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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'

#11

Post by flyinglizard »

pphysch wrote: post #7
api wrote: post #2

TSMC 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 pa…

Vague geopolitical considerations are very secondary and policy dependent compared to the real and abrupt chaos which will ensue if TSMC is taken out.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#12

Post by topspin »

At some point in the next 10 years Taiwan will be surrounded by half a dozen Chinese aircraft carriers[1].

The rest of the world knows that continuing to rely so heavily on Taiwan for crucial components is not viable.

[1] https://www.cnn.com/2021/11/09/china/china-aircraft-carrier-...

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#13

Post by jl6 »

alooPotato wrote: post #10
foolfoolz wrote: post #8

the 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 enti…

> One thing I'm curious about is how you define "critical manufacturing"?

It’s a good question. For me, critical means you can’t walk away from a deal because you need the product, meaning you end up being extorted. Food and energy meet this criteria. Do chips? Maybe. And if so, then yes, you’re absolutely right that you would need to secure the supply chain/graph too. Maybe not the whole graph if you work back to the point where there is a diversity of competitive sources.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#14

Post by sigstoat »

alooPotato wrote: post #10
foolfoolz wrote: post #8

the 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 enti…

> this effectively means every country needs to manufacture everything.

depending on your exact goals, it could be worthwhile to bring a little bit of every node on the graph onshore. you retain critical experience, and have at least some hope of ramping up. getting a bunch of functioning, complicated businesses to expand is way easier than creating them from scratch.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#15

Post by JamesBarney »

alooPotato wrote: post #10
foolfoolz wrote: post #8

the 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 enti…

I don't think this is true.

You really only have to focus on parts of the supply chain that are required to produce, fuel, food, medical, and military equipment that also are not produced anywhere in the world except by a potential a adversary or next to a potential adversary.

It's a big undertaking sure, but it's really only onshoring pieces that are produced exclusively in China or next to it.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#16

Post by rgrieselhuber »

alooPotato wrote: post #10
foolfoolz wrote: post #8

the 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 enti…

For countries that want to maintain a high degree of sovereignty and have the resources to do so, it’s probably the way to go. 100% is impossible of course but directionally the smart move.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#17

Post by jimmaswell »

alooPotato wrote: post #10
foolfoolz wrote: post #8

the 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 enti…

If we can at least make sure "the west" has it covered that's a great start, and the US is definitely capable if the will is there. Probably unrealistic for every tiny South American or European country to do literally everything.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#18

Post by JumpCrisscross »

topspin wrote: post #12

At some point in the next 10 years Taiwan will be surrounded by half a dozen Chinese aircraft carriers[1]. The rest of the world knows that continuing to rely so heavily on Taiwan for crucial components is not viable. [1] https://www.cnn.com/2021/11/09/china/china-aircraft-carrier-...

> Taiwan will be surrounded by half a dozen Chinese aircraft carriers

Every time U.S. aircraft carriers enter a discussion, the reams of developments in anti-ship missile and swarming tactics with aerial or maritime drones (or fast boats) comes up.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#19

Post by SkyMarshal »

alooPotato wrote: post #10
foolfoolz wrote: post #8

the 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 enti…

Not necessarily, if you find a way to restrict supply chains to allied nations only that you don’t have risk of war with.

Re: TSMC head says drive to onshore chip supply chain is 'unrealistic'

#20

Post by alooPotato »

JamesBarney wrote: post #15
alooPotato wrote: post #10

Earlier quoted context omitted.

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 enti…

I don't think this is true. You really only have to focus on parts of the supply chain that are required to produce, fuel, food, medical, and military equipment that also are not produced anywhere in the world except by a potential a adversary or next to a potential adversary. It's a big undertaking sure, but it's really only onshoring pieces that are produced exclusively in China or next to it.

"fuel, food, medical, and military equipment" and "exclusively in China" seems like it'd literally bring in the entire dependency graph.
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