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It is categorically NOT a huge win for the stock. This is all happening because of US subsidies. The US has more expensive workers who are overall worse at the

It is categorically NOT a huge win for the stock. This is all happening because of US subsidies. The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. The subsidies only make this a viable option for political reasons. The decision to create a fab in Arizona is strictly speaking unprofitable and essentially a economically irrational move for the company. It is ONLY being done because of US demand and political tension from China. For a shareholder this move is not good when looking at it in terms of profit. I know this is a hard pill to swallow but it's true. Don't joke about Europe. The best place for tsmc to expand is actually china. But this won't happen for various reasons that we all know about.

mixmastamyk 4y ago
Short-sighted comment. You know how you develop expertise? That’s right, you invest in it.
- deltaseventhree 4y ago
  Long sigted. The investment starts from scratch. Why not invest in some places cheaper? Why not invest in a place that has better expertise? Overall the long term vision is to wrestle some control away from China. That is the long term bet the US and tsmc are ultimately making and what's driving the decision. But economically this is a bad bet.
  - mixmastamyk 4y ago
    The why is obvious. Not having vital infra solely in the hands of a potential enemy is strategy 101. Economics are but one factor of many.
    - deltaseventhree 4y ago
    - deleted 4y ago
      [deleted]
TreeRingCounter 4y ago
> The best place for tsmc to expand is actually china. The chinese are vastly worse at fab than americans. Why do you point out that american workers are worse than TW, but neglect to mention that Chinese are even worse? Not trying to make a judgment about people from USA, CN, TW as a whole - mostly just a function of experience.
- dirtyid 4y ago
  > neglect to mention that Chinese are even worse? Because they're not. PRC has worst fabs due to equipment sanctions, and now expertise sanctions (first by TW, then US). But said sanctions were placed at all because the cost and quality (east asian work ethic etc) of PRC semi workers weren't in question. Versus US workers being described as "group of giant babies" by TSMC employees ranting on PPT about doing more work for less pay than Americans in Arizona. Experience doesn't matter if you don't work hard enough. It's precisely because PRC workers, who can keep up with TSMC "military" pace, have demonstrated potential to run great fabs that led to companies like TSMC expanding in PRC in the first place, and why US had to do export controls, and do massive CHIPs subsidy to get fabs on US soil.
ScoobleDoodle 4y ago
The “various reasons we all know about” I’m guessing are: theft of intellectual property, theft of the technology and skills. I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech.
- phkahler 4y ago
  >> I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech. For a US company, probably. They seem to pick up Chinese Ph.D.s with ease.
- deltaseventhree 4y ago
  Espionage is a minor reason. Trivial really. The main reason is the looming threat of invasion of Taiwan from China. Such an action is catastrophic for Taiwan and the US. I thought this was obvious. Guess not. The US is an easier espionage point for the US to steal technology from Taiwan. Most likely it will happen. But simple espionage isn't enough for this technology to fully transfer. The expertise and knowhow is just too challenging. Do not let your patriotism blind you from the moral grayness that operates within the US as well.
  - Mikeb85 4y ago
    Does TSMC "own" the technology? Because their fabs are wholly dependent on ASML, a Dutch company. And they're using that to produce tech that's designed in the west as well.
    - t-3 4y ago
      Right, only culturally European people know how to do anything. Those Taiwanese are just factory workers, no expertise at all, that's why Intel is in such good shape these days. Chipmaking is obviously so easy the only reason we let them do it is to keep the price down. /s
      - Mikeb85 4y ago
theturtletalks 4y ago
Good thing a stock price is about the future growth of a company. Hell, many public companies are valued at billions but still take a yearly loss. They are "subsidizing" their own growth in a sense.
- deltaseventhree 4y ago
  Stock price encompasses many things. Overall outlook is good. However the Arizona plant is not a good move for the company. Your post looks like a rationalization of your own purchasing decisions. If this is a correct observation I would self reflect on your own biases.
  - galangalalgol 4y ago
