[HN Gopher] TSMC ups Arizona investment from $12B to $40B with s...
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TSMC ups Arizona investment from $12B to $40B with second semi fab
Author : totalZero
Score : 344 points
Date : 2022-12-06 13:35 UTC (9 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| aresant wrote:
| This + the recent news that Apple is planning to diversify
| production out of China (1) is hard not to read into regarding
| the US' view of where US/China relations are heading . . . any
| geopolitical armchair experts have a view?
|
| (1) https://www.wsj.com/articles/apple-china-factory-protests-
| fo...
| uni_rule wrote:
| Policies like this actually move pretty slowly. This is still a
| reaction to Ukraine in february, not planning for anything in
| particular, just the possibility of a fucked status quo.
| vinibrito wrote:
| Or maybe even a reaction to the pandemic. Which means a
| couple years ago at least.
| hayst4ck wrote:
| I think not being able to procure n95 masks because mask
| production was all off-shored, particularly to China, was a
| real wake up call that supply chain security is integral to
| national security.
|
| Ukraine was the moment that showed that: "No two countries
| that both have a McDonald's have ever fought a war against
| each other." is a false idea.
|
| Hong Kong made it clear that the idea of increasing
| prosperity in China will not lead to it's liberalization,
| nor can China be relied upon to be bound by documents that
| are "historical documents that no longer have any practical
| significance."
| markus_zhang wrote:
| I read it as an interest exchange between US and China. US has
| the upper hand here so managed to grab some good stuffs fron TW
| while China probably got the permission to go in the future.
| MegaSec wrote:
| Good.
| bfrog wrote:
| It's interesting to see semi fab factories becoming a hot thing
| here in the states with an entire campus being rolled out in Ohio
| along with expansions and further growth in the southwest. Can
| only mean good things for workers as more options become
| available.
| FpUser wrote:
| I guess this is TSMCs getaway if things will get sour with China.
| Rapzid wrote:
| In a sense.. Currently western liberal democracies have a
| monopoly on the most advanced microprocessor manufacturing
| tech.. And they plan to keep it that way indefinitely.
|
| This "sours the milk" so to speak and it makes it easier to
| take TSMC off the board.
|
| For one, if there was ever any real consideration by China of
| forceful takeover it would be made clear TSMC would not be a
| spoil of war. This makes a scorched earth threat even more
| credible.
|
| For two, it disincentizes playing games with Taiwan as a pawn
| based on the wests reliance on chips flowing out. Knowing the
| chips are flowing in large quantities from other countries
| removes the lynchpin status.
|
| Third, it stabilizes supply in the chance that something does
| happen. Maybe a natural disaster. Maybe a blockade.
| starkd wrote:
| I think it makes it more likely that China is going to swallow
| up Taiwan without even firing a shot. Wargame simulations are
| giving a dim prospect for defending the island. US has removed
| fighter jets from Japan. And public opinion in Taiwan for
| resisting China has slightly shifted toward accomadation. I
| hope I am wrong.
| FpUser wrote:
| >"I think it makes it more likely that China is going to
| swallow up Taiwan without even firing a shot."
|
| I am not sure about "without even firing a shot" part but
| golden parachute type people and important staff will most
| likely be relocated to the US right before that and the rest
| of Taiwanese will have to suck it up. Yes very sad story and
| I hope it does not happen.
| philliphaydon wrote:
| > And public opinion in Taiwan for resisting China has
| slightly shifted toward accomadation.
|
| Huh? No it hasn't. Taiwan doesn't want to end up like Hong
| kong. They know the 1 country 2 systems doesn't exist. Taiwan
| is already an independent country. They just want to keep
| status quo so China will leave them alone.
| boc wrote:
| If China really thinks their completely untested military can
| easily pull off the largest amphibious assault in history,
| they deserve the results. It would be an absolute bloodbath.
| Wargame simulations are ways for the pentagon to get more
| money from congress... the reality is that invasions aren't
| easy to hide and never go quite as planned.
|
| If you disagree just go read up on the wargames and
| predictions for a Russian invasion of Ukrainian. Most people
| thought they'd reach Poland in days, if not hours. And they
| had the second most capable military in the world, on paper.
| selectodude wrote:
| It's also important to remember that a war game that your
| military wins isn't a very useful war game. The whole goal
| is to find blind spots in military strategy and planning.
| "Nah we're good everything is great" is how you end up
| getting worked by Ukraine.
| DiogenesKynikos wrote:
| > If China really thinks their completely untested military
| can easily pull off the largest amphibious assault in
| history, they deserve the results. It would be an absolute
| bloodbath.
|
| For which side? No one knows.
|
| There would be so many factors at play, both military and
| economic, that it is almost impossible to predict how
| things would play out. All anyone knows is that China's
| capabilities have increased many times over in the last 20
| or so years, and that they are increasing every year.
| However, no country on Earth has fought a war on this scale
| for decades (with the possible exception of Russia and
| Ukraine right now), so no one knows what the outcome would
| be.
| fintechjock wrote:
| > US has removed fighter jets from Japan.
|
| They're phasing out older variants of the F-15 C. They will
| be replaced by F-15 EXs when they are ready, and until then
| the old F-15s will be replaced with F-22s
| warinukraine wrote:
| Remember when Warren Buffet invested into TSMC and someone said
| he must know something we don't?
| criddell wrote:
| I keep wondering if this is different than when Foxconn
| announced a $10b investment in Wisconsin but carried through
| less than 10% of that?
| totalZero wrote:
| Judging by the pictures, TSMC is building a lot of
| expensive-looking stuff out in Arizona. I know they're both
| Taiwanese companies but this project seems a bit different.
|
| https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-
| to...
| PartiallyTyped wrote:
| TSMC has had a license to print money for a while now given
| how huge ASML's backlog is.
| chrisjc wrote:
| Is ASML even going to be able to meet the demand created by
| all these fabs opening up across the US (and rest of the
| world)?
|
| The stories I've heard about what it takes to build a
| single machine would suggest to me that scaling up would be
| a huge feat and I could only imagine take years to
| accomplish.
|
| Then again, perhaps TSMC and their peers had predicted this
| kind of growth and already placed their orders long ago?
| imhoguy wrote:
| Maybe they will just move a chunk of existing fab?
| [deleted]
| tooltalk wrote:
| ASML has now $32+B worth of backlog and they are still
| able to make only ~40+ EUV per year.
| tooltalk wrote:
| Buffet probably knows little or nothing about the fab
| industry and probably didn't make this investment decision.
|
| TSMC is upping their investment in the US, but I agree with
| Morris Chang that the US operation won't be as lucrative --
| ie, thye won't be able to maintain 50+% profit margin.
| Further, TSMC really didn't have any competition in the last
| 2-3 nodes and Samsung was largely absent in 7/5/4nm, but
| Samsung is going mass production with 3nm GAA pretty soon and
| TSMC is going to have to put up a good fight to maintain
| their dominance.
| Lind5 wrote:
| Astounding amount of semi investments. $500B in this list alone
| https://semiengineering.com/where-all-the-semiconductor-inve...
| adam_arthur wrote:
| Onshoring is a logical result of improved automation.
|
| When labor costs lessen, transportation and logistics become the
| primary concern. Wouldn't be surprised if 100 years from now most
| final good assembly is done locally.
|
| Of course sometimes raw materials and inputs are more expensive
| to transport than the finished good, so there will always be
| cases where long distance transportation of finished products is
| still preferred
| conradev wrote:
| Onshoring in this case is a logical result of improved tax
| incentives. Almost every cost is higher in the US - not just
| labor.
|
| Improved automation does reduce costs, but those cost
| reductions are even better in places where manufacturing is
| already cheap.
|
| Semiconductors have a very high value to weight ratio, so
| shipping them globally makes more sense than it does for other
| items.
| rdevsrex wrote:
| Which is driven by concerns over the safety of Taiwan's fabs.
| thereddaikon wrote:
| The highest costs in Semiconductor fabrication are the
| specialized machines needed. Most of them are at best dual
| sourced. Many are single sourced. The fact a technician in
| the US can make $100k when their counterpart in China would
| make $50k doesn't matter when the EUV Lithography machine is
| hundreds of millions of dollars.
| andrewmutz wrote:
| Who makes those expensive machines? Are they made in-house
| by companies like TSMC? Or are they purchased from others?
| And whats the geopolitics of that part of the supply chain
| (made in taiwan? made in china? made elsewhere?)
