[deltaseventhree]

It is categorically NOT a huge win for the stock. This is all happening because of US subsidies.

The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan.

The subsidies only make this a viable option for political reasons. The decision to create a fab in Arizona is strictly speaking unprofitable and essentially a economically irrational move for the company.

It is ONLY being done because of US demand and political tension from China. For a shareholder this move is not good when looking at it in terms of profit.

I know this is a hard pill to swallow but it's true.

Don't joke about Europe. The best place for tsmc to expand is actually china. But this won't happen for various reasons that we all know about.

[boc]

> The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan.

Putting the rest of your statement aside, this is a very silly thing to say. The United States invented the IC and started silicon age. Integrated circuits made in Silicon Valley were literally on the moon at the same time that Taiwan was still an incredibly poor country living under martial law.

Maybe today there aren't the exact people in the US to compete with Taiwan on this chipmaking process, but that doesn't mean the US lacks the ability to compete. It's not about general country-wide work ethic. If the right person to get the job done is a one-in-a-million person... well the US has 330 of them vs 23 in Taiwan.

[philwelch]

Countries change over time. If the US has the ability to compete with Taiwan in semiconductor manufacturing, we sure haven’t shown it in recent decades.

[deltaseventhree]

Things change. As of right now the US can't compete.

In the past the US could compete, but that doesn't speak to the status quo.

In the future the US may change but this is unknown. It may very well be the US will never recover. This is a realistic possibility.

Either way the status quo is that the US is currently inferior to Asia in terms of semiconductors.

[coredog64]

IBM and Intel are competitive with TSMC and Samsung when it comes to ability to cram transistors onto wafers. This idea that only Taiwan/TSMC knows how to fab is light years from reality.

[deltaseventhree]

Well that wasn't my idea? You simply assumed that was my idea without me saying it.

The idea that tsmc and Samsung can fab better then the US is unequivocally true.

[KerrAvon]

Well, that is certainly the Chinese government's take on things.

Your posts suggest that the US should just give up and let Asia -- more specifically China -- dominate semiconductors forever because US workers are lazy, fat, and stupid. Am I characterizing your position correctly?

[deltaseventhree]

No. My posts suggest none of that.

I am simply stating the truth. It is from the perspective of a tsmc shareholder not a patriotic American who wants to beat china for no other reason then being the best.

As a tsmc shareholder one part of your post is correct. US workers are unfortunately lazier and slower and more expensive. Not necessarily stupider. You characterized this part of my position partially correctly.

As for what the US should or should not do, I never commented on that. Your patriotism and defensiveness specifically injected rivalry into your response. I literally have no opinion on what Taiwan or China or the US should do. I am neutral on that front.

[ferrumfist]

> US workers are unfortunately lazier and slower and more expensive

I guess we just kinda stumbled into being one of the wealthiest and most developed countries in the world while having the lazier/slowest/most expensive workforce.

[bigbillheck]

I guess it was technically the workforce that did those coups and invasions whenever it seemed that the resource pipes might be turned off.

[gorjusborg]

> US workers are unfortunately lazier and slower and more expensive

Wow. At least you aren't hiding your nationalistic bias.

[gorjusborg]

That may or may not be true, but making them is a prerequisite for improving.

Asian labor may be cheaper and better, but relying on resources with precarious ties to authoritarian regimes has its own cost.

Sometimes 'best' encompasses more than just bottom-line and functional metrics.

[coredog64]

> The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan.

GMAFB. Intel has several of their fabs in the Phoenix metro area, they’re another 3-5 major players in the area, and there’s a talent pipeline from the local University into these companies.

Intel’s problems aren’t an inability to fab, it’s an inability to translate their design language into the new, smaller process.

[deltaseventhree]

It's universally well known that Asian workers work harder and can be paid less.

It's not just about intels capabilities. It's about economic wage standards. The cost is just too high in the US.

That being said tsmc workers in Taiwan are by far more capable then Intel this is proven by the 3nm process of which Intel is completely incapable of achieving.

[ahkurtz]

You have posted many times in the thread saying the same thing, but slightly moderated because you got flagged.

You said elsewhere "things change" regarding labor force quality. They do. Asian labor across the board, but especially in China, has been rapidly increasing in cost while for example USA labor is stagnant in overall cost. Apple is medium-term going to be priced out of China just by labor costs. It is actually smart in a real-politik sense (and a business sense you deny) for labor sourcing to start looking a lot more broadly at different countries on a cost basis. USA is rich in some measures, but in terms of purchasing power and compensation of much of working class, it no longer is.

