:
| > No one would bat an eye if a Carrier Strike group
| launched F35 fighters to attack the Chinese mainland to
| disable missiles before they were used. In fact, this is
| 100% expected strategy for this situation.
|
| > Something like this is almost a necessity, so that US
| Marines could do "something" to support the US Navy. Its
| probably too much to ask the US Navy to solo all of China
| by themselves.
|
| We aren't striking Russian forces despite their
| deliberate targeting of civilians and numerous war
| crimes. Why would we attack a far more dangerous
| adversary first? The moral argument is clearly not
| enough, and we have no defense pact.
|
| We'd risk giving them their Pearl Harbor moment, and
| facing the carefully directed rage of a 1.4 billion
| population command economy under single party
| authoritarian rule.
| scarmig wrote:
| > No one would bat an eye if a Carrier Strike group
| launched F35 fighters to attack the Chinese mainland to
| disable missiles before they were used. In fact, this is
| 100% expected strategy for this situation.
|
| This isn't an accurate understanding of current US
| military or foreign policy thinking.
|
| https://www.airuniversity.af.edu/JIPA/Display/Article/249
| 127...
|
| > Military strategists, planners, and force requirements
| developers should anticipate America's civilian
| leadership needing effective military options short of
| mainland attacks on China. RAND analysts seem to
| appreciate the risks of homeland attacks, suggesting that
| "as low as the probability of Chinese first [nuclear
| weapons] use is, even in the most desperate circumstances
| of a prolonged and severe war, the United States could
| make it lower still by exercising great care with regard
| to the extensiveness of homeland attacks and by avoiding
| altogether targets that the Chinese could interpret as
| critical to their deterrent."
|
| Attacks against the mainland are certainly possible,
| depending on circumstances, but it's neither the default
| nor expected.
| gscott wrote:
| I bet every US military platform uses chips from Tawain...
| if China was to take or even blockade Tawain it would be
| bad for the us military industrial complex. Not to mention
| the worldwide recession, job cuts and other problems not
| being able to put that one last needed chip into products
| like cars would cause.
| iamleppert wrote:
| Because we all know how great it's been being out of stock of
| everything for months now. The current system is working so well!
| /s
| danans wrote:
| I'm curious to see if the chip supply constraints will result in
| device designs that make more efficient use of them. I think some
| auto manufacturers are already doing exactly that.
| rektide wrote:
| Morris Chang (founder of TSMC)'s speech a year ago touched on 3
| huge advantages Taiwan uniquely has. Having a whole, well-knit-
| together country with such intense knowledge & specilaization in
| making chips is something that would be extremely hard to
| recreate anywhere else. A community of practitioners is key.
| https://interconnected.blog/morris-chang-global-semiconducto...
|
| The United States had extreme success growing really good chip
| designing talent with the digital foundry model. We simply gave
| college students & others access to the means of production.
| Something we see eFanless/Google/Skywatdr kind of doing these
| days, with free chipmaking (at 130nm). But how we get good at
| making the foundries, create a body of expertise in not chip
| design but chipmaking, at any level of density... hard problem.
| christkv wrote:
| Do people just forget that intel has fabs all over the world
| with that expertise as well?
| little_endorian wrote:
| Morris Chang's point is that TSMC is able to draw upon
| Taiwan's very best talent, as the country's most attractive
| employer. Likewise, Samsung is among the most prestigious
| Korean employers. In contrast, where does Intel rank among US
| employers?
| jcranberry wrote:
| I thought Samsung had an absolutely horrible reputation as
| an employer.
| nosianu wrote:
| Except that we had articles like this one, telling us about
| severe and not easily solved problems at Samsung:
| https://news.ycombinator.com/item?id=31064080
| notyourday wrote:
| The ones where it has not been successful at making their own
| chips using their own designs? Those fabs?
| rat9988 wrote:
| Well, they are not the cutting edge anymore, but are still
| a powerhouse.
| notyourday wrote:
| No, they _were_ a power house. We will know if they still
| are a powerhouse if a year from now we no longer have
| these kinds of discussions.
| dragontamer wrote:
| Since TSMC reached 7nm and 5nm first (and it will be years
| before Intel reaches parity with 5nm technology, and TSMC is
| expected to reach 3nm by that point...), its obvious for us
| to be focused on what TSMC/Taiwan is doing that we in the USA
| aren't.