| pkaye wrote:
| The machines are made by other companies. Lithography is
| the most expensive now and its made by ASML in
| Netherlands is the only solution for EUV lithography. But
| there are many steps in manufacturing and a machine for
| each. The major equipment manufactures are spread across
| US, Europe and Japan. In the US the three big equipment
| manufacturers are Applied Materials and Lam Research and
| KLA.
|
| The costs are probably driven by extreme engineering
| requirements (temperature, pressure, corrosive chemicals,
| low contamination) and R&D costs to meet these
| requirements. The production volumes are not high either.
| Its not like they are building millions of these
| machines.
|
| Asianometry on YouTube is a good source for this kind of
| topic.
|
| https://www.youtube.com/watch?v=5Ge2RcvDlgw
| thechao wrote:
| In many ways, ASML:
|
| https://www.asml.com/en/products/euv-lithography-systems
| briffle wrote:
| ASML is the very high end, but there are many other
| manufacturers as well. Canon and Nikon both make
| lithography systems used in many wafer fabs.
| r00fus wrote:
| I really doubt anyone else than ASML can do 4nm (which
| this factory is planned to target).
| brookst wrote:
| Capex amortizable across the life of the fab and usually
| treated beneficially for tax purposes (though these fabs
| are so tax-special that may be meaningless). Opex is with
| you forever and affects the economics of the business much
| more profoundly.
| fundad wrote:
| "Tax incentives" like writing off Capex have been there for
| the taking. So yes, the improved tax incentives with
| bipartisan support translates to stability for investors.
| ouid wrote:
| the cost _reductions_ are necessarily worse in the places
| where costs are lower. I think you didnt do that math right.
| You might be right that the logistics for shipping silicon
| are still so good that this does not reach the amdahl limit,
| but it is not a consequence of your argument.
| adam_arthur wrote:
| The cost difference between US and China for a fully
| automated factory is negligible. Even considering real estate
| costs and taxes.
|
| No tax incentive needed to onshore in the long run
| CHY872 wrote:
| While semiconductor fabs are highly automated, the machines
| are complex enough and do extreme enough things that they
| break a lot, requiring human intervention. MTBF for many of
| the machines used can be measured in hours, it's not like
| you can set up and go home. TSMC has around 65k employees
| overall - a cursory search did not yield their makeup by
| job breakdown, although from 1997 through 2003 around 50%
| of their employees were 'factory' workers via [0].
|
| I'd expect high-margin items like semiconductors to be more
| amenable to onshoring anywhere - certainly Intel has almost
| all of its fabs in highly developed countries, but I think
| this is hardly a cost efficiency move - rather it's a hedge
| against the failure of globalization and the risk of the US
| losing access to advanced semiconductor technology in case
| of strife in Taiwan. Russia has already lost this access.
| TSMC took in about $56B in '21, of which about $28B was
| 'cost of revenue', the amount they needed to spend on
| supporting this revenue (marketing, legal, production,
| e.g., not building factories or R&D). There's certainly
| room for increased production costs while maintaining a
| profit.
|
| [0] - https://www.researchgate.net/figure/TSMC-personnel-
| structure...
| richardwhiuk wrote:
| This isn't onshoring - onshoring would be moving to Taiwan -
| this is the Taiwanese Semiconductor Manufacturing Corporation.
| philwelch wrote:
| It's onshoring from the perspective of an American company
| that contracts out to TSMC fabs, such as Apple, AMD, nVidia,
| Marvell, Qualcomm, or other major TSMC clients. Sony is also
| a TSMC client so if TSMC built fabs in Japan, Sony would be
| onshoring.
| lifeisstillgood wrote:
| This is onshoring - to the shores of a country whose national
| sporting league called _The World Series_.
|
| There is a distinctly USA centric view of the world :/)
| _-david-_ wrote:
| MLB isn't a national thing. There are two countries (US and
| Canada) who have teams.
| throwaway4good wrote:
| This has got nothing to do with improved automation.
| totalZero wrote:
| It would make more sense to put the mega-fabs where electricity
| is cheapest in the Americas, and that certainly isn't Arizona.
| pvarangot wrote:
| ASU has a good optical engineering program too, electricity
| is no the only variable.
| thehappypm wrote:
| Isn't solar the cheapest energy per KwH? A sunny place like
| Arizona with tons of empty space should be able to cheaply
| deploy lots of energy.
| zdw wrote:
| There's also a nuclear plant nearby in AZ:
|
| https://en.wikipedia.org/wiki/Palo_Verde_Nuclear_Generating
| _...
|
| Nuclear + Solar seems like it would be a pretty ideal mix
| in a hot climate, especially given that peak demand for air
| conditioning coincides with solar maximum output, and
| Nuclear could handle some of the base/overnight load.
| jfghi wrote:
| Do these plants not require tons of water?
| zdw wrote:
| from the wikipedia link - they use sewage/greywater for
| cooling:
|
| > The power plant evaporates the water from the treated
| sewage from several nearby cities and towns to provide
| the cooling of the steam that it produces.
| miguelazo wrote:
| This treated sewage is the water that Vegas now provides
| for general use, and what AZ will need just for its
| people in about 5 years. Wasting it on chip production is
| going to go over slightly better than the Saudis wasting
| groundwater on alfalfa.
| redtriumph wrote:
| This may not be true today. But when I first arrived in
| US in AZ, I was told Phoenix boasts highest numbers of
| golf club concentration in entire US, despite high water
| requirements of a golf club and being in middle of
| desert.
|
| I suspect the ongoing Western US drought would have
| worsened the water situation.
| rsj_hn wrote:
| Arizona has the reputation of being a desert, but in
| reality it is a state that is half-desert and half-
| mountain, and has a tons of water. Enough to waste on
| ubiquitous golf courses and alfalfa farms. There is a
| canal system taking the water from the mountains to the
| drier south where people live.
|
| But the population pressures are realigning who pays what
| for the water now, so I expect the alfalfa farms are
| going to go, and chip fabs will take their place.
| miguelazo wrote:
| "Has tons of water"? LOL It is 5 years from rationing.
| Vegas solved their problem 20 years ago, things in AZ
| have gotten 10x worse.
| eitally wrote:
| The thing you don't mention is that Arizona is wasting
| other people's water -- nearly 40% is sourced from rivers
| originating in other mountainous states
|
| https://www.arizonawaterfacts.com/water-your-facts
| rsj_hn wrote:
| I don't mention it because it's not true. The idea that
| if a river originates in one state, then that state owns
| all the water from the river is not how ownership of
| river water works. And in America, rivers often form the
| border of states, so there are always competing claims
| about which state gets which percentage of the river.
| These are generally settled through treaties and
| agreements among states, and those agreements were made
| also for the Colorado river. Arizona is only taking its
| share of the water as per the treaty, not someone else's
| share.
| miguelazo wrote:
| And it's share of water was already insufficient a decade
| ago, which is why the water table has run dry in many
| rural areas, forcing people to truck in bottled water or
| pack up and leave.
| thehappypm wrote:
| Do you mean the Colorado River? The one that flows
| through the Grand Canyon? The canyon in Arizona?
| r00fus wrote:
| Yes, the Colorado River whose headwaters comes from the
| state of Colorado.
| StreamBright wrote:
| It is but you also need controllable components with the
| ability to quickly change output performance when
| building solar as your peak source. Usually this means
| gas turbines, in some cases this could also mean battery.
| totalZero wrote:
| I think that depends how much build-out you have to do in
| order to install the kind of capacity required for a $40B
| semiconductor fab, which would hypothetically need some
| kind of major energy storage infrastructure or backup
| source in the event that solar is the main source of
| electricity.
|
| > Large semiconductor fabs use as much as 100 megawatt-
| hours of power each hour, which is more than many
| automotive plants or oil refineries do. [0]
|
| If a fab is running at that consumption rate for twenty
| hours every day for one year, it will consume approximately
| all of Arizona's 735,000 MWh of annual utility-scale solar,
| wind, and geothermal net electricity generation. [1]
|
| Contrast that with the annual hydroelectric generation of
| Itaipu Dam in South America, at 79,440,000 MWh in 2019. [2]
|
| [0] https://www.mckinsey.com/~/media/mckinsey/dotcom/client
| _serv... [pdf]
|
| [1] https://www.eia.gov/state/print.php?sid=AZ
|
| [2] https://www.power-technology.com/projects/itaipu-
| hydroelectr...
| thehappypm wrote:
| Here is a solar plant in California, which broke ground
| over a decade ago, that produces 550 MW of power, for
| $2.5B. Build even a small version of one of these and its
| 100 MW power needs are met.
