TSMC is the center of the universe for chip fab. AMD, NVidia, Qualcomm, and Apple all rely on their manufacturing. Doesn't this create a systemic risk especially with Taiwan's ties to China?
TSMC just stopped making chips for one of its biggest customers just because the U.S. passed a law. They're building a big facility in Arizona just to satisfy the economic nationalists in the U.S. Plus, Samsung is also outside of China, and while their technology is behind TSMC, they are fairly competitive. I don't think any ties Taiwan has with China are very worrying in this case.
TSMC's ties with the U.S. are, on the other hand, a big strategic threat to China, and maybe to other countries that aren't the U.S.
Samsung has just as many ties with the US as TSMC. Both companies use semiconductor manufacturing equipment from US firms like Applied Materials and KLA. The reinterpretation of US export controls that bars TSMC from selling to Huawei extends from not just barring companies from selling products to China with US technology inside, but also barring companies from using US technology to manufacture Chinese-designed products that are then sold to China. This applies to Samsung just as much as TSMC.
TSMC isn't real bottleneck here. It's US semiconductor manufacturing equipment firms fully under US jurisdiction that underpin the supply chain for any modern fab.
this area of industry is perhaps the most interesting- the firms doing research and at the forefront of chipmanufacture, but in the lay tech press doesn't get a lot of fanfare. Are there good links to write-ups about how this industry is structured, etc? The only other company I know about is ASML who makes the EUV lithography machines...
I'd say that the ties of Taiwan with China are not that concerning, considering that they actually consider themselves to be the legitimate government of China in exile on the island of Taiwan and that the mainland has missile batteries ready to fire missles on them.
I guess the real danger here in our unforeseeable world will arise if the American government becomes either unwilling or unable to defend Taiwan from a sea invasion from the CPC, something that would probably be more serious to American (and world) security than losing a few fabs in Asia, I think.
Do you think the American government is able to defend Taiwan right now?
With China about 100 miles from Taiwan, I don't see how anyone could get close without mass casualties. China has the shorter and more secure supply lines. They could send an invasion force using numerous small water vessels in waters they could easily defend. In the end, the losing side would just destroy all the important places in Taiwan.
Would China actually bother with that? I don't think so. They like doing business with the Americans, and that would basically be a declaration of war to the USA. Even if it didn't boil down to that, sanctions would hurt them plenty, much more than they want. After all, Taiwan wasn't not for a split second part of Communist China, so what's the point of risking anything for an overcrowded island as long as no one recognizes them as independent?
So yes, I think the conflict will definitely remain frozen for the next decades, and it will be at least until either the CPC loses control of the mainland, the USA lose their grip on the region, or some US politician goes bananas and pushes for Taiwanese independence.
Technically, they do, they are forced to remain the Republic of China (and also lay a claim on Mongolia) because any change of status would be interpreted by The PRC as a declaration of independence. So yes, while it's quite clear they don't care about the mainland, they have to de jure still keep the irredentist clauses in their laws and statutes in order to avoid war with the Chinese.
> TSMC is the center of the universe for chip fab. AMD, NVidia, Qualcomm, and Apple all rely on their manufacturing. Doesn't this create a systemic risk especially with Taiwan's ties to China?
It does, and that's not only TSMC, or even fabs as such.
Taiwan is a source for a many single vendor semiconductor manufacturing equipment, and consumables. Taiwan going down means the semiconductor industry as such, globally, going down for a few years at least.
First thing that comes to mind are lithography machines, but for the very high-end ASML is the only game in town currently afaik. And they are sitting in the Netherlands (working with Zeiss in Germany). For larger feature sizes there are vendors too.
Equipment, some low profile stuff like coaters, wafer preparation, and cleaning. Packaging equipment, and consumables. Some AMHS. Gas, and chemical handling equipment. Some resist makers.
Clean room material markers, few makers of vacuum grade plastics, FOUP, film, and other carriers.
All GloFO, Sam, and Japanese all use at least in some part something from Taiwanese makers. If for example, the only one maker of particular brand of proprietary resist stripper does go down, I don't know if somebody would even be able to reverse engineer it to know how it works, let alone reproduce it.
They will have to go back few generations in the resist tech to resume production with non TW suppliers.
And like that with many, many other parts of the ecosystem. It's only a tip of the iceberg.