    After flooding took out most of the world's magnetic hard drive manufacturing capacity, it seemed clear that absolute efficiency in the immediate sense was the enemy of a robust long term manufacturer. I'm not sure why human v human threats are being heeded when nature v human ones were not, but diversifying your locations absolutely makes sense. There are some geographic constraints to where locating fabs make sense. And cost of living has to be balanced with the need for knowledge workers. If you ran TSMC and you wanted to be sure no single disaster or war destroyed your whole manufacturing capability, where would you put the fabs? China's coast seems too close disaster wise and the same war that would dust your TW masks might destroy those too. Middle east maybe for climate and shipping logistics? Then one in the EU, perhaps spain? North america is probably third choice, and between climate and cartels that probably means the US. If third pick is paying you to go there, maybe it does make good sense.
    - deltaseventhree 4y ago
      Vietnam, Korea, many parts of Asia. The US is a arbitrary choice. It is done because of the shared rivalry the US has with Taiwan against China.
      - galangalalgol 4y ago
markus_zhang 4y ago
I see this as a bargaining chip between US and China. Both sides "win".
- deltaseventhree 4y ago
  Possibly. But tsmc itself loses by moving the fabs to a much more expensive area.
coredog64 4y ago
> The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. GMAFB. Intel has several of their fabs in the Phoenix metro area, they’re another 3-5 major players in the area, and there’s a talent pipeline from the local University into these companies. Intel’s problems aren’t an inability to fab, it’s an inability to translate their design language into the new, smaller process.
- deltaseventhree 4y ago
  It's universally well known that Asian workers work harder and can be paid less. It's not just about intels capabilities. It's about economic wage standards. The cost is just too high in the US. That being said tsmc workers in Taiwan are by far more capable then Intel this is proven by the 3nm process of which Intel is completely incapable of achieving.
  - hardware2win 4y ago
    Arent people really small % of semico investments?
  - davrosthedalek 4y ago
    What percentage of the chip cost is the wage cost? This might be relevant for a 90uM process, but I think at 4nm, the wages are a minuscule part of the production costs.
    - deltaseventhree 4y ago
      Should be a huge portion of the cost. The material is just silicon. The expertise and know how that goes into this is where most of the money goes. For Taiwan, this expertise is better, faster and cheaper.
      - adwn 4y ago
        You're forgetting about the billions of USD that go into buying the machines that make up the fab. > The material is just silicon. No, a lot of chemicals are required as well.
boc 4y ago
> The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. Putting the rest of your statement aside, this is a very silly thing to say. The United States invented the IC and started silicon age. Integrated circuits made in Silicon Valley were literally on the moon at the same time that Taiwan was still an incredibly poor country living under martial law. Maybe today there aren't the exact people in the US to compete with Taiwan on this chipmaking process, but that doesn't mean the US lacks the ability to compete. It's not about general country-wide work ethic. If the right person to get the job done is a one-in-a-million person... well the US has 330 of them vs 23 in Taiwan.
- philwelch 4y ago
  Countries change over time. If the US has the ability to compete with Taiwan in semiconductor manufacturing, we sure haven’t shown it in recent decades.
- deltaseventhree 4y ago
  Things change. As of right now the US can't compete. In the past the US could compete, but that doesn't speak to the status quo. In the future the US may change but this is unknown. It may very well be the US will never recover. This is a realistic possibility. Either way the status quo is that the US is currently inferior to Asia in terms of semiconductors.
  - KerrAvon 4y ago
    Well, that is certainly the Chinese government's take on things. Your posts suggest that the US should just give up and let Asia -- more specifically China -- dominate semiconductors forever because US workers are lazy, fat, and stupid. Am I characterizing your position correctly?
    - deltaseventhree 4y ago
      No. My posts suggest none of that. I am simply stating the truth. It is from the perspective of a tsmc shareholder not a patriotic American who wants to beat china for no other reason then being the best. As a tsmc shareholder one part of your post is correct. US workers are unfortunately lazier and slower and more expensive. Not necessarily stupider. You characterized this part of my position partially correctly. As for what the US should or should not do, I never commented on that. Your patriotism and defensiveness specifically injected rivalry into your response. I literally have no opinion on what Taiwan or China or the US should do. I am neutral on that front.
deleted 4y ago
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deleted 4y ago
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mixmastamyk 4y ago

