Taiwan and TSMC Shaking In Their Boots After SOTU Address

100 Billion dollars to put chip fabs in the US...

One of the major value assets of Taiwan...

After we have our own fabs in the United States, why protect Taiwan from China anymore?

China has seen we won't step in with the power of NATO for Ukraine...

After we don't need TSMC and have our own chip fabrication... The United States won't need to step in with the power of NATO for Taiwan.

I'll place my bet today, within 3 years of the Intel chip fab being built on US soil, the Chinese government will take that as a green light, and begin their own takeover of Taiwan.

You heard it here first folks.

My guess is chips made in the US will cost a minimum of 3-5 times more than chips currently imported from Taiwan.
As long as corporations have the choice, they'll buy the cheaper processors- and with all of the insane regulations we put up with in the US, products made for these markets use a LOT of those chips.

Having said that, manufacturing chips here is a good idea... but it won't prevent us from depending on Taiwan for most of our chips.

a reply to: lordcomac

It's not the regulations that make the chips more expensive here (at least not the main reason). Taiwan isn't a third world country, so our requirements aren't going to be too much crazier than theirs.

China controls most of the raw materials that are used in the manufacturing of said chips. Taiwan is right next door so its cheaper to produce there.

This will go nowhere...

Money will be disbursed, ground will be broken, photo-ops will happen.

After the first couple equipment sheds go up, everyone will go home.

originally posted by: lordcomac
My guess is chips made in the US will cost a minimum of 3-5 times more than chips currently imported from Taiwan.
As long as corporations have the choice, they'll buy the cheaper processors- and with all of the insane regulations we put up with in the US, products made for these markets use a LOT of those chips.

Having said that, manufacturing chips here is a good idea... but it won't prevent us from depending on Taiwan for most of our chips.

I have to agree with you, especially after Biden's comments about unions. There's no way something manufactured in America can compete with the prices of overseas goods. This will just be another cluster F for some future administration to sort out. Kicking the can down the road is so typical of liberal administrations.

This must be kid sniffers Joes version of America first.Wonder where he got that idea?

originally posted by: glen200376
This must be kid sniffers Joes version of America first.Wonder where he got that idea?

It came from Pat Gelsinger--the CEO of Intel. He wants to restore Intel’s dominance in chip making and reduce America’s reliance on Asian manufacturing. What a fool. With your vast experience and superior intelligence, you should obviously be CEO of Intel.

If we fail to grasp the concept that we can make these here and as we make more it becomes easier to share the costs across the processes and recoup the initial investment, will miss a chance to stay ahead of the game. Plus, if we go to war and don't have the ability to make our own we will be dead in the water waiting for our due date.

originally posted by: CriticalStinker
a reply to: lordcomac

It's not the regulations that make the chips more expensive here (at least not the main reason). Taiwan isn't a third world country, so our requirements aren't going to be too much crazier than theirs.

China controls most of the raw materials that are used in the manufacturing of said chips. Taiwan is right next door so its cheaper to produce there.

The chips will cost more here- higher wages, tighter restrictions on pollution, higher energy costs, higher taxes... and of course as you said increased materials cost.

The regulations are the reasons we need so many of the darn things. Modern automobiles are full of them! I had a diesel pickup truck from the early 80's with zero computers and almost no electronics... and it got better fuel economy than my "modern" 23 year old truck, which has more than a couple of computers. Newer vehicles are more computer than car, and it's not limited to that industry. I could rant all day about it.

a reply to: lordcomac

I think those points are valid for nineties and early 2000's Taiwan... But we're closer than most think on pollution standards, energy costs, and wages.

It comes down to logistics. Everything that needs those chips are made over there. Everything needed to make the chips are there. That's the crux.

a reply to: gspat

Have any idea of Intel's current fab structure and where those fabrication facilities are located? This is a strategic move for Intel to make sure that they carve enough capacity for themselves, as well as being sure that if they invest more in surge capacity that they can keep their facilities utilized via a foundry model similar to TSMC. It is quite a genius move and helps guarantee Intel doesn't have to be reliant on TSMC in the future. Fabrication facilities are not cheap to build and every semiconductor company that produces their own chips has to balance the enormous cost of a facility with being able to keep it fully utilized. Intel hates to send any of their designs to TSMC, but right now if they don't have capacity for their newer product lines they have no choice. There are lots of little guys out there that have a pure foundry model which allows Intel to try to make sure they get enough capacity for themselves and take advantage of not enough worldwide capacity for the little guys.

a reply to: Archivalist

But you do agree that this is a great thing, right?

We need more manufacturing done here in the states.

originally posted by: 1947boomer

originally posted by: glen200376
This must be kid sniffers Joes version of America first.Wonder where he got that idea?

It came from Pat Gelsinger--the CEO of Intel. He wants to restore Intel’s dominance in chip making and reduce America’s reliance on Asian manufacturing. What a fool. With your vast experience and superior intelligence, you should obviously be CEO of Intel.

