
Washington pressures TSMC to make chips in US - baybal2
https://asia.nikkei.com/Business/Technology/Exclusive-Washington-pressures-TSMC-to-make-chips-in-US
======
Nokinside
I think there is a geopolitical reason why most TSMC's 300mm GIGAFAB's and
advanced backend fab are located in Taiwan (1 fab in China).
[https://www.tsmc.com/english/contact_us.htm#TSMC_fabs](https://www.tsmc.com/english/contact_us.htm#TSMC_fabs)

Concentrating geopolitical risk of TSMC operations makes Taiwan more important
to the rest of the world. The US would naturally want to reduce this risk. In
Taiwan-China conflict world chip production would take a huge hit or be in the
danger of falling under Chinese rule.

If TSMC's leadership is patriotic, they should refuse this pressure as much as
they can and ask more weapons for Taiwan instead.

~~~
Aperocky
> patriotic

Be careful for what you wish for. Taiwan’s formal name is Republic of China,
the older generations does not exactly share the younger generations wish of
independence. In fact, they are often patriotic .. to China.

~~~
pgcudahy
I think the last elections argue against that
[https://www.nytimes.com/2020/01/11/world/asia/taiwan-
electio...](https://www.nytimes.com/2020/01/11/world/asia/taiwan-election-
china.html)

~~~
gpm
I think you might need to interpret "China" in the grandparent to this post as
literally the land and people, instead of the more common meaning of the
current government.

Taiwan's official view, as I understand it, is that they are the rightful
government of the land and those people, and that the people currently
reigning are illegitimate.

~~~
khuey
Yes that's the "official" view but relatively few people actually believe
that.

------
zweep
What Washington should be doing is investing in creating a US-based top-notch
semiconductor foundry business. And that's something that takes 20+ years.

~~~
manicdee
Are Apple and Tesla building their own foundries or outsourcing?

~~~
tooltalk
Apple's A chips were, once upon a time, manufactured by Samsung in Austin,
Texas until 14nm in 2015. Tim Apple switched to TSMC in Taiwan shortly after
defending Apple's outsourcing practices in a rare national TV appearance,
boldly claiming that "the engines of iPads and iPhones are made in US."

Tesla's chips are made in Samsung's Austin, Texas plant.

~~~
kijin
Well, there's the American fab we've been looking for! Samsung isn't too far
behind TSMC, is it? Even if the Austin plant were a generation or two behind
their Korean plants, it shouldn't be too difficult to bring it up to date --
especially if the investment will be rewarded by lucrative defense contracts.
Besides, Samsung already builds a lot of military-grade stuff for the Korean
government, so it's not like they lack the experience.

This sounds much easier than telling TSMC to build a whole new fab on American
soil.

~~~
tooltalk
Well, the key thing is to get everyone to use the US plant, but nobody wants
to use potential competitor's foundry, who recently announced that they plan
to spend $100+B to challenge other logic chip makers. A few minuscule defense
contracts aren't probably worth what they have to invest in -- Samsung for
instance has already spent $15B in their Austin plant.

------
filereaper
DoD's having a crisis with its trusted Foundry Program [1][2].

Originally, IBM's East-Fishkill plant was the largest trusted-foundry of near
latest generations (14nm, 22nm) but that was sold off to Global-Foundries,
which then sold it off to ON Semiconductor. Now it needs someone to fab the
latest generation with a full chain-of-trust.

[1] [https://semiengineering.com/a-crisis-in-dods-trusted-
foundry...](https://semiengineering.com/a-crisis-in-dods-trusted-foundry-
program/)

[2][https://www.dau.edu/cop/dmsms/DAU%20Sponsored%20Documents/Ou...](https://www.dau.edu/cop/dmsms/DAU%20Sponsored%20Documents/OutreachHandoutJanuary2016.pdf)

~~~
BostonEnginerd
ON is at least a US owned company. Should make it easier to maintain the
trusted foundry there, as they have several other sites which are accredited.
According to their marketing material, they are licensing the GF/IBM 45nm/65nm
nodes.

[https://www.onsemi.com/pub/Collateral/BRD8079-D.PDF](https://www.onsemi.com/pub/Collateral/BRD8079-D.PDF)

------
awinter-py
security risks aside, andy grove of intel publicly regretted offshoring
semiconductor manufacturing because of his suspicions about generational
shifts in innovation and expertise

I've tried to read econ papers on colocation of innovation and manufacturing
-- they're mostly long-winded and unconvincing but the concept is compelling

~~~
jmole
intel is one of the few companies with leading-edge fabs in the US.

[https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si...](https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites)

~~~
Turing_Machine
Doesn't Samsung have some fabs in Texas?

