Is America Stealing TSMC?
Вставка
- Опубліковано 28 лис 2024
- Check out my podcast episode with Tim: podcasts.apple...
6:00 - Note. I do know the Japan fab will be a joint venture. However, TSMC management noted that is because it is producing a specialty technology.
Links:
The Asianometry Newsletter: asianometry.com
Patreon: / asianometry
Twitter: / asianometry
I've spoken to some Taiwanese people about this. They believe that after TSMC is secure in the US, the island of Taiwan will be gradually abandoned by the US defense and just left to China. It's not an unreasonable fear.
I guess you spoke to the wrong people
Hahaha
That makes a lot of sense.
After all, the vulnerabilities in semi-conductor manufacturing is the only major kink in the US's manufacturing chain.
If TSMC increases their US manufacturing so the world is no longer reliant on chips from Taiwan, what rhetoric will the US have to defend Taiwan?
Contain China from an island 100 miles off their coast? Out of a sense of Moral protection?
No, the cost/benefit analysis will shift away from defending Taiwan, as China continues their meteoric military buildup in hypersonics, Naval warships and drones.
totally makes sense.
If the US only cared about semiconductors, why did Dulles put Howitzers on the island before the industry even existed? Why did General MacArthur spend so much time during the Korean War planning a Taiwan theater?
There's clearly a military objective still in Fortress Taiwan. There's value to countering the PLAN's sub fleet with Taiwanese telemetry. And I wouldn't doubt the US tries to embed a 4-star general in Taiwan given the decay of Straits relations.
@@unfathomablej You're talking about world events that happened almost 70 years ago. This is a completely different country with a completely different geopolitical strategy. The US isn't in the business of "fighting communism" these days, if anything they're the ones spreading it.
The key driver is taiwanese people who are extremely dedicated to the company. I lived in Taiwan for a short time and can say that the labor realities are very different from the United States. Taiwanese engineers are highly skilled and extremely engaged with their work, yet work longer and have less quality of life than Americans. It will be interesting to see TSMC adjust to American culture in Arizona.
Always hear about this worker harder and longer stories. They just work stupider. Work smarter and you don’t have to show off to the boss by putting in pretend to work time.
@@TheBooban lol dawg you really think TSMC achieved what they are right now with a bunch of engineers pretending to show effort?
Ah yes, ruthless exploitation of people.
If your lab doesnt work unless you run it like a sweatshop then no one is impressed. the product being produced is completely irrelevant. every business manager who visited TMSC has been horrified, not impressed or scared they cant make the products there. Bragging that they grind out product and burn through people like a village forcing cavemen to cast bronze tools all day for the neighboring villages. the iron age is looking down and theyre not impressed. Culture? sure. keep it. be proud of it. Pride from being taken advantage of is a PHASE in industrialized societies, like Detroit steel. Eventually the host population opens its eyes and returns to what matters in puritanical pursuits: the homestead. At the end of these sociological phases we see generational workers recreating the machine shop at home. with Taiwan and semiconductor fab their own "culture" has not assimilated the technology into the residences. After this many decades its clear that Taiwan as a nation lacks the cultural and instinctual cues that lead the other nations on their paths.
Steal? How can you steal what is incomplete?
@@privateprivate5373 The US currently is still in the transformation, more and more people are realizing they don't want to be treated like garbage just to make billionaires richer.
There's a quote from Moris Chang, the founder of TSMC. I found out this in a book about semi conductor wars and that was,
"America has many talents, especially the geniuses. They are capable of inventing many novel things in this industry. Yet they lack the 'middle ones': the ones who actually assemble chips in the fabs. But in asia, we don't have that much of geniuses here yet we have many well-educated and good-tempered middle ones. So its easier to do manufacturing in east asian countries than in america."
So I dont think the US can have all the levels of chip industry, from labs to fabs, even though they got money. It will be beneficial for both America and Taiwan to know what they are good at.
As someone working in the industry, I am hearing a lot of companies planning to diversify or already working on diversifying their portfolio to include Samsung or Intel to reduce risk to their business due to geopolitical issues. Volume is king in the leading edge semiconductor competition so if TSMC loses significant wafer volume to its competitors, it could lose its lead as well (in fact, that's the main reason Intel lost its lead). TSMC should do whatever it takes to keep its wafer volume ... hopefully this is just a bump in the road that'll come to pass.
=YOU DONT UNDERSTAND THE FULL SCALE SITUATION.....IT IS AN *_EVACUATION_* ,GOT IT??AND,IN ACTUAL,TAIWANESE PEOPLE WORKING ON TSMC NOW,WILL BE LIVING IN THE US QUITE SOON
=I GUESS YOU KNOW WHAT THIS DOES MEAN....A PREPARATION FOR ALL OUT WAR WITH PRC,INDEED
this 1000%.
They are. There's a huge Intel plant as well being built in Columbus, Ohio. Microchips are just too crucial to our national security. That's why we had to bribe those companies with over $50 billion in subsidies to convince them to come here...instead of, you know, just allowing them to build here, promising public infrastructure that is already built, saying it's, you know, mainland America where you won't get invaded. I guess that wasn't enough, though. Shouldn't companies be competing with the People, instead of the People using their tax dollars to bribe companies to build there? I guess we just put a new nuclear target on our backs now. Fortunately, it's being built in East Columbus, so all the Fallout will blow East of us. Good planning! o_O
This is really inaccurate, I'm unsure at which stage of the production cycle and which part of the "industry" you are working in but the reason why the top fabless chip designers namely Apple, Nvidia, and AMD have moved away from Samsung (Intel doesn't contract manufacture) is because Samsung's technology is vastly inferior to TSMC. Samsung's yields and chip quality in Apple's iPhone 6s (see chipgate scandal) is what drove Apple to move exclusively to TSMC. Intel lost its lead because it was stuck on the 14nm process node for a ridiculous amount of time adding on to that incompetent management and complacency due to lack of competition from AMD. Intel has even contracted capacity from TSMC because of its own inability to compete on the manufacturing technology. If you believe that "diversification" is enough of a reason to move away from TSMC despite the clearly inferior manufacturing technology from Samsung (which is in the same geopolitical region mind you) you have no idea what you're talking about. Intel isn't even in the same conversation since they don't do contract manufacturing and their entire process improvement strategy is incompatible with client requirements for contract manufacturing. Even if they did start entering the contract manufacturing space they would only be producing 7nm in 2026 which is so many generations behind the leading edge its basically a non-starter for any major fabless chip designer.
@@VictorTechG I am going to try to educate you on this topic, hopefully you'll listen and learn rather than making flippant ignorant comments!
1. Intel got back into the foundry business just under two years ago and they released their 18A PDK to customers a while ago. I personally know of several companies working on porting their designs to 18A, that doesn't mean everyone's going to switch to Intel, it means companies are looking for options to reduce risk as much as possible.
2. No, Samsung technology is not "vastly" inferior to tsmc, they are one generation behind, i.e. their best node is more or less on par with tsmc 7nm/6nm in terms yield & performance. tsmc was two generations behind Intel for decades until they caught up and overtook Intel!
3. No, Intel didn't lose its lead because of "lack of competition from AMD", that had zero to do with it! They lost their lead because they missed the mobile market and the enormous explosion of mobile chip volume funded tsmc's leading edge R&D while intel had to be very aggressive with their 10nm (quad-patterning with DUV, etc.) in order to attempt and keep their margins intact, which was the primary reason why 10nm was delayed by several years and caused tsmc to take the lead ... it all has to do with volume, like I said volume is king in leading edge competition!
4. I didn't say companies will be "moving away from tsmc", I said they are diversifying, i.e. they are going with a multi-source strategy, by designing their chips based on multiple foundry technologies to reduce risk. However, if tsmc can convince these companies to not move volume to the competition by, for example offshoring fabs, it must do so, because …. you guessed it, volume is king in the leading edge!
5. The geopolitical risk to tsmc is unique to Taiwan, who is under constant threat of war by a country who has explicitly stated that they intend to take Taiwan by force in the near future. That's the one and only reason that companies are looking for diversification, if China wasn't threating to invade Taiwan, these companies would happily continue relying on tsmc (and Taiwan) as their single source. Samsung is in South Korea so it's not under the same risk!
6. The process naming convention by these chip companies has become meaningless for a while. Intel's 10nm (now called Intel7) is on par with tsmc 7nm while Samsung 4nm is on par with tsmc 7nm/6nm, I am guessing Intel 4 (previously called Intel 7nm) will be on par with tsmc 5nm. Anyways, the point is that tsmc is clearly ahead of Samsung/Intel by about one generation maybe 1.5 generation but not much more!
Also, it should be stated that I am rooting for tsmc to succeed, however, the reality is that they'll need to do what their main leading edge customers want or risk losing part of their wafer volume to the competition.
As a Taiwanese grad student in SoCal studying this issue (I am more interested in the politics of this), I appreciate that you made this (and other) great video(s)! It is a true concern for plenty of Taiwanese, but I think that the concern is more on the political implication rather than the "real" impact on the industry and that the "semiconductor shield" might be less monumental once TSMC is moving some of the production out of Taiwan. As you said, this shift from TSMC is not critical to the Taiwanese semiconductor industry or the competitive edge of TSMC, and I would also argue that this shift might also strengthen the leverage of Taiwan in international politics once it leaves a positive impact on the US industry and other businesses.