|
| https://en.m.wikipedia.org/wiki/Topaz_Solar_Farm
| Turing_Machine wrote:
| The 550 MW "nameplate capacity" is peak. The capacity
| factor of 26.6% means that it actually only produces
| about 146 MW on average. Nuclear power plants generally
| have a capacity factor above 90%.
| thehappypm wrote:
| 146 MW on average is still more than this facility needs.
| j_walter wrote:
| Nope...once all phases are built they will be using
| ~250MW of power.
| pfortuny wrote:
| Not during the night and not when it is cloudy. Averages
| are vey bad numbers for something which is on 24/7.
| Turing_Machine wrote:
| And definitely not if the clouds suddenly blow in when
| the process is at a critical stage.
| HDThoreaun wrote:
| Electricity usage is much, much lower at night in Arizona
| because everyone turns AC off due to temperature drop.
| Plenty of baseload generators that can be better utilized
| at night with increased manufacturing.
| wewtyflakes wrote:
| Do the plants typically run at night? Also, doesn't the
| capacity factor account for these variations already?
| Turing_Machine wrote:
| No, you would need a large storage facility as well.
|
| A nameplate capacity of 550 MW with a capacity factor of
| only 26% almost certainly means there are a lot of times
| when it isn't generating any power _at all_ , or at least
| none to speak of.
| wewtyflakes wrote:
| Right, but if those align with the times where the plant
| is not used at all (night), does it matter? That being
| said, I have no idea what the normal operational
| schedules are for these types of facilities.
| Turing_Machine wrote:
| I'd wager a large sum that if you're investing $40
| billion in a plant, you're going want it running
| 24/7/365.
| computah4eva wrote:
| HDThoreaun wrote:
| Solar farms are one of the fastest electricity generators
| to build. AZ will have no problem stepping up production
| in the face of demand.
| CydeWeys wrote:
| > Large semiconductor fabs use as much as 100 megawatt-
| hours of power each hour
|
| Ooof, this kind of writing where the author doesn't
| understand units just gets my goat. Just say it uses 100
| MW! Geez.
| totalZero wrote:
| I prefer it as written, because the additional
| information of timeframe for measurement indicates that
| the author is not talking about momentary/peak power.
| j_walter wrote:
| Which indicates the author knows nothing about how
| semiconductor fabs use power. Power usage is stable with
| a few percent...and 100MW is really on the low side for
| this fab. If all 6 phases are completed as they are
| expected to be...it's more like 250MW.
| samcheng wrote:
| The cheapest energy is from a hydroelectric plant built
| generations ago.
|
| Fun fact: That's why Boeing first built their planes
| outside Seattle - the electricity needed to refine the
| aluminum was cheap.
|
| These days, you can see that effect in the large
| datacenters that have sprung up near the Columbia River in
| Oregon.
|
| I'd guess TSMC's siting decision had a lot to do with tax
| breaks, labor pool, and cheap land.
| atlasunshrugged wrote:
| Probably also hedging for geopolitical risk? Not sure how
| only having facilities in a country at least somewhat
| likely to be invaded in the next few years affects the
| stock price but it probably doesn't hurt to put one in
| the middle of a country very unlikely to be invaded and
| very likely to want to purchase chips built domestically.
| gct wrote:
| Fun fact most experts consider the US uninvadable: https:
| //en.wikipedia.org/wiki/Invasion_of_the_United_States#...
| antonjs wrote:
| Cheap, _seismically stable_ , land.
| wikibob wrote:
| Seismic activity
| intrasight wrote:
| Also, I would think that lots of water is needed, and Arizona
| is pretty dry.
| JumpCrisscross wrote:
| > _would make more sense to put the mega-fabs where
| electricity is cheapest in the Americas, and that certainly
| isn 't Arizona_
|
| Geologically stable. And at least for business, politically
| stable. Same reason Walt Disney is frozen in Phoenix [1].
|
| [1] https://www.alcor.org/
| CamperBob2 wrote:
| Ah, the lesser-known Pascal's Wager business plan.
| WatchDog wrote:
| Semiconductors are probably one of the lightest products
| relative to their costs.
|
| So as you alluded to, the long distance logistics of delivering
| the finished products, have a negligent impact on it's price.
| tester756 wrote:
| People are cheap in semico in compare to building/equipment
| throwaway4good wrote:
| The geopolitical context for this is wild; and in some ways is
| Taiwan selling its crown jewels and sacrifying its strategic
| relevance for unclear returns.
|
| https://asiatimes.com/2022/12/us-mulls-scorched-earth-strate...
|
| US mulls scorched earth strategy for Taiwan
|
| US strategy to blow up Taiwan's semiconductor fabs to deter China
| might do more harm than good
|
| The US is mulling disabling or destroying Taiwan's semiconductor
| factories in the event of a Chinese invasion. This stark change
| raises questions about its capabilities and commitment to defend
| the island.
| r00fus wrote:
| The "mulls scorched earth strategy" part is completely solid
| game theory.
|
| Always make it clear for your opponent that your worst-case
| scenario will result in severe blowback if at all possible.
| Then you can a) try to ensure that scenario never happens and
| b) mitigate the outcome or response if it does.
| rsj_hn wrote:
| But it's only solid game theory if one side doesn't have
| escalatory dominance.
|
| For example, during the cold war, the US always had far, far
| fewer troops in Europe than the Soviet Union, and didn't have
| anywhere near the sea-lift capacity to transport the
| quantities of men and material necessary across the Atlantic
| to defend Europe. But we had nukes, and so we had plans to
| nuke Germany in case Warsaw pact forces invaded and made sure
| the Soviets understood those plans. Nuclear weapons nullified
| the escalatory dominance of the Soviet Union in a land war
| against NATO.
|
| Now, the question is, who has escalatory dominance in Taiwan?
| It's clearly China. All the US can do is blow up the chip
| fabs, but China wants Taiwan for reasons that have nothing to
| do with the chip fabs, and would still want Taiwan even if it
| had no chip fabs. Even if it had no industry or population
| whatsoever. Whereas the US only wants Taiwan for the fabs,
| which China can destroy whenever it wants.
|
| Unless we actually put nukes in Taiwan or commit to defending
| Taiwan with nukes, China will have escalatory dominance and
| not the U.S.
|
| So that leads us to the second question -- what happens when
| you threaten to escalate but the other side has escalatory
| dominance? Then you end up making the situation worse,
| because you are in effect provoking the other side to begin a
| chain of events in which you are guaranteed to lose. That is
| _not_ solid game theory.
| CamperBob2 wrote:
| I'll confess that I don't understand Taiwan's importance to
| China. They can put a certain amount of their resources
| into taking Taiwan -- which will absolutely _not_ gain them
| access to TSMC 's production capacity under any conditions,
| due to a web of Western dependencies that runs deeper than
| any rabbit hole -- or they can put the same resources into
| improving their own economic strength. Why wouldn't they
| choose the latter?
|
| The reason I say I don't understand any of this is that the
| same reasoning should have applied to Russia. If they had
| spent a fraction of the effort and energy they've
| historically devoted to harming other countries on
| improving their own country instead, they would be way
| ahead of the game... yet they didn't, and don't show any
| indication of changing course.
|
| Is the same irrational thinking present among China's
| leadership? If so -- and their pathological obsession with
| Taiwan certainly suggests that it is -- then things are
| really going to suck for everyone involved.
| rsj_hn wrote:
| Really you need to understand your opponent's utility
| function before immediately leaping to making summary
| judgments that China is not acting in its own interest.
|
| For example, knowing that mainland China and Taiwan are
| the remnants of a civil war, in which mainland China has
| wanted to absorb Taiwan long before it had any chip fabs,
| as China views itself as the nation of the Chinese people
| as a whole, with Taiwan a historical part of China. This
| is the Chinese view. You may not _agree_ with this view,
| but that doesn 't give you the right invent some fake
| view and ascribe it to the Chinese, one that is easier
| for you to understand. 600,000 Americans died in our
| civil war and great slaughter and economic destruction
| was committed in order to prevent a portion of the US
| from seceding. Was that irrational? Maybe to your payoff
| function, but not to those of the US at the time.
|
| This idea that Taiwan = place where chips are made is a
| decidedly American view but is not the Chinese view.
| Chips wont be made in Taiwan in the future, and they
| weren't made there in the past. Taiwan is much more than
| this, it is a population of Chinese people living in a
| region that was viewed as a historical part of China, and
| thus China views Taiwan as a rogue province first, and a
| chip maker second. Just because _you_ view Taiwan as a
| chip producer does not mean that China does, or that
| China even cares about the chip production nearly as much
| as the "rogue province" part.