Just curious, what would you have liked to see the U.S. do about Hong Kong? Arguably if anyone was gonna do something it should probably be the British being their agreement was broken. I'm sure the British would have U.S. backing them if they wanted to retaliate.
The U.S. started removing the extra trade agreements from Hong Kong (which arguably is a large part of what made Hong Kong what it is today) and sanctioned individuals in the Chinese government [1]. While this seems to be a "weak" response, I'm not sure what else I would like to see short of getting the military involved.
Given that agreement on Hong Kong independance was set to expire relatively soon, is difficult to justify serious intervention from a cost/ benefit perspective.
The original seisure of Hong Kong was an act of gunboat displomacy, and not exactly an exemplar of justice and law. Consider how its seen in donestic politics in China.
This does not mean that I approve of China's activity, just putting things in perspective.
>if anyone was gonna do something it should probably be the British
Except the UK has much bigger issues ATM like dealing with the social, political and economical fallout of Brexit and Covid-19.
To put it mildly, even if they wanted to, it's tough for them to help put out a fire in a far away village when they have a huge dumpster fire in their own back yard to deal with first.
Building relationships with our allies in the area (TPP), State Department diplomacy, etc. to pressure China effectively. I think TPP was dead regardless of who won, but that State is impaired right now.
It is hard to see what the US should do, but I think the west has a moral obligation to do something (even though it is technically an Anglo-sino agreement).
The UK is trying to welcome people from Hong Kong to the UK (passports left over from before the handover) which could hurt them where it actually matters if lucky.
The 'government' is not an independent actor - its soft power. And its especially soft in US. This whole thing with 'executive power', look at me I am doing things - its all smoke and mirrors.
Obama promised to end wars close down Guantanamo bay and in the ended up keeping up all war campaigns and on top of that he started droning people around the world.
The 'big boys' of the industry have enough fingers in the pie(s) to have their say in things that would affect them.
And independence of Taiwan is definitely one.
> Hong Kong fell without a peep from the U.S.
Because it was mostly Chinese businessmen window to the world, is fall of independent HK really that big of a deal for US or UK?
HK isn't a sovereign nation, Taiwan is. Also, having the US go in would be questionable. Wasn't the "one country, two systems" treaty an agreement between uk and china?
I mean, you can make the same argument with "the earth is flat... depends on who you ask". At least when it comes to the Taiwan (the island) I don't think there's any doubt that the ROC government has a monopoly on violence there. They also have their own military, police force, and collect their own taxes, independent of the PRC.
Best I can recall, it was formed by Nationalists, partly Nazy government that had to flee after like a third Communist uprising when they relised there were more revolting peasants than they had bullets.
Obvious a lot of time has passed, but it's not quite flat earth. It just requires a sence of 'historical justice', however unhelpfull
It's a little bit more complicated than "ask Taiwanese", depends on whether you ask the indigenous people or those coming from mainland ~1949 and their descendants, you may get different answers.
I don't think you mean Native Taiwanese (as in Native Americans) here, so I have to say people are not unanimous about whether "Taiwan" is a sovereign nation.
Except completely reclassifying it to remove the thing that made China want to seize control in the first place: special trade status.
Other than that, what could the current administration do that wasn't screwed up by its predecessors?
My allusion to incompetent government in the U.S. should not be construed as limited to the current administration. The U.S. government has been screwing up a lot of things for a very long time now.
Yes, with many thanks to the Republican party that doesn't believe in governing competently. The party of anti-government has been doing everything it can for decades to get the government to break down and screw up. Instead of improving government, they've been systematically destroying its ability to deal with real problems.
> you guys understand that Hong Kong has and always been part of China, correct? UK gave back a land that wasn't their to keep.
PRC signed an agreement with the UK that set out the legal parameters for this transfer of sovereignty, and PRC is contradicting that agreement with their actions. While it may not legally be the UK's to keep, it was not China's to take in this respect either.
> What can any Western country or US president can do? Do you declare a war with a country over a piece of land that is rightfully their?
Well, in the mean time, the U.S. has terminated the special status of Hong Kong which allowed it to serve as the conduit between the civilized world and a country with essentially no rules that regularly outweigh pure class/political privilege.
The English legal system and liberal order that the UK imposed on Hong Kong was in large part what made them so dazzlingly wealthy and dynamic; and if PRC wants to corrupt that, the result is that the benefits of the system they are corrupting disappear with that system.
