6 ms·

Trump to impose 25% to 100% tariffs on Taiwan-made chips, impacting TSMC

89 points by tlyleung 2y ago

ggm 2y ago
Isn't this inviting a rapprochement with the mainland? Not trying to be over dramatic about it, but given there is a persisting strand of belief inside the Taiwanese political community that unification ON THEIR TERMS is a thing, I would think at this point an unreliable US partner, who asks your principle worldwide income stream to relocate is .. not the friend you hoped for. The writing was on the wall when "make some of the chips onshore" happened, and now with packaging long line looping, the next logical step will be "do some of the packaging onshore" followed by "no packaging or fab from offshore" I wonder if the US government will next ask ASML holding to also open plants inside the continental USA? if I was the EU, I would consider very hard what a response would be. "we are witholding Novo-nordisk product from the USA until bilateral trade relationships return to normal" is unlikely I guess. as is "decent Brie will not be available in the USA for the forseeable future"
- SavageBeast 2y ago
  Personally I view the tariffs as a threat to get compliance. Its possible the goal is to get them to "have a brilliant idea" and invest in some American production. I don't know why but Asking Nicely never works for anything, why should international trade be any different.
  - talldayo 2y ago
    > I don't know why but Asking Nicely never works for anything, why should international trade be any different. America literally failed to compete. We had fabs, even competitive and industry-leading ones, for several decades. But Intel didn't adopt EULV and whether or not you agree with their business decision, that left America without a leading node. TSMC and Samsung would take up ASML's EULV spec and the rest is history. America fell off the map with our "14nm+++++ Advanced TurboYield" technology, and the almighty belief in free market competition didn't provide us with a new champion. The reason tariffs like this are necessary at all is because America cannot sell chips unless the government tips the scales with their fat meaty finger. Nobody wants our chips. Intel and Apple both gave up trying to make laptops on American silicon. AMD and Nvidia both orbit around the EULV suppliers because they're both cheaper and more advanced. This is a temper-tantrum in response to realizing that government subsidy is the only other way to stimulate production.
  - fzeroracer 2y ago
    If a person punches you in the face and then offers you a business opportunity, are you more or less likely to accept it?
  - JumpCrisscross 2y ago
    > possible the goal is to get them to "have a brilliant idea" and invest in some American production TSMC built a massive plant in Arizona. It's been hitting rocks, from frustration over "rigorous working conditions," e.g. people being "called into work for emergencies in the middle of the night," to differences in manufacturing cultures, e.g. "employees were expected to pitch in with work outside their job descriptions because construction of the facility was behind schedule" which "did not sit well with everyone" [1]. [1] https://www.nytimes.com/2024/08/08/business/tsmc-phoenix-arizona-semiconductor.html https://www.nytimes.com/2024/08/08/business/tsmc-phoenix-ari...
- JumpCrisscross 2y ago
  > wonder if the US government will next ask ASML holding to also open plants inside the continental USA ASML's supply chain is critically linked to U.S. suppliers. (EUV was jointly developed between Americans and Europeans.)
  - ggm 2y ago
    One of those times fate sharing may be net beneficial.
- mytailorisrich 2y ago
  [flagged]
Tadpole9181 2y ago
Someone talk me down here, genuinely. Combine this with the other tariffs, killing green manufacturing and the chips act and infrastructure bills, threatening our allies, a freeze on all federal grants and loans (a couple hours ago, if you aren't keeping up), etc... how does this not result in a total collapse of the US economy? Tech is a significant portion of our market. How could destroying our ability to source the most advanced hardware and driving a wedge in between a critical ally who literally cannot concede for their national security possibly lead to anything but a lack of trust or confidence in the US, increased costs, and a shrinking market for US tech?
- JumpCrisscross 2y ago
  > how does this not result in a total collapse of the US economy? In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities. > How could destroying our ability to source the most advanced hardware It won't. Taiwan depends on us. They'll cave and we'll get a short-term win. What it also does is create a strategic imperative for Taiwan to balance its dependence on America. Those chickens, unfortunately, won't come home to roost for years.
  - nonethewiser 2y ago
    > In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities. Actually its the opposite. In the long term it incentivizes manufacturing chips in the US. Domestic manufacturing has bipartisan support (see Biden's CHIPS bill) and obvious nation security implications. That's not to say tariffs are the right solution but the end goal is good and uncontroversial. It creates economic chaos in the short term because the supply of domestic chips is relatively low and the cost of foreign chips will increase dramatically. This will normalize over time as domestic production ramps up.
    - 2y ago
11thEarlOfMar 2y ago
TSMC has a fab starting up in Phoenix this year. https://spectrum.ieee.org/tsmc-arizona https://spectrum.ieee.org/tsmc-arizona
DemocracyFTW2 2y ago
[flagged]
hindsightbias 2y ago
Fab ulous. Art of the deal, Xi must have agreed to wait until 2028. Next, tax free repriation of that $200B Apple has buried in Ireland to fund those fabs.
dzhiurgis 2y ago
this gotta crash nvidia more than deepseek...
- IAmGraydon 2y ago
  Interestingly, it's not, which means the market doesn't believe he'll actually do it. Personally, I think they may have a very rude awakening in the near future.
  - UncleOxidant 2y ago
    He has a history of talking out of his ass. He blusters about something, his insiders take him aside and explain why it's a very bad idea and he's off to the next attention-getting tirade. Hopefully that's what happens in this case.
k310 2y ago
Sometimes, threats are meant to squeeze a little payola out of the targets. Obviously not the case here. Ahem.
abvdasker 2y ago
Genuinely insane to the point that I don't believe he'll actually do it. I have no idea who this is for. It will certainly alienate the US tech sector that just spent the last month bending the knee to Trump. It will push Taiwan into the arms of China. I have no idea how this is remotely compatible with all the hawkish AI rhetoric. Baffling on all fronts.
- bloomingkales 2y ago
  As messed up as it is, he is bargaining for his enterprise. Under the table deals for him and his partners (there are many now, crypto, truth social, $djt, kushner family, these are the ones we know) where other countries negotiate the tariff down via these nasty secret exchanges. The legacy of this administration may truly be so bad that people will be slapped by old ladies when this all over. Spit on.