~~~
bradstewart
Samsung does have a fab in Austin (maybe elsewhere), but it's mostly flash in
the 50-180nm range, not a leading edge process AFAIK.

~~~
bob1029
The Samsung LSI/flash lines in ATX are not a leading process node in terms of
all foundries (i.e. TSMC), but last I heard they were pretty close to the
bleeding edge of what Samsung is capable of in their Korean factories. The ATX
lines were always intended to be exact copies of their Korean counterparts,
but this may have deviated in recent years (I have been out of the loop for ~7
years now on their internals).

Some of the major reasons behind Samsung building that factory in Austin were
to satisfy Apple and to also leverage the more "open" innovation attitudes of
the average American worker.

~~~
tooltalk
According to Samsung's own account, their first fabrication plant in Austin,
Texas opened in 1997, followed by major upgrades/expansion in 2007 and 2017.

------
wrkronmiller
Couldn't this have the opposite effect from what is intended? If all the US
military TSMC chips come from a separate facility from those for Huawei,
etc... then there's only one, big, target with minimal collateral damage.

~~~
adventured
No. If you're already at the point of China bombing fab plants in the US,
you're at absolute war and many millions of people will die. The US would
respond very badly, quite overly irrationally to an extreme to having its
mainland bombed. Having those fabs in eg Taiwan and of mixed use (US & China
both deriving supply from them) would be pointless under that conflict
scenario anyway; all it would do is keep China from bombing them - maybe - and
instead they'd seize them physically and shut off US supply while trying to
keep their own supply going (the US can't stop China from taking Taiwan; if
they move on Taiwan, they're getting anything left standing, including fabs).
There's zero upside to keeping them mixed with US / Huawei if there's a
conflict.

~~~
riversflow
> the US can't stop China from taking Taiwan; if they move on Taiwan, they're
> getting anything left standing, including fabs

I’ve seen this repeated in this thread, is there any evidence of this apart
from conjecture?

~~~
adventured
Sure, I think it's quite technically obvious when you look at any aspect of
the matter. Taiwan is five feet from mainland China and they have a massive
military that is increasingly quite advanced technologically (clearly the
overall #2 military in the world in both capability and technology at this
point; Russia is superior to China in a few categories, but not overall; China
is rapidly rising, Russia's military is rusting) and they have an increasingly
potent navy. They can stand off US carriers effectively and are building
multiple carriers of their own. They can rapidly, massively resupply locally,
whereas the US would have the British Empire problem of trying to supply a
conflict very far away (and facing non-stop Chinese harassment & losses in
attempting to resupply into Asia). US bombing capability is far too limited in
volume now versus a target as massive as modern China's manufacturing and
military (we can't take it down effectively or fast enough; and we couldn't
easily consistently penetrate their territory air defenses anyway; Russia
would very happily feed them volumes of S missile systems, which would
severely restrict US bombing efforts). US military resupply is wildly
expensive, Chinese military resupply is not (specifically on such a
local/regional basis). My god the resupply capabilities of a full war footing
modern China in the local region - just get the fuck out of the way of that.
Picture WW2 scale US manufacturing arms output capability and then double it.

What is the US going to do, lose a couple hundred thousand soldiers and a
large number of naval ships trying to save Taiwan, which is an impossible task
long-term. No chance the American public goes for that unless the mainland US
is at risk or unless China makes the mistake of killing a large number of US
soldiers in eg South Korea or Japan. Taiwan is an ally, it isn't necessary for
US national well-being. If China gets Taiwan, and the US keeps its
manufacturing-import relationship with China/Taiwan for its domestic economy
benefit, the US public will have little appetite for an actual war with China.
Where's the US public self-interest otherwise?

Do you kill everyone in China, alternatively (not plausible, as that's all out
nuclear warfare between the two nations)? Because that's the only way to
permanently stop them from taking Taiwan if they want it. They have an
authoritarian system, truly epic scale manufacturing capabilities of all
sorts, a rapidly advancing military, and 1.4 billion people to throw at
problems (with only minimum regard for killing large numbers of them if it's
regarded as absolutely necessary for national goals; China will tolerate
losses far better than the US, authoritarian systems have demonstrated that
repeatedly in the prior century).

~~~
myrandomcomment
This is more obvious scenario.

[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/)

Any invasion plans would require a ton of perpetration that would be seen
months before.

The US Military is a logistic machine. No President would sit by and watch the
preparations and do nothing. The death of a US carrier group in defense would
ensure that the US would not backdown. Think of the US after Pearl Harbor. It
would end with nukes and the US would “win” for some definition of the word
win at that point. The Russians would op out hoping to come out the untouched
as the US and a China destroy themselves. Because of this a well reasoned
response risk wise would be for the US just to go nuclear day one and
decapitate China before they saw it coming. That’s far more likely.

~~~
duhast
MAD

------
chvid
I thought the deal about the F35 and other fighter planes was that when the
various countries bought this hardware they got to build a part of it. Really
as a way to soften or justify the absurd cost of these things,

For example here in Denmark, the Danish company Terma which is specialised in
radar technology produces a number of components for the F35:

[https://www.terma.com/media/444108/f-35_and_terma_171012_scr...](https://www.terma.com/media/444108/f-35_and_terma_171012_screen.pdf)

------
phkahler
I'm curious about the politics here. I get making the chips in the US, but if
security is the concern they should no be made by a company based in Taiwan
regardless of where the fab is.

