TSMC’s dominance poses risks to the global economy • Hacker News Board

Re: TSMC’s dominance poses risks to the global economy

#31

Post by newswasboring » Thu, Jun 24, 2021, 8:11 AM UTC

sydthrowaway wrote: post #28

newswasboring wrote: post #19

Earlier quoted context omitted.

Here is another one. World relies on only one relatively obscure dutch company for its EUV lithography equipment. For DUV the market is divided between 3 players two in japan and the aforementioned one. Apps market for semiconductors is also cornered by two companies. This whole space has consolidated in last decade or so. Everyone wants to have full control over their supply chain, so everyone is trying to buy their…

Any competitors to ASML?

No real competitors. They own the EUV market because they own the only company making EUV sources (Cymer). They also work very closely with Zeiss and co own some of the important patents I think (but don't quote me on this). A Japanese company Gigaphoton made a EUV source, but I am not aware of any orders from any major fab to them. I think since 2018 they are just trying to be second source for source parts (guessing from the fact that they have stopped publishing HVM numbers and are more focused on proving they can make reliable parts). Its become so sad that they don't even mention their EUV source on their website, but then again these type of companies rarely pay attention to their web presence.

Re: TSMC’s dominance poses risks to the global economy

#32

Post by Koiwai » Thu, Jun 24, 2021, 8:12 AM UTC

epberry wrote: post #18

ksec wrote: post #12

Here is another headline, The world relies on two chip marker in South Korea for NAND and DRAM, leaving Everyone Vulnerable. Although arguably NAND and DRAM are commodities, and US already has a back up strategy ( Micron ).

South Korea is not 100 miles from China and has a massive US military presence. This article is about the very real danger that China invades Taiwan - which it has already stated it wants to do (in case the military flyovers were not convincing) - and cuts off the world from the best silicon.

I don't want to argue if China will "invade" Taiwan.

But what make you think China will "cut off the world" IF that happens?

That's not how this works, that's not how any of this works.

Re: TSMC’s dominance poses risks to the global economy

#33

Post by dkjaudyeqooe » Thu, Jun 24, 2021, 8:12 AM UTC

Archio wrote: post #14

ksec wrote: post #12

Here is another headline, The world relies on two chip marker in South Korea for NAND and DRAM, leaving Everyone Vulnerable. Although arguably NAND and DRAM are commodities, and US already has a back up strategy ( Micron ).

Arguably as well, South Korea is underneath significantly less geopolitical threat than Taiwan.

That depends on how crazy the current leader of North Korea feels at any moment, given the huge standing army it has, as well as the nukes.

Re: TSMC’s dominance poses risks to the global economy

#34

Post by inglor_cz » Thu, Jun 24, 2021, 8:13 AM UTC

newswasboring wrote: post #19

ksec wrote: post #12

Here is another headline, The world relies on two chip marker in South Korea for NAND and DRAM, leaving Everyone Vulnerable. Although arguably NAND and DRAM are commodities, and US already has a back up strategy ( Micron ).

Here is another one. World relies on only one relatively obscure dutch company for its EUV lithography equipment. For DUV the market is divided between 3 players two in japan and the aforementioned one. Apps market for semiconductors is also cornered by two companies. This whole space has consolidated in last decade or so. Everyone wants to have full control over their supply chain, so everyone is trying to buy their…

The Netherlands are not located just next to a hostile military power, though.

Re: TSMC’s dominance poses risks to the global economy

#35

Post by fractallyte » Thu, Jun 24, 2021, 8:13 AM UTC

Reminds me of Asimov's "Foundation" (https://en.wikipedia.org/wiki/Foundation_series).

The (first) Foundation was set up on a small, insignificant planet, surrounded by belligerent powers. Its continued existence was made possible only by playing those powers off against one another.

And the Foundation itself: highly advanced technology that those very powers came to rely on...

Re: TSMC’s dominance poses risks to the global economy

#36

Post by LatteLazy » Thu, Jun 24, 2021, 8:14 AM UTC

qwerty456127 wrote: post #15

helsinkiandrew wrote: post #13

It's interesting to think about what the solutions to this problem are. The advantages of buying from TSMC are presumably they have a lead in both technology and cost that will make your product better and cheaper. The disadvantages are that in natural disaster or war/military event the chips won't be available and you'll have difficulty shipping your products. It's very hard for a company to take the latter seriousl…

The solution is to stop playing the bullshit game of Taiwan non-recognition, give it a seat in the UN and protect it.

