
U.S. considers cutting Huawei off from global chip suppliers - pseudolus
https://www.reuters.com/article/us-usa-huawei-tech-tsmc/u-s-mulls-cutting-huawei-off-from-global-chip-suppliers-with-tsmc-in-crosshairs-idUSKBN20B1YO
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fgonzag
What are they going to threaten TSMC with? Banning it's products? So you kill
the smartphone and most of the SoC industry in one fell swoop?

TSMC has way more bargaining power than Huawei. The US won't be able to bully
it around that easily. They could easily find enough buyers for their wafers
in Asia and Europe.

Any tarif would be directly passed onto TSMC's clients too, so it'd be
straight up taxing 80% of the things that have silicon in them. I don't see
what leverage the US govt has on an entity with as much global relevance and
few competitors as TSMC.

~~~
101404
> What are they going to threaten TSMC with?

Its a Taiwanese company. The US is pretty much the only country that helps
Taiwan to continue to exist as an independent country (not officially, but in
practice). If the US tells Taiwan to stop supplying Huawei, that's what they
will do.

I an still not sure though what the motives if the US are in bashing on Huawei
so much.

~~~
fgonzag
You do realize China thinks and claims it owns Taiwan. If Taiwan refused to do
business with a Chinese company on behalf of the US, you'd be guaranteed to
have the Chinese army there within the week. China-Taiwan relations are
nothing to fuck with, unless the US is willing to spill major blood.

To China this is no different than the US demanding a Tibetan village stop
trading with China.

~~~
teknologist
The analysis says that China would "spill" plenty of blood in that situation
too, and the outcome might not be as predictable as you think...

[https://foreignpolicy.com/2018/09/25/taiwan-can-win-a-war-
wi...](https://foreignpolicy.com/2018/09/25/taiwan-can-win-a-war-with-china)

~~~
fgonzag
The whole point of the preceding paragraph is stating that china is absolutely
willing to spill blood over Taiwan. We're asking if the US govt has enough
political capital to fight a war against a country with an actual army over
literally nothing at all. The US hasn't fought one of those since World War
II, and it hasn't had a war with major casualties since Vietnam IRC?

China doesn't care if half its army comes back home in body bags. Their
country is built on extreme nationalism and Taiwan going off script is an
existential threat to their model. Could the US population tolerate a casualty
rate much much higher than Vietnam, especially over an economic dispute?

Nobody is disputing the US would beat China in a war.

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davidw
Nice article on TSMC in the Christmas edition of The Economist:

[https://www.economist.com/christmas-
specials/2019/12/18/a-lo...](https://www.economist.com/christmas-
specials/2019/12/18/a-look-inside-the-factory-around-which-the-modern-world-
turns)

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throw0101a
Won't this just cause them to set up their independent supply chain?

As I understand things, part of the reason for encouraging international trade
(esp. post-WW2) was/is to tie different countries together so that it would
disincentivize conflict between them.

~~~
wmf
The only advanced semiconductor foundries are TSMC and Samsung; if Huawei was
locked out of both they would be stuck with inferior technology.

~~~
totalZero
What's your definition of "advanced"?

Intel, UMC, GlobalFoundries don't make your list??

~~~
wmf
At this point Huawei is looking for 5 nm and 3 nm capacity so no, Intel, UMC,
and GlobalFoundries do not make the list.

~~~
totalZero
What does 5nm mean to you? It's all jargon. Intel's 7nm is comparable to
TSMC's 5nm. Go do some research instead of making arbitrary classifications
based on marketing terms.

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Taniwha
God, it's like some giant running amok, staggering around stepping on markets,
how can anyone do business in the world these days?

Given past experience the result will of course be a domestic Chinese fab
industry that out competes the rest of the world .... when what we want is
real competition in this space

~~~
teknologist
It would seem that the US view is that CCP state sponsorship of companies for
surveillance purposes is not conducive to "real" competition in the market

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teruakohatu
What is the end game here? I can't figure out if they want to cripple Huawei,
which seems unlikely to succeed, or if this is some sort of negotiatong tactic
as part of some bigger geopolitical game.

~~~
toomuchtodo
Both. It’s meant to be punitive for past transgressions related to trade
(which is a complex issue beyond the scale of a single thread) and send a
message for future interactions.

~~~
h0l0cube
> punitive for past transgressions related to trade

You can take the morality out of it. This is simply two adversaries in a power
play.