|
| TSMC seems to have achieved a sizable technological lead over
| Intel, that will perpetuate for the next few years or even
| decade.
| bilbo0s wrote:
| Bet against the US if you like, but it's a losing bet.
|
| Onshoring will happen. In the US. In China. in the EU. And
| likely in Russia too.
|
| This has become a national security issue, and at least in
| the US, we are resolved to make it happen.
| dragontamer wrote:
| Taiwan / TSMC are allies. The solution is rather simple:
| convince them to build a lab in Arizona. Lo and behold:
| TSMC is building a lab in Arizona.
|
| The debate is largely over. We're just dealing with the
| details / qualms right now. Culture clashes as Taiwanese
| business managers are learning that US workers have a
| different culture than they expected (and vice versa).
|
| Taiwan / TSMC doesn't like it, but they probably
| recognize it as necessary. We USA folk have to be
| reminded though that this technology belongs to another
| country, we're merely "hosting" them.
|
| -------
|
| There's also some other knock on effects: Japan is asking
| TSMC to build a factory within Japan (after all, if USA
| gets a fab, shouldn't Japan deserve one?). TSMC likely
| doesn't want to spread itself too thinly around the
| world.
|
| This overall discussion isn't about one-or-two key /
| emergency factories being built around the world. That
| has already happened.
|
| The overall discussion is "how much" should TSMC spread
| itself around the world and build redundant supply
| chains?
| bilbo0s wrote:
| This is not about fabs. This is about expertise. A TSMC
| fab in Arizona is nowhere close to being enough to
| satisfactorily address our security concerns with respect
| to critical infrastructure. We won't stop until we can
| stand up the entire supply chain using domestic
| intellectual capital. In fact, we aren't going to stop
| until that domestic intellectual capital not only exists,
| but is safely redundant.
|
| None of the other nations will stop at a domestic fab
| either btw. This issue is not going away, and I suspect
| the EU is as determined to stand up a domestic supply
| chain as we are.
|
| And don't even get me started on China. We can assume
| they are probably much further along than is generally
| known. Because they always are.
| tooltalk wrote:
| They are not just "allies." The Taiwanese gov't had heavy
| handed intervention from its inception to what it is
| today. IMO, this has little to do with "culture" and more
| to do with the gov't protecting jobs and keeping their
| know-how and infrastructure in Taiwan.
| TrevorJ wrote:
| It's not clear to me that onshoring would be without
| utility if it's not on the current node. Surely there are
| vast improvements to security and defense concerns to be
| had through onshoring even if it's (conservatively) 3 years
| behind the cutting edge.
|
| There's also a good possibility that this would be useful
| in the market as well if it solves some supply chain
| issues. Car manufacturers won't need 3nm tech for quite
| some time, if ever. Hobbyist boards like the Pi have been
| hard to get for months now. Graphics cards that were 2-3
| years old were going for huge premiums up until recently as
| well. All in all it seems as if there would be at least
| _some_ markets for chip tech that isn 't on the bleeding
| edge.
| dragontamer wrote:
| USA has plenty of older fabrication labs, and most of our
| critical technology is probably on 22nm or 40nm nodes (or
| older).
|
| US Military equipment is pretty famously on old nodes /
| older technology for reliability and supply chain
| purposes for example. And its probably entirely domestic
| (Micron, Intel, GloFo).
|
| The need for higher-end nodes is almost a "luxury"
| factor. There's a benefit if the latest iPhones were
| brought onshore and were US-made. This is for economic
| reasons (less economic disruption if China attacks
| Taiwan), even if it leads to slightly higher costs.
|
| ------
|
| I know that TSMC is pissed off at the "culture clash" in
| Arizona (one of these "on shore" US fab-labs) however. I
| can pretty much imagine a "Gung Ho" (1986 movie)
| situation occurring there. It doesn't look like the
| Arizona fab-lab will be complete in time, and TSMC is
| blaming US worker culture.
| bsder wrote:
| > USA has plenty of older fabrication labs
|
| Do we? The current, continuing semiconductor shortage
| argues otherwise.
|
| I mean, the fact that a "switching regulator" can go out
| of stock borders on the absurd unless those fabs are busy
| producing stuff with higher margins.