Short-sighted comment. You know how you develop expertise? That’s right, you invest in it.

deltaseventhree 4y ago
Long sigted. The investment starts from scratch. Why not invest in some places cheaper? Why not invest in a place that has better expertise? Overall the long term vision is to wrestle some control away from China. That is the long term bet the US and tsmc are ultimately making and what's driving the decision. But economically this is a bad bet.
- mixmastamyk 4y ago
  The why is obvious. Not having vital infra solely in the hands of a potential enemy is strategy 101. Economics are but one factor of many.
  - deltaseventhree 4y ago
  - deleted 4y ago
    [deleted]

TreeRingCounter 4y ago

> The best place for tsmc to expand is actually china. The chinese are vastly worse at fab than americans. Why do you point out that american workers are worse than TW, but neglect to mention that Chinese are even worse? Not trying to make a judgment about people from USA, CN, TW as a whole - mostly just a function of experience.

dirtyid 4y ago
> neglect to mention that Chinese are even worse? Because they're not. PRC has worst fabs due to equipment sanctions, and now expertise sanctions (first by TW, then US). But said sanctions were placed at all because the cost and quality (east asian work ethic etc) of PRC semi workers weren't in question. Versus US workers being described as "group of giant babies" by TSMC employees ranting on PPT about doing more work for less pay than Americans in Arizona. Experience doesn't matter if you don't work hard enough. It's precisely because PRC workers, who can keep up with TSMC "military" pace, have demonstrated potential to run great fabs that led to companies like TSMC expanding in PRC in the first place, and why US had to do export controls, and do massive CHIPs subsidy to get fabs on US soil.

ScoobleDoodle 4y ago

The “various reasons we all know about” I’m guessing are: theft of intellectual property, theft of the technology and skills. I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech.

phkahler 4y ago
>> I wonder if Arizona US will be an easier espionage point than Taiwan for China to exfiltrate the tech. For a US company, probably. They seem to pick up Chinese Ph.D.s with ease.
deltaseventhree 4y ago
Espionage is a minor reason. Trivial really. The main reason is the looming threat of invasion of Taiwan from China. Such an action is catastrophic for Taiwan and the US. I thought this was obvious. Guess not. The US is an easier espionage point for the US to steal technology from Taiwan. Most likely it will happen. But simple espionage isn't enough for this technology to fully transfer. The expertise and knowhow is just too challenging. Do not let your patriotism blind you from the moral grayness that operates within the US as well.
- Mikeb85 4y ago
  Does TSMC "own" the technology? Because their fabs are wholly dependent on ASML, a Dutch company. And they're using that to produce tech that's designed in the west as well.
  - t-3 4y ago
    Right, only culturally European people know how to do anything. Those Taiwanese are just factory workers, no expertise at all, that's why Intel is in such good shape these days. Chipmaking is obviously so easy the only reason we let them do it is to keep the price down. /s
    - Mikeb85 4y ago

theturtletalks 4y ago

Good thing a stock price is about the future growth of a company. Hell, many public companies are valued at billions but still take a yearly loss. They are "subsidizing" their own growth in a sense.