If no TSMC let Americans figure out themselves. No Advanced Jets, Jets fall out of the sky no Starlink and etc. Why don't just use Intel 100% made in the USA so proud its American, except the fact F-35 might fall out the sky.
We will steal all of your jobs, and there is nothing you can do about it!
Bwahahahahaha!
@@edwardpi9852 then Taiwan will be a province of China.
@@edwardpi9852 TSMC is manufacturing American chip designs. NVIDIA, AMD, and Apple will have no issue finding someone else to make their chips.
@@xisusformerlyderucci9444 You seem to miss the point, which is Taiwan's security: there is a great debate in Taiwan over whether the US will REALLY come to our aid militarily once the PRC rockets start raining down. Lots of statements by Joe Biden that he will, yes, but really when it comes to the real thing, will the sitting POTUS (who might not be Biden then) chicken out? Dependence on advanced TSMC fabs were the few things Taiwan had leverage over the US to not make that kind of decision, and this AZ build-up will greatly undermine this. There is already phrases in the US media on how these AZ fabs are "enough to satisfy all of America's needs".
TSMC is not the only company to be concerned about terms and conditions imposed by the U.S. government on companies that apply for CHIPS and Science subsidies. South Korean chipmakers are also unhappy with these requirements and believe that they could lose more than they get.
Building an extremely high water consumption facility in Arizona seems hare brained to me. Yeah, I know they claim they can stretch out the limited water with reclamation processes, but there is already explosive growth in the Phoenix area not expected to slow anytime soon, and the western States have been plagued with droughts in recent years. Somehow they’ve kept Phoenix going all these years, though, so who knows.
if its a closed loop, then after the initial fill, it really should just need topping up every now and then
It's all a scam.
Peoples palms have been "greased"
@@Fanta.... could you share rescources to learn more ?
There's already a nuclear power plant out there.
the water needs of an industry like chip fabrication are basically nothing VS what water is wasted by subpar agricultural practices.
OMG the quote attributed to "Tim Apple", I'm dying
One correction is that the US is not just interested of the 5nm, also the 4nm and 3nm. These are the core of the TSMC in present time. As is said, these development is based years of hard working cumulation. No one in the right mind would be willing to export them without the reason. From what I can see. It's NOT STEALING. Because stealing would imply that the Taiwanese does not know about the transfer. So, if it's not stealing, nor voluntaries. It has to be gun "ROBBERY". That is the only way to describe this type of arrangement.
What is it strong arm robbery
What the USA wanted was TSMC's high end chip manufacturing expertise shifting from Taiwan to Arizona. The second motive was decimating the competition of TSMC, Samsung and other foreign chip manufacturers, so that the USA will reign supreme. The USA forgot about China, Huawei and SMIC, thinking Chips Alliance will take care of that. Arrogance is not a good thing.
The promised subsidy of US$15 billion dangled in front of TSMC by Joe Biden came with stiff conditions, including passing over sensitive technical details, customer information and the sharing of profits with the USA Government, an unheard of thing. Imagine having to share profits on top of paying taxes on the residual profits, TSMC might as well give up the factory. But, fret not, because TSMC reaped what they sow.
TSMC subsequently decided not to apply for the subsidy, putting paid to the trap set by the USA. High tech information that the USA was hoping to snarl from TSMC failed to materialise. By the way, the USA had all the years been accusing China of stealing tech under deals and agreements signed with USA companies, so what do we call those deals they had with TSMC? It takes a thief to catch a thief.
Totally agree, packaging is often overlooked and its really clever stuff
Amazon would certainly know about that.
yeah quite funny that US manufacture high end chip wafer in arizona but still need to send the wafer to china for packaging.
This is a great video and deeper than I expected.
One thing the last few years has taught us all is that modern supply chains are very fragile. Whether it’s a war, pandemic, port issues, or tariffs, having single points of failure in your supply chain is not good business. This is why Apple is wants some (not all) of its manufacturing in the United States and will want some in Europe as well.
The other interesting thing I thought of with the Arizona fab specifically is that it’s just down the street from the new Intel fab that they sold off to their JV (with private equity contributing 49% of the cost). It doesn’t get discussed much, but Intel is also one of TSMC’s larger customers and has been for a long time. While there’s no direct evidence to suggest that TSMC’s facility will be supporting Intel’s operations, it makes a tremendous amount of sense in terms of logistics that Intel’s orders will be fabbed in Arizona once operational. This could just be a coincidence of course, but I’m not one to believe in coincidences that require an 11-figure investment. But that’s just me.
Lastly, in terms of national security issues, expanding to Arizona makes a lot of business sense for TSMC. Sensitive government customers (CIA, NSA, military, etc) want their stuff manufactured domestically to make it more difficult for foreign governments to interfere or sabotage production. That Bloomberg story a few years ago may have been fabricated, but that doesn’t mean the concern in the government isn’t real. A lot of those orders have gone to Intel for that very reason, and TSMC opening up a facility in Arizona - in theory - means that they’ll be able to bid on those contracts going forward.
And they won't go bankrupt when USA turns Taiwan into Ukraine.
Apple wants some production in the US? I will always remember Obama asking Time Cook to build a factory in the US. He answered it was never going to happen as it was impossible to move the necessary chain. Hah! China started with dirt! They had nothing! Everything can be moved. Slap 500% tariff and you bet they will move!
Or China......they WANT YOU
When I was in college a decade ago I learned that we had basically globally optimized our supply chains for cost. so we were shipping stuff 18 zillion times around the globe simply because it was cheaper/cheapest to do so. This didn't really take into account pollution or natural disasters (I guess they would just raise prices if they accounted for emissions, right?). The pendulum was swung pretty far in one direction. I think covid taught us we simply cannot rely on everything being stable and cheap when there are pandemics and disasters, so I think we're starting to see a swing towards more expensive but perhaps simpler and more resilient supply chains and sourcing. We're also really seeing how important chip production is, because the lack of chips impacts SO MANY other industries like home appliances, cars, anything electronic. So I see this simply as a way to trade low costs for stability, nothing else.
You mean so that CIA can put in spyware..
Just a few items to keep in mind; The Integrated Circuit was invented by Jack Kilby @ Texas Instruments in 1958. He was awarded the patent. Jack Kilby used germanium as the substrate, Robert Noyce at Shockley Semiconductor used silicon, which is the basis for almost all IC’s now. For a number of years ALL IC’s were manufactured in the USA, mostly each company or a partner in the USA. Texas Instruments had their own manufacturing and produced all of their products. Noyce, Shockley and Gordon Moore founded Intel in 1968. Intel invented the first microprocessor. Morris Chang, founder of TSMC worked at Texas Instruments for 25 years and was recruited by the Taiwanese government to develop IC manufacturing domestically. He convinced American companies to go “fabless” in order to reduce their costs. Obviously that worked. The other side of the story is that having only one location or source of manufacturing puts companies at risk. The push for global manufacturing is happening and would have happened almost regardless of other issues. At best TMSC will have to build factories in multiple continents, countries and regions. Most likely other companies will build facilities to build semiconductors and IC’s. Monopolies usually cause their own problems by restricting availability of supply.
Well said, this video didn't give credit or the creator of this technology. So how can America steal a tech we invented. TSMS has just refined this technology greater than anyone else in the world.
You hit the nail on the head and something I felt the need to post as well. The US transferred the semiconductor industry to Taiwan in 1974, if anything therre should be rights to repossess it if there is threat of takeover and monopolization by China.
Thanks for this perspective. I didn’t realize that Taiwanese people thought that we were stealing tsmc tech.
Not Taiwanese people but proChina media rather
Of course you guys also don't rhink that your country is stealing Syrian oil directly by illegally occupying Syria.
Garrus Vakarian actually they are. USA control one area in Syria and have military basis there
@Garrus Vakarian American backed Kurds no?
Garrus Vakarian no not that there is a battalion on Iraq border and usa refuse to leave both area even so syri has full control and usa was never invited
Great video. And one thing that people are missing is that many Taiwan nationals are being employed in the U.S. My wife works for a company that's building that AZ plant, and the vast majority of the employees, including her boss, are Taiwanese nationals.
That population is tiny relative to the amount of people going to the mainland for school and work. More importantly, the latter had been exploding, while the former has been in decline for decades. As recently as 20 years ago, number of people coming here from Taiwan were four times compared to today, and basically nobody went to the mainland to live and work long term.
@@georgedang449 Very informative 👍 But how is that relevant?
@@yapdog The point is your example, even if accurate, is an exception instead of the rule. And it illustrates the larger issue of labor for a return of semiconductor industry to America. We just don't graduate nearly enough stem majors to support it. Moving TSMC's top executives and their families over, like we've been doing, won't solve the labor problem. Taiwan's brain drain began more than a decade ago, is accelerating, and its destination isn't here.
@@georgedang449 Your analysis of the wave that Taiwanese went / moved to PRC ( and other countries also included in the wave ) is basic on before Xi comes into office .