| duped wrote:
| The first two points are at best opinion and and worst
| nationalism, neither are facts.
| VWWHFSfQ wrote:
| Chang is very well known for making these kinds of statements
| that make no sense.
| TrevorJ wrote:
| It isn't that his point isn't _true_ , it's just that it is
| tautological. It's sort of like saying cars are more useful
| in country X than country Y because country x has roads. On
| the one hand: yes. On the other hand: it used to be that no
| country had roads, so obviously this is a problem with a
| solution. The country has roads, because it has cars.
| hahaxdxd123 wrote:
| What? I am reading the English translation and it seems based
| in truth to me.
|
| 1. The US of course has technical talent. However the vast
| majority would rather work in in the higher margin software
| industry, not hardware. If I am intelligent/hard-working
| enough in America to understand the physics behind semi-
| conductors, I would rather apply that to prop trading than
| Intel.
|
| 2. Manager-employee customs are vastly different across
| cultures. What is institutionalized in Japan is harassment in
| America. If he says Taiwan has a sufficiently different
| culture, I believe him.
| trentnix wrote:
| He wouldn't be commenting if it was really unrealistic.
| vondur wrote:
| Well, if the Chinese do invade and take over Taiwan, it will be
| lesson learned too late.
| cjsplat wrote:
| As Moore's law slows down, fabs will have longer life near the
| leading edge.
|
| So, for example, 45 nm rolled out in 2007. If in 2005 you were
| crazy enough to try to bootstrap a 32 nm fab, you might have
| hoped to have the line completed a year behind the industry _if_
| you were lucky. (You have to get it working, get the
| customers,and get them shipping in volume to get the business
| healthy.)
|
| So Joe's Tool and Die startup fab rolls out their 32->36 nm
| process in 2010. And they luck out because the 22->28 happens in
| 2012 (a 3 yr gap vs the typical 2 yr at that time.)
|
| But 22->28 rolls out and JT&D is playing catch up again.
|
| If the same cycle stretches to 5 years, the technology ramp
| becomes much more manageable.
| outside1234 wrote:
| After the German debacle over having to kowtow to Russia to
| receive oil and gas and essentially in doing so fund the killing
| of Ukrainians, everyone has to be rethinking who they are reliant
| on and making sure they are strategically diverse.
|
| China is the obvious example of this where we need to break out
| the supply chain across more countries. I fully expect this to
| happen through a combination of corporations and countries
| realizing their exposure to "China doing something nuts" and
| acting accordingly. You already see Apple doing this, for
| example, with India.
| jmoak3 wrote:
| Apple is also attempting to mobilize Indian workers before
| China's working population declines enough to be noticeable.
| The cost of business in China (regardless of international
| policy) is guaranteed to rise as the number of available hands
| decreases from mass aging.
| vkou wrote:
| No, the cost of business in China isn't rising because of
| demographics, it's rising because China is no longer an
| impoverished country. Wages in it have grown massively.
| jmoak3 wrote:
| I was referring to the future, the demographic situation is
| guaranteed to raise costs. I'm sure the extra leverage
| China's citizens have from their earned wealth will play/is
| playing a part as well.
| gnulinux wrote:
| Well, of course, TSMC doesn't want chip supplies to be onshored.
| It's everyone other than TSMC and Taiwan willing to do so. West
| wants to have reliable access to chips without potential war with
| China.
|
| In addition to geopolitics, wouldn't overproduction of chips be
| beneficial to consumers in the form of cheaper chips and greater
| variety?
| hwillis wrote:
| greater variety is not a thing that would happen (and
| incidentally, as an electrical engineer, there's plenty of
| variety already). The hardware used in semiconductor foundries
| is all made by the same few companies, which is a major reason
| everyone gets similar advances at the same time- they're all
| working with the same tools.
|
| The vast majority of variety in product lines comes from who is
| ordering the chips, not the foundries where they are made.
| Adding more foundries will not introduce any more different
| chips, just chips that have subtly different performance or
| reliability, which is already a nightmare engineers deal with
| continuously.
