[wsetchell]

TSMC has a great business today, but world governments are dumping around a few hundred billion dollars in subsidies towards local TSMC competitors (e.g. ~$25B-$75B from the CHIPS act alone depending on how you count)

TSMC's moat isn't enough to withstand that much subsidized competition. All of those new competitors will chase market share and destroy the profitability of the market.

Solid move.

[dougmwne]

Yeah, chip market is very likely to go from boom to bust. There was an incredible amount of investment as governments realized that chips needed to be commodity cheap with guaranteed supply or the modern economy could collapse. Expect silicon to be more like wheat and oil moving forward, heavily subject to government investment, regulation and controls to ensure a steady supply.

[scarface74]

It doesn’t matter how much money governments are throwing at competitors. The expertise required is tied up in Taiwan everything else is just to get political brownie points.

Just like when the TSMC factory does come online and is fully operational in the US, there will still be a huge dependency on Taiwanese manufacturing.

It’s the same thing you saw when Cook prostrated himself to Trump showing Apple “bringing Mac manufacturing to the US”. All they did was bring final assembly of Mac Pros that sold in low volumes back.

Apple did the same in the UK and other countries to make the politicians look good.