@@joycem5967 Indeed. Young people move for opportunity, not politics. Although the exodus to the mainland is vastly greater than the trickle elsewhere, since they don't have to go through immigration, and being Chinese it's the same culture and language. Everything is the same as at home except politics, few people, especially young people, bother to vote anyway. Mainland as a destination has largely replaced immigration elsewhere, especially to Japan and Korea, but also us and eu.
The idea of "an European TSMC" has been making the rounds, ever since the start of the pandemic.
I remember last year that I was at a large meeting in a very old castle with a lot of folks from Dutch industry and Dutch policymakers. They had a bunch of 'trendwatchers' waxing about how it would be awesome to have our own TSMC and how The Netherlands could be the Taiwan of Europe (surely, we've got ASML, Philips, NXP and IMEC and the Ruhr area next door).
And then someone from accounting from a certain Dutch electronics manufacturer showed a presentation with some hard numbers, with estimates in time and money, if everything goes well and smooth sailing, and the goal was to catch up to "TSMC in 2019". I saw some faces turning pale.
Never heard about those plans again.
Very interesting to hear about this, as a Taiwanese I've long thought of how Taiwan could adopt the dutch system of international commerce, further expanding our leverage in the international community. I feel like the two governments could really benefit from working with each other on these subjects.
@@eugenelee533 Believe me, but there has been a lot of cooperation between the two countries, for decades already. (see the history of TSMC in that aspect)
The way Dutch do business internationally is something that should be learned of, and rather, as a warning. It is a lesson where you let private businesses grow and have a certain exposure to political influence, until you're only left standing with the acccumulated debt. The other lesson is in keeping tax havens inside tax havens. Hong Kong grew wealthy on all the money that old Dutch companies like Shell and Unilever kept away from the Dutch Crown. Only during WWII, those companies were pressured to move their financial facilities to Curacao, after the Dutch government (in exile) made Curacao into a tax haven of it's own, on the promise that they would be paying for a reconstruction after the war. After the war, they either stuck to Curacao, or moved back to Hong Kong or both (in the case of Unilever and Shell, they eventually moved to the City of London). In notes and minutes of Dutch policymakers and top bureaucrats, we can still see them using the old Hong Kong names for some of these companies, and sometimes refer to them as "Kongsie" (公司) instead of company.
I for one, pray that @Asianometry will dedicate a video on this particular subject.
@@YaoiMastah interesting observations from history. Thanks for sharing and hope too Asianometry do a video about this.
"a large meeting in a very old castle"... smells like Bilderberg? hahaha
I think Sweden or Norway would be best suited. They just have a higher level of Tech available and really just smarter people than the Netherlands.
I think if we had any sense, we would be bulking up our domestic production. I once heard it quoted that replacing TSMC will cost decades and hundreds of billions in investment.
your point might be two-fold.
China still is building out the capacity to develop all the different types of chips, not just the high-end N3 etc logic / AI / QuantumComputing chips. They believe they will be able to flood the market, making all chip companies fabless, basically design houses, dependent upon Chinese manufacturing process technology.
in the US we have small companies taking on such a state-owned corporation --- that must be the focus of anti-dumping and monopolistic foreign competition.
Replacing TSMC would require massive ecosystems of the Intels, AMDs, Micron etc --- which would require such investments to make the US the home of custom chips to support other countries' FABless designs ...
in the US that is the challenge & much more investment in our own education/engieering schools as well as tool companies like the AMATs of the world -- which is difficult given the capitalist ethos of the gov not 'picking winners' even if it is an American .... vs a foreign competitor
@@kevinkanter2537 I'd argue that a big part of the issue is that we rely on mass manufactured chips way more than we rely on bespoke custom jobs.
As it stands, if we were to get cutoff from Taiwan and China the chip supply vanishes overnight.
That's why China's investing heavily in midget subs, and the US in P8 sub-hunters.
Thus Americans are trying to steal it. They have always considered Asians fools and taken advantage of their innate kind nature and generosity. And I mean no India. Indians don't know how to behave.
@@halhal-my4pt Bot created 4 days ago.
@@simpmaster7995 Yes super bot indeed idiot!
The U.S. created the semiconductor industry, bringing back some manufacturing to the U.S. is hardly stealing it. Especially when there a massive shortage of these chips.
A quick look at who owns the most shares in TSMC makes the idea of the USA "stealing" TSMC seem rather naive.
I think everyone is spooked by the idea of a global supply chain being dependent on a single place, it introduces massive global systemic risk if war should break out in the area. Ukraine's war caused massive shock the global chemical market. The unfortunate reality is that the economy is now going to bifurcate significantly in the face of this risk and possibly become way less efficient
Hopefully the economy becomes less efficient. Efficiency in the neoliberal context means you one disaster away from massive crisis. A system that could completely buckle from a shipwreck (Suez) or regional conflict... isn't a system worth preserving
As described by Asianometry before, the semiconductor supply chain will probably be global for the forseeable future. Having a FAB is only a smart part of the whole operation.
It will make up for its Inefficiency with its reliance
@@camadams9149 It's the same cost, paid different ways. More resiliancy is just insurance, and the insurance premium is paid over time by higher prices. No need to get on a high horse and lecture people about why your optimal point is better than their optimal point, everyone has an opinion on this trade-off.
@@lekhakaananta5864 No, it's not the same cost. Having redundancy requires additional investment. Having a fragile system causes crises to ripple out and cause mass economic damage ex. Japanese Tsunami effect on chip prices
The current system is fragile and that costs way more than redundancy in the long term.
Secondly, yes people do need a lecture because they keep making the same mistakes, because they're stupid, and can't think past next quarter
This kind of cracks me up. "The US is stealing TSMC..." Well actually, it's a fab running Dutch Lithography machines supplied by US technology. this technology originated in the US, we just had greedy ass businessmen here who didn't want to invest in Chip fabs and just wanted to design the chips that are shipped off shore where cheap labor can produce them cheaply. The US is more than capable of producing these chips, it's just we aren't capable of producing them cheaply.
Honestly giving our tech to ASML instead of an American company is one of the biggest L in our country’s history
Great video as usual.
I live in Ireland and during the last century most of the major tech companies setup European HQ's here to take advantage of a couple of factors but mostly due to favorable tax breaks. The massive investment changed the country and curbed the population decline, but also, billions of dollars were heading to the US. Ireland didn't steal these companies, they just expanded. If TSMC wants to remain a dominant global player it needs to expand globally.
"grow where you sell" makes sense.
What's currently going on with the semi-conductors scene in the USA feels really bizarre due it's quick turn around.For the longest time it felt like America's semi conductor scene was dead like the Bethlehem Steel Plant which even Billy Joel made a song about it's decline, or dead like Britain's cloth mill, pottery, or ship building industries.
Cotton mills and steel plants aren't fundamental to the millitary industrial complex.
Tsmc is, and the whole chips bill was created to pull tsmc into the usa.
The samsung and intel parts where just added to make it look like an open process.
This will also be a one time thing and it won't happen again. Tsmc is now invested in the usa
@@baronvonlimbourgh1716 Steel is very much fundamental
It’s not bizarre since big manufacturing companies will go to wherever (it is legal to) if the government gives enough incentives (subsidies, grants…) or disincentives (barriers to entry, tariffs…) to produce outside the country.
@@uku4171 but high tech , high quality steel is available from multiple places. The millitary industry doesn't need much steel, it needs specific steel. And that need probably is covered in the usa or at least in multiple friendly places.
What tsmc offers was only available in taiwan. Nowhere else.
Why would you say that? Aside from the last 5 years, Intel always had the best process nodes and they have always had most of their fab capacity in the US. Thousands of Americans get up everyday and go to work in a fab. There's also TI and GF...
Though it's true that the Arizona plant won't replace all of TSMC's production, the fear is that it's the beginning of a forced transfer by the U.S. government in both production and the technology.
Forced? Or by choice? I think with China set to eventually take over, it might be a reasonable strategy to setup an alternative escape-to location.
That’s what it is. The US is getting ready for losing Taiwan to China.
WHY USE THE WORD FORCED? WHO made this remark, the Taiwanese who are invited by USA to work in the Arizona Factories? Is this offer SO BAD? Maybe THE TSMC factory instead, should move to CHINA to be protected by the Chinese Govt., so that TAIWAN would not need to be INVITED to JOIN COMMUNIST CHINA?
force more like tsmc abandoning taiwan and begging us to house it.
Thank you for (in my opinion) an unbiased analysis as always. As a student in the semiconductor field, it nice to have a very objective outlet for this kind of news. Without your concise videos, I would likely not have taken the effort to scrounge for news across different sources to piece together a picture for myself.
It's rare nowdays to see non american exceptionalism news
I work in the structural steel industry and one of the jobs we're fabricating is the TSMC facility being built locally in Arizona.
WHATS YOUR POINT !!
@@rogervonschleusingen4603 To reinforce what the subject of the video is, duncel.
I think the concern is TSMC is not acting based on market needs but geopolitical pressure. This opens possibility that US can force TSMC to surrender its technology advantage to US.
its all american tech. they already own it.
@@eirikarnesen9691 not really
@@aedaldaniel yes they do
@@eirikarnesen9691 I repeat again not really.
USA is trying to mitigate the risk associated with having leading edge chip production being produced offshore. TSMC is still going to make money like crazy on chip production no matter where it is located. TSMC can sell chips in USA, EU and the rest of the world for that matter.