|
| China sells the cheapest chips, and companies only buy the
| cheapest chips. Making more foundries in the EU and Europe will
| not change that fact. China will have the huge majority of
| demand. If anything, a reduction in demand will give more power
| to counterfeiters and raise the floor price you have to pay to
| avoid them. It won't really impact prices at all (counterfeit
| chips are almost nonexistent for anything costing more than a
| couple cents) but it will make life significantly more
| irritating for people like me.
| MangoCoffee wrote:
| >The hardware used in semiconductor foundries is all made by
| the same few companies, which is a major reason everyone gets
| similar advances at the same time- they're all working with
| the same tools.
|
| it depend on the craft smith's skill. everyone have access to
| Python but some is able to craft a robust app while others
| app is buggy and unusable.
|
| TSMC consistently have the best yields and quality chips
| yellow_postit wrote:
| Acquired did a podcast deep dive in TSMC history which
| supports your argument -- they've arrive at those yields
| from just a massive set of iterations. I had a lot more
| respect to the art + science aspect of chip manufacturing
| the more I learn about fabs, having originally thought it
| was a basic recipe easily replicated.
|
| [1] https://www.acquired.fm/episodes/tsmc
| kennywinker wrote:
| When I read greater variety I was thinking of a greater
| variety of functions not a greater variety of fabrication
| techniques. Like if you're shopping for a regulator there are
| dozens of manufacturers with dozens of options. If you're
| shopping for something strange... say a 16x16 switch matrix?
| I think there's a single chip? Excess capacity because of a
| proliferation of fabs could lead to a lot of cool chips being
| made for a low cost. Which in turn enables new technology in
| that "these are cheap, what can i make with them?" way.
| R0b0t1 wrote:
| Eventually the tech to create the chips will become more
| common and people will make their own purpose built chips.
| Eventually.
| hwillis wrote:
| That assertion fits worse with this industry than like, any
| other. The constant flow of freshly obsolete semiconductor
| machinery literally feeds entire other industries. There is
| always a huge amount of easily available equipment to make
| high performance semiconductors because new technology is
| constantly replacing it with new tooling.
|
| Expertise and facility time are the limiting factors. Low
| volume purpose built SOCs will never be cheap (outside
| chiplet-based designs) because the ability to fill out a
| production line is critical to amortizing the immense
| startup cost of a design.
|
| It is already possible to have completely custom chips
| built in lots of <100 on older manufacturing nodes. Runs
| cost low five figures to low millions of dollars. Some
| college courses involve having an entire chip made. Anyone
| can order one on 20-30 year old equipment. There is no
| demand and it will never get significantly cheaper aside
| from mass-produced chiplet ICs.
| core-utility wrote:
| > In addition to geopolitics, wouldn't overproduction of chips
| be beneficial to consumers in the form of cheaper chips and
| greater variety?
|
| Another reason why TSMC would be against this
| 55873445216111 wrote:
| Historically, excess wafer fab capacity is what bankrupts
| semiconductor companies. An underloaded fab very rapidly eats
| up profit. Over the last 10 years, the industry has become very
| cautious not to overbuild capacity. We have now arrived at the
| opposite end of the long term (~10 year) cycle and we have
| accumulated a serious underinvestment in capacity.
| hoseja wrote:
| Why isn't it possible to do this industry at less than razor
| edge?
| sct202 wrote:
| It wasn't razor edge in 2009, when TSMC was running a 40%
| utilization rate. Forecasting is hard, and when you have in
| recent experience a massive glut it makes companies
| conservative about demand forecasts and investments.
| xxpor wrote:
| See also: oil "capital discipline" right now
| deelowe wrote:
| I'm not sure I agree with some of the responses. The issue
| is that the price to build or retrofit fabs goes up
| significantly with each generation. Only a few companies
| have been able to survive given the amount of financial
| risk involved.
| blihp wrote:
| Because that's not where you end up in a world without
| numerous serious competitors.
| Macha wrote:
| I would generally assume a lack of competitors would lead
| to a decreased need to innovate and therefore fatter
| margins.
| blihp wrote:
| Right, which is pretty much where we are now: very fat
| margins largely because fabs have been banging up against
| capacity for a while now because they could. (i.e. to
| avoid the risk of overcapacity... why take a chance if
| you don't have to?) In a more perfect world with healthy
| competition, one or more of them would see the lack of
| capacity and see opportunity to take the risk to build a
| new fab to take some of that business. The fact that it's
| basically governments saying 'you will do this' tells you
| everything you need to know about how much the players
| are really driven by competition.