~~~
kevingadd
Why is Taiwan specifically a threat? They're a long-term ally and their voters
recently gave a new mandate to anti-China leaders in an election. If the US is
worried about threats from Chinese electronics companies like Huawei it
doesn't make any sense to alienate Taiwan.

~~~
nwallin
Taiwan isn't the threat. China annexing (or otherwise disrupting) Taiwan is.

~~~
sroussey
At which point the US can nationalize the fab on US soil. That makes a
compelling argument for forcing fab creation here.

~~~
hoseja
Not if you're Taiwanese.

------
RantyDave
It's not a bad idea. It would (presumably) insulate them against future border
tariffs.

------
incompatible
Would the location of the factory really make much difference? If TSMC was to
buckle under China pressure, it could probably find a way to interfere with or
distribute secrets from the US military chips regardless of the physical
location.

~~~
klodolph
TSMC is "in China" it's just that ROC fabs are a few process nodes ahead of
anything in the PRC.

Various US military and government orgs prefer to buy chips entirely sourced
within the US, this isn't as much about pointing fingers at China, but it is
presumably harder to suborn domestic workers than foreign workers.

Personally, my take on things is that the major world powers should use
silicon entirely manufactured and assembled within their borders for critical
and military/government hardware. It is too damn hard to verify chips after
they are manufactured, because potential backdoors and vulnerabilities are too
small to see these days. It is always an arms race between attackers and
security, and whichever side is "winning" in a particular domain will shift
back and forth, and the cost-effective tradeoffs will shift in position. Same
thing happens in physical warfare over the course of history.

The argument that PRC "could probably find a way to interfere" is not germane,
because perfect security was never on the table in the first place. We are
just comparing different relative levels of security on a probabilistic basis
comparing cost of attack and cost of defense.

~~~
bluGill
Military prefers locally sources parts because if war breaks out you need
absolute certainly you can get the critical parts you need to build whatever
weapons you don't have. For short war this isn't a big deal because you are
stuck with whatever you have one hand. For a longer war you need to buy more
weapons - and that means you need a source you can buy them from. Friends and
enemies change all the time, so the only way to be 100% sure is to produce
your own parts in your country.

------
kds3
So, at first we encouraged military companies mergers to save our money (back
from 1980s?) and left only with a few monopolies, then suddenly there is only
one company that can make our military chips? What a surprise! And now we have
to pay premium to have them made on our soil? Same situation with non-military
monopolies and near-monopolies.

~~~
vonmoltke
It was the 90s, and the only major defense contractor that had large fabs for
digital chips was TI. The consolidation had little effect on where the chips
are made.

------
knolax
Sounds like forced IP transfer to me.

------
ausjke
TSMC is beating Intel for making chips.

Still Intel is the last hope for US to secure IC manufacturing should a war,
or a huge earthquake brought down Taiwan someday.

I suddenly think it's time to buy INTC stocks.

~~~
jngreenlee
Texas Instruments, Micron, OnSemi, Amkor, Microchip...there's lots of options
US based for ICs!

~~~
ausjke
None of them are advanced these days comparing to TSMC, other than Intel.

~~~
NonEUCitizen
Not even Intel.

~~~
ausjke
That's true, Intel is the only one that is closest, though a little too far
behind.

------
xvilka
Politics aside that is the huge problem of having a monopoly in that industry.
I really hope we will have more contract chip manufacturers at some point in
the future.

------
throwGuardian
From a purely economic viewpoint, fabs these days have such high levels of
automation that locating them in Asia doesn't carry the cost benefits it used
to

------
ptah
I fail to see how this removes chinese interference purely by moving
manufacturing to US

------
bgorman
TSMC already makes chips in the US through Wafertech in Washington (state)

~~~
metaphor
From the article:

> _The U.S. accounts for 60% of TSMC 's sales, but the company operates only
> its subsidiary WaferTech there, producing chips for mature technologies._

In this case[1], "mature technologies" appears to mean downto 160nm tech
node...essentially irrelevant with respect to FPGAs.

[1]
[https://www.wafertech.com/en/foundry/technology.html](https://www.wafertech.com/en/foundry/technology.html)

------
jtdev
Good

------
lota-putty
How is it different from colonialism?

Leeching in the name of democracy?

There are several democracies between Taiwan & USA.

------
NicoJuicy
I'm wondering which foreign company would trust today's president.

The current president receives worse approval ratings than Poetin or Xi ( was
a Washington company based petition in Europe, Asia,...)

Which is a very hard achievement to reach.