I support recognising Taiwan. But doing so won't make it any more secure.

Re: TSMC’s dominance poses risks to the global economy

#37

Post by johnwalkr » Thu, Jun 24, 2021, 8:16 AM UTC

kmonsen wrote: post #5

_carbyau_ wrote: post #3

While the world wouldn't grind to a complete halt without Taiwan, they are a (the?) major player in high end chips. While not 100% watching it I feel as though China US relations have whole strategies around Taiwan. Of course, if war over Taiwan breaks out, I plan to hit up my local computer shop, preferably within the hour.

I think if there is a U.S. China war over Taiwan we have larger issues.

For one individual not necessarily. Life (often) goes on during war.

Re: TSMC’s dominance poses risks to the global economy

#38

Post by vmception » Thu, Jun 24, 2021, 8:16 AM UTC

riffraff wrote: post #25

fxtentacle wrote: post #23

Why is news like this not driving the stock price up? I mean to me this sounds as if TSMC could easily raise prices and increase profits and their customers will still buy the exact same amount... Because they have to.

The risk TSMC faces is that competitors will bring up new capacity and deal with improved performance, the stock projects the value of profit "forever" not just for the next couple years.

(Inaccurately projects)

Nothing is “priced in” and prices really highly on historical volatility

One way to tell is to look at how nearer term options are priced than LEAPS are. LEAP pricing is telling you nobody knows a damn thing and they are consistently undervalued.

Re: TSMC’s dominance poses risks to the global economy

#39

Post by LatteLazy » Thu, Jun 24, 2021, 8:20 AM UTC

I wonder if China will invade. If the last few years have told us anything, it's that China can do whatever it likes. The rest of the international community is fractured like never before. There may never be a better time, if and only if China can get it done quickly and reliably. Xi (Winne the Pooh) is in a strong place to do it politically.

Re: TSMC’s dominance poses risks to the global economy

#40

Post by greenforer » Thu, Jun 24, 2021, 8:24 AM UTC

Been thinking about this for a few weeks. Taiwan is profiting immensely from semiconductors, that means demand for semiconductors is very high. This was also the case before 2020. So, manufacturing semiconductors is profitable. It is clear to me that if semiconductor production was doubled overnight, many new industries making use of the newly available cheap chips could arise and bring innovation. Why only Taiwan? Those factories are very expensive. Think of what Taiwan has to offer so that we can compare the rest of the world: - Access to sea - 20% corporate tax - (comparatively) sober, stable politics. The rules don't change much.

Then I thought about where I would build one, given this profitable circumstances: 1. Cannot be in (most) of Europe, due to high taxes and advanced and advancing work regulations. Standards are too strict to allow for innovation. Most of low tax Europe are tax heavens unsuitable for high scale industries. Estonia and Georgia give some breathing room, but are friendlier to services. 2. I cannot build it in Africa: high taxes, extreme corruption and high risk of politics affecting the company. 3. I might be able to build it in the US. Being close to the client is not as important as having access to sea. US politics are turbulent and if corporate tax is raised, then there's no competition to be made. 4. South America is a bag. Almost all SA countries have corrupt governments at every layer, but there are a few business friendly ones. Most countries cannot be considered. Panama is already focusing in other things, Uruguay (25% corporate) and Brazil (~34%) cannot compete. 5. I'm unsure about Middle East, I don't see anything there 6. Asia is massive: 6.a. China could happen. 6.b. South East Asia is too erratic compared to Taiwan, investors will go to Taiwan instead, or invest in something else. Singapore is too small. 6.c. Japan is an stagnant economy and there is too much bureaucracy and regulation involved. 7. Australia ~26% corporate tax rate is not going to make the cut. I'm not knowledgeable about regulations.

I probably have missed something, I tried to put onto words my thinking process on why Taiwan might still be the most profitable place to make these industries. The whole world is in the middle of a shortage of this material, yet alternatives to Taiwan don't seem to arise.