|
| It's a great time to be a semi manufacturer: TSMC has
| customers like Apple funding their expansion, Intel has
| the U.S. government funding theirs. Can you blame them? A
| decade of record profits isn't what it used to be...
| joenathanone wrote:
| The lithography machines and factories are prohibitively
| expensive, it can take years of production to break even,
| if you over build you may just end up in the red.
| Additionally the fabs have a limited lifespan when they are
| cutting edge and able to produce premium chips.
| ajsnigrutin wrote:
| Premium fabs, premium chips, and shortages of everything,
| from modern ("premium") graphics, to shitty DIP AVRs
| (relatively old tech). New fabs can still produce old
| chips when needed, and we need all of the chips now, and
| a bunch of the "new tech" chips, will still be needed in
| 20+ years, so that fab line can still operate then.
| rednerrus wrote:
| Then shouldn't the government be involved in ensuring we
| have what's necessary? Seems like strategic reserves are
| in order here.
| metalliqaz wrote:
| don't know why you were downvoted for that. it is clear
| in 2022 that it's a national security issue
| paulmd wrote:
| They are, and TSMC and Samsung aren't happy about it
| (nevermind that both Samsung and TSMC are de-facto quasi-
| state enterprises themselves[0]).
|
| "Hmm, I wonder who that sign is for..."
|
| https://archive.ph/kvlnp /
| https://www.bloomberg.com/news/articles/2022-03-28/tsmc-
| sams...
|
| It started with getting TSMC to build a fab in Arizona,
| but to be fair it's a small fab (25k wafers/month) and
| 5nm will not be leading-edge by the time it's
| operational. Presumably the point of that fab is
| traceability/domestic sourcing for the
| defense/intelligence community - I'd expect that to
| mostly be used for products to be sold to the USG, and
| that's how it's sized, just what they'll need for
| defense. But this new initiative looks like a sea change
| to me - both in US chipmaking and foreign policy.
|
| I think the situation in Ukraine with neon supply (used
| in older processes, like the automotive chips that are
| already in shortage...) has finally struck the fear of
| god into US policymakers. It's increasingly clear that
| the supply chain is dangerously single-source in many
| many areas (EUV and high-end DUV litho machines, fine
| chemicals and high-end passives, ABF film, etc), and any
| problem in any area of the world can have huge
| implications, because the "build one part in every
| country" strategy means conflicts are going to disrupt
| _something_. You reduce the risk of a black-swan event
| taking out the whole industry at once, but you also
| increase the risk of _at least some disruption_
| happening, and at this point any disruption is
| catastrophic in itself.
|
| But beyond that, China is taking advance of the world
| being distracted by russia to rattle the saber with TSMC
| again and that's ultimately just not a tenable situation.
| Not just on China's part either, Taiwan is working the
| situation too and that's a problem too.
|
| Not only could china blow up the world's chip supply by
| starting a war with Taiwan, but TSMC has that leverage at
| any time too. A fab is a tuned swiss watch, even simply
| wiping all the computers used to run it (or getting
| cryptolockered like happened a year or two ago) or
| opening the fab up and allowing it to be contaminated
| would basically halt production for a period of at least
| months, and that's practically trivial to do. Actively
| destroying certain machines could put the fab out of
| action for _years_ , and blowing up a couple EUV machines
| is easily within reach of nationalists/partisans at TSMC
| if it came to it. Even beyond physically having the fabs
| on US soil, that means that TSMC and Samsung (and thus
| their respective governments) have leverage over US
| policymakers in terms of US national foreign policy - and
| letting foreign corporations have leverage over US
| foreign policy simply is not an acceptable situation.
| It's been a boiling-the-frog situation getting here but
| China rattling the saber over Taiwan while Russia is
| invading Ukraine is beyond the redline and the situation
| can't be allowed to persist.
