You've addressed a fascinating set of questions regarding TSMC investing in the US semiconductor manufacturing capacity.
I think the cultural differences you cite as a key issue go beyond the differences between Taiwanese and American engineers. For one, hiring in Phoenix means hiring from Intel. Intel has a long history of arrogant, conflict-driven internal operations. Some (including myself) would argue that arrogance and focus on conflict for decision-making is a key part of what put Intel 5 years behind TSMC on a technology basis. TSMC managers overseeing former Intel engineers...not exactly a picture of harmonious cooperation.
And then there's the well-recognized short-term focus of both American business and American government. As you accurately portray, the Biden Administration is using money for semiconductor manufacturing to create near-term construction jobs for the middle class in two key Electoral College states (AZ, OH). The question is whether the US government in the long term is as committed to wafer manufacturing as Taiwan's government has been. The whole "build chips for the national defense" bit sounds more rationalization than strategy.
But the critical question about TSMC putting cutting-edge fabs in the US really isn't about middle class jobs or long-term US government strategy or whether anyone can retrain former Intel employees to do things a different (dare I say "better"?) way.
The real question is what the added capacity from 2-4nm fabs TSMC in Arizona and Intel fabs in Ohio will do to industry capacity, and how that will affect pricing. TSMC has done a brilliant job over the last decade managing fab capacity increases with increasing demand. Now a whole chunk of cutting-edge fab will come online in the US.. What will that do to foundry wafer pricing? And what will Apple, Samsung, Broadcom and nVIDIA do in supply negotiations to leverage the weakness created in the supply chain by significant increases in cuttig-edge fab capacity? Would love to see your thoughts on this topic...
Kaden, your article dives deeply into the intricate dynamics that shape TSMC's venture into the US semiconductor scene. By looking at both the strategic incentives and the challenges from the perspectives of TSMC and the US, you've painted a detailed picture of the global and national forces at play. Your focus on the cultural and operational challenges highlights a facet of international manufacturing that's often overlooked. Moreover, your insights into the potential effects this expansion could have on semiconductor market dynamics, such as pricing and supply chain configurations, open up important discussions about the future of high-tech industries worldwide. It's a thought-provoking piece that encourages deeper reflection on how geopolitical and economic strategies shape technological advancements across different countries. Excellent work!
Congratulations on getting this Substack off the ground with an impressive start! Kaden, your article presents a well balanced view of a series of complex intertwined issues with clarity, not an easy feat. Can't wait for more! --Laura Smoliar
Kaden:
You've addressed a fascinating set of questions regarding TSMC investing in the US semiconductor manufacturing capacity.
I think the cultural differences you cite as a key issue go beyond the differences between Taiwanese and American engineers. For one, hiring in Phoenix means hiring from Intel. Intel has a long history of arrogant, conflict-driven internal operations. Some (including myself) would argue that arrogance and focus on conflict for decision-making is a key part of what put Intel 5 years behind TSMC on a technology basis. TSMC managers overseeing former Intel engineers...not exactly a picture of harmonious cooperation.
And then there's the well-recognized short-term focus of both American business and American government. As you accurately portray, the Biden Administration is using money for semiconductor manufacturing to create near-term construction jobs for the middle class in two key Electoral College states (AZ, OH). The question is whether the US government in the long term is as committed to wafer manufacturing as Taiwan's government has been. The whole "build chips for the national defense" bit sounds more rationalization than strategy.
But the critical question about TSMC putting cutting-edge fabs in the US really isn't about middle class jobs or long-term US government strategy or whether anyone can retrain former Intel employees to do things a different (dare I say "better"?) way.
The real question is what the added capacity from 2-4nm fabs TSMC in Arizona and Intel fabs in Ohio will do to industry capacity, and how that will affect pricing. TSMC has done a brilliant job over the last decade managing fab capacity increases with increasing demand. Now a whole chunk of cutting-edge fab will come online in the US.. What will that do to foundry wafer pricing? And what will Apple, Samsung, Broadcom and nVIDIA do in supply negotiations to leverage the weakness created in the supply chain by significant increases in cuttig-edge fab capacity? Would love to see your thoughts on this topic...
Kaden, your article dives deeply into the intricate dynamics that shape TSMC's venture into the US semiconductor scene. By looking at both the strategic incentives and the challenges from the perspectives of TSMC and the US, you've painted a detailed picture of the global and national forces at play. Your focus on the cultural and operational challenges highlights a facet of international manufacturing that's often overlooked. Moreover, your insights into the potential effects this expansion could have on semiconductor market dynamics, such as pricing and supply chain configurations, open up important discussions about the future of high-tech industries worldwide. It's a thought-provoking piece that encourages deeper reflection on how geopolitical and economic strategies shape technological advancements across different countries. Excellent work!
Congratulations on getting this Substack off the ground with an impressive start! Kaden, your article presents a well balanced view of a series of complex intertwined issues with clarity, not an easy feat. Can't wait for more! --Laura Smoliar