89 points by tlyleung 2y ago

ggm 2y ago

Isn't this inviting a rapprochement with the mainland? Not trying to be over dramatic about it, but given there is a persisting strand of belief inside the Taiwanese political community that unification ON THEIR TERMS is a thing, I would think at this point an unreliable US partner, who asks your principle worldwide income stream to relocate is .. not the friend you hoped for. The writing was on the wall when "make some of the chips onshore" happened, and now with packaging long line looping, the next logical step will be "do some of the packaging onshore" followed by "no packaging or fab from offshore" I wonder if the US government will next ask ASML holding to also open plants inside the continental USA? if I was the EU, I would consider very hard what a response would be. "we are witholding Novo-nordisk product from the USA until bilateral trade relationships return to normal" is unlikely I guess. as is "decent Brie will not be available in the USA for the forseeable future"

SavageBeast 2y ago
Personally I view the tariffs as a threat to get compliance. Its possible the goal is to get them to "have a brilliant idea" and invest in some American production. I don't know why but Asking Nicely never works for anything, why should international trade be any different.
- talldayo 2y ago
  > I don't know why but Asking Nicely never works for anything, why should international trade be any different. America literally failed to compete. We had fabs, even competitive and industry-leading ones, for several decades. But Intel didn't adopt EULV and whether or not you agree with their business decision, that left America without a leading node. TSMC and Samsung would take up ASML's EULV spec and the rest is history. America fell off the map with our "14nm+++++ Advanced TurboYield" technology, and the almighty belief in free market competition didn't provide us with a new champion. The reason tariffs like this are necessary at all is because America cannot sell chips unless the government tips the scales with their fat meaty finger. Nobody wants our chips. Intel and Apple both gave up trying to make laptops on American silicon. AMD and Nvidia both orbit around the EULV suppliers because they're both cheaper and more advanced. This is a temper-tantrum in response to realizing that government subsidy is the only other way to stimulate production.
- fzeroracer 2y ago
  If a person punches you in the face and then offers you a business opportunity, are you more or less likely to accept it?
- JumpCrisscross 2y ago
  > possible the goal is to get them to "have a brilliant idea" and invest in some American production TSMC built a massive plant in Arizona. It's been hitting rocks, from frustration over "rigorous working conditions," e.g. people being "called into work for emergencies in the middle of the night," to differences in manufacturing cultures, e.g. "employees were expected to pitch in with work outside their job descriptions because construction of the facility was behind schedule" which "did not sit well with everyone" [1]. [1] https://www.nytimes.com/2024/08/08/business/tsmc-phoenix-arizona-semiconductor.html https://www.nytimes.com/2024/08/08/business/tsmc-phoenix-ari...
JumpCrisscross 2y ago
> wonder if the US government will next ask ASML holding to also open plants inside the continental USA ASML's supply chain is critically linked to U.S. suppliers. (EUV was jointly developed between Americans and Europeans.)
- ggm 2y ago
  One of those times fate sharing may be net beneficial.
mytailorisrich 2y ago
[flagged]

