Taiwan Semiconductor Manufacturing Company (TSMC) was founded in late 80s and introduced a completely different model to the market of semiconductor manufacturers, which were all focused to both design and manufacturing of their own chips at the time, Intel being a prime example of that model and the dominant player then.
What TSMC did was to focus exclusively on manufacturing chips under other brands, and they became better and better at it. Since they didn't handle the design of chips, only the R&D and production of chips, they started carving out a larger global market share of the semiconductor industry as time passed, and the manufacturers with integrated processes had a hard time keeping up the pace.
Currently, they have 50% of the global semiconductor manufacturing market share, and one of the only top-notch R&D labs for chips.
Samsung is struggling to keep up on R&D, Intel wants to revive R&D but they are way behind, most everyone else relies on TSMC for creating their super-performant chips. You can count here Apple, Nvidia, AMD, etc.
Grok says a single advanced fab costs upward from $20bn, and TSMC supports these costs on its own, which is another competitive advantage to attract smaller customers and to bolster innovation from startups.
One can say it was and is a matter of national security for the United States what happens with TSMC, given its new rivalry with China, and the latter's claim on Taiwan.
It is quite possible that even Uncle Sam won't be able to protect Taiwan from China's claims for much longer, that's why the deal they reached in Trump's first term was "upgraded" after a little public arm-twisting during his campaign: "Taiwan should pay us for defense", which probably was put into practice when he became president.
So, on Monday, Trump & TSMC announced a $100bn deal which would build TSMC production in Arizona. Trump said that after this, the US will have 40% of the global market share in semiconductor manufacturing. Great deal for them! May be a good deal for TSMC too, which won't be as centralized. However, from what I heard from experts in the technology field (way before this deal was announced), it will be hard to find workers anywhere else in the world that have the same competence, work ethics, and are as cheap as they have over there (compared to their qualifications). We have to assume chips produced elsewhere than Taiwan may be more expensive for this reason. Unless they export the workforce too?
I don't think this is good news for Taiwan. Once the US becomes a force in semiconductor manufacturing, it could back down from protecting Taiwan from China.
Maybe the fact that R&D will likely remain in Taiwan will make it something to fight over, given how few competitive R&D labs for chips are in the world, and that they are the best.
The deal also infuriated China, along with the additional tariffs. I doubt they will watch and do nothing, but they are not the kind that rush into things.
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I think it's good to branch out the semiconductor business, but it might hurt Taiwan. Then again, if the research is done in Taiwan, then the US has a vested interest in keeping it safe. Who knows what will happen.
And still, the majority of the manufacturing will remain in Taiwan, so they still have something to protect there. But at some point, it may become impossible. Plus, if both Russia and the US play super-powers and start taking in new territories, you can bet China won't hesitate to do the same.
For real man, if the US locks down 40% of semiconductor production, Taiwan might lose some real leverage. Also, good luck finding workers as skilled and cheap as in Taiwan. Don't know but I'll see how China reacts to this in the long term
Those were Trump's words. But sounds kind of unrealistic for multiple reasons, even if Intel and others ramp up chip production and even R&D in the US too. For once, besides TSMC's core remaining in Taiwan, there's also Samsung (we saw Trump threw some darts at South Koreans too - I wonder why, lol), and the Chinese, who are on route to fighting with TSMC for supremacy, from what I read.
guess you're right on this one man. It actually feels like one of those things that sounds tough on paper but is way more complicated in reality 🤣
TSMC isn’t just a factory, it’s decades of expertise, supply chains and talent all packed into Taiwan.
I get it, shifting dominance overnight isn’t happening. Also, picking fights with both South Korea and China at the same time 🤦🤦🤦🤦 serious move
Trump seems to be picking fights with pretty much everyone at this time. In many cases, it's probably a negotiation technique, but you never know when he comes across someone crazier than he seems (and may not be).
exactly that's what I fear man, the moment some world leader with a power almost equal to United States gets pissed off it's dooms day
I'm not as afraid of nuclear bombs as I am of economic war, hybrid war, or even semi-conventional war. The former is very unlikely to happen. The latter are happening all the time.
I see your point man, you're very right
That's a huge deal for USA, as always Europe will end screw up
Taiwan is a metter of time before it will fall to China, China has patience, they are not rushing, might take 10-20-30 years, they can wait
Actually, it's unlikely the US will be able to fight China without Europe, and Trump knows that. He's just playing a hard game, as it did with others.
In the meantime, China is courting Europe intensely, since Trump is bashing the EU...
And that's how geopolitics is played. Action and reaction.
I don't think they'll be that patient. Things have sped up considerably in recent years. It depends a lot how the conflict in Ukraine will end up for Russia, and what the US does about Panama and Greenland (again, mentioned in last night's speech by Trump). I'm pretty sure if both end up at least partially in favor of the super-powers, China will annex Taiwan in no time.
Oh in case you haven't heard Blackrock bought like 80% of Panama ports from Chinese companies, so yea he got Panama now
Yep, I heard. What's interesting and I saw others remarked it was that he avoided saying their name in the speech. BlackRock dudes must've been pissed, lol.