|
| Being able to step outside of your own values and
| understand someone else's values is table stakes for
| doing this game theory exercise.
|
| Moreover, the assumption that the military development of
| China which is ostensibly done to become strong enough to
| conquer Taiwan (but which would probably happen anyway)
| somehow comes at the expense of Chinese "development" --
| is just not how China (or anyone else) views development.
| Most people view development as both military and
| economic. China's rise necessarily includes military
| power, and it's not at all clear that their military
| investment is so high as to cause their overall rise to
| be slowed. Certainly the US is more than happy to spend a
| trillion on defense each year and invade some country
| ever few years, yet we attribute much of our development
| to the growth of _our_ military-industrial complex.
|
| > If they had spent a fraction of the effort and energy
| they've historically devoted to harming other countries
| on improving their own country instead, they would be way
| ahead of the game... yet they didn't, and don't show any
| indication of changing course.
|
| That is a fantastically uninformed reading of history.
| Either indulge in propaganda that vilifies the behavior
| of your enemies and attributes to them irrationality, or
| you predict your opponent's behavior, _but not both_.
| Russia isn 't the one who invaded or attacked 125
| countries in the last 30 years. Is America acting against
| its own interests by doing that? No, they may be acting
| against _your_ interests, but they are not acting against
| their own interests. If you truly believe a nation is
| consistently acting against its own interests, that just
| means you are confused about the facts or about the
| nation 's interests. And if you think one nation is out
| to "hurt other nations" rather than defend what they view
| as their own legitimate interests, then you aren't tall
| enough for the ride that is geopolitics.
| tooltalk wrote:
| >> The US is mulling disabling or destroying Taiwan's
| semiconductor factories in the event of a Chinese invasion
|
| I think this completely bogus. Firstly, the geopolitical
| tension in the region isn't about to go off anytime soon --
| Taiwan just elected pro-China KMT party last week.
|
| Second, Taiwan is one of the largest investors in China. In
| fact, most of CCP's chip initiatives in China are spearheaded
| by Taiwan-expats (ie, ex-TSMC/UMC engineers) dreaming of
| striking rich in China. Take for instance Mong Sang Liang, a
| Berkeley PhD and former head of TSMC R&D, now co-CEO of SMIC in
| China.
|
| Third, those fabs are both capex and opex intensive. These fabs
| are not self-healing perpetual machines -- those expensive
| equipments need constant babysitting by various foreign vendors
| just to ensure they are running 24x7. I doubt that Taiwanese
| would agree to such an extreme plan.
| [deleted]
| MrMan wrote:
| Why Arizona why not NY state
| russianGuy83829 wrote:
| Thats why Buffet bought that stock a week ago..
| brookst wrote:
| It's good news geopolitically, and the construction will produce
| a lot of jobs. But people should temper long-term job
| expectations.
|
| This huge of an investment in a tech where TSMC will face
| competition from fabs in lower-cost countries almost certainly
| means the company believes it can use extensive automation to
| avoid having labor costs sink their ability to compete on price.
|
| (Yes, there may be a window where they don't have to compete on
| price, but you build fabs for 5-10 years of production)
| bmitc wrote:
| > It's good news geopolitically
|
| I actually think the opposite. It will be good for global
| supply chains but not geopolitics, because it reduces the
| reliance on Taiwan thus opening it up for assimilation.
| mlindner wrote:
| I think it actually increases assimilation with the US
| instead. One of the things that improved US relations with
| Japan when there was fear that they would take over the US
| was when they started building a bunch of US-based
| manufacturing.
| kibwen wrote:
| That's describing something different. In the 80s the US
| was worried that Japan would dominate the US economically.
| The dynamic here is that Taiwan is worried that China will
| dominate Taiwan militarily. The assimilation being
| referenced above is not between the US and Taiwan, but
| between the Taiwan and China.
| kube-system wrote:
| The US has no such fear about Taiwan. Taiwan has a fear
| that they will be invaded by China if they do not have
| industry that is too important to China to be interrupted
| by war.
| brookst wrote:
| Are you saying China is more likely to invade Taiwan if
| the destruction of TSMC's Taiwanese fabs could be
| mitigated by buying the same products from TSMC's US-
| based fabs?
| ido wrote:
| I believe what they are saying that the US is less likely
| to risk war with China to protect Taiwan if they can get
| chips sources domestically.
| kube-system wrote:
| I phrased that wrong. I meant that they want to be
| important to the world in general (and the US), not
| specifically China.
| baybal2 wrote:
| ianai wrote:
| Nope. Chips clearly have a national security component.
| Ensuring local supply reinforces national security. Which
| reinforces geopolitical commitments through making those
| commitments more credible.
|
| Edit-removed a comment
| SteveNuts wrote:
| The geo in geopolitics means the whole planet, not just the
| USA. Destabilizing Taiwan could have major effects
| mlindner wrote:
| > Nice try though.
|
| I think you shouldn't use that type of wording on hacker
| news. It's clearly against the rules.
| brookst wrote:
| Even if it were bad for Taiwan, geopolitics is about more
| than Taiwan.
|
| But I'm not sure this is bad for Taiwan: today, China can
| wipe out TSMC overnight. With these fabs there will be
| Taiwanese revenue streams coming from mainland US, which
| streams can support Taiwan government and military.
|
| Walk me through why it's bad for Taiwan to be more
| economically diversified?
| Animatronio wrote:
| Well for one the US won't be so inclined to defend TW so
| much. Sure, there will be posturing, maybe even a proxy war
| like in Ukraine, but generally speaking the US will not be
| sending troops anymore, now that the golden goose has
| nested on its shores.
| boc wrote:
| Or conversely the US will commit even more resources to
| the defense of Taiwan now that their own domestic supply
| of chips is safe.
|
| The US had no strategic interest in Ukraine yet we've all
| seen the reaction. The US will gladly defend Taiwan and
| create the hill for the CCP to die upon.
| Animatronio wrote:
| Now please explain why would the US send troops to defend
| TW if there's nothing actually valuable there anymore?
| Ukraine was hugely important for it's position next to
| Russia, and so is TW. And still, no US troops on the
| ground in Ukraine, and there won't be any in TW. This is
| a smart way of giving up on TW without actually admitting
| it, and there's nothing to be ashamed of, really.
| brookst wrote:
| You seem to be asserting a few contradictory things:
|
| 1. Taiwan can only be defended with US troops on the
| ground
|
| 2. Ukraine has no US troops on the ground and is being
| successfully defended
|
| 3. The US would only put troops on the ground to protect
| valuable things like TSMC fabs
|
| 4. (by implication) if China attacks Taiwan and destroys
| TSMC fabs tomorrow, the US would have no incentive to
| defend Taiwan because the fabs are gone
|
| I don't see it. Ukraine looks likely to survive as a
| country without US troops on the ground. Ukraine, as you
| note, has no fabs or similarly valuable assets. Why can't
| those exact same conditions play out in Taiwan, which is
| also much much much harder to invade with ground troops
| than Ukraine was?
| Animatronio wrote:
| 1. The topic was US defense of TW. How exactly would it
| be defended by the US without troops? 2. Ukraine is
| defended by the Ukr army - with copious amounts of ammo
| and weaponry yes from NATO but no troops. At the same
| time the US never said they would send the army into
| conflict to defend it; when it comes to TW, despite the
| strategic ambiguity or whatever it's called, the general
| belief is there would be US boots on the ground. 3. The
| US would send its soldiers if there was something
| valuable obviously - be it fabs or oil or whatever, but
| not just to fight China for a random island in the
| Pacific. Otherwise they would have done it already on the
| countless atolls that are being fortified. 4. Yes, pretty
| much that. Just that it would not be obvious, but rather
| a long war of words would precede it... Again, nothing
| wrong with it. As long as no lives are lost I guess it is
| for the better.
| ti00 wrote:
| Far beyond the value of TSMC, Taiwan is the lynchpin of
| the first island chain [1]. Taiwan remaining friendly to
| US interests is crucial to the integrity of the first
| island chain and thus the US island chain strategy[2]. In
| the event of conflict with China, control of the first
| island chain would allow the US to effectively interdict
| all maritime trade to China by denying access through the
| chokepoints created by the first island chain. This is
| frankly much more valuable to the US from a strategic
| perspective than TSMC (though TSMC is obviously very
| important).
|
| You can also note the importance that Chinese planners
| place on this as well by looking at the Belt and Road
| Initiative, in particular the land-based projects that
| aim to connect China to European markets via rail [3][4].