|
| Even if the US gets enough TSMC-owned capacity to not be
| completely dependent on Taiwan itself - what if China
| invades Taiwan and the US decides to allow Taiwan to
| fall? TSMC could destroy (or seriously damage) their US
| fabs in retaliation and still blow up the US (and world)
| economy. And the only other cutting edge fabs in the
| world are Samsung and Intel... and Samsung is sitting
| under the barrels of tens of thousands of North Korean
| artillery pieces, and now they've got nukes and ICBMs
| too. They have older fabs in Texas but all their cutting-
| edge stuff is in South Korea. It's not a problem today,
| but these are strategic projects with a 20 year spin-up
| time (given all the associated industries that need to be
| replicated) and foreign policy issues can easily crop up
| within a timespan of a year or less. What happens if
| North Korea gets antsy and Samsung doesn't think the US
| is committed enough to the defense? Samsung could
| basically do the same thing as TSMC if they really wanted
| too, and now you've got two quasi-state enterprises with
| leverage over policymakers.
|
| Global Foundries, too, is owned by an Abu Dhabi sovereign
| investment fund, they're not cutting edge, but they're
| yet another potential state-level player.
|
| Fabs are strategic infrastructure and letting foreign
| nationals control delicate, easily-destroyed strategic
| infrastructure simply isn't acceptable anymore, period.
| And the US is explicitly and specifically choosing to
| disarm the Sword of Damocles that Taiwan has used to
| exert control over US foreign policy, going forward TSMC
| won't be able to use the fabs as leverage - which
| obviously has huge implications for Taiwan's foreign
| policy, this really calls into question the long-term
| commitment of the US to the defense of Taiwan. I don't
| think we're gonna abandon them tomorrow by any means, but
| in 10 years there is going to be a different balance of
| power. Both of those are huge foreign-policy sea changes.
|
| But yeah, the idea of "the end of history" and that
| globalization means that nobody is ever going to get into
| any conflicts ever again because _" gosh, we're all just
| so economically intertwined"_ is dead - it's obvious that
| conflicts will happen and the intertwining just means
| that we have tons of economic problems when it does.
| That's another sea change. It's not going to stop
| neoliberals from doing it anyway, corporations will still
| lobby for deregulation and offshoring and tax cuts
| because it makes them money and neoliberals will
| generally oblige, but this is a signal that policymakers
| are starting to be aware that they can't just handwave
| and "the free market will take care" of strategic
| industries with massive foundational implications to
| downstream products and the industry as a whole.
| Globalization doesn't mean strategic industries aren't
| strategic.
|
| [0] TSMC and Samsung are both quasi-state enterprises.
| TSMC is explicitly intertwined with Taiwan's foreign
| policy, they were the ones to negotiate for vaccines for
| taiwan for example, and Taiwan recently used the threat
| of cutting off TSMC's water (during shortages) as
| leverage in negotiations/etc. Samsung is a chaebol, one
| of the megaconglomerates that essentially run Korea's
| government shadowrun-style (this is how they
| industrialized from basically nothing to cutting-edge in
| 40 years, intense and tight corporate-state
| coordination). And this isn't just US-style "corporations
| donate to everyone", Korea's presidents have been
| repeatedly convicted of corruption for benefiting
| Samsung, and other actions are almost certainly happening
| behind the scenes that don't see the light of day on
| newspapers or can't be proven with hard data. Both
| Samsung and TSMC are either instruments (TSMC) or
| puppeteers (Samsung) of their states' foreign policies
| and cannot just be viewed as big corporations, they are
| players on the international stage in themselves.
| lsllc wrote:
| It's not unprecedented -- during the cold war, the US Air
| Force spent $279M (~$3B in today's money) on building
| some of the largest presses in the world specifically to
| enhance the capabilities around building complex and
| strong aircraft parts:
|
| https://en.wikipedia.org/wiki/Heavy_Press_Program
| stevenhuang wrote:
| Wow. Attached is a fascinating doc going through the
| specs and construction process of this feat https://web.a
| rchive.org/web/20120227025023/http://files.asme...
|
| It has pictures!
| 55873445216111 wrote:
| In practical terms, the government is just too slow to
| actually help. They always shoot behind the target. The
| semiconductor market is cyclical. By the time the CHIPS
| Act, etc, actually get passed and implemented, the market
| will already be in oversupply and voters/politicians will
| complain about government handouts for these companies.
| thorRay8383 wrote:
| In practical terms the government is intentionally
| hamstrung to appear incompetent:
|
| https://about.usps.com/who-we-are/financials/annual-
| reports/...
