TSMC head says drive to onshore chip supply chain is 'unrealistic'
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Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#2TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world to Taiwan's security against the PRC.
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#3TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world to Taiwan's security against the PRC.
And he's saying it wouldn't be "profitable" because they'd have overcapacity.
But countries wanting to bring it in-house may not care about that, or be willing to pay for that.
Ignoring shortages, Russia would be much happier right now to be oversupplied with the chips they need than having to get them through China. And lots of other countries are now re-evaluating what risks may be inherent in their supply chains.
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#4TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world to Taiwan's security against the PRC.
And he's saying it wouldn't be "profitable" because they'd have overcapacity. But countries wanting to bring it in-house may not care about that, or be willing to pay for that. Ignoring shortages, Russia would be much happier right now to be oversupplied with the chips they need than having to get them through China. And lots of other countries are now re-evaluating what risks may be inherent in their supply chains.
So TMSC would also stop being profitable by that logic I think, unless there is some structural advantage they have?
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#5After the German debacle over having to kowtow to Russia to receive oil and gas and essentially in doing so fund the killing of Ukrainians, everyone has to be rethinking who they are reliant on and making sure they are strategically diverse.
China is the obvious example of this where we need to break out the supply chain across more countries. I fully expect this to happen through a combination of corporations and countries realizing their exposure to "China doing something nuts" and acting accordingly. You already see Apple doing this, for example, with India.
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#6Well, of course, TSMC doesn't want chip supplies to be onshored. It's everyone other than TSMC and Taiwan willing to do so. West wants to have reliable access to chips without potential war with China.
In addition to geopolitics, wouldn't overproduction of chips be beneficial to consumers in the form of cheaper chips and greater variety?
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#7TSMC is in part a Taiwanese defense asset. They don't want anything moved because right now having so much supply chain in Taiwan chains the rest of the world to Taiwan's security against the PRC.
This is an oft-repeated meme that doesn't align with the historical facts. TSMC is a distant secondary factor in the geopolitical competition over Taiwan, which is a continuation of the Chinese civil war that started in 1927 and has never officially ended.
If TSMC didn't exist, or was located in e.g. Vietnam, Taiwan would still be a vital strategic asset in Washington's stated policy to contain Communist China (as part of the "first island chain" [1]). There would still be a geopolitical competition without TSMC.
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#8the pandemic and its effects showed that the cost benefits of globalization are beaten by the national security benefits of onshoring. i think we will see more critical manufacturing, even at great expense, move back to the u. s.
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#9Well, of course, TSMC doesn't want chip supplies to be onshored. It's everyone other than TSMC and Taiwan willing to do so. West wants to have reliable access to chips without potential war with China. In addition to geopolitics, wouldn't overproduction of chips be beneficial to consumers in the form of cheaper chips and greater variety?
> In addition to geopolitics, wouldn't overproduction of chips be beneficial to consumers in the form of cheaper chips and greater variety?
Another reason why TSMC would be against this
Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'
#10the pandemic and its effects showed that the cost benefits of globalization are beaten by the national security benefits of onshoring. i think we will see more critical manufacturing, even at great expense, move back to the u. s.
One thing I'm curious about is how you define "critical manufacturing"? Manufacturing seems like a directed graph where each node is a product or material and the edges are dependencies or inputs to that product.
So if you want to onshore manufacturing of a particular product, you need to also onshore all of its dependencies. My contention is that the graph is so densely connected that you end up having to bring entire supply chains onshore and this effectively means every country needs to manufacture everything.