|
| 1. https://en.wikipedia.org/wiki/First_island_chain
|
| 2. https://en.wikipedia.org/wiki/Island_chain_strategy
|
| 3. https://en.wikipedia.org/wiki/New_Eurasian_Land_Bridge
|
| 4. https://en.wikipedia.org/wiki/China%E2%80%93Central_As
| ia%E2%...
| boc wrote:
| The US isn't giving up Taiwan- it's the perfect
| opportunity to humiliate the CCP. China is in way over
| their heads if they actually believe they can achieve a
| naval landing on a fortified island without air
| superiority. It would be an absolute massacre.
|
| Additionally, the US could simply embargo Chinese supply
| lines and dare them to engage.
| anonymouslambda wrote:
| I volunteer you to go fight in Taiwan to "humiliate the
| CCP".
| dotnet00 wrote:
| They might do it because of the value in denying China
| access to Taiwan. Even assuming that Taiwan blows their
| semiconductor fabs to prevent China from getting them,
| there's still all the know-how and all the other stuff
| that the US wouldn't want China potentially getting its
| hands on, like American weapons. There would also be the
| consideration of the risk to Japan (and other friendly
| nations in the region) created by allowing China to just
| take Taiwan without at least Ukraine levels of backlash.
| mupuff1234 wrote:
| I'm guessing Taiwan received quite a carrot in order to
| get their approval for the TSMC expansion.
| Animatronio wrote:
| No carrot I'm afraid :D I think this decision was 100%
| made by TSMC and the US. Both get what they want: -
| continuity of operations and safety for TSMC - locally
| sourced chips for the US and most importantly - much
| diminished importance for Taiwan, meaning they do not
| have to defend it with troops (which is the most
| important aspect of war - see Afghanistan, Vietnam, and
| so on).
| bmitc wrote:
| > geopolitics is about more than Taiwan
|
| That's obvious and wasn't stated otherwise.
| yyyk wrote:
| It may be a useful talking point to get the public to do the
| right thing on Taiwan, but frankly there's no meaningful
| economic reliance on TSMC/Taiwan and policy makers know this.
| totalZero wrote:
| Absent any form of fab redundancy in the global economy, the
| fabs make Taiwan fragile in the eyes of the Western powers.
| Taiwan is safer when it is not a pressure point for the
| entire Western economy because it's easier to defend
| territory that can withstand a few hits.
| baybal2 wrote:
| mlindner wrote:
| > This huge of an investment in a tech where TSMC will face
| competition from fabs in lower-cost countries almost certainly
| means the company believes it can use extensive automation to
| avoid having labor costs sink their ability to compete on
| price.
|
| What countries are you imagining that will suddenly become
| competitive in semiconductor manufacturing? As far as I know
| there are no up and coming companies of note. (Companies in
| China are not of note as they have been permanently prevented
| from further advancement.)
| anonymouslambda wrote:
| "Permanently prevented" -- semi manufacturing is an
| engineering problem, not magic. Engineering problems can be
| solved, unless you think Chinese people are inherently
| inferior engineers.
| sidibe wrote:
| Yup, this isn't making the cheapest t-shirts possible. The
| cost of labor is nothing compared to the revenues. For a fab
| you want a stable government and environment, and good
| tax/trade situation, and reliable, quality labor.
| Jenkins2000 wrote:
| I remember reading that making chips requires a lot of water,
| something that Arizona is running out of, will this be a problem?
| jiggyjace wrote:
| Arizona is not running out of water. There's a lot of
| fearmongering surrounding water levels at Lake Mead or with the
| Colorado river, but Arizona doesn't get the majority of its
| water from those sources. It also uses 10x less water with a
| population of 7m as it did in 1950 with a population of 0.7m.
|
| Arizona has a state-of-the-art water portfolio that uses lots
| of reclaimed water and is not reliant on micro or even macro-
| climate trends. A megadrought has impacted the area for the
| last few decades and only now are Arizona cities talking about
| the needs for conservation and possibly cuts in the next decade
| or so, but if climate models hold up the drought will be over
| in that time frame anyway.
| nickphx wrote:
| No, Arizona is not running out of water.
| https://www.arizonawaterfacts.com/water-your-facts
| usui wrote:
| Is it plentiful enough that extracting highly-pure water is
| an economically-solved problem in Arizona?
| gjsman-1000 wrote:
| If I was conspiratorial, I'd say this serves as a excuse for
| building more pipelines for getting more water from other
| states.
| peteradio wrote:
| What is the longest and (large enough) volume water piping
| system in the world? From my recollection its not long enough
| to significantly make inroads to another state.
|
| edit: I think I might be wrong, looks like China has done
| significant waterworks across their country.
| Vt71fcAqt7 wrote:
| Why isn't it the same as say an oil pipeline? Those can get
| really long.
| nickvanw wrote:
| Oil is significantly more valuable than water - the added
| cost per gallon of water would be astronomical.
|
| 1 oil barrel is 42 gallons and costs around $75 today. I
| pay about $6 per CCF of water which is 748 gallons. It
| might be worth doing this with oil, but even if you
| scaled it up, it would be hard not to have the transport
| cost more than the actual water.
| bcrosby95 wrote:
| It would be cheaper to just desalinate it.
|
| Of course Arizona doesn't really have that option. But
| California does, and Arizona already sources water from
| the Colorado River, which California does too.
|
| Anyways. I think moving California off the Colorado River
| would do a lot to ease the water problems in the
| southwest.
| CameronNemo wrote:
| California has had trouble kick starting desalination. It
| is an energy intensive process, and the California
| electricity grid (especially in water poor SoCal) is
| still heavily dependent on fossil fuels (even some coal
| plants in other states feed into the LA metro).
| Furthermore, desalination intakes can negatively impact
| marine life, unless subsurface wells are used. Those are
| more expensive and companies pursuing desalination are
| not eager to foot the bill for them. Perhaps most
| importantly, desalination (even without subsurface wells)
| is more expensive than current sources of water in
| Southern California. I've not even mentioned the
| challenges in achieving safe exhaust of brine.
| [deleted]
| nonethewiser wrote:
| Well that seems significant.
|
| Article says the chips in the 2nd fabs will be better than the
| first. And will meet all domestic US demand. Not sure what all
| that includes.
|
| I wonder how domestic the full supply chain is. If the US is
| relying on China for rare earth metals or something.
| akira2501 wrote:
| > Not sure what all that includes.
|
| Possibly a lot of currently obsolete military equipment that
| can no longer be produced due to lack of domestic parts
| suppliers.
| ianai wrote:
| The US has rare earth mines and even more deposits. They just
| got priced out through decades of lower prices for those
| minerals. (Which just shows that resource allocation even for
| scarce resources, follows financial incentives similar to other
| financial considerations. Stuff being left in the ground
| actually makes them available for another day when they're
| higher valued.)
| kibwen wrote:
| Indeed, but rare earth mining also has negative environmental
| impact even above and beyond normal mining operations. The US
| is partly paying China to outsource the environmental
| devastation.
| akiselev wrote:
| Mitigating that environmental impact is what makes rare
| earth mining so costly. China is quickly learning that
| environmental remediation [1] is much more expensive and
| their appetite for destroying their environment for profit
| is quickly disappearing, especially as the middle class
| grows and moves up Maslow's hierarchy.
|
| From the article:
|
| _> "The rare earth industry is a pillar industry here in
| Ganzhou and we must keep it running, but there's still more
| to do to figure out a truly environmentally friendly method
| to pursue sustainable growth," Zhang Guanjun, deputy
| director of the public relations department of the Ganzhou
| Party Committee, said in an interview. "Ironically, because
| the prices of rare earths have been so low for a long
| period of time, the profits from selling these resources
| are nothing compared to the amount needed to repair the
| damage."_
|
| [1] https://e360.yale.edu/features/china-wrestles-with-the-
| toxic...
| Clent wrote:
| No, China is absorbing the economic impact of destroying
| their own environment.
|
| There is no blame to be placed else where.
|
| No one is tricking China into destroying their environment.
| robertlagrant wrote:
| I don't think previous poster said they were.
| googlryas wrote:
| China demanded it even, by basically cornering the rare
| earth market via dumping
| Varloom wrote:
| The article is wrote for tech illiterate audience.
|
| They will use EUV for the first factory (2024). And High-NA EUV
| (next gen from ASML) for the second factory in 2026.
|
| 4nm,3nm are just marketing terms, and means nothing, since they
| stopped naming nodes according to their actual size since 16nm.