PS - TSMC has had China trying to steal away chip production for years
They can't produce uva-chips. Lol
What about the jobs? For maybe 5 to 10 years, Taiwanese would be employed, but when Americans get the necessary skills, it will cause other us companies to be able to make highly advanced micro chips, and tsmc would lose its monopoly, Taiwanese would lose jobs, China might be able to replicate it, Taiwan would eventually fall
@@Omer1996E.C war before 10 years.....don't think too far...
@@earthcomedy I'm not thinking about China, but Taiwan itself. If Taiwan lost it's monopoly, there will be no strong incentive for the US to protect Taiwan, like they are strongly doing now. Taiwan is not Europe
Even if we talked about China, the opening of TSMC in the United States might be a silent advantage or a blessing in disguise to China, especially since it is easier to American lobbies to export it to China via another Asian or African country
Stop the lies. And be ashamed for stealing from Asia. You fathers did it but now no chance. Asia will fight back, I know I will. It will be for justice not religion, race, or any from other stupid tribal doctrine.
I agree and I think this was a fair and reasonable assessment.
I think TSMC has conducted its business carefully, modestly and with both its customer needs and with the economic and strategic benefits to Taiwan in mind.
I appreciate your take on this. Coming from a person with one foot in both worlds, and one as knowledgeable as yourself, this assessment seems fair and reasonably unbiased. Thank you. 😁👍
President Biden held a chip in his hand and said: "This is a weapon". Every Chinese has seen the video. And knowing why Huawei was sanctioned
The Americans are behind the chip techniques of Taiwan and Korean. The made no secret that they want to steal these technologies. Under a lot of threads behind closed door from the Americans, the Korean and Taiwanese must move there best to Arizona. One day they will wake up and find out that they have been raped!!!
USA can do this if it invests more than $50B
The problem here is that mainland China could stop the production of TSMC chips in Taiwan with just a handful of missiles, so the US needs at least a backup local source. I don't expect Taiwan to lose its primary source role in the foreseeable future.
Ones in Japan and Taiwan also Arizona
Geopolitics, a push toward U.S. reshoring, America's desire to strengthen critical chip sourcing, its lagging base of STEM manpower, and more make this a fascinating saga that will unfold for decades. Thanks for the insight, Asianometry!
The US really doesn't have a STEM shortage..... it simply is a shortage of engineers and talented folks who do not want to work for the same wages Apple, Samsung, etc. pay in China and India. Always remember the adage "Follow The Money". There is no limit to American corporate greed.
@@danbro1970 TSMC aren't going to pay STEM workers China or India level wages. They cannot be that dumb to not be aware that wages in America is like 10x higher
@@danbro1970 other way around. it is the companies who do not want to pay good salary to American workers so they outsource the job to people in China or India that are paid 15 cents a day.
@@UserUser-zc6fx silicone valley is almost occupied with Indians and Chinese. without the immigrants, American tech industry would lose 50%of workforce. this is elytra evidence that shortage of STEM students is very serious. from my exp in tech industry, the pay is insanely high, but I don’t see many Americans working here. Maybe less than 10%.
@@UserUser-zc6fx I usually think American culture doesn’t favor engineer. American culture more favors businessman. The nerd and geek image of STEM student really pulls young people from science and engineering
"In January 1955, the U.S. Congress passed the “Formosa Resolution,” which gave President Eisenhower total authority to defend Taiwan and the off-shore islands."
In other words the US was defending Taiwan long before there was a TSMC.
"Defending" lol.
@@bozo5632 Hey I am personally in favor of the US returning to its natural state of isolationism. China will take Taiwan and South Korea. Russia will walk over Europe. Lets see where it goes from there.
@@danharold3087 Russia wouldn't walk over much, definitely not all of Europe. They wouldn't even want to, but anyway they couldn't.
China hasn't fired a single bullet at anyone in decades. They plan to buy the world, not invade it.
I wish it was true that USA's natural state was more isolationist, or less globally aggressive, but when was it ever true? We've been at war for 200+ years of our history.
@@bozo5632 Take a look at the pro war propaganda cartoons shown is US movie theaters prior to WWII. The guy on the street felt this was Europe's war and Europe should take care of it. Europe complained that the US was late to join in WWi and WWII. The Korean war started when a diplomate said we would not defend Korea. Check the net.
The US has learned that the longer it ignores foreign conflict the greater the butcher will will be. Better to keep a lid on it. Does not always work and of course it will be portrayed as US aggression.
China and wars. See Section 3 en.wikipedia.org/wiki/List_of_Chinese_wars_and_battles Same story as the US but goes back much further.
Russia would take all that it wanted. A country every few years. Works better that way because so long as it is not your country it is easier to stay out of it.
Audit the enormous amount of Taiwan govt money that flow to the republican lobbyists' pocket in the capital hill every year you'll understand why the US must "defend" Taiwan.
All your videos are so intelligent and well researched, thank you!
Researched in support of Americans evil plan. Hiding the fact TSMC is being stolen right in front of Taiwanese folks. English based journalism is highly susceptible and tends to tilt towards the west and Europe. Taiwan is not going to be Thailand- a nation that sells their daughters into prostitution to serve the sick foreigners. Asia will rise, so back off!
Taiwanometry, Foxconn in Minnesota concerns Taiwanese but Foxconn in China was celebrated, why?
Any nervous Taiwanese should consider Trump may have saved your national security by standing up for Taiwan from China.
Also remember that TSMC got its' initial technology from American semiconductor corporations and still rely most from American technologies. What TSMC has is an operational processing skills not equipment technologies nor semiconductor material science technologies.
I remember when Foxconn was making cheap counterfeit connectors of Amp and Molex.
I remember when US Sematech helped start the TSMC, and how Japanese semiconductor industry trained TSMC to counter Korean semiconductor industry.
I agree TSMC has best 7nm processing skills with western semiconductor technologies which has majority shares, but it is not a Taiwanese technology. Would TSMC maintain top performance skill in 3nm process?
The most important factor is, Taiwanese weren't concerned when China bullied TSMC to build factory in China but Taiwanese are concerned America is taking its' own technology back to America!
When Honda opened up plants in Maryville, East Liberty, and Anna in Ohio, followed by 9 more over the years, did the US steal Honda? No, they just produce 2/3 of what they sell in the US here in the US. It just made sense for them. And it made sense for the US to let them. It makes sense to the US for semiconductors used in the US to be mostly produced in the US. It can be accomplished through TSMC building them here, or the US implementing tariffs so that some other company builds them in the US.
Absolutely appreciate your broad perspective and analysis. Thanks to you for your great videos.
This news is slightly different than what I've read and this has come from TSMC.
First, there is one site in AZ for TSMC, but it's a site that's set up to become 6 phases which makes it as large as any plant in Taiwan. This wasn't stated very clearly in this video. So, 6 phases. Last year, TSMC had said they will add phases as they see fit. TSMC has already said, from what I've read that they will have an N3 node production in the AZ plant. Maybe that's phase 3, but I imagine getting to smaller nodes, for which NO ONE is getting near 2nm or 1nm right now because you need, or it's almost impossible to do without the under development ASML machines for which I forget the name of the lithography acronym, but it allows these companies to go smaller than 3nm. And they're not going to try either. So, 2nm and smaller isn't under development in a way that allows these companies to actually produce 2nm. It's in R&D. Intel is going to be the first company to get their hands on this newer equipment. So, 2nm isn't going to happen until 2025 at the earliest. But that's OK and it's not much out of the timelines of the fabs, mostly Intel, Samsung and TSMC.
TSMC will probably have more than one phase be 3nm in AZ because it's going to be around for a long time. 3nm is SO transistor dense that the issue won't be needing to shrink so much over the next 5 - 7 years even though 2nm will be out before then, it's going to be the characteristics of the nodes. And before anyone makes a comment to me about this, go look up a density chart for Intel or TSMC that gets you down to 3nm. The jump between 7nm, which companies are currently using (minus the brand new AMD products on TSMC 5nm and Nvidia brand new GPUs on TSMC N4 and Samsung low power 4nm, or 4N) down to 3nm is HUGE. The increase in density going from 7nm to 3nm is about 3X.
So this gets you to characteristics, which is going to be critical for 3nm nodes, just like it's going to be for 5nm and 4nm nodes because these are going to be around for a long time, once again because 2nm requires new lithography equipment from ASML and a LOT of R&D by the fabs and it will be a very expensive node and for companies that need a small IC but don't want the huge cost of 2nm, they're going to stick with 7nm - 3nm nodes. I'll look at TSMC only with this or it becomes too long. Right now AMD is using TSMC N6 and N5 for their newest products. N6 is really a variant of N7. N5 is a new node which is now open for mass production to a larger realm of customers. Last year they were in risk production with Apple and I think one or two other companies. So, a company like AMD makes circuits that need to be very dense, like a graphics core or CPU core, but for the entire CPU package, which is the thing you actually buy, also called an SoC, there are multiple chips. Zen 4 which AMD just released uses N6 for a die that does I/O functions, talking to components in the system, and they use N5 for the cores. The cores currently include cache, such as L1, L2 and L3 cache, but cache doesn't scale down as well as a typical transistor, just like amps that transmit signals out of the SoC don't scale down very well and is why AMD uses a different N6 die for those functions. And this get amplified because of how much TSMC charges for the different nodes. AMD JUST moved to using chiplets for graphics cards for this exact reason. A graphics card that you plug into a motherboards to run your monitor is a very complex circuit if you buy one that's designed for gaming, which most are, if not all. AMD's newest generation, RDNA 3 has a central graphics core chip, and then around it are MCD chips, where the function is I/O and cache, the things that don't scale down well. This will allow AMD to make a GPU for less money than Nvidia, at least for the chips. This is exactly what AMD said in giving the reason for moving to a chiplet design for RDNA 3 graphics cards. They said that TSMC N3 is very expensive, and it is, and they need to push as much as they can off that node if those circuits don't scale down well with a smaller node.
