Seems like a well sourced video. Here are some notes of what's discussed:
- The factories are not joint ventures, they are fully owned by Taiwan.
- Build-outs in US are not going to be the most cutting edge technology.
- TSMC has ~$36bn in capital expenditures in 2022. The Arizona fab is ~$9bn a year. Majority of TSMC investment remains in Taiwan.
- TSMC produces ~15m waifers a year, ~80% produced in Taiwan. Arizona fab will produce ~250k waifers a year from 2024, ~500k from 2026.
- TSMC has at least 5 other build outs in Taiwan.
- The notion that US is going to be self sufficient in terms of chips thanks to the Arizona fab is flawed:
1. By volume, most chips are not what this fab is going to ship.
2. There are other chip foundries with specialty processes in Taiwan.
3. Taiwan leads the rest of the pipeline: assembly, packaging and testing.
Are the fans owned by Taiwan, or TSMC? Those are not the same thing.
And how many of TSMC’s 15m wafers/year are recent nodes? If the majority are 60nm that’s not a super meaningful number.
I agree that this TSMC investment is not going to make the US self sufficient by totally replacing all Taiwan-made chips with US-owned production. But I don’t think anyone ever made that claim?
Except video skips the primary purpose/argument of reshoring onto US soil is de-risking in case of potential PRC-TW scenario. In which case US will likely nationalize these fabs, aka stealing, for even the small but critical strategical capacity they fill. The more accurate assessment is America is setting up contingency to steal some of TSMC in event of PRC trying to steal most of TSMC. Or that Chang wasn't exactly enthused to build Arizona fabs, and even now question the viability with subsidies. Like how would one attribute intentions of powerful party A persuading/coercing weak party B to build likely loss making venture against B's desires, out of the way in A's backyard, on the premise that one day, A will confiscate venture from B.
Derisking and geographically diversifying these assets (crucial unique capabilities, technologies, skills, processes, etc.) are IMO the most obvious wins here. If there's a PRC-TW invasion, at least some assets will exist outside Taiwan that can be leveraged to scale out beyond going from scratch, this really gives a head start.
I'm not entirely sure the goal in the US is to nationalize the resources to mask a 'steal' although I'm sure nationalization is a thought out contingency. I think TSMC ownership and people of Taiwan wouldn't need much incentive to scale up and would happily welcome an onpour of resources from the US and other governments should China invade or pressure them. The US isn't typically in the game of flat out stealing although it's undoubtedly a last resort desperation option that's embedded in this decision making.
Also, if I were Taiwan, this helps remove at least one strategic attraction from a PRC invasion scenario. It takes the option of basically controlling world chip supplies off the table as an incentive for PRC. There are undoubtedly plenty of other incentives, but it's one less thing in their cost/benefit analysis of an invasion that could help sway the decision away from an invasion.
Yes but I think important to recognize that contingency is the large basis of the "stealing" TSMC narrative. The other consideration TW semi workers who get to jump the H1B VISA line eyeing for immigration shortcut to US if that option ever opens up = expertise transfers to Intel/US semi. Both US and TW has restricted TW semi talent from working in PRC semi to prevent knowledge transfer, the same concern applies when TW talent is in US, who has much better capacity to brain drain and "steal" expertise.
> TSMC ownership and people of Taiwan wouldn't need much incentive to scale up
There's been ample signals that TSMC leadership are weary of Arizonal expansion, and the meme of of US stealing TSMC are from murmurs in TW by people unhappy with erosion of silicon shield. On the flip side you have TSMC leadership angry that US export controls is cutting off major revenue / future growth in PRC, while underpaid semi workers are angry over controls to work in PRC semi for massive compensation. Opinion on the island falls in camp of preserving silicon shield (i.e. no leading edge fabs abroad) to leverage US into assistance. Or preserve silicon shield to keep money printing strategic industry for barter with PRC if US doesn't assist. There isn't a camp that thinks scaling up TSMC infra outside of island is a good idea that I'm aware of. Also I want to wadger even without funding UKR war, US weapon sales / deliveries to TW has been susipiciously slow with many dates set after fab openning, almost like onpour of US resources is dependant building these fabs in first place.
>one less thing
I argue it's one more thing with Oct export controls, since PRC has even less access to leading edge semi from island, vs US who maintains unrestricted access. Now there is more incentive, arguably pressing short/medium term need, to distrupt TW semi because it would hurt US disproportionately more, and close relative semi gap.
