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TSMC ups Arizona investment from $12B to $40B with second semi fab

cnbc.com

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Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#101

Post by thehappypm »

totalZero wrote: post #99
adam_arthur wrote: post #63

Onshoring is a logical result of improved automation. When labor costs lessen, transportation and logistics become the primary concern. Wouldn’t be surprised if 100 years from now most final good assembly is done locally. Of course sometimes raw materials and inputs are more expensive to transport than the finished good, so there will always be cases where long distance transportation of finished products is still pr…

It would make more sense to put the mega-fabs where electricity is cheapest in the Americas, and that certainly isn't Arizona.

Isn’t solar the cheapest energy per KwH? A sunny place like Arizona with tons of empty space should be able to cheaply deploy lots of energy.

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#102

Post by akiselev »

kibwen wrote: post #19
ianai wrote: post #10

Earlier quoted context omitted.

The US has rare earth mines and even more deposits. They just got priced out through decades of lower prices for those minerals. (Which just shows that resource allocation even for scarce resources, follows financial incentives similar to other financial considerations. Stuff being left in the ground actually makes them available for another day when they’re higher valued.)

Indeed, but rare earth mining also has negative environmental impact even above and beyond normal mining operations. The US is partly paying China to outsource the environmental devastation.

Mitigating that environmental impact is what makes rare earth mining so costly. China is quickly learning that environmental remediation [1] is much more expensive and their appetite for destroying their environment for profit is quickly disappearing, especially as the middle class grows and moves up Maslow’s hierarchy.

From the article:

> “The rare earth industry is a pillar industry here in Ganzhou and we must keep it running, but there’s still more to do to figure out a truly environmentally friendly method to pursue sustainable growth,” Zhang Guanjun, deputy director of the public relations department of the Ganzhou Party Committee, said in an interview. “Ironically, because the prices of rare earths have been so low for a long period of time, the profits from selling these resources are nothing compared to the amount needed to repair the damage.”

[1] https://e360.yale.edu/features/china-wrestles-with-the-toxic...

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#103

Post by wikibob »

totalZero wrote: post #99
adam_arthur wrote: post #63

Onshoring is a logical result of improved automation. When labor costs lessen, transportation and logistics become the primary concern. Wouldn’t be surprised if 100 years from now most final good assembly is done locally. Of course sometimes raw materials and inputs are more expensive to transport than the finished good, so there will always be cases where long distance transportation of finished products is still pr…

It would make more sense to put the mega-fabs where electricity is cheapest in the Americas, and that certainly isn't Arizona.

Seismic activity

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#104

Post by kortex »

adam_arthur wrote: post #79
tony_cannistra wrote: post #71

Earlier quoted context omitted.

Arizona actually already does this, in profound quantities. https://en.wikipedia.org/wiki/Central_Arizona_Project The problem isn't the pipes, obviously. It's the fact that the 1922 agreement that divided up the water in the Colorado River (upon which Arizona depends) incorrectly calculated the amount of water available in the river every year. The Colorado River Compact divides up 20 million acre-feet of water. Mode…

And the Colorado River is the only water source in North America right? People have a fetishization with hyping up disappearing water sources as leading to mass forced desertions of population centers, which is not rooted in any kind of reality. We can already pipe oil from texas to Canada with ease, we can do the same from Canada to Arizona with water. Or wherever else. The economics and viability of it is obvious a…

> We can already pipe oil from texas to Canada with ease, we can do the same from Canada to Arizona with water. Or wherever else. The economics and viability of it is obvious and clear.

Oil and gas are far more value dense than water. Pipeline transport adds somewhere around $5-20 per barrel of oil, or $0.03/L. Some quick googling suggests Phoenix residents pay around $0.00022/L. That's a factor of 142x.

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#105

Post by andrewmutz »

thereddaikon wrote: post #86
conradev wrote: post #73

Earlier quoted context omitted.

Onshoring in this case is a logical result of improved tax incentives. Almost every cost is higher in the US – not just labor. Improved automation does reduce costs, but those cost reductions are even better in places where manufacturing is already cheap. Semiconductors have a very high value to weight ratio, so shipping them globally makes more sense than it does for other items.

The highest costs in Semiconductor fabrication are the specialized machines needed. Most of them are at best dual sourced. Many are single sourced. The fact a technician in the US can make $100k when their counterpart in China would make $50k doesn't matter when the EUV Lithography machine is hundreds of millions of dollars.

Who makes those expensive machines? Are they made in-house by companies like TSMC? Or are they purchased from others? And whats the geopolitics of that part of the supply chain (made in taiwan? made in china? made elsewhere?)

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#106

Post by totalZero »

criddell wrote: post #27
warinukraine wrote: post #14

Earlier quoted context omitted.

Remember when Warren Buffet invested into TSMC and someone said he must know something we don't?

I keep wondering if this is different than when Foxconn announced a $10b investment in Wisconsin but carried through less than 10% of that?

Judging by the pictures, TSMC is building a lot of expensive-looking stuff out in Arizona. I know they're both Taiwanese companies but this project seems a bit different.

https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-to...

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#107

Post by adam_arthur »

kortex wrote: post #104
adam_arthur wrote: post #79

Earlier quoted context omitted.

And the Colorado River is the only water source in North America right? People have a fetishization with hyping up disappearing water sources as leading to mass forced desertions of population centers, which is not rooted in any kind of reality. We can already pipe oil from texas to Canada with ease, we can do the same from Canada to Arizona with water. Or wherever else. The economics and viability of it is obvious a…

> We can already pipe oil from texas to Canada with ease, we can do the same from Canada to Arizona with water. Or wherever else. The economics and viability of it is obvious and clear. Oil and gas are far more value dense than water. Pipeline transport adds somewhere around $5-20 per barrel of oil, or $0.03/L. Some quick googling suggests Phoenix residents pay around $0.00022/L. That's a factor of 142x.

If they pay $0.00022/L then its really not that scarce after all huh?

True scarcity would drive prices up and increase cost viability of transport, obviously. The reason its not done right now is because its not an imminent problem

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#108

Post by thechao »

andrewmutz wrote: post #105
thereddaikon wrote: post #86

Earlier quoted context omitted.

The highest costs in Semiconductor fabrication are the specialized machines needed. Most of them are at best dual sourced. Many are single sourced. The fact a technician in the US can make $100k when their counterpart in China would make $50k doesn't matter when the EUV Lithography machine is hundreds of millions of dollars.

Who makes those expensive machines? Are they made in-house by companies like TSMC? Or are they purchased from others? And whats the geopolitics of that part of the supply chain (made in taiwan? made in china? made elsewhere?)

In many ways, ASML:

https://www.asml.com/en/products/euv-lithography-systems

Re: TSMC ups Arizona investment from $12B to $40B with second semi fab

#109

Post by samcheng »

thehappypm wrote: post #101
totalZero wrote: post #99

Earlier quoted context omitted.

It would make more sense to put the mega-fabs where electricity is cheapest in the Americas, and that certainly isn't Arizona.

Isn’t solar the cheapest energy per KwH? A sunny place like Arizona with tons of empty space should be able to cheaply deploy lots of energy.

The cheapest energy is from a hydroelectric plant built generations ago.

Fun fact: That's why Boeing first built their planes outside Seattle - the electricity needed to refine the aluminum was cheap.

These days, you can see that effect in the large datacenters that have sprung up near the Columbia River in Oregon.

I'd guess TSMC's siting decision had a lot to do with tax breaks, labor pool, and cheap land.

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