So, characteristics are power consumption and frequency ranges, and between those two things there's a curve. It's a frequency curve and it's plotted against power consumption at a certain frequency. You could also call it a power curve since that's what you're plotting based on frequency. Samsung makes the best low power nodes from my understanding, and this means VERY low power at lower clock frequencies, which is perfectly fine for small devices that don't do a lot of computing, so a smart phone for instance. So this is a characteristic that's very important to Samsung and Apple, VERY low power at lower clock speeds. The actual node now, with as much as transistor density has increased (more dense) isn't critical anymore for small devices like a phone. You aren't going to edit a video with After Effects or V-Ray on a smart phone. Samsung and Apple can get ALL the transistors they possibly need on 5nm or 4nm node when it comes to smart phones. What's more important is low power.
At the other end is high frequency which increases power consumption due to resistance. Resistance increases as frequency increases, and at some point you can't clock a die any faster because the resistance is too high, which creates heat, and the heat becomes too prohibitive. But high performance compute (HPC) devices need to clock as fast as possible. So this is the inverse of very low power at slower clock speeds. The node has to handle high heat. Right now, the best node out there for handling high power is Intel 7. For instance they're about to put out a CPU that can hit 6GHz. Right now their CPUs can handle 5.7 - 5.8GHz sustained, over multiple cores. AMD can't do this using TSMC nodes. However this comes with the downside of a lot of power consumption, so another characteristic would be clocking at 5.5GHz+ with creating less resistance in the die which will reduce heat and power consumption.
So TLDR, characteristics of these nodes are very critical. TSMC's AZ plant is a 6 phase plant. They WILL bring N3 to it. They will bring other nodes based on need, for all we know they could produce a 6nm node or a 28nm node there. This is something TSMC will figure out. Getting below 3nm while being cool, isn't so critical because the transistor density is SO great for 3nm AMD and Intel could create CPUs for the next 5 - 8 years on that ONE node. But costs are becoming prohibitive, and moving to smaller nodes is no longer something that a company automatically jumps into, and in this case we're talking about companies that make HPC devices since the cost of these advanced nodes is already too high to make basic ICs with. So, TSMC could have multiple phases be N5, N6, N4, N3. We just don't know because demand for the nodes is unknown as companies try to move away from having a single die for a circuit to having multiple dies (MCM or chiplets or tiles, all the same thing). This is being driven now more by cost than anything else. For those who ignore the high cost, their products are going to be VERY expensive. Nvidia graphics cards that are coming out now (4000 series GPUs, Ada Lovelace) aren't using MCM are their brand new graphics cards are obscenely priced. Their pricing for instance for something around the 2080 to 3080 to 4080 (going over 3 generations for the xx8x level of performance) has basically doubled in cost. Those high costs are pushing people away from buying them. It's already showing up in their sales data. Nvidia is supposed to move to an MCM design for their next gen products. Intel is also moving to their MCM design next generation with 14th gen Core CPUs, AMD has been using MCM for CPUs for 3 generations now and are now using MCM for their graphics cards. So with all these companies moving to MCM designs and pushing part of the circuitry to less advanced nodes that cost less, there is no way to predict what TSMC will do with the 6 phases at their AZ plant. TSMC has already said they will add phases as they see fit, and they've already confirmed there will be a 3nm node (N3) at this plant.
Lastly, TSMC is not going to put the newest nodes outside of Taiwan. But that doesn't mean these plants aren't very useful if you actually read what I posted. But as N3 is going to be a critical node, TSMC already plans to produce N3 in AZ. It will probably be about 2 years behind what comes out of Taiwan.
I think this is also TSMC's way of getting around Tarrifs that have occurred with regards to silicon. THere is nothing wrong with Diversifing your manufacturing footprint.
TSMC major bank backers are primarily European (namely Germans who produce the mirrors and Dutch who own ASML), US and Canadian. TSMC is all ready a world wide effort to pump out the latest and greatest microchips. From what I can gather, TSMC just pumps out the final product but they do not exist independently. Not by a long shot even.
Lmao nice cope. They are slowly becoming a vassal
I'm amazed at the confidence of TSMC at getting to 2 to 1 nm fabs. I would have thought those would be theoretical still. Still, very impressive if their timeframe bears fruit.
Angstrom is still mostly theory, 2/1nm is already being researched. ASML have already started development of the lithography machines, and Intel has the first machine on order
It's just a name, not a real "1nm" size...
people forgetting its name is "2nm-process" its not really 2nm in size but only the "process" lol
@@abuanwp Yes I understand this, but still, a process shrink has sometimes been quite difficult to achieve -- as we saw with Intel's 14+++++ node.
@@Briguy1027 That's actually when the nanometer nomenclature started to break down. Intel's third 14nm wasn't 14nm anymore, even though the first two arguably were.
Fact is, AMD's chips are simply better. They don't have a substantial node advantage as Intel would like you to believe. Intel has been doing underhanded crap for decades.
When I heard Intel was a lead on developing the new GPU power plug, I knew it would backfire, and it quite literally back *fired.* Same with USB 4; it's actually Intel's Thunderbolt.
As someone who works on economic strategic planning, the Arizona Fab is extremely important to decision making on critical cutting edge defense supplies. Definitively saying this Fab won't affect our defense decisions... is speculative at best.
I live right next to the plant they are building in Phoenix, AZ. We can already see the economic boom the plant will create to my local area via businesses and homes being built around the area. The job opportunities will be life-changing for those in the tech industry here is AZ, which up to this point has been under-par. It's great to see more things made in America.
Let’s see if it will last 5 years. Semiconductor is not a rewarding industry in the us. I studied EE 10 years ago. Many of my classmates who are in the Industry want to leave. the pay is too low tbh. 150k at most for a 10+year exp engineer. if you work at FAANG, 10+year exp engineer can earn 500k per year. Every one of my classmates in semiconductor are talking about being a software engineer. I just think semiconductor won’t be able to keep enough talents in the industry.
150k is for ic design engineers. For manufacturing, the pay is even lower. I think it’s around 100k. believe me, except for old men, no young engineer will choose to work in a foundry. The only chance is to increase the pay to around 200k which can make it attractive. Consider manufacturing typically means long work hour and labor intensive(true for a foundry).
What is just as important is whether they provide a livable wage for maintenance workers, janitors, groundskeepers, etc. It is only a benefit if the increased cost of living it brings is offset by increased wages for people of all income groups.
Basically this plant may fail tremendously. But hey, someone needs to milk this project first . 😂😂
@@cathie3874 Most of the manufacturing process on modern nodes are automated completely. Most of the work is maintenance and supply of materials.
A hedge is against the Taiwan market as a whole. 100% agree with you. I grew up in Los Altos, btw. TSMC itself remains a proxy against larger conflict. There is zero thought amongst CS capitalists (like myself), that the US can create replace the TSMC. We can't! Forget about the IP. What they have created is trust with their customers and unparalleled capability. What will be interesting is the strain of the CCP and how they will continue to react to it.
If china took the island it would be possible to push vast federal dollars into intel. (already starting to do so). Intel is also not the only fabs already on American soil. TSMC has massive investment the only reason they have pushed past intel pushing out wafers. Japanese and American companies produce most of the machinery and IP for chip production etc. The fact is the mainland would be bankrupt the day it invaded the island. It is barely holding by a thread during the current recession. TSMC also receives most of it's investments from American Insurance companies etc who own most of the company.
It is essential that US and Western companies have the knowledge, expertise and ability to design and manufacture bleeding edge chips in case Taiwan falls. This is what it all comes down to.
So more about diversifying a portion of US supply chain by partitioning some TSMC production from any random acts of God or deliberate acts of man that would affect Taiwan? I think TSMC and their customers would have been perfectly happy keeping everything in Taiwan for economic reasons if the last several years had been more "normal" and the future status quo certain.
certainly, but after ukraine war I dont think so called status quo r gaurantee at this point any where in the world. specially not in the taiwan straight
It's almost certain that USA needs China to invade Taiwan.
I think a lot of those high end 5,4,and 3 nodes will be going to companies such as AMD for CPU, Servers, and GPUs, and Nvidia for their GPUs and such, plus Apple products. It will also help them become more recession proof by being able to shift production. I am not sure if European plants are going to be happening with the energy shortage they have. More people mean more devices and more chips, that will never stop. This will also cut down on shipping costs.
My guess is that the USA is aware that they can't manufacture the technology they need in case of war in the USA, away from the conflict zones, and by Apple. Also, it's funny as TSMC was founded by taking a bunch of USA-educated (practical not degrees) USA-resident engineers with years of understanding of USA technology and organizations and fly them to Taiwan.
