TSMC head says drive to onshore chip supply chain is 'unrealistic' • Hacker News Board

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

#31

Post by kennywinker » Thu, Apr 21, 2022, 5:23 PM UTC

hwillis wrote: post #22

gnulinux wrote: post #6

Well, 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?

greater variety is not a thing that would happen (and incidentally, as an electrical engineer, there's plenty of variety already). The hardware used in semiconductor foundries is all made by the same few companies, which is a major reason everyone gets similar advances at the same time- they're all working with the same tools. The vast majority of variety in product lines comes from who is ordering the chips, not the…

When I read greater variety I was thinking of a greater variety of functions not a greater variety of fabrication techniques. Like if you’re shopping for a regulator there are dozens of manufacturers with dozens of options. If you’re shopping for something strange… say a 16x16 switch matrix? I think there’s a single chip? Excess capacity because of a proliferation of fabs could lead to a lot of cool chips being made for a low cost. Which in turn enables new technology in that “these are cheap, what can i make with them?” way.

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

#32

Post by hackernewds » Thu, Apr 21, 2022, 5:23 PM UTC

jaywalk wrote: post #25

flyinglizard wrote: post #11

Earlier quoted context omitted.

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

This is exactly correct. If China took out TSMC, we would have an unimaginable global catastrophe on our hands that would make Covid look like nothing. There are far too many eggs in that basket.

This seems like an exaggeration. What are the resulting catastrophe?

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

#33

Post by ketzo » Thu, Apr 21, 2022, 5:24 PM UTC

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.

To be more accurate, the pandemic showed that onshoring beats globalization... in a pandemic.

The cost benefits were wildly outstripping the national security benefits before 2020! That's why globalization has thrived!

I know that's the point, and I'm sort of willfully misinterpreting what you're saying. But the cost benefits of globalization aren't going away, and people's fears of the pandemic and supply-chain disruption will fade with time.

Critical manufacturing simply will not be onshored by participants in capital markets if it costs more. It's the kind of thing that only a government can really make happen, and the U.S. government does not seem willing to impose massive costs on ~all of its largest industries.

Semiconductors -- maybe. There's a lot of focus on this particular industry right now, and Intel + the CHIPS Act might be able to make waves in the U.S.

But I think it's incredibly unrealistic to expect any significant share of global manufacturing to move back out of Shenzhen any time soon.

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

#34

Post by samus » Thu, Apr 21, 2022, 5:25 PM UTC

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…

Some dependencies are fine to leave off-shore if there is a diverse set of suppliers or if they are located in safe and friendly countries.

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

#35

Post by samus » Thu, Apr 21, 2022, 5:26 PM UTC

alooPotato wrote: post #23

rgrieselhuber wrote: post #16

Earlier quoted context omitted.

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.

I think what I'm getting at is that unless you do 100% of the graph (at least with your allies) you're eventually going to be dependent on an adversary. Like you might not solve anything by bringing chips onshore if your only supply of silicon for those chips is offshore. So you're just pushing the problem down the stack...

Silicon is one of the most common minerals on Earth. Rare metals are a different story.

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

#36

Post by kube-system » Thu, Apr 21, 2022, 5:27 PM UTC

alooPotato wrote: post #20

JamesBarney wrote: post #15

Earlier quoted context omitted.

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.

I can't think of much now that the US relies on for fuel, food, medical, and military equipment that is exclusively made in China. Especially the latter.

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

#37

Post by kadoban » Thu, Apr 21, 2022, 5:27 PM UTC

No post body was provided.

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

#38

Post by samus » Thu, Apr 21, 2022, 5:29 PM UTC

jaywalk wrote: post #25

flyinglizard wrote: post #11

Earlier quoted context omitted.

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

This is exactly correct. If China took out TSMC, we would have an unimaginable global catastrophe on our hands that would make Covid look like nothing. There are far too many eggs in that basket.

This won't happen because China would also take a hit. TSMC is safe as long as China doesn't have a cutting-edge semiconductor industry that can replace the lost output from the latest nodes.

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

#39

Post by vkou » Thu, Apr 21, 2022, 5:29 PM UTC

jmoak3 wrote: post #29

outside1234 wrote: post #5

After 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 co…

Apple is also attempting to mobilize Indian workers before China's working population declines enough to be noticeable. The cost of business in China (regardless of international policy) is guaranteed to rise as the number of available hands decreases from mass aging.

No, the cost of business in China isn't rising because of demographics, it's rising because China is no longer an impoverished country. Wages in it have grown massively.

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

#40

Post by jacobolus » Thu, Apr 21, 2022, 5:31 PM UTC

dragontamer wrote: post #27

JumpCrisscross wrote: post #18

Earlier quoted context omitted.

> 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.

That's because China can launch anti-ship missiles from any Chinese highway to threaten US Carriers. In contrast, the weapon-platforms of Taiwan / US Navy are simply more constrained. Sure, US Destroyers / Cruisers are good missile platforms and US Aircraft Carriers / F35 fighters are also good delivery mechanisms for anti-ship missiles... But China has the advantage of land-based missiles, land-based air force, AND…

How useful are anti-ship missiles in Ishigaki Island (Japan), Batanes (Philippines), etc.?

If Taiwan is loaded with anti-ship missiles, cruise missiles, naval mines, loitering munitions, artillery, modern fighter jets, etc., any Chinese invasion is at the very least going to come at very steep cost in life/military hardware.

And then the economic costs (to everyone in the world) are going to be extreme.