As for the quality of USA workers you've commented on a lot, I'll give you there is a serious decline in education. Saying they are slow or lazy shows you don't know anything about USA. The vast majority of the country is working itself to death and the life expectancy is cratering. As sad and reprehensible as it is, from the kind of logic you're using, a desperate and broken workforce is a GREAT business opportunity.

There is something beyond "American Exceptionalism" and "Asian Exceptionalism" and I think you really need to find it.

[arghnoname]

I always feel there's some implicit racism or belief in cultural superiority or something at play in these discussions. Anyone who has gone to grad school can see pretty plainly that the top schools are stuffed with Chinese and Indian nationals. They're capable and they work hard. Some of them, not a small number, go back home. Further, western industry set up shop in Asia for their own reasons and brought their expertise over.

The west had a lead, but 'we' trained Asians at our top institutions and worked closely with Asian manufacturers so that they can make our most sophisticated products more cheaply. There are a lot more people in Asia, and high relative poverty and cultural practices encourage a higher degree of scholastic achievement. Of course they're beating us now.

Outside of a very explicit and intense effort to develop domestic talent and retain foreign talent (or bloody wars), the west probably won't ever really lead ever again. This was the obvious outcome decades ago, but these things take time. The gap will grow and will extend up the value chain--western nations will do protectionism to try to slow this (e.g., Huawei, current chip restrictions), but cat's out of the bag.

I don't think it's a good or a bad thing from a global perspective. It just is. The great power competition that may result, wars, etc, is a very bad thing. The US in particular should compete as best it can, but it's best for everyone if we learn to live in a multipolar world.

[mr_toad]

> Anyone who has gone to grad school can see pretty plainly that the top schools are stuffed with Chinese and Indian nationals. They're capable and they work hard.

People in grad school tend to be hard working and smart, that’s how they got there. Hypothesis: foreign nationals have to be even smarter and harder-working to secure places in US universities, hence the stereotype.

[arghnoname]

It wasn't my experience that they were harder working or more capable than the domestic talent. Because of the immigration benefits, some had additional motivations native-born Americans didn't have, but there are easier ways to immigrate. There were some differences culturally in how certain things were approached, but I thought capability wise there was not an obvious and significant disparity in terms of capability of students by national origin.

What was noticeable is that there were a lot of these students and to the extent that the US does not retain them, we are training the workforce of our competitors. To the extent we do retain them, we are poaching the talent of our competitors. My guess is this is tough to balance and where we're at now is making total global innovation higher but lowering the proportion of the pie over which the US has dominion.

[davrosthedalek]

What percentage of the chip cost is the wage cost? This might be relevant for a 90uM process, but I think at 4nm, the wages are a minuscule part of the production costs.

[deltaseventhree]

Should be a huge portion of the cost. The material is just silicon. The expertise and know how that goes into this is where most of the money goes. For Taiwan, this expertise is better, faster and cheaper.

[adwn]

You're forgetting about the billions of USD that go into buying the machines that make up the fab.

> The material is just silicon.

No, a lot of chemicals are required as well.

[deltaseventhree]

Those billions are also mostly R&D. It's also from a country external to Taiwan. ASML, the Ductch.

Yes, Obviously there's a lot that goes on in this process, more then "just" silicon. But if you want a summary, then cost expertise and knowhow, eclipses actual process. In a sense it is just "silicon" when measured relative to the ability and knowledge required to transform that material.

[ajhurliman]

Chip-making isn't the same as sewing together cheap trinkets, and the Chinese economy has changed to support a growing middle-class so the reality of Chinese labor costs has drifted from the stereotype in recent years (especially in the domain of skilled labor).

Not to mention the lack of seismic activity and humidity that AZ offers.

[hardware2win]

Arent people really small % of semico investments?

[ScoobleDoodle]

The “various reasons we all know about” I’m guessing are: theft of intellectual property, theft of the technology and skills.

I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech.

[deltaseventhree]

Espionage is a minor reason. Trivial really.

The main reason is the looming threat of invasion of Taiwan from China. Such an action is catastrophic for Taiwan and the US. I thought this was obvious. Guess not.

The US is an easier espionage point for the US to steal technology from Taiwan. Most likely it will happen. But simple espionage isn't enough for this technology to fully transfer. The expertise and knowhow is just too challenging.

Do not let your patriotism blind you from the moral grayness that operates within the US as well.