|
| With a vote Congress destroys budgets and the narrative
| is the PO sucks.
|
| Government incompetence is private interest driven
| propaganda
| yeetsfromhellL2 wrote:
| Yeah...sometimes. Starve the Beast tactics are real, and
| they work, but I've seen the (county and state)
| government really, _really_ mishandle things when they
| had every reason and all the ability to do better. The
| level of incompetence is so unbelievable that other
| people who watched the same thing happen believe it was
| 100% intentional. Three big factors that I usually see
| which lead to stuff like that: money (wasn 't really a
| factor here), ideology (almost certainly was) and general
| incompetence (yep).
|
| Government will screw you one way, corporations will
| screw you in another way. I don't trust either.
| squeaky-clean wrote:
| But Congress is part of the government. So it's
| hamstringing itself. It's the same line of thought when
| some large dinosaur of a company purchases a startup.
| "Welp, startup is going to suck in 2 years." It's not the
| startup's fault, but to the consumer it's still going to
| suck. It doesn't really matter why.
| thorRay8383 wrote:
| 55873445216111 wrote:
| It takes >$10B and >2 years to build a fab which will be
| effectively obsolete ~2 years after it opens. If it doesn't
| open on schedule or is underloaded, the ROI goes negative
| almost immediately. (I somewhat oversimplified this of
| course but it's to make the point.)
| hoseja wrote:
| Obsolete? Automakers etc are huuuungry for old chips.
| StillBored wrote:
| Not just automakers, and not just old fabs. Not
| everything needs the latest bleeding edge process. So,
| even then some of the old processes get updated to
| support larger wafers.
|
| Ex: brand new 65nm fab:
|
| https://www.electronicsweekly.com/news/business/bosch-
| opens-...
|
| So, 10-15 year ROI easy, and I'm guessing that might
| stretch even further as the trend to ever smaller nodes
| slows. AKA I'm betting 2nm doesn't look nearly as aged in
| 2040 as 90nm looks today.
| 55873445216111 wrote:
| Yes but there is a huge technology gap. example:
| Automakers need a lot more small low-power MCUs built on
| ~130/90nm process. A 14nm fab that started 2 years ago is
| never going to be producing those 130/90nm MCUs.
| Furthermore, the semi toolmakers that produce the tools
| needed to build 130/90nm chips stopped making those tools
| years ago. This is a rabbit-hole that just keeps going.
| The problem isn't going away soon or easily.
| mjevans wrote:
| Maybe three different 'bands' of production:
| * cutting / bleeding edge (as now) * 80/20 trailing
| edge (5 year LTS of cutting edge) * Cost focused
| 'lifetime' LTS
|
| It seems like the cutting edge is built, and transitioned
| to the 80/20 already. It's that cost focused bulk
| components / entry level that lacks investment or even
| planning.
|
| Maybe that's where some industry development and co-
| ordination from regulators could help establish a market
| that's healthy.
| mistrial9 wrote:
| > accumulated a serious underinvestment in capacity
|
| says who? the world's rivers and oceans are polluted with
| micro-plastics and heavy metals from E*Waste, while thirty
| years of "wild west" profits and dog-eat-dog markets, COMDEX
| and single-use devices will take 1000 years to degrade in
| Nature.
|
| Calls for "more" to be viewed with earned-suspicion IMO
| btgeekboy wrote:
| While I do agree that e-waste is a real problem, it's not
| like we can just sit with old tech and say "nah, that's
| good enough." We need both more and better fabs, and better
| waste handling / recycling.
| beamatronic wrote:
| Maybe a certain level of tech IS good enough.
|
| A better world for people means education and healthcare,
| not a 1mm slimmer disposable phone.
| peanuty1 wrote:
| Newer chips are also more energy efficient (at least, at
| the same level of performance).
| TrevorJ wrote:
| A phone from 3 years ago, running software from 4 years
| ago would be as fast as anyone would reasonably need, but
| it gets obsoleted via software bloat.
|
| More frameworks, more layers of abstraction and no
| confining force that forces anyone to write software that
| isn't a bloated mess.
| inetknght wrote:
| > _it's not like we can just sit with old tech and say
| "nah, that's good enough."_
|
| But, why not?