deltaseventhree 4y ago
Stock price encompasses many things. Overall outlook is good. However the Arizona plant is not a good move for the company. Your post looks like a rationalization of your own purchasing decisions. If this is a correct observation I would self reflect on your own biases.
- galangalalgol 4y ago
  After flooding took out most of the world's magnetic hard drive manufacturing capacity, it seemed clear that absolute efficiency in the immediate sense was the enemy of a robust long term manufacturer. I'm not sure why human v human threats are being heeded when nature v human ones were not, but diversifying your locations absolutely makes sense. There are some geographic constraints to where locating fabs make sense. And cost of living has to be balanced with the need for knowledge workers. If you ran TSMC and you wanted to be sure no single disaster or war destroyed your whole manufacturing capability, where would you put the fabs? China's coast seems too close disaster wise and the same war that would dust your TW masks might destroy those too. Middle east maybe for climate and shipping logistics? Then one in the EU, perhaps spain? North america is probably third choice, and between climate and cartels that probably means the US. If third pick is paying you to go there, maybe it does make good sense.
  - deltaseventhree 4y ago
    Vietnam, Korea, many parts of Asia. The US is a arbitrary choice. It is done because of the shared rivalry the US has with Taiwan against China.
    - galangalalgol 4y ago

markus_zhang 4y ago

I see this as a bargaining chip between US and China. Both sides "win".

deltaseventhree 4y ago
Possibly. But tsmc itself loses by moving the fabs to a much more expensive area.

coredog64 4y ago

> The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. GMAFB. Intel has several of their fabs in the Phoenix metro area, they’re another 3-5 major players in the area, and there’s a talent pipeline from the local University into these companies. Intel’s problems aren’t an inability to fab, it’s an inability to translate their design language into the new, smaller process.

deltaseventhree 4y ago
It's universally well known that Asian workers work harder and can be paid less. It's not just about intels capabilities. It's about economic wage standards. The cost is just too high in the US. That being said tsmc workers in Taiwan are by far more capable then Intel this is proven by the 3nm process of which Intel is completely incapable of achieving.
- hardware2win 4y ago
  Arent people really small % of semico investments?
- davrosthedalek 4y ago
  What percentage of the chip cost is the wage cost? This might be relevant for a 90uM process, but I think at 4nm, the wages are a minuscule part of the production costs.
  - deltaseventhree 4y ago
    Should be a huge portion of the cost. The material is just silicon. The expertise and know how that goes into this is where most of the money goes. For Taiwan, this expertise is better, faster and cheaper.
    - adwn 4y ago
      You're forgetting about the billions of USD that go into buying the machines that make up the fab. > The material is just silicon. No, a lot of chemicals are required as well.

boc 4y ago

> The US has more expensive workers who are overall worse at the job and don't have the expertise to be compete with the people in Taiwan. Putting the rest of your statement aside, this is a very silly thing to say. The United States invented the IC and started silicon age. Integrated circuits made in Silicon Valley were literally on the moon at the same time that Taiwan was still an incredibly poor country living under martial law. Maybe today there aren't the exact people in the US to compete with Taiwan on this chipmaking process, but that doesn't mean the US lacks the ability to compete. It's not about general country-wide work ethic. If the right person to get the job done is a one-in-a-million person... well the US has 330 of them vs 23 in Taiwan.

philwelch 4y ago
Countries change over time. If the US has the ability to compete with Taiwan in semiconductor manufacturing, we sure haven’t shown it in recent decades.
deltaseventhree 4y ago
Things change. As of right now the US can't compete. In the past the US could compete, but that doesn't speak to the status quo. In the future the US may change but this is unknown. It may very well be the US will never recover. This is a realistic possibility. Either way the status quo is that the US is currently inferior to Asia in terms of semiconductors.
- KerrAvon 4y ago
  Well, that is certainly the Chinese government's take on things. Your posts suggest that the US should just give up and let Asia -- more specifically China -- dominate semiconductors forever because US workers are lazy, fat, and stupid. Am I characterizing your position correctly?
  - deltaseventhree 4y ago
    No. My posts suggest none of that. I am simply stating the truth. It is from the perspective of a tsmc shareholder not a patriotic American who wants to beat china for no other reason then being the best. As a tsmc shareholder one part of your post is correct. US workers are unfortunately lazier and slower and more expensive. Not necessarily stupider. You characterized this part of my position partially correctly. As for what the US should or should not do, I never commented on that. Your patriotism and defensiveness specifically injected rivalry into your response. I literally have no opinion on what Taiwan or China or the US should do. I am neutral on that front.

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