~~~
toomuchtodo
IP and patent theft is a legal, not moral, issue. Examples of theft of Western
intellectual property by China is trivially available, and requires no
enumeration here.

~~~
h0l0cube
Property rights _are_ a moral concern, though of obvious financial import. But
as far as I'm aware, the trade war is not premised on increased enforcement of
property rights in China, but on the trade deficit.

~~~
DeonPenny
A trade deficit that people believe was created using unfair trading practice
which includes the violation of Property rights among many other

~~~
h0l0cube
As far as I'm aware, at the behest of it's trading partners, China had already
made strides to implement IP laws prior to the trade war. Once again, the goal
of the trade war isn't to improve China's engagement with it's trade partners,
which can be achieved through bi-lateral trade agreements, but to address the
growing power of China.

Edit:

To clarify my own opinions, I'd be really happy for a trade war if it's
objective was to change China's policies. If China grows unimpeded with the
same human rights, and lack of enforcement of IP laws, it means the whole
world would have to compete on the same terms. This would mean a degradation
of human rights in first-world countries in the long run.

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simonblack
As Julia Roberts says in 'Pretty Woman'.

'You guys work on commission, huh? So I went elsewhere!!'

'Big mistake! Big!! HUUGGE!!!'

When you say 'But there is no elsewhere.' you're right. _FOR TODAY!!_

Tomorrow, China will now have to produce its own chips. And those chips will
be cheaper and put the US's chip manufacturers out of business. (Just like the
US paper manufacturers, and the furniture manufacturers, and the small-item
manufacturers, and the tools manufacturers, and the clothing manufacturers,
and the ... but you get the point.)

------
blackrock
This is quite fascinating. Trump and his cronies are now willing to burn his
own house down, and burn everyone else’s house down, in order to not let
anyone play.

Blocking TSMC from selling to Huawei, might very well kill TSMC. I don’t know
the specifics, but TSMC rely on the sales from Huawei to sustain their R&D and
manufacturing investments. This is why it is economical for Apple and Qualcomm
to use a contract manufacturer, since only they (TSMC) can sustain the economy
of scale. If TSMC falls apart, then where is Apple and Qualcomm going to
manufacture their chips?

By doing this, Trump has now painted a target on every other Chinese company:
DJI, One Plus, Xiaomi, Lenovo, Alibaba. Although I am sure they have already
drafted up contingency plans.

At some point, if it hasn’t happened already, these companies are going to
band together, and create their own platforms and technologies. The Chinese
market is massive enough to sustain these companies internally, while they
mature and build out their technology, for later export to the rest of the
developing world.

The key tool here is the photolithography machines from ASML. Once China’s
scientists builds a replacement, then there is no further dependence. So if
Trump wants to get the maximum effect, then he should pull the trigger on
this, right now.

Five years ago, a lot of pundits kept saying that Chinese tech companies were
only competitive because they had the China government backing them up, and
blocking the Chinese market from American domination by Google and Facebook.
Well, today, that decision seems prescient. Nobody back then, ever thought
that an American President would do such a thing, but today, here we are.

~~~
ksec
>Blocking TSMC from selling to Huawei, might very well kill TSMC.

Um. NO. They either continue to sell Smartphone using chips from TSMC, or they
retreat the Smartphone market where other maker will continue to use TSMC's
chip.

~~~
blackrock
I think you read my sentence backwards.

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Traster
The US wants to stop a Chinese company buying chips from a Taiwanese company?

The problem the US has is that it has blatantly conflated national security
with economic interest. Now we've got no idea whether Huawei is a genuine
threat or whether America would just prefer you buy American. The UK was a
great example - even one of the US's closest allies isn't excluding Huawei
from 5G infrastructure.

If there was actually a clear national security threat and the US was acting
reasonably, its allies would be backing it and we might actually see a unified
resistance to potential Chinese espionage. Instead the world is pretty much
unified in seeing this as another one of Donald Trump's _fantastic negotiating
ploys_ where he alienates all his allies, sacrifices key objectives needlessly
and then claims victory anyway.

~~~
volak
Its bipartisan. [https://www.pbs.org/newshour/politics/watch-pelosi-warns-
nat...](https://www.pbs.org/newshour/politics/watch-pelosi-warns-nato-allies-
against-integration-into-huaweis-5g-networks)

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NicoJuicy
I wonder who shorted TSMC, it seems to be a recurring pattern for Trump