Also, it is not always right to honour the law, when dealing with bandits. The CCP does not care for the law, so their assertion of a legal right to Hong Kong (which has not matured anyway) is hypocritical, and can essentially be ignored at no moral hazard.
Furthermore, even if we asserted that the CCP has some agreed legal right to Hong Kong that will mature in some years, I would not agree that it has a moral right to take its people as property.
A true leader would have gotten on the phone with all of his counterparts in all of our allied countries and given notice to China that the new laws to curtail freedoms are a red line. And come up together with a list of collective sanctions (including banking) to threaten China with.
Instead, Trump has spent so much of his time kissing up to Xi to get his help to win the re-election (per Bolton's book). And check out some tweets from 2020:
"Terrific working with President Xi, a man who truly loves his country."
"In particular, on behalf of the American People, I want to thank President Xi!”
"“Just had a long and very good conversation by phone with President Xi of China. He is strong, sharp and powerfully focused on leading the counterattack on the Coronavirus."
"Of his many tweets over the three-day Memorial Day weekend, when the Hong Kong issue was at the top of the news, none was about Hong Kong. During the Hong Kong protests of 2014, Mr. Trump tweeted one of his few clear statements on the plight of the territory: “President Obama should stay out of the Hong Kong protests, we have enough problems in our own country!”"
https://www.nytimes.com/2020/05/27/opinion/china-hong-kong-l...
> A true leader would have gotten on the phone with all of his counterparts in all of our allied countries and given notice to China that the new laws to curtail freedoms are a red line. And come up together with a list of collective sanctions (including banking) to threaten China with
This is literally, exactly what the White House did.
Can you please point me to an article where Trump called the leaders of all our allies to create a coalition? And also which collective sanctions were created?
I think you might be over estimating how long things were shut down in Asia. Outside of Hubei, China had an extended Chinese New Year for a couple weeks (in February) and a longer post holiday ramp up. Taiwan, South Korea and Japan didn't shut down.
Pretty much any company that imports stuff from China would have already had additional supplies built up to cover the normal CNY shut down and ramp up so the supply chain issues were lower than if COVID had shut down China at a different time of the year.
TSMC has fabs in Washington and they are going to open another one in Arizona. They also have a bunch of design centers in the US, so no. The strategic planners have thought of all of these things way ahead of you.
Even with that, the global supply chain in semiconductor consumables will go down for a few years. With all respects, its not humanly possible to operate such a "born global" industry as semiconductors manufacturing without a globally integrated supply chain.
Russia for example still keep tries to have a 100% internal military semiconductor supply chain. Their best chips made on a domestic process are 10μm. TI military foundry is not much further ahead.
I doubt that any actual "strategic planner" actually put his hand on any American policy making process in the last 30 years. The way how terribly unprepared the US was to even such an insignificant nationwide emergency like the virus, is the best proof.
With all due respect, the US Gov doesn't have to depend on TI for defense/national security chips. They could cut a deal with Intel as soon as the ink is dry on the security clearances.
In principle, in case of extreme urgency on a level of national emergency, they can, but this will also mean that it will be Intel who will have to redesign, and adapt the mask. Some military IP is so old, that it isn't even digitised, or is a non-syntheszed, hand drawn IP. Some of it will likely be completely unworkable on a new CMOS process because of dependency on some, now exotic, high speed CML logic.
And we are only talking about digital chips. Analog chips case will likely be hopeless without a specialty analog foundry.
In the peacetime, it is very, very unlikely they will be able to "reorient" to make defence chips, as it will seriously disrupt the company.
And in the end, it may not matter at all if the supply chain for materials will go down in case of a military conflict.
Now imagine Chine acquiring outdated, but still somewhat decent fab capability to sustain itself in a pickle .. and then rolling over Taiwan. Wouldnt have to be in the open, a big 'oopsie all TSMC fabs burned down overnight' would create chaos for not prepared nations.
The important machines from TSMC are made by other companies. Competitors can and will also make 5nm chips. TSMC definitely has a headstart and it requires a huge investment to realize a fab (machines, clean rooms) also a lot of integration work and many optimisations to become profitable.
TSMC's ties with the U.S. are, on the other hand, a big strategic threat to China, and maybe to other countries that aren't the U.S.