[Mikeb85]

Does TSMC "own" the technology? Because their fabs are wholly dependent on ASML, a Dutch company. And they're using that to produce tech that's designed in the west as well.

[t-3]

Right, only culturally European people know how to do anything. Those Taiwanese are just factory workers, no expertise at all, that's why Intel is in such good shape these days. Chipmaking is obviously so easy the only reason we let them do it is to keep the price down. /s

[Mikeb85]

They obviously have expertise, the point is that the parent was implying that all the tech involved is exclusively TSMC's, which is also wrong. The parent literally said the US is trying to "steal" TSMC's technology...

So maybe read my comment in context instead of implying racism right off the bat SMH.

[chrischen]

Well if TSMC is not doing anything valuable then someone tell the shareholders because ASML is worth almost only half of TSMC.

[Mikeb85]

Why is Apple worth more than ARM and TSMC?

[dgfitz]

Software

[phkahler]

>> I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech.

For a US company, probably. They seem to pick up Chinese Ph.D.s with ease.

[TreeRingCounter]

> The best place for tsmc to expand is actually china.

The chinese are vastly worse at fab than americans. Why do you point out that american workers are worse than TW, but neglect to mention that Chinese are even worse?

Not trying to make a judgment about people from USA, CN, TW as a whole - mostly just a function of experience.

[dirtyid]

> neglect to mention that Chinese are even worse?

Because they're not. PRC has worst fabs due to equipment sanctions, and now expertise sanctions (first by TW, then US). But said sanctions were placed at all because the cost and quality (east asian work ethic etc) of PRC semi workers weren't in question. Versus US workers being described as "group of giant babies" by TSMC employees ranting on PPT about doing more work for less pay than Americans in Arizona. Experience doesn't matter if you don't work hard enough. It's precisely because PRC workers, who can keep up with TSMC "military" pace, have demonstrated potential to run great fabs that led to companies like TSMC expanding in PRC in the first place, and why US had to do export controls, and do massive CHIPs subsidy to get fabs on US soil.

[theturtletalks]

Good thing a stock price is about the future growth of a company. Hell, many public companies are valued at billions but still take a yearly loss. They are "subsidizing" their own growth in a sense.

[deltaseventhree]

Stock price encompasses many things. Overall outlook is good. However the Arizona plant is not a good move for the company.

Your post looks like a rationalization of your own purchasing decisions. If this is a correct observation I would self reflect on your own biases.

[galangalalgol]

After flooding took out most of the world's magnetic hard drive manufacturing capacity, it seemed clear that absolute efficiency in the immediate sense was the enemy of a robust long term manufacturer. I'm not sure why human v human threats are being heeded when nature v human ones were not, but diversifying your locations absolutely makes sense. There are some geographic constraints to where locating fabs make sense. And cost of living has to be balanced with the need for knowledge workers.

If you ran TSMC and you wanted to be sure no single disaster or war destroyed your whole manufacturing capability, where would you put the fabs? China's coast seems too close disaster wise and the same war that would dust your TW masks might destroy those too. Middle east maybe for climate and shipping logistics? Then one in the EU, perhaps spain? North america is probably third choice, and between climate and cartels that probably means the US. If third pick is paying you to go there, maybe it does make good sense.

[deltaseventhree]

Vietnam, Korea, many parts of Asia. The US is a arbitrary choice. It is done because of the shared rivalry the US has with Taiwan against China.

[galangalalgol]

I think you are certainly right, but why focus on Asia exclusively as a second fab location? One earthquake could flood all of them. As I said, oil giants in the middle east trying to diversify seems pretty ideal. I only suggested EU for the knowledge workers and it faces a different ocean.

[coredog64]

From a geopolitical standpoint, US investment in Vietnam’s manufacturing capability would put pressure on China. China is trying to move up the value chain with Vietnam already eating their lunch on the low end.

[mixmastamyk]

Short-sighted comment. You know how you develop expertise? That’s right, you invest in it.

[deltaseventhree]

Long sigted. The investment starts from scratch. Why not invest in some places cheaper? Why not invest in a place that has better expertise?

Overall the long term vision is to wrestle some control away from China. That is the long term bet the US and tsmc are ultimately making and what's driving the decision. But economically this is a bad bet.

[mixmastamyk]

The why is obvious. Not having vital infra solely in the hands of a potential enemy is strategy 101.

Economics are but one factor of many.

[markus_zhang]

I see this as a bargaining chip between US and China. Both sides "win".

[deltaseventhree]

Possibly. But tsmc itself loses by moving the fabs to a much more expensive area.