[lainga]

Is Liu misunderstanding the Western plans or am I? I was under the impression that the US and Europe intended to get some onshore fab capacity as a second-source and backup in case Taiwan is blockaded or worse.

If the plan was to replace TSMC entirely, well, I'd think he was justifiably concerned as (a) a threat to his business and (b) evidence that the US was decoupling from Taiwan. But I don't think that's the case.

[PeterisP]

Arguably US and Europe absolutely intend to get some onshore fab capacity as a backup, and the choice for TSMC is to either do that (perhaps demanding some subsidies as enticement) or refuse with the expectation that this will inevitably cause attempts to decouple from TSMC even if it's not economically viable, purely for strategic reasons.

IMHO there are some similar trends with EU agricultural policy, where arguably one of the reasons (not much discussed to general public, but obvious if you look at what's being done) for sustaining farming subsidies in sectors where EU would be uncompetitive (due to climatic reasons and labor costs) is the strategic goal to ensure that EU does not become reliant on imported food even if it can be farmed cheaper elsewhere, so that in case of major geopolitical disturbances in coming decades (e.g. caused by climate change) there's local farmers, farmland, skills and infrastructure for that. The costs seem huge, but in proportion to the whole economy they're affordable - the same would apply for on-shore chip fab capacity that's needed for strategic self-sufficiency of key resources.

On the other hand, I fully agree with the TSMC statement that it would be economically unrealistic for EU to expand semiconductor fab capacity to fully satisfy their own needs - it's feasible to expand fab capacity so that you have some onshore supply of modern chips, but it's impractical (and IMHO not within plans of any politician) to ensure that there would be enough fab capacity to supply all the consumer consumption, the expectation is that most of the volume would still be supplied from Taiwan and elsewhere.

[PeterisP]

On the other hand, if I think more about it, it may be a key strategic interest of Taiwan to ensure that USA and EU don't get any reasonable onshore fab capacity in the near future - if Taiwan (and trade with it) becomes irreplaceable for USA and EU, possibly even more irreplaceable than the trade with mainland China, that would ensure that USA and EU would be motivated to defend Taiwan against any attempts of forceful reunification.

[acoard]

The goals aren't mutually exclusive, they just depend on time-frame and how well things go.

Regardless, even if it is the former goal, it is still a potential threat to TSMC profits. Personally, I would not look at it in terms of Liu (mis)understanding, but acting in his own self interest to maximize his profits.

[dylan604]

If you went to the trouble of building this capability to produce chips, why in the world you not make that your primary source?