Apple mobile processors are now made in America by TSMC
(timculpan.substack.com)1593 points by colinprince 3 days ago
1593 points by colinprince 3 days ago
> US manufacturing is about to be reinvigorated
One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. And the share of the workforce has fallen even faster, as the actual manufacturing has moved towards higher value items and greater degrees of automation.
I think the actual outcome of this policy is mixed. I think it was a big case of corporate welfare that will result in somewhat increased chip production in the US. I think this is a win for national security. I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.
> One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. And the share of the workforce has fallen even faster, as the actual manufacturing has moved towards higher value items and greater degrees of automation.
The last part is missing something important though. If we're measuring "output" in dollars and the US is doing the parts (like aircraft manufacturing) that globally don't have a lot of competitors, the high "output" is from high prices rather than high production, and then what we're doing is surviving in the markets where there isn't a lot of competition and getting killed in the markets where there is.
There are three problems with this. The first is that it implies the US isn't competitive in competitive markets, which is a sign that something is very messed up. The second is that the markets where other countries aren't competitive tend to get eroded over time. The US essentially had a lock on the auto market in the mid-20th century; not anymore. What happens when China starts making globally competitive aircraft?
And the third is that supply chains matter. If you give up on the low margin stuff instead of figuring out how to make it competitively domestically (e.g. via automation) then foreign competitors have a leg up when it comes to making the high margin stuff for which the commodities are inputs.
> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.
Relying on "free markets" actually requires free markets. If other countries are willing to subsidize their industries until they drive manufacturing out of the US, that's not a free market. It's the equivalent of a monopolist using dumping and tying to leverage their existing monopoly into new markets, but with a country acting as the monopolist and therefore being exempt from antitrust enforcement.
Doing the same thing in return is not likely to be an efficient strategy, but neither is the status quo. The main alternative would be to realize that the thing we've been calling "free trade" is not actually that and a country that subsidizes its industries until its US competitors exit the market has to be dealt with as an abusive monopolist, e.g. via tariffs and similar policy levers, since antitrust laws don't apply to foreign governments.
We are not only measuring in dollars. We measure tons of steel, number of cars produced and so on. Not all of those measures are growing, but many are. While market share has gone down, total production is up.
Take cars - https://www.bts.gov/content/annual-us-motor-vehicle-producti... US production is up greatly in 2019 (that is