You left out some important things to understanding the whole picture. The problem is not about somehow USA will replace Taiwan, but that there is a deliberate attempt on the US part to reduce Taiwan's importance in the supply chain. In this sense, the investment in Arizona is a definitive loss for Taiwan, and it's questionable if TSMC gains anything as a company. Let me elaborate.
First, as you stated in your video, Apple has committed to buying 20,000 chips from the new plant. This directly translates into 20,000 less chips bought from TSMC plants in Taiwan (which produces 100,000 chips a year), a 20% reduction in sales. This means 20% less tax from TSMC for the Taiwan government, possibly leading to cutting down 20% employees needed, salaries paid, economic activities lost. This is just simple math.
Second, the market price for a 5nm wafer is about 14,000USD; the cost of producing a 5nm wafer in Taiwan is about 6400USD, meaning TSMC has a 60% margin per wafer when its produced in Taiwan. In America the cost to produce a 5nm wafer 11800USD, TSMC's margin is reduced to about 15%, a HUGE difference. The investment literally makes no sense.
Lastly, you mention in your video that somehow this investment can secure purchase orders from American customers like Apple. This is again questionable since Apple arguably will buy from TSMC regardless since they make the best chips.
For a year I've been talking with people in the semiconductor industry here in the USA about building packaging operations here and it has fallen on deaf ears. It doesn't matter if a country can make semiconductor wafers if they still have to send the wafers back to the other side of the world to package them.
TATA conglomerate is the largest company in India. They recently unveiled a new Electronics company to specifically test & package Semiconductor Wafers. They believe that starting with the low end testing & packaging is the best practice to build a semiconductor ecosystem in India.
I'm still baffled that they're putting a factory in such a water-intensive industry in a place with no water
Intel also expanded by building more foundries too.
Now think about how it's effecting all us poor hicks who have to live off the same water table because we're too poor to live deeper inside of phoenix (literally just because of all the recent immigration)
TSMC is far from being the only semi conductor manufacturer in Taiwan I'm invested in HIMX who holds patents for VR and AR chip production 😀
Literally no one in your audience is surprised at the length of your TSMC playlist.
Put it this way, the hardware inside those factories cost billions, a single lytho typer can cost upwards of $20 billion, so the 3000 or so fabs and associated SC, Packaging and RD sectors on that Island contain around a Trillion dollars of hardware, add another couple of trillion for the last 20 years in research and building costs, so the $50 Billion Chip Act money is pissing in the wind, yes, it helps centre fabs on american soil, but that island is unmatched when it comes to WHOLE PROCESS MANAGEMENT, they are experts in it.
We have 8 Taiwanese working in our company in Malaysia and all of them believe America is stealing TSMC.
I remember being at a packaging house in Kaohsiung and seeing FOUPs (wafer holder box) from all over (2009). Such as Korean customers sending their wafers for packing to Taiwan. I suspect this is true today and will continue. Intel's Packaging houses include Penang Island in Malaysia and Vietnam.
Philippines lose out
🙄 For someone from Taiwan, you know very little how Taiwanese views TSMC. TSMC is known as “silicon shield” in Taiwan for a while because it’s strategic importance shields Taiwan in times of crisis. Taiwanese believes that it will not only garner international support in time of crisis, but also deter China from taking military action because China is dependent on it as well. That… only works if TSMC is physically located in Taiwan. Whether TSMC transfer tech to US and make money does not matter. Its physical location does. This is not unfounded fear, nor echoed by minority - it’s a well-reasoned & very loud in Taiwanese public opinion today. Also, everything *starts* small.
Thanks for adding a lot of nuance to an important discussion. You made a great point about the packaging companies being under-rated. An un-packaged die is essentially useless. Packaging will play a huge role in delivering the performance capability of the super dense, many-core microprocessors.
let's also admit that the 3% of packaging in the US is not high-end. Most of Intel's AssemblyTest backend packaging is done in the Vietnamese mega-plant, which took most of the work from Malaysia, Phillipines --- so definitely NOT deglobalized. However, like TSMC the high-end packaging R&D is done in Intel's home-country the USA. Also, like TSMC fabs the development Intel FAB is based in Oregon and CE'ed out to AZ , New Mexico & will be to Colorado. The ecosystem built up around these main technology development sites are the secret sauce --- and Taiwan has been building it up for many years --- this is a key point made by a great video.
@@kevinkanter2537 dont forget intel ireland.
@@CRneu I was so focused on USA fabs and the backend packaging TD vs Mfg CE division that I didn't discuss. Ireland is of course a major FAB (not pkg) center for Europe while the Israel sites have major R&D sites as well as manufacturing.
Thank you for your excellent analysis and commentary.
Honestly we chose the worse location to put that fab in. That plant needs so much water. Why put it in the most water stressed region of the USA 🤦🏾♂️
You have a delightful way of explaining things. I have deeply enjoyed your videos and learned a ton from them. Bravo! Wonderful work! And thank you.
I don’t think so because it’s only one TSMC plant to keep the US defense industry supplied. The top chips for most consumer goods will be made in Taiwan. There is no separating TSMC and Taiwan, they are inextricably linked.
The US defense would be dumb to rely on anyone else than US based companies. Yeah Taiwan is technically an ally, even a vassal state if you will, but that isn't set in stone by any means.
Didn't he say they're making two plants?
@@uku4171 it’s one location making the top end stuff, the other is lower end iirc now that I think about it
@@fedyx1544 I agree but Intel had idiotic management for a while. That changed and they are catching up now.
@@12time12 when it comes to military stuff better to have idiotic management than potentially compromised one.
The US should just focus on investing in its own companies, rather than harboring TSMC or Taiwan, the US can have their own similar chip base without them either way, in the matter of years which I believe is why TSMC chose to go through with this anyways. I don't think the US should even be trying to involve itself with Taiwan and China personally.
Not to nitpick (I actually found this one funny), at 4:39 in this video beneath the statement from Apple, the person credited for that statement is Tim Apple, not Tim Cook.
Valid concern. Arguable points regarding the role of very early semiconductor science and tech in whatever exists today, and the nature of supply chains. Most important to me, however, is to ensure that Taiwan remain a key partner in the industry, honoring its IP and certain role in what is yet to come. That said, recent history argues for ensuring multisource supply chains for reasons of security.
Build one in Costa Rica
Think about it, Intel would have an adversary here.
-Central Américan is perfect to ship both south and north America
-Costa Rica has no military so no war problems
-Stable economy
-Really near to the Panama canal
(Plus a dry Gateway that is on its way in CR)
I think the biggest asset in Taiwanese defense is not TSMC, it's the Taiwanese traffic. American road planing meets Asian driving habits. 😙
@Chang JungChia I walked in some Taiwanese cities. It reminded me of an old game where you could drive with a tank over everything. 😚
Yes ! please cover packaging !
In my view if anything TSMC is just a fab, they don't invent the chip making machines or the chip design software, those are Dutch/US companies so the intellectual capital sits with them. So in theory fabs can be built anywhere so as long as the workforce is there to support the endeavor.
Kinda disappointed that you didn't reflect on if there is any risk with moving the production outside Taiwan.
And would the US steal TSMC if they could?
What would the pro/cons for the US be?
Why would they even want to steal it?
The value does not only lie in mass production of high end chips. Equally important is IP and the skills of the labor force, something not as easy to just take as machines and/or locations
@@Hippida yeah, they're not like occupying other countries to steal their oil, and try to sanction the competitors, so they can be the biggest player in the "free market".
New York Times had a story on how Apple tried building a new line of computers in the US (I think around Cupertino), and it failed. You can't just build a factory, you need an infrastructure. One of the problems was, for example, they needed a large volume of a custom screw. There was no single manufacturer that could deliver that volume, and none of them could meet Apple's schedule. In Zhengzhou, they could find a single supplier to handle the whole job on schedule. The Chinese government helped new companies with manufacturing engineers, etc. In Zhengzhou, an American engineer demonstrated how he could walk down the street and buy enough parts to put together an android phone, and then an iPhone, from scratch. The broader problem is that you can't just build a new factory in isolation. Tech development requires an infrastructure. The classic case (which I think Paul Krugman got his Nobel prize for describing) was Rochester, NY, which was the location of Eastman Kodak, which led to a concentration of related companies in optics, chemicals, etc. If Kodak needed a technician or engineer, they could steal one from the local factories, and vice versa. The local education systems could tailor themselves to the needs of the local industry, and form collaborative ventures. That infrastructure has been pretty much destroyed in industrial America. I think the biggest mistake Americans made was destroying our mostly-free college and university system. If you want bright kids to study engineering, charging them $100.000 for a university education is not a good incentive. About 40% of American PhDs are foreign born. The Chinese are beating us fair and square -- they're smarter, work harder, and meet deadlines. I like the Chinese. They're good teachers, they fund education, and I'm willing to have a friendly competition with them. Just give me the resources. The best thing Biden could have done for education was to cancel student debt, and he couldn't even do that.
I think you're half right. Chinese people place far greater value on hard work and academic achievements, which is why the American government can spend more money on public education than China, despite only having 1/3rd of it's population, and still produce inferior results. That's without mentioning the higher tuition rates those 40% foreign graduates must pay compared to American citizens.