Tadpole9181 2y ago

Someone talk me down here, genuinely. Combine this with the other tariffs, killing green manufacturing and the chips act and infrastructure bills, threatening our allies, a freeze on all federal grants and loans (a couple hours ago, if you aren't keeping up), etc... how does this not result in a total collapse of the US economy? Tech is a significant portion of our market. How could destroying our ability to source the most advanced hardware and driving a wedge in between a critical ally who literally cannot concede for their national security possibly lead to anything but a lack of trust or confidence in the US, increased costs, and a shrinking market for US tech?

JumpCrisscross 2y ago
> how does this not result in a total collapse of the US economy? In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities. > How could destroying our ability to source the most advanced hardware It won't. Taiwan depends on us. They'll cave and we'll get a short-term win. What it also does is create a strategic imperative for Taiwan to balance its dependence on America. Those chickens, unfortunately, won't come home to roost for years.
- nonethewiser 2y ago
  > In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities. Actually its the opposite. In the long term it incentivizes manufacturing chips in the US. Domestic manufacturing has bipartisan support (see Biden's CHIPS bill) and obvious nation security implications. That's not to say tariffs are the right solution but the end goal is good and uncontroversial. It creates economic chaos in the short term because the supply of domestic chips is relatively low and the cost of foreign chips will increase dramatically. This will normalize over time as domestic production ramps up.
  - 2y ago

11thEarlOfMar 2y ago

TSMC has a fab starting up in Phoenix this year. https://spectrum.ieee.org/tsmc-arizona https://spectrum.ieee.org/tsmc-arizona

DemocracyFTW2 2y ago

[flagged]

hindsightbias 2y ago

Fab ulous. Art of the deal, Xi must have agreed to wait until 2028. Next, tax free repriation of that $200B Apple has buried in Ireland to fund those fabs.

dzhiurgis 2y ago

this gotta crash nvidia more than deepseek...

IAmGraydon 2y ago
Interestingly, it's not, which means the market doesn't believe he'll actually do it. Personally, I think they may have a very rude awakening in the near future.
- UncleOxidant 2y ago
  He has a history of talking out of his ass. He blusters about something, his insiders take him aside and explain why it's a very bad idea and he's off to the next attention-getting tirade. Hopefully that's what happens in this case.

k310 2y ago

Sometimes, threats are meant to squeeze a little payola out of the targets. Obviously not the case here. Ahem.

abvdasker 2y ago

Genuinely insane to the point that I don't believe he'll actually do it. I have no idea who this is for. It will certainly alienate the US tech sector that just spent the last month bending the knee to Trump. It will push Taiwan into the arms of China. I have no idea how this is remotely compatible with all the hawkish AI rhetoric. Baffling on all fronts.

bloomingkales 2y ago
As messed up as it is, he is bargaining for his enterprise. Under the table deals for him and his partners (there are many now, crypto, truth social, $djt, kushner family, these are the ones we know) where other countries negotiate the tariff down via these nasty secret exchanges. The legacy of this administration may truly be so bad that people will be slapped by old ladies when this all over. Spit on.