Why should the US nationalize these fabs? I mean, regardless of whether China invades Taiwan or not, the fabs located in the US are owned by TSMC, and TSMC is owned by TSMC's shareholders, which will likely remain the same regardless of whether the state of Taiwan still exists...
The same reason west confiscated Russian reserves, and destroyed historic economic linkages via sanctions. You can't "regardless" of invasion when invasion/not invasion are qualifiably different geopolitical realities. Most analysis suggest at minimum there will be heavy PRC sanctions in event of invasion, a successful one would make TSMC a PRC controlled company, which which will not be business as usual for TSMC operations or share holders.
They don't really need to "steal it" as in take it from their owners. The owners will own it in the US and will probably have an incentive to keep running their operation if Taiwan takes a hit.
It is getting stolen from "Taiwan", however. Since Taiwan guarantee for independence is the world's dependence on its chips.
You can even get ChatGPT to write an entirely plausible speech from the President declaring that event:
> Write a impassioned speech for an American wartime president making a speech declaring the immediate nationalization of the Arizona TSMC chip fab for national security reasons.
Posting ChatGPT spew is very tedious, but it completely nails it.
TSMC is a public company. Last news I see shows a drop to 73% of the company being foreign-owned. The biggest shareholders are American. It might be more accurate to say it's an American company that operates in Taiwan.
Is the US chinese-owned because it's amongst the top holders of the US's debt then? Of course not.
If you think american shareholders have a huge say in the running of the company, or can claim their works and assets anytime like you've been saying, get real. American shareholders only care if the profits TSMC line up their pockets.
Bringing up the debt was a useless strawman. The US government is not a corporation, and China definitely doesn't own the majority of the US. China isn't even the largest foreign debt holder either. And foreign debtholders don't hold most US debt - the US does. Be better, these were 4 inaccuracies / fallacies in one statement.
That's exactly how ownership works in the US and other free nations. If foreign citizens own the majority of a private US company and its voting shares, they have control over that company. Taiwan has similar rules. [0]. "Each shareholder of the Corporation shall have a voting right for each share they hold.
Voting rights may be exercised in writing or electronically at the shareholders' meeting of the Corporation."
Taiwan allows significant foreign ownership, even where it is restricted it's set to 60% max (it isn't for TSMC). And they are a democratic, capitalist society, not an authoritarian one like China. And they have many reason to placate Americans, since we're the only thing standing between them and China.
> If foreign citizens own the majority of a private US company and its voting shares, they have control over that company.
And I highly doubt Taiwan's government would allow any move that threatens their one of their economic golden gooses. Then as mentioned in the video, you literally do not get to control employees through a vote of shares - they'll quit and work at another competitor. You might think people will always stick to the principles of democracy and rules of law, but as the US itself has proven itself time and time again, they'll put on tariffs if push comes to shove, screw democracy.
Hell, the incentives don't even line up for shareholders to fulfill America's dreams and wishes. Trying to equate voting shares to a company being 'American' without addressing the social, political realities is wishful American centrism.
TSMC is literally building out multiple fabs in Arizona to placate America's wishes, including a 4nm and 3nm process, which is more advanced than any they currently have.
> Hell, the incentives don't even line up for shareholders to fulfill America's dreams and wishes. Trying to equate voting shares to a company being 'American' without addressing the social, political realities is wishful American centrism.
This is literally what's happening. It's not a dream or wish, it's a desire, and one that TSMC has decided to fulfill. You continue to say "they won't" but they have already decided to do exactly what the US wants.
- The factories are not joint ventures, they are fully owned by Taiwan.
- Build-outs in US are not going to be the most cutting edge technology.
- TSMC has ~$36bn in capital expenditures in 2022. The Arizona fab is ~$9bn a year. Majority of TSMC investment remains in Taiwan.
- TSMC produces ~15m waifers a year, ~80% produced in Taiwan. Arizona fab will produce ~250k waifers a year from 2024, ~500k from 2026.
- TSMC has at least 5 other build outs in Taiwan.
- The notion that US is going to be self sufficient in terms of chips thanks to the Arizona fab is flawed: 1. By volume, most chips are not what this fab is going to ship. 2. There are other chip foundries with specialty processes in Taiwan. 3. Taiwan leads the rest of the pipeline: assembly, packaging and testing.