@@homuraakemi493 The US controls the world economy and guarantees a prosperous life so it’s attractive (so far) for talented immigrants. Somewhere I read 70% graduates of the top 1 Engineering School in China come to the US (generally they soon get permanent residence and offered US citizenship). Here in San Francisco Bay Area what I know is that they have a huge alumni network. One of the kids of my boss read and publish papers in AI during high school.
To give you a perspective, I’m a Chinese expat and my hometown has a population of about 1 million people. Out of that 1 million there is less than 1 people per year who can get admitted to that school. If someone gets admitted the city major joins his/her high school graduation party. For the rest of the 99 million, they are not that much different than your average folks in a Midwest town. Drinking, getting boozy, smoking leaves, gambling, etc. day and night.
Here in my workplace, a small startup, we have dozens of alumni from that school, alone. That’s the level of brain drain US has on China with it’s American Dream.
As long as US stays open and offer what it has promised, we’d like to do business and contribute to the success of this country. In the contrary if US cannot hold it together, with anti-abortion, Asian-hate and Chinese-purchase-land ban, overcooked spy drill, and China seems more an attractive option, people will jump the boat. 1/3 to 1/2 Apple, gone to Huawei. At this time being we are generally more on the US side since China neither can hold itself together or even worse, and we love what US dollar can buy, but who’s to say.
I know a guy, when he was 18, came to the US to see if he wants to live here and get green card by the way. His father is a businessman. He landed at LAX and went out the airport and hollys**t this is a s**t hole. He went straight back and went to Singapore for Economics degree in NUS.
If US or China or whoever wants to win the competition, soft power is the key. Folks are different, but not by that much.
A few things to remember. The US is the only country preventing Taiwan from being overrun by China.
The US for once is being proactive and strategic by bring back (notice I said, 'bringing back') chip making within it's boarders where it would be less vulnerable to attract from China.
Also, the US cannot afford to abandon Taiwan because of its geographical presence.
Words are important. Taiwan's ability to be the world leader in advance chip technology and reproduction is solely and I mean solely from the military protection and funding from the West.
That's not arrogant statement but a factual one that must not be overlooked or taken for granted.
I would argue it’s also a geopolitical move overall for Tiawan. Having fabs in the US and Europe paying taxes and employing locals will increase political support for Tiawan in general in those countries. The closer the economies are tied the more likely US and Europe will support Tiawan.
Also a smart national security move for the US. With all of the issues that the US is having with China, Russia, and North Korea, it is a very smart move.
The reason I worry about this is that if TSMC moves mostly to America, it takes away incentive from the US to protect Taiwan from China, while only boosting the US economy and their technological lead. Thank you for the video.
Taiwan is decentralizing. Diaspora settlements throughout their allies worldwide. Eternally cranking out the most advanced technology for those who provide sanctuary.
tscm stock is owned by us hedge fond in comparison to samsung thus tscm is on the edge of technology in comparison to samssung they are more far
It's the other way around. TSMC coming to America is the payment (bribe) to protect them from China.
@@geocam2 If the plants are a success economically (which I kind of doubt but we'll see) what's to stop them from moving most of the company there?
Although I appreciate your concern, I would encourage you to consider other factors. 1. Americans hate bullies ( and, yes we are usually blind to our own bullying ). 2. Building fabs in the US puts USMC into the awareness of ordinary citizens and ties Taiwan tighter to the United States ( Unfairly, most Americans haven't heard of USMC) in an increasingly important state politically.
Tsmc founder said manufacturing in US is too expensive …. They just have no choice due to political issues
Stealing is a strong word , personally I prefer robbing
Better TSMC settled in AZ than TSMC being robbed by china.
Nice video! I like these two points the most when it comes to Taiwanese concerns about TSMC diversifying away from Taiwan:
* Expect the majority of chips to still flow from Taiwan - 2:00 "Taiwan's 4 Giga-Fabs, which can put out over 100,000 such wafers" already vs the 20-50k AZ is projected to do by 2026, and vs ~1.3M wafers/mo TSMC may be doing this year (7:26), and the many other buildouts they'll do in Taiwan (8:09)
* Chips alone may not decouple your supply chain from Taiwan - 10:40 "And Taiwan’s leading positions in the rest of the chip supply chain like wafers, packaging, assembly and testing? America's position in global packaging, assembly, and test capacity is even worse than its fabrication market share" - an excellent point that people should remember, as these chips probably will end up being shipped back to Asia for those stages even if made in the USA! But I would love to see a comprehensive analysis on how critical Taiwan could still be to the semiconductor industry even if the US/JP/Europe could make the chips more locally. (Guess I'll have to wait for your videos on ASE/SPIL/Powertech ;).
Regarding capex, if a 2nd AZ fab adds maybe $9B/yr, then 1-2 more fab projects outside Taiwan of comparable scale could change the annual capex to favor international countries. The Japan Kumamoto fab although smaller at
i sure hope the usa has a plan to blow up every tsmc factory in tawain if china were to mosey on in there.
@@jrok96 I sure hope not; that would not make anyone enamored with the US, and make it an enemy of Taiwan. And as Morris Chang has noted, TSMC is more than the factories, but also the people and relationships with partners around the world necessary to do what it does. This essentially would render the factories non-operable in the event of any invasion.
Rather than think of destruction, consider what TSMC is expanding beyond fab capacity: the additional formal avenues to move brains around if need be (and much easier than entire factories).
I understand your view and I respect it. Im a fellow socal resident growing up not far from your childhood home. The way i see it is this and Im confident other Americans are of similar feelings. The way i see it is that the global pandemic sent a lightning bolt around the world when it comes to high quality chip production. And with the dependency the U.S. has on foreign production was a wake up call. I believe the U.S. values the high quality chip production Taiwan provides and with recent statements and moves from the U.S. to back Taiwanese chip production by trying to cut ties to main land Chinese chip production. The U.S. has a commitment to Taiwan and its independence and I as an American totally support and back Taiwanese independence. I know im not alone when it comes to this belief and support. Americans value the relationship with Taiwan and know the quality of Taiwanese products. I understand the concern but Taiwan has become a key player in global manufacturing of a vital component to the worlds life. Taiwan has established itself as a world leader in that market and should not be threatened. In my opinion Taiwan and its quality production of semiconductors coupled with its relationship with the U.S. and other western countries will only strengthen going forward. The U.S. and its investment in itself to become self sufficient in production of chips is not only long over due but is a necessity moving forward to not only invest in our economy but to enable us to withstand another episode like the one we saw when the pandemic shut down global supply chains and causing a complete shut down of production. The ripples of that are still being felt in certain sectors and its wrecked havoc on the world economy. I feel Taiwan has established itself as a major player in the world when it comes to the chips and will be for the foreseeable future. The business ties its been able to establish and its direct connection to western governments has solidified Taiwan as a legitimate player and a partner for the foreseeable future. The market will definitely change but I believe it will be a chance to further expand and open opportunity to expand and explore new capabilities and I believe Taiwan will continue to evolve and develop into a an even stronger partner and ally going forward. I value the partnership America shares with Taiwan and alot of western governments feel the same. So much so that if it comes to standing against you know who alot of us do support that and I can assure you we will honor those commitments. Taiwan has shown nothing but promise and they can back it up. Taiwan in my eyes in a major player and will continue to be while growing stronger and becoming ever more independent and free. A small democratic country stands up to face a giant bully while becoming a major global player in the supply of a vital component is something to be proud of and its not going unnoticed. Very encouraging and Im excited to see Taiwan keep growing and becoming a powerhouse in Asia and a becon of democracy. nothing but love and respect from here in Socal!!
This is by far the best channel on UA-cam. I hit the like button before the video begins because every single time I am impressed with your videos. My wife askes me evey time she hears your videos if I have hit the like button before the video started.
Steal is the wrong word
It's more like daylight robbery.
😂 global political problems are forcing this. Take a look sometime.
As a recently retired employee from the worlds largest semi-conductor capital equipment manufacturer I have over 40 years of experience in fabs all over the world. I don't think TSMC has anything to worry about losing its lead in production of chips. I've worked in Taiwan a number of times and installed a significant number of tools in both the north and south of the nation, node 3 (and node 2, when produced) will be a TSMC skill kept close to home. The US is smart enough to NOT kill the goose that lays the golden eggs, unlike others! The real trick is keeping Xi from doing a really STUPID thing and screwing up a great place in his misguided attempt to take the island by force. Hong Kong fell by force because there were no armed defenders, Taiwan is not defenseless and won't go as easy. The construction of TSMC fabs here and in Europe will make production of TSMC products less vulnerable to ccp blackmail and coercion thus protecting both TSMC and the free world. art
Why would the US help defend Taiwan if all of premier chip manufacturing is taken back to america and europe? Taiwan will fall easily for china's heft then. Stationing the tsmc industry in taiwan to keep supplying semiconductors to china may help keep china at bay. Just a thought.
@@scamexpose123 As easy as you make it sound that after TSMC has factories in the US we would allow Taiwan to fall into the hand of the ccp there is the moral question.
How would we be thought of in history if we the worlds second largest democracy ran away from Taiwan in it's most desperate hour? I don't think this nation is that shallow and cowardly.