That's a great vision for a CEO to have and I'm all for it. But, Intel will have to do that on their own, not use a billion dollars of taxpayer money to get it done. Intel was once the dominant chip maker. They gave that up on their own. They can regain it on their own.

originally posted by: lordcomac
My guess is chips made in the US will cost a minimum of 3-5 times more than chips currently imported from Taiwan.
As long as corporations have the choice, they'll buy the cheaper processors- and with all of the insane regulations we put up with in the US, products made for these markets use a LOT of those chips.

Having said that, manufacturing chips here is a good idea... but it won't prevent us from depending on Taiwan for most of our chips.

I knew a guy who was head of tool sales for a company located in Taiwan, they made everything there for their tools because they wanted control over quality. They make tools for Snapon and other name brand companies so their quality is pretty good, I talked and texted this guy quite a bit when I became a regional sales person but I didn't follow through because of my car accident. I had contacted lots of local tool suppliers, but never really got much done because of the epilepsy and especially the meds that I was on which made me dumber than a box of rocks..

According to the guy I talked to most of the taiwan companies do get their parts from China, the quality varies by which company they get them from. They are assembled in Taiwan...so have a taiwan sticker on them. This company was totally Taiwan based, no china parts at all. The guy's uncle was the head of the company, and he was pretty honest about everything he told me, I thoroughly researched the company and Morris seemed to be truthful.

So made in Taiwan does not mean all parts of the product were made in Taiwan...and we talked about the relationship of Taiwan and China quite a bit, He said most of the people in China were pretty good people, but there were quite a few bad people there at the top too who had all the power. He said he would not want to be working under those people running things in China. I haven't talked to him in almost eighteen years now, I should see if he is still working or if he retired, the company is still there and busy. He was a nice guy.

originally posted by: CriticalStinker
a reply to: lordcomac

It's not the regulations that make the chips more expensive here (at least not the main reason). Taiwan isn't a third world country, so our requirements aren't going to be too much crazier than theirs.

China controls most of the raw materials that are used in the manufacturing of said chips. Taiwan is right next door so its cheaper to produce there.

Until not long ago though Taiwan was a developing country. Using a different example, China is not a "third world country" anymore but it's not reached a per capita development level of the West, Japan, Singapore, etc. Look at GDP and income per capita. But even with China's rise to a intermediate state of development (again per capita not gross), it's becoming expensive enough to manufacture that some firms have moved to actual truly developing countries such as Indonesia, Vietnam, etc. With Taiwan I assume there is some parallel.

a reply to: lordcomac

The process is heavily automated these days, just like modern auto manufacturers.

a reply to: Madviking

I think you bring up an excellent point.

China's middle class has gotten to such a degree they can start asking for more, or demanding more. With that, the prices increase. The cities with smog are having to ween back their unfettered consumption, and be more thoughtful with it. The growing demand is driving up certain costs. In some ways, they are starting to resemble us in many ways.

To cope with this unfolding reality, they're starting what many emerging empires do, nation building. They're developing a silk road from their raw sources in Africa and some of the other places you pointed out directly to China. From there, they're developing rails, ports, and skyways to Europe to sell.

Now, one would say that's an area where we have an advantage, and to some degrees we do. We already have a well established infrastructure the world over, with ever so creative relationships on every continent to ease our passage. But where they still differ is how they involve themselves. They don't thrust themselves in the middle of every conflict or tiff as some sort of moral sage. They don't get bogged down in foreign affairs like we do.

This isn't me praising them, merely trying to make sense of it all (maybe I'm way off). All that said, they'll find flaws in their system and structure just like we did. And their stint will be limited, the question is how long.

I'm sure if we were smart, we could counter it and come out on top. We've done it before, and if there's a nation who can go up against adversity, it's us. But I'm not as hopeful this time around, not because I don't want to be, because I don't think that's the outcome.

The core cost of manufacturing in the US compared to Asian markets is a non-starter. Just the labor alone is enough for US chips to price themselves out of the market. The fully burdened labor rate in this country is so extreme that only a small percentage of potential customers will even be able to afford the product. Sales will be weak as a result, which will result in even higher cost per piece. I say fully burdened because the energy requirements are so severe that, depending on how the overhead is captured, the prices could be many times higher than the nearest competitor. Knowing the way US businesses operate, I would not be surprised to find that the best part of the US chips is the advertising. The product quality itself will probably be lacking compared to the Asian variety. Like making the US entirely EV by 2030, this is yet another biden pipe dream that simply won't work.

originally posted by: Vroomfondel
The core cost of manufacturing in the US compared to Asian markets is a non-starter. Just the labor alone is enough for US chips to price themselves out of the market. The fully burdened labor rate in this country is so extreme that only a small percentage of potential customers will even be able to afford the product. Sales will be weak as a result, which will result in even higher cost per piece. I say fully burdened because the energy requirements are so severe that, depending on how the overhead is captured, the prices could be many times higher than the nearest competitor. Knowing the way US businesses operate, I would not be surprised to find that the best part of the US chips is the advertising. The product quality itself will probably be lacking compared to the Asian variety. Like making the US entirely EV by 2030, this is yet another biden pipe dream that simply won't work.

easy, the MIC can afford it.

wait till yall see how many chips in an electric tank!

a reply to: sarahvital

Moore's Law is broken. Time to develop a new processing technology rather than trying to compete with Taiwan.