[bilbo0s]

And frankly, this is everyone's motivation. EU wants to not depend on TSMC. US has gone all-in to not depend on TSMC. China has gone all-in to not depend on TSMC. And there are even rumors that Russia is trying to build their capabilities in this regard.

I think the leadership at TSMC is being a little naive. Alternatively, they may know very well what's going on here and they are being willfully obtuse to paint as bright a picture as possible of their long-term prospects.

[mirthflat83]

You don’t become a leader in this industry by being naive. HN readers are being naive believing that TSMC really meant what they said. Anyone with a brain knows that the US wants to reduce reliance on TSMC

[tachyonbeam]

Yeah. It's not just supply chain, it's also national security.

> I think the leadership at TSMC is being a little naive. Alternatively, they may know very well what's going on here and they are being willfully obtuse to paint as bright a picture as possible of their long-term prospects.

It could be two things:

1. Some arrogance, "hah, this is harder than you think"

2. They're trying to discourage the competition because they know it will hurt their bottom line.

Even if they only lost 10% of their revenue, that can still hurt a lot. They could go from being a growing business to stagnating or shrinking.

[gpm]

3. They're trying to discourage competition, because competition impacts their (Taiwan's) national security.

I don't think TMSC is naive about the geopolitical importance that they have to Taiwan.

[tachyonbeam]

I was thinking about that recently. China can't realistically invade (or intimidate/sanction) Taiwan as long as they are dependent on TSMC, because of those semiconductor manufacturing plants went down, it could be a global economic disaster, and China would be one of the most heavily impacted, given the proportion of everyone's electronics they manufacture.

[dirtyid]

China can't realistically invade TW until it can take on USN 10-15 years from now after more build up / military modernization anyway. Happenstance of TSMC dominance is IMO blessing in this regard, buys PRC 10+ years of military and semi catchup time. There's going to be theatrics and political posturing in the interim by US/CN/TW, but ultimately TSMC buying TW time is buying CN time to close gap with US.

[tasogare]

The West should deal diplomatically openly with Taiwan: some limited production creation in EU/US in exchange for international recognition and protection of Taiwan.

[cpleppert]

That would be incredibly dangerous for Taiwan because China would react if it felt the military balance would actually change.

More importantly, the EU/US are not really in a position to make a credible threat to China. Let’s say they China declares its intention to forcibly ‘reunify’ Taiwan. EU sanctions on China would be incredibly painful... for the EU. The EU just signed a new trade treaty with China which probably tells you all you need to know about that option.

So down to the US. If the US didn’t deter China by trying to change the facts around Taiwan when it was considerably weaker it’s hard to understand why the US would take that step now.

That’s kind of the problem here. There isn’t anything that would credibly deter China at all so taking moves to antagonize China don’t accomplish anything. Even if other countries felt threatened by this they would much prefer to engage in ‘buck passing’ rather than taking actions that would directly hurt them.

[ihaveajob]

From the Taiwan point of view, allowing any competition is opening the door to trouble in the long run. Political winds come and go, but building semiconductor capacity can't be done overnight, so the longer they can keep their edge, the longer they'll be relatively safe from their neighbor to the north.