| nicoburns wrote:
| I don't think a tech illiterate audience has a clue with 4nm
| or 3nm mean
| susrev wrote:
| i dunno, they can google it pretty easily
| jason-phillips wrote:
| > I wonder how domestic the full supply chain is.
|
| The supply chain necessarily includes some Japanese and Dutch
| companies for their specialized tooling that cannot be sourced
| from American companies. Many of the spare parts and raw
| materials can be sourced domestically.
|
| However, it is ultimately unavoidable that many of the
| constituents within these spare parts, repair kits and raw
| materials would be manufactured/synthesized in China.
|
| (I worked on the supply chain systems and processes at Samsung
| Austin Semiconductor for almost a decade.)
| icey wrote:
| For at least part of this, ASML has had a large facility in
| the Phoenix metro (Tempe) for quite a few years. Assuming
| that's one of the Dutch companies you're referring to.
|
| TSMC is going to benefit from the microchip industry that's
| already in Phoenix thanks to Intel's enormous presence here.
| fooker wrote:
| What are some of the companies in the microchip industry
| in/around Phoenix?
| icey wrote:
| There are a lot: https://www.chipsetc.com/semiconductor-
| companies-in-arizona....
| conradev wrote:
| Chips primarily require silicon, which is not a rare-earth
| metal (it is rather abundant), but it takes a lot of expensive
| equipment and energy to purify it and slice it into wafers.
|
| TSMC currently sources their wafers from Taiwan, Japan,
| Singapore, Germany and others:
|
| https://investor.tsmc.com/static/annualReports/2005/pic/E-3-...
|
| (edit: that PDF is out of date, but the wafer supplier list
| largely isn't)
| j_walter wrote:
| No...chips are made on Silicon. What is required to make them
| into semiconductors requires a lot of special metals, gases
| and other chemicals. They source those things from around the
| globe...including Ukraine for things like noble gases.
| pfdietz wrote:
| How much rare earths do you imagine a semi fab uses?
| Tempest1981 wrote:
| Are the 2 plants side-by-side? Or some distance apart?
|
| Edit: I found another article that says they are at the same
| site.
| badrabbit wrote:
| Don't these fabs need like an insane amount of water? Why would
| they build it of all places in arizona which as far as I know
| barely meets drinking water requirements (at least at some
| cities) and is basically mostly a desert?
| jasonwatkinspdx wrote:
| They need a lot of water initially but recycle it as they
| operate.
|
| Intel and ASML already have facilities in Arizona. I'd assume
| TSMC chose partly based on that allowing them to hire out of
| the local talent pool, along with incentives from the state.
| duped wrote:
| Arizona paid them more in subsidies than the other states would
| adam_arthur wrote:
| Water can be piped around cheaply. Worst case they pump it in
| from nearby states
| tony_cannistra wrote:
| Arizona actually already does this, in profound quantities.
| https://en.wikipedia.org/wiki/Central_Arizona_Project
|
| The problem isn't the pipes, obviously.
|
| It's the fact that the 1922 agreement that divided up the
| water in the Colorado River (upon which Arizona depends)
| incorrectly calculated the amount of water available in the
| river every year.
|
| The Colorado River Compact divides up 20 million acre-feet of
| water. Modern analyses show that the Colorado river's average
| flow is about 15.5 million acre feet, and has been less than
| 13 million acre-feet during the last decade or so. These
| reductions curtail who gets what water.
|
| https://www.5280.com/how-the-100-year-old-colorado-river-
| com...
| adam_arthur wrote:
| And the Colorado River is the only water source in North
| America right?
|
| People have a fetishization with hyping up disappearing
| water sources as leading to mass forced desertions of
| population centers, which is not rooted in any kind of
| reality.
|
| We can already pipe oil from texas to Canada with ease, we
| can do the same from Canada to Arizona with water. Or
| wherever else. The economics and viability of it is obvious
| and clear.
|
| Residents of water scarce areas would pay marginally higher
| taxes to support this
| tony_cannistra wrote:
| > People have a fetishization with hyping up disappearing
| water sources as leading to mass forced desertions of
| population centers, which is not rooted in any kind of
| reality.
|
| I have never heard this. Where are you reading that?
|
| Disappearing water sources are a reality. Time and time
| again, long pipelines like what you suggest just aren't
| viable.
|
| I'd suggest you enjoy some fact-based reporting on the
| topic: https://grist.org/agriculture/drought-water-
| pipeline-cost-we...
|
| The near- and medium-term solutions we need are solely in
| use reduction. Period.
| adam_arthur wrote:
| Oil pipelines have already proven the economic viability.
|
| The choice of abandoning trillions of real estate vs a
| 10s of billions infrastructure project is obvious.
|
| Article cites the cost as $14B which is effectively
| nothing vs the alternative. Even $100B is nothing. These
| two TSMC fabs are $40B alone
|
| So much fearmongering from economically illiterate
| people. Use your brain
| NikolaNovak wrote:
| >>Oil pipelines have already proven the economic
| viability.
|
| For _oil_. Water has far lower value density.
| adam_arthur wrote:
| For water. Its proven we can build many thousand miles of
| pipeline for 10s of billions.
|
| Which is vastly cheap enough and sufficient to solve this
| problem. Much cheaper than alternatives
| mikeyouse wrote:
| I love how arm chair engineers have solved the water
| crises in the south by suggesting people "just build
| pipelines!".
|
| Just the lack of understanding of like 15 different
| aspects of the problem with that idea and the confidence
| to defend regardless is kind of amazing.
| adam_arthur wrote:
| You're right, piping water from point A to B is perhaps
| one of humanity's most challenging problems.
|
| What's really sad is that so many people are brainless
| enough to believe that this is not possible to solve, and
| easily so, once incentives drive it forward.
|
| Your comment does remind me of many of the 0.1-0.5x
| engineers I've worked with though. We need hundreds of
| people to maintain a mobile client, it's not possible to
| do it with a handful!
| mikeyouse wrote:
| I'm sure those "0.1x" engineers found you a treat to work
| with. One of the more impressive combinations of abject
| ignorance and misplaced confidence I've seen in a long
| time. Believe it or not, but there are indeed people
| who've designed large volume water piping systems on
| Hackernews..
| selectodude wrote:
| Where is the water coming from? It's not coming from the
| Great Lakes or the Mississippi River. Where are these
| enormous volumes of untapped water that we can pump over
| the Rocky Mountains?
| tony_cannistra wrote:
| I hate to break it to you, but your "economically
| illiterate people" might actually understand some
| fundamental social and political realities that you've
| not yet had the chance to reckon with. Not to mention the
| physical realities of water resources.
|
| Your comparison to oil pipelines is nonsense. Where to
| start: privatization, a global commodity market, relative
| scarcity, massive extractive capex.... Sure, we built oil
| pipelines easily in the past. How difficult has it
| become? Surely the capital exists. Why don't we build
| more?
|
| Nobody is talking about abandoning real estate.
|
| The tragedy of people like you is that you provide a
| half-compelling distraction. People
| (cities/farmers/industry) need to use less water.
|
| The longer it takes to get people to realize this, the
| harder it is to fix.
| achenatx wrote:
| water problems are actually energy problems. With cheap
| energy, you can clean all water from residential areas
| and you can pipe water in from where it is plentiful.
|
| Water is not usually created/destroyed it is moved around
| and contaminated.
| adam_arthur wrote:
| Why would we practice conservation when we can spend
| $30-50B in capex amortized over 50 years via marginally
| higher taxes on the populace with minimal opex to solve
| the problem permanently?
|
| Thats why they are economically illiterate. The obvious
| and more cost effective choice will win in the end, and
| it doesn't involve austerity and suffering and repentance
| for high water use
| tony_cannistra wrote:
| Because it wouldn't solve the problem permanently.
|
| The folks who wrote the Colorado River Compact thought
| they were solving the problem of dividing the river's
| water permanently, too. They made it worse.
|
| I don't disagree that economics are a critical part of
| this conversation. But I don't understand how you're
| making the argument that enabling more water use, not
| less, is cost effective.
|
| Even amortized across 50 years, $30B is more than the $0B
| required if we just use less water.
|
| None of this even comes anywhere near discussing the
| potential deleterious ecological (and economic!) impacts
| of draining water-rich ecosystems by piping their water
| elsewhere. Look to the phase-out of leaded gasoline as a
| great example of how externalities matter.
| throwntoday wrote:
| I don't think you appreciate just how much water the
| northern part of the continent has.
| tony_cannistra wrote:
| Actually, I do. I've lived there.