| potta_coffee wrote:
| I'm of the opinion that what we have is good enough. What
| we need are consumer devices that are not made with
| planned obsolescence in mind. I have perfectly viable
| devices that are sitting around that I don't want to
| throw in a landfill, that are deprecated purely because
| of software changes. It's clear when we can afford to
| toss all of our ram / compute at running Electron
| applications.
| inetknght wrote:
| I completely agree with you.
| fennecfoxen wrote:
| Because sooner or later no one will buy it. They will buy
| the new tech with better performance at a fraction of the
| cost, and your firm will go out of business -- or, if
| subsidized, have its budget laughed out of Congress.
| btgeekboy wrote:
| Remember when someone famously said 640kb of memory ought
| to be enough for anybody?
|
| Imagine if video games' audio/video just stopped
| improving past the SNES. Imagine if we decided that 56k
| dialup was good enough. Imagine if we stopped improving
| cell phone cameras past the iPhone 3G. These things seem
| pretty low quality now because we've incrementally built
| so many better things in the interim. The unleaded
| gasoline of today is going to be as absurd as the leaded
| gasoline of yesterday within many our lifetimes. But we
| can't make big leaps without the interim nudges forward -
| the N64, the DOCSIS cable modem, modern phone cameras,
| hybrid vehicles. To do those, we need better microchips.
|
| We also need more of them. Just because the richest areas
| of the world have theirs doesn't mean the less-well-off
| areas need to be shut out because they didn't get in on
| time.
| charcircuit wrote:
| >Remember when someone famously said 640kb of memory
| ought to be enough for anybody
|
| No because that is a made up quote.
| cjsplat wrote:
| The wash out in the memory industry was generally the
| opposite.
|
| DRAM was a boom and bust market and during bust/oversupply
| windows vendors that under invested in the next node
| technology got washed out when the next boom cycle happened.
| When the market is high volume, price per bit, and new nodes
| are every 2 or 3 years, you can't really compete it your are
| nearly 2x as expensive (30% linear improvement => 70% squared
| cost per bit).
|
| Of course you need to survive the dry times, but you make
| maximum margin when you are on the next fab node and your
| competition isn't.
|
| I think what you are saying makes more sense when applied to
| contract manufacturers than all semiconductor companies.
| unethical_ban wrote:
| I feel like there was a lesson about just-in-time inventory
| for critical supply chains recently. Perhaps a product as
| complex, sophisticated and absolutely necessary for a modern
| society should have government guarantees.
| stubish wrote:
| What will the lesson be though? Once the dust settles, it
| may well be that the savings over the last few decades
| outweighs the losses due to the supply shortages. I guess
| it comes down to how good the risk analysis was and if they
| acknowledge that once-in-a-lifetime events happen many
| times in a lifetime.
| 55873445216111 wrote:
| Honestly, the risks of just-in-time have always been know.
| The problem is that holding excess inventory and/or reserve
| capacity costs real money, and somebody has to pay for it.
| Investors/managers drive out wasted costs or eventually
| they go out of business. (Absent government support.)
| kube-system wrote:
| Maybe it's time to implement policies that encourage reserve
| capacity, as we do with some other critical industries.
| 2OEH8eoCRo0 wrote:
| If chips are cheap then isn't it tougher to turn a profit
| building wildly expensive fabs?
| peppertree wrote:
| If you wait on TSMC it would never happen. I'm bullish on Intel
| to pull this off. Intel has the expertise, the right CEO to
| execute, the government support, and most importantly the drive
| for survival.
| joe_the_user wrote:
| The thing about chips that is causing all the paradoxical
| effects we're seeing is that chip production extraordinarily
| specialized and capital intensive. You can't just build more
| chips - you have to build more chip factories for the type of
| chip you want. And if you build more chip factories than you
| need or factories of the wrong type, some of those factories
| will be unprofitable, will shutdown, at high cost, and then you
| will have fewer chips than you need, again.
| cultofmetatron wrote:
| plus, tsmc having the majority of their fabs in Taiwan is the
| biggest incentive for the united states to step in if China
| tries to invade.
| axg11 wrote:
| > West wants to have reliable access to chips without potential
| war with China.
|
| The West also wants reliable access to chips _despite_ war with
| China.
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