Isn't this inviting a rapprochement with the mainland?
Not trying to be over dramatic about it, but given there is a persisting strand of belief inside the Taiwanese political community that unification ON THEIR TERMS is a thing, I would think at this point an unreliable US partner, who asks your principle worldwide income stream to relocate is .. not the friend you hoped for.
The writing was on the wall when "make some of the chips onshore" happened, and now with packaging long line looping, the next logical step will be "do some of the packaging onshore" followed by "no packaging or fab from offshore"
I wonder if the US government will next ask ASML holding to also open plants inside the continental USA? if I was the EU, I would consider very hard what a response would be.
"we are witholding Novo-nordisk product from the USA until bilateral trade relationships return to normal" is unlikely I guess. as is "decent Brie will not be available in the USA for the forseeable future"
Personally I view the tariffs as a threat to get compliance. Its possible the goal is to get them to "have a brilliant idea" and invest in some American production. I don't know why but Asking Nicely never works for anything, why should international trade be any different.
> possible the goal is to get them to "have a brilliant idea" and invest in some American production
TSMC built a massive plant in Arizona. It's been hitting rocks, from frustration over "rigorous working conditions," e.g. people being "called into work for emergencies in the middle of the night," to differences in manufacturing cultures, e.g. "employees were expected to pitch in with work outside their job descriptions because construction of the facility was behind schedule" which "did not sit well with everyone" [1].
> I don't know why but Asking Nicely never works for anything, why should international trade be any different.
America literally failed to compete. We had fabs, even competitive and industry-leading ones, for several decades. But Intel didn't adopt EULV and whether or not you agree with their business decision, that left America without a leading node. TSMC and Samsung would take up ASML's EULV spec and the rest is history. America fell off the map with our "14nm+++++ Advanced TurboYield" technology, and the almighty belief in free market competition didn't provide us with a new champion.
The reason tariffs like this are necessary at all is because America cannot sell chips unless the government tips the scales with their fat meaty finger. Nobody wants our chips. Intel and Apple both gave up trying to make laptops on American silicon. AMD and Nvidia both orbit around the EULV suppliers because they're both cheaper and more advanced.
This is a temper-tantrum in response to realizing that government subsidy is the only other way to stimulate production.
Combine this with the other tariffs, killing green manufacturing and the chips act and infrastructure bills, threatening our allies, a freeze on all federal grants and loans (a couple hours ago, if you aren't keeping up), etc... how does this not result in a total collapse of the US economy?
Tech is a significant portion of our market. How could destroying our ability to source the most advanced hardware and driving a wedge in between a critical ally who literally cannot concede for their national security possibly lead to anything but a lack of trust or confidence in the US, increased costs, and a shrinking market for US tech?
> how does this not result in a total collapse of the US economy?
In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities.
> How could destroying our ability to source the most advanced hardware
It won't. Taiwan depends on us. They'll cave and we'll get a short-term win. What it also does is create a strategic imperative for Taiwan to balance its dependence on America. Those chickens, unfortunately, won't come home to roost for years.
> In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities.
Actually its the opposite. In the long term it incentivizes manufacturing chips in the US. Domestic manufacturing has bipartisan support (see Biden's CHIPS bill) and obvious nation security implications. That's not to say tariffs are the right solution but the end goal is good and uncontroversial.
It creates economic chaos in the short term because the supply of domestic chips is relatively low and the cost of foreign chips will increase dramatically. This will normalize over time as domestic production ramps up.
How quickly do you think that manufacturers could set up American fab plants? Domestic chip production on the level of TSMC is several years out even if all available resources were directed toward it now.
They're not particularly behind TSMC. The issue is one of costs - TSMC is cheaper. If Trump hits them with tariffs, suddenly it's no longer cheaper than fabbing with Intel.
Intel's fabs aren't competitive, period. They might compete when 18A gets taped out, but that's been in development hell for years now and is struggling to leave the sampling stage. TSMC has a track record of profitable EULV yields and can even charge competitors for fab access. I say that as an Intel apologist.
If Trump's goal is to make imported chips unprofitable, then he's going to push America backwards. Even Intel doesn't use Intel's fabs for high performance or high efficiency designs at this point.
> This will normalize over time as domestic production ramps up.
The problem is that it takes 5 years from the time ground is broken to the time an advanced fab is producing chips. In the meantime you decimate domestic industries that were dependent on these Taiwanese chips.
Part of this might be bluffing or just for show, so we don't know if Trump will follow through on these tariffs. Though the uncertainty alone this introduces could have serious effects as companies might avoid investments that Trump could blow up at any moment.
The grant freezes are just outright insane, how bad this will get depends on how long they last. The slight silver lining is that this order might just be so extreme that it'll fail and be overturned. This is not a carefully planned attack on the impoundment control act but they just flipped the table entirely.
Your best chance is that Trump might listen to the billionaire buddies that would lose money here instead of those that just want to see the government burn.
Interestingly, it's not, which means the market doesn't believe he'll actually do it. Personally, I think they may have a very rude awakening in the near future.
He has a history of talking out of his ass. He blusters about something, his insiders take him aside and explain why it's a very bad idea and he's off to the next attention-getting tirade. Hopefully that's what happens in this case.
Genuinely insane to the point that I don't believe he'll actually do it. I have no idea who this is for. It will certainly alienate the US tech sector that just spent the last month bending the knee to Trump. It will push Taiwan into the arms of China. I have no idea how this is remotely compatible with all the hawkish AI rhetoric. Baffling on all fronts.
As messed up as it is, he is bargaining for his enterprise. Under the table deals for him and his partners (there are many now, crypto, truth social, $djt, kushner family, these are the ones we know) where other countries negotiate the tariff down via these nasty secret exchanges.
The legacy of this administration may truly be so bad that people will be slapped by old ladies when this all over. Spit on.
Not trying to be over dramatic about it, but given there is a persisting strand of belief inside the Taiwanese political community that unification ON THEIR TERMS is a thing, I would think at this point an unreliable US partner, who asks your principle worldwide income stream to relocate is .. not the friend you hoped for.
The writing was on the wall when "make some of the chips onshore" happened, and now with packaging long line looping, the next logical step will be "do some of the packaging onshore" followed by "no packaging or fab from offshore"
I wonder if the US government will next ask ASML holding to also open plants inside the continental USA? if I was the EU, I would consider very hard what a response would be.
"we are witholding Novo-nordisk product from the USA until bilateral trade relationships return to normal" is unlikely I guess. as is "decent Brie will not be available in the USA for the forseeable future"