|
| Generally speaking, substantial alterations to
| hydrological regimes can cause deleterious cascading
| ecological effects. Just look toward the literature on
| the hydrological (and consequential ecological) effects
| of dams (necessary to divert water) for examples.
|
| One of particular interest is dams' tendency to reduce
| the frequency and severity of flooding events, which are
| characteristically necessary for much of the functioning
| of floodplain ecosystems such as those you're describing.
|
| Such reductions can wreak havoc on biodiversity in these
| regions.
| kortex wrote:
| > We can already pipe oil from texas to Canada with ease,
| we can do the same from Canada to Arizona with water. Or
| wherever else. The economics and viability of it is
| obvious and clear.
|
| Oil and gas are far more value dense than water. Pipeline
| transport adds somewhere around $5-20 per barrel of oil,
| or $0.03/L. Some quick googling suggests Phoenix
| residents pay around $0.00022/L. That's a factor of 142x.
| adam_arthur wrote:
| If they pay $0.00022/L then its really not that scarce
| after all huh?
|
| True scarcity would drive prices up and increase cost
| viability of transport, obviously. The reason its not
| done right now is because its not an imminent problem
| idontknowifican wrote:
| it's an essential for life and the consumer price
| reflects heavy subsidies
| [deleted]
| phpisthebest wrote:
| >Why would they build it of all places in arizona
|
| for the Cynical person: Ensuring a future crisis is a sure fire
| way to get a nice Big Government Bailout in a few years to pay
| off the rest of the Capital costs that were not already covered
| by CHIPS....
| king_magic wrote:
| Access to plentiful, cheap water was a major reason why Micron
| chose Upstate NY for their new fabs.
| tony_cannistra wrote:
| I came here for this comment. Thank you for bringing this up.
|
| Although Phoenix is one of America's most progressive cities
| with regard to minimizing per-capita water usage, the whole
| prospect of the city of Phoenix was ill-conceived from the
| beginning.
|
| Of course that doesn't matter now -- the city is there. But I
| hope that TSMC knows what they're getting themselves in to.
| shagie wrote:
| An article from August 2021: Water shortages loom over future
| semiconductor fabs in Arizona
| https://www.theverge.com/22628925/water-semiconductor-
| shorta...
|
| > Chipmakers are setting up shop in Arizona as drought
| worsens
|
| > Major semiconductor manufacturers looking to expand in
| Arizona will likely be spared from water cuts induced by an
| unprecedented water shortage in the Southwest, at least for
| now. As part of the scramble to end a shortage of another
| kind -- the global dearth in semiconductor chips -- both
| Intel and TSMC plan to open new facilities in Arizona. But
| they're setting up shop just as one of the worst droughts in
| decades grows worse across the Western US.
|
| > ...
|
| > While Intel recycles much of its water, more fabs will mean
| it will need to send even more water through its systems. The
| company says that Arizona has been "vital" to Intel's
| operations for more than four decades. The state is already
| home to its first "mega-factory network" and its newest
| semiconductor fab. Intel used more than 5.2 billion gallons
| of water in Arizona in 2020 -- roughly 20 percent of which
| was reclaimed water, according to its most recent corporate
| responsibility report.
|
| > ...
|
| > TSMC said in an email to The Verge that for now it doesn't
| expect the water shortage to have "any impact" on its plan to
| build a new fab in Arizona, although it says it will
| "continue to monitor the water supply situation closely."
| gdilla wrote:
| I was also wondering about the added energy needed to keep
| the fab cool enough to work in during the punishing summer
| months in phoenix. Seems like an odd choice.
| coredog64 wrote:
| If only there was a way to turn energetic photons into
| electricity?
| tony_cannistra wrote:
| Thanks for sharing that. At the very least, Arizona has
| "water budget" in the form of severely curtailing water-
| intensive agriculture.
|
| I am hopeful that the politicians there are smart enough to
| realize that semiconductor fabs are an industry whose water
| needs are worth prioritizing more than farming alfalfa in
| the desert.
|
| The problem is that these agricultural water rights are
| old, and the folks who hold them are often disenfranchised.
| Using a ton of water in the desert to farm is their whole
| livlihood; we don't just pull people's generational careers
| out from under them any more, like we used to. Not without
| a chance at an alternative.
| coredog64 wrote:
| Farmers are selling their farmland to developers who then
| turn it into housing. Everyone wins: Residential water
| use is significantly lower than agricultural, the farmers
| get rich, and more housing is being built.
| Mistletoe wrote:
| Should people live in an area with no water?
|
| It feels like we have so many problems caused by people
| just not living in the locations in the USA where there
| is lots of rainfall and water. I have tons of water, my
| state just uses lakes filled by rainwater. We make
| electricity with it too.
|
| https://commons.m.wikimedia.org/wiki/File:Average_precipi
| tat...
|
| I always find it interesting that people keep cramming
| into the western and specifically southwestern part of
| the USA. Like the original settlers just kept going that
| way due to the human natural urge to keep going further
| and hope things would be better over the horizon. I often
| wonder what America would be like if the western US was
| settled first. I imagine people would have noticed how
| awful and non-conducive to human life it is and kept on
| trucking to the promised land in the East.
| khuey wrote:
| The problem is less people living in areas with no water
| and more people growing water-intensive food in areas
| with no water. 80% of water usage in California, which
| has 40 million residents, is agricultural.
| scythe wrote:
| If you live on a 20' by 50' plot that gets six inches of
| rain per year, that's 500 cubic feet, or enough water for
| ten people to drink all year. And that's low rainfall
| even by Arizona standards (Phoenix gets 7 inches while
| Tucson and the plateaus are wetter), a small plot of land
| (1/43 acre), and ignoring any reuse or importation. The
| Southwest has _plenty_ of water for people to live their
| lives, as long as it 's utilized efficiently. It's
| _agriculture_ that isn 't suitable.
|
| It's also worth recognizing that the western United
| States _was_ settled first, as people came down the
| Pacific Coast after crossing the Beringia land bridge
| during the previous ice age. California in particular has
| always been quite densely populated, and the only (IIRC)
| indigenous irrigation systems were built by the Hohokam
| near the Colorado Plateau.
|
| EDIT: https://repository.si.edu/bitstream/handle/10088/23
| 978/SMC_8...
|
| >The population [of California] cannot be tabulated by
| tribes, but there can be no question that it was several
| times larger than any other area north of Mexico and that
| the destruction has been correspondingly greater.
| bcrosby95 wrote:
| Should people live in an area that needs to burn fossil
| fuels for heating? Energy efficient heat pumps, which AC
| is, only work on a relatively narrow band of temperature
| differentials. You can't really use them in freezing
| conditions.
|
| There's lots of hand wringing about living in hot, dry
| climates. It's just odd to me because where people live,
| in general, are not particularly amenable to the number
| of humans living there.
| shagie wrote:
| Heat pumps have come a long way.
| https://youtu.be/MFEHFsO-XSI gets into the energy
| efficiency of heat pumps and their temperature
| tolerances.
| Mistletoe wrote:
| Cold can be mitigated by enhanced R-value insulation in a
| single application. Water use is continuous.
|
| https://www.energystar.gov/campaign/seal_insulate/identif
| y_p...
|
| I don't really see a hot/cold stratification in this
| chart- https://www.statista.com/chart/12098/the-us-
| states-with-the-...
|
| And even then, the difference in costs seems quite small.
| Alaska is $332 and Georgia is $310.
| tony_cannistra wrote:
| I hear you, but I feel like this argument is fraught. We
| can't (shouldn't) really be telling people what they
| can/can't do.
|
| We can restructure incentives, though. (e.g.: taxes).
| Perhaps this is just kicking the ethical quandary down
| the road.
| misterprime wrote:
| And food still shows up in the grocery stores. Yay!
| icey wrote:
| There have been people living where Phoenix sits today for at
| least 1,500 years. The canals in Phoenix were originally dug
| by the Hohokam 1,400+ years ago. Dutch settlers used what
| remained to design the canal system that's used today. Here's
| a cool article that describes some of what they built
| http://www.azheritagewaters.nau.edu/loc_hohokam.html
| downrightmike wrote:
| These plants will be 100% recycling on water and Phoenix
| gives a lot of water to Tucson to store that they could pull
| back as needed. Central Arizona Project is a good read. reply
| treesknees wrote:
| They do need a lot of water, initially, but it was pointed out
| that it's similar to filling a swimming pool [1]. Yes you need
| a lot of water at first, however it's not as though all that
| water is just being dumped outside to evaporate. It's cleaned
| and recycled, and recaptured from the air within the plant.