The problem is no one knows and I hope we never have to test the limits of this relationship.
Even if we have most of TSMCs fab abilities here, there are machines and abilities that we should not allow China to just take by force! I certainly don't know how this will play out in the real situation.
This isn't good for the world! art
We learned that we need to diverse delivery chains. And this is what needs to be done.
With the majority of shareholders of TSMC in the US, I think a technology transfer is inevitable.
@@UserUser-zc6fx The design and architecture of the majority of the chips are of U.S. ingenuity . Taiwan is cutting edge on the actual manufacturing process.
Both countries work hand in hand with the other to create a superior product. I think that many Taiwanese natives are being offered positions
in the new facilities and this will provide a safer and more secure enviroment than living on an island within striking distance of Chinese missiles.
@@UserUser-zc6fx it's not just most it is all. TSMC does not reinvent the wheel. All it's manufacturing machinery etc come from the USA, Japan, and Europe. TSMC only has the skilled labor.
Jensen Huang: CEO of Nvidia; born in Tainan, Taiwan
Lisa Su: CEO of AMD; born in Tainan Taiwan
TSMC's most advanced FAB's (5 NM and 3NM) : located in Tainan, Taiwan. TSMC's HQ is located in Hsinchu (northern Taiwan)
ASML's only live demo facility (outside of the Netherlands): located in Tainan, Taiwan
they are all american,obliged and swear on their flags
Jensen Huang's family immigrated to the USA when he was 9 years old. Lisa Su when she was 3 years old. They were born in Taiwan but grew up in the USA. lol so I do not understand your point. They both developed their skills working at American companies.
I still cannot comprehend the wisdom of building a water-intensive plant in a desert, out of all places.
@Garrus Vakarian The Phoenix area (where this is being built) is in a tier 1 water shortage and projected to be a tier 2 by next year. Being next to a lake does not mean you have a ton of available water. An industry might not even be legally allowed to take that water.
It's easy.
If the dessert offers you the biggest tax exemptions and guarantees you water no matter what on it's own dime, you will pick the dessert..
@@en0n126 tsmc will have guarantees to have first dibs on that water before anyone else.
@Garrus Vakarian You didn't explain anything before. There's a difference between proclaiming something and explaining something. The other guy is right. TSMC was given an outstanding deal at the expense of regular Arizonans.
@Garrus Vakarian I never claimed that Arizona is just a large desert. I have family in Phoenix. I've been in the mountains.
The term "Stealing" is simplifying a complex process to a zero-sum game. Current technology will over time move to wherever the factories are. From Taiwan to America. From America to mainland China. Taiwan can, will, must try to innovate and stay ahead of the game. They have a good head start, are at the cutting edge right now, but shouldn't expect for the near-monopoly to last forever.
the us is forcing china to be competitive. and china will be, because chips aren't magic and physics works the same in taiwan or the us or china. so with money, which china has plenty of, and time they will catch-up just a question of 5 years from now or 10 years from now. the world is being split into two by the us, one supply chain for them and one for china. unfortunately i dont see the us supply chain as being competitive with china's
@ Eligan Rimsa They already have electric rockets even Elon Musk can't produce that made by Taiwan freshman in college rocket class for aerospace majors rock on Taiwan!
@ Eligan Rimsa if Taiwan cooperated with Ukraine who built soviet space shuttle and biotech could really do something!
This is so deeply hypocritical to even suggest a Taiwanese company is being stolen from, it's beyond belief.
Thanks for the great content as always. Would be very interesting to hear about the assembly/package/test supply chain in Taiwan and globally.
I do appreciate your point of view. Everyone needs to be able to present a fair and balance point of view and I see your point.
I tend to think the move of building fabs in countries such as Europe and US is a part of supply chain diversification to supply different regions, in view of a future deglobalized world.
Another great video. The stats on wafer capacity and packaging technologies put things in perspective.
Purely from a business security standpoint having multiple locations for your manufacturing is just a smart way to go.
Exactly. It's pretty simple really.
My prediction is that once TSMC has its Arizona plant up running smoothly, the Taiwan plant will be blown up mysteriously - like Nord Stream, except this is not against Russia, but to prevent China grabbing it.
That ridiculous. We do business with our frienemies. The Saudis own many of our oil refineries. China owns a ton of our real estate market. If we weren't proactive years ago creating the Dept of Energy, the politicians here would have sold all our Nuclear power plants to Russia by now.
It’s easy to update small fabs…I’m sure when it opens, it will have the capacity and size needed for future production.
"Tim Apple" lol
?
@@NoNameAtAll2 His actual name is Tim Cook (the head of Apple)
@@NoNameAtAll24:40 the quote is from “Tim Apple”. This is a reference to the time trump met with Tim Cook, CEO of Apple and forgot his last name calling him “Tim Apple”. It became a meme for a bit
1. My thinking about this is somewhat like the same strategy done by Japanese car companies. They took advantage of the tax break, including the US Chip Act.
2. This could be a pre emptive move in case China takes over Taiwan?
TSMC is a great foundry with gifted engineers and a knack for establishing efficient fabs. But they never made their equipment nor developed the chip designs. While you can steal humans, I don’t think western countries do that much anymore.
TSMC is now Uncle Sam's comfort woman.
Well The Microchip technology is an American licensed technology, Thr fact that TSMC is going to spread our their production is like the Technology coming back home, not stealing it.
microchip tech was invented by america BUT NOT , NOT LICENCED by america , just like ALL OTHER THINGS WE LEARN IN SCHOOLS & UNIVERSITIES, KNOWLEDGE FLOWS AROUND and every one learns and you can develop your own from there and this is HOW THIS WORLD GROWS & that is why scientists publish journals for others to see !!!!!!!!!!!!!!!!
Is that what they teach you at the American schools?
In semiconductors, it’s all about production capabilities…your ignorance is showing
@@tomsunwifi2767 Taiwan was introduced essentially as a manufacturing partner, having to license the machines and processes from Western companies. They did not get started out there in their own and up and invent the machines, the processes and heck even the production lines...
If we move automobile manufacturing back from Thailand that is stealing right? Even Japan's automotive industry was setup thanks to the US's manufacturing patents
TSMC fail big time in Arizona I heard. Taiwanese not willing to paid subcontractors on time and paid wages are not fair, plus TSMC is hiring more Taiwanese with highly skill to finish construction other than use the American labor force. TSMC company is behind schedule and over budget. Plus different ethic in work most Americans are not able to work long hours like the Taiwanese and the disappointment in safety are not being regulated which causes a huge problem. TSMC even announced that this time setting in America doomed to fail. TSMC is highly strict with their work ethic and they now having hard time to recruit the right people due to the lack of skill in USA compare to in Taiwan. 😂
This will end up like HTC which was at the forefront of smartphone technology - before BlackBerry and Apple - then they just started to be a pawn of Google through Nexus then Google took over their division and renamed it pixel.
it is considered a matter of national security for the United States at this point. TSMC can retain its IP, talent and market share by doing business in the US. Guarantees that the US actually follows through on. Refusing this arrangement (as TSMC has wisely chosen not to do) would result in loss of market share as there are alternative companies which would establish leading edge fabs in the USA. I don't think it is such a huge ask for such a critical national security partner in maintaining Taiwanese autonomy.
Nut what would be their incentive of maintaining Taiwanese autonomy if TSMC moves to the US?
@@uku4171 exactly. and when China strike down on Taiwan guess where it's people and capital would flee?
So what you're saying is.. we can make the advanced wafers here at the US fabs (3nm, 5nm, etc), but that we cannot do anything with them, since all the advanced assembly happens in Taiwan anyways? This seems crazy to me that they'd offer billions in subsidies, just to ignore that key component.
Cannot call it a "steal" if Taiwanese actively cooperating willingly. American just make the most out of this opportunity. The status quo will not hold, since American always want to keep the cutting edge technology in its own hand.
Especially when nothing stops Taiwan from continuing to make chips
Taiwan likely being coerced to give up its silicon shield for US natsec. This may not end well.
Edit: Also need to take into account US' other high tech vassals when considering it's capacity to replace TSMC's capabilities.
Where were transistors invented in the first place? Much less your lighting, air conditioning, running water, and personal computer?
@@davidjeff6869 Yeah but it's like saying that China have all the rights in innovation done by Westerners in ammunition just because they invented gunpowder lol.
Nah can’t be 😂😂😂😂
USA is pure good and only wants to help Taiwan like this American UA-camr says 😂😂😂
I am ignorant so please inform me. In the Arizona fab , The DUV light source used to manufacturer four nanometer wafers. Is owned by an US company. How can they take what is already theirs. Costs will be lower overseas. I find it interesting, the way they use light to create the pathways inside the wafers. This is what let me down this rabbit hole.
I agree with all your points. Is Taiwan experiencing a "brain drain" right now? This is the most important question in this matter.
yup this the one. This is very dangerous for Taiwan.
@@rabbitazteca23 all 47 of them?
@@alexandrep4913 what do you mean?
@@NaderNabilart Pretty much all countries are having a semiconductor brain drain. China, the US, Taiwan etc.
for several years they were experiencing a big brain drain to Mainland China. That's what really started all the sanctions.