|
| While Arizona doesn't have an abundance of excess water, they
| do have pretty strict usage guidelines and rules in place from
| the Department of Water Resources [2]. Assuming we can trust
| the government's call on this (are they being objective and
| fair, or tilting the reports to bring in Billions of dollars of
| corporate revenue and jobs) then these fabs should have no
| problem being supplied with water or impacting others in the
| area.
|
| [1] https://www.cnbc.com/2021/06/04/why-intel-tsmc-are-
| building-...
|
| [2] https://www.arizonawaterfacts.com/water-your-facts
| Analemma_ wrote:
| This seems wrong. Didn't TSMC have to throttle down
| production recently because Taiwan had a drought? Why would
| they have had to do that if the plants don't need new water
| after the "initial fill"?
| labrador wrote:
| Apparently they've figured it out: TSMC tackles Taiwan
| drought with plant to reuse water for chips
| https://archive.ph/XIff9
| treesknees wrote:
| Yes, exactly. In places like Taiwan TSMC just didn't need
| to account for recycling/treating the water - I'm sure
| it's cheaper not to do so. In Arizona it's a requirement
| so it's built into the cost of investment.
| yellow_lead wrote:
| It depends on how many typhoons fill the reservoirs
| though. This year we only had a few.
| dsr3 wrote:
| Some people said because Arizona is in relatively stable
| seismic region in the US. But I don't buy it. TSMC fab in
| Taiwan is also located in seismic prone region. Compared to the
| cost of the fab itself, seismic isolation system is relatively
| affordable.
| dharbin wrote:
| I heard a story about an Intel fab in Arizona that would
| always produce bad silicon at a certain time a day. After
| some investigations it was determined that a train passed by
| at that time every day causing enough seismic activity to
| disrupt the manufacturing process.
| akiselev wrote:
| They need seismic isolation regardless of where they build.
| Cutting edge fabs require such precision that a poorly
| shielded USB port can cause enough noise to create problems,
| let alone the vibrations from distant earthquakes. (Source:
| previous work with electron microscopes)
|
| Fabs are expensive because every part of building it from the
| electrical wiring to the seismic isolation to the HVAC system
| needs to be perfectly tuned to remove all sources of noise.
| Most of these costs are superlinear if not exponential with
| the magnitude of noise.
| foobiekr wrote:
| Logistics risks around the plant are not nearly as easily
| done. There is an inherent benefit to not being exposed to
| seismic and weather issues. AZ isn't a bad choice.
| totalZero wrote:
| Yes, but the cost of ultrapure water is essentially represented
| by the cost of electricity used for purification.
| downrightmike wrote:
| These plants will be 100% recycling on water and Phoenix gives
| a lot of water to Tucson to store that they could pull back as
| needed. Central Arizona Project is a good read.
| jimbob45 wrote:
| I was curious about this a while back. My cursory research
| showed that these facilities are actually phenomenal at
| recycling water to the point that they're not actually guzzling
| water at the rate you might expect.
|
| _...deputy spokesperson Nina Kao said via email that
| "approximately 65% of the water used in the Arizona fab will
| come from TSMC's in-house water reclamation system..._
|
| https://www.azcentral.com/story/opinion/op-ed/joannaallhands...
| scythe wrote:
| While water does seem like a serious issue, it also feels very
| Monday-morning quarterback: _of course_ the largest
| semiconductor manufacturer in the world knows that Arizona has
| low rainfall. What I 'm curious about is what makes Arizona
| _preferable_ over, say, Idaho or Tennessee. Proximity to
| California? No freeze-thaw cycle? Solar energy?
| robotnikman wrote:
| Energy might be a big one. Solar is plentiful here in a state
| where cloudy days are rare, and there is also the Palo Verde
| nuclear power plant
| [deleted]
| klelatti wrote:
| I'm interested in the financial aspect of this. Assuming US Fabs
| are more expensive than in Taiwan that then must mean lower
| margins or higher prices.
|
| I wonder if Apple for example has said that they are prepared to
| pay a premium to ensure diversity of supply?
| jason-phillips wrote:
| The iPhone SoC was made by Samsung in Austin for many years, so
| this has already happened. At the time everyone assumed that
| Apple wanted to diversify away from Samsung for other reasons
| which were not necessarily financial.
| GeekyBear wrote:
| > At the time everyone assumed that Apple wanted to diversify
| away from Samsung for other reasons which were not
| necessarily financial.
|
| When Apple was dual sourcing chips from both Samsung and
| TSMC, the Samsung version of the A9 had a ~10% reduction in
| battery life compared to the TSMC version, although the
| performance was nearly identical otherwise.
|
| https://www.tomshardware.com/news/iphone-6s-a9-samsung-vs-
| ts...
| metadat wrote:
| The article you linked actually reports the Samsung version
| lasted longer than the TSMC chip (the opposite of what
| you've stated).
|
| Samsung was on a 14nm fab process.
|
| TSMC was on a 16nm fab process.
| GeekyBear wrote:
| My bad. I should just say that there were the same
| silicon lottery issues we see when we buy a chip from a
| single vendor, eg Intel today, compounded by the fact
| that the process nodes were different too.
|
| The popular narrative at the time was that TSMC chips had
| the better battery life, but it depended on those silicon
| lottery results.
|
| >What we know is that there isn't enough information
| currently out there to accurately determine whether the
| TSMC or Samsung A9 SoC has better power consumption, and
| more importantly just how large any difference might be.
| 1-on-1 comparisons under controlled conditions can
| provide us with some insight in to how the TSMC and
| Samsung A9s compare, but due to the natural variation in
| chip quality, it's possible to end up testing two
| atypical phones and never know it.
|
| https://www.anandtech.com/show/9708/analyzing-apple-
| statemen...
|
| However, when the chips fell as they may, Apple single
| sourced the A10 at TSMC, and they would have had the
| largest number of performance data points.
| tooltalk wrote:
| dual sourcing? I thought TSMC's 16nm was just transitional
| to wean off Samsung's US operation completely in favor of
| TSMC in Taiwan. Did Apple "dual-source" at Samsung/TSMC
| 10nm? or 7nm?
| klelatti wrote:
| I bet the Samsung SoC's were a lot cheaper though as less
| sophisticated. Samsung -> TSMC got them away from a
| competitor, possibly cheaper (US -> Taiwan) and onto better
| roadmap.
|
| This is quite different and possibly a further sign of Apple
| spending to diversify supply chains.
| [deleted]
| tooltalk wrote:
| It was probably a bit cheaper, but Apple was Samsung's
| anchor customer since mid 2000's. I don't think Apple used
| Samsung's 10nm or 7nm -- ie, there was no "dual sourcing"
| or "diversifying" supply chains to speak of. I think
| Apple's move to TSMC was largley driven by Apple's
| China/Taiwan first outsourcing practices.
| jupp0r wrote:
| Apple doesn't care that much about cost of chips. Their margins
| are wide enough that even a substantial increase in chip
| pricing won't significantly impact their profits.
| [deleted]
| nicoburns wrote:
| I don't really think this is true. Apple's margins are so
| wide _because_ they care about the cost of all their
| components.
| mistrial9 wrote:
| this is profoundly wrong; Apple and other hardware brands
| have not only practiced material source cost discipline to
| the extreme, but their internal culture promoting and
| strengthening that resulted in a nerdy work-a-holic with no
| life to become CEO of one of the largest companies in the
| world, specifically because he would, and did, put whole
| companies out of business with suffocating negotiating
| tactics over portions of a penny. This is exactly in the
| pattern of Dell Inc, where the saying about commercial supply
| partners was "those who do business with Dell, go out of
| business"
|
| source- electronics recycling business in Silicon Valley for
| a few years
| tooltalk wrote:
| Apple is known for squeezing their suppliers to last penny.
| HDThoreaun wrote:
| My understanding is the that the two biggest financial
| advantages for building domestic fans are the CHIPS act
| subsidies and lucrative defense department contracts that are
| required to be sourced domestically.
|
| Not unlikely that there's a significant political aspect
| involved here too though.
| KoftaBob wrote:
| I've been trying to build a habit lately of finding the primary
| source of news like this, especially since news agencies seem to
| be very hit or miss with whether they link to their primary
| source.
|
| So for whoever is interested, this is the original announcement
| by TSMC themselves: https://pr.tsmc.com/english/news/2977
| sdsd wrote:
| Thanks, that's a really cool habit! Has this lead to any
| changes re how you perceive news? How far does news tend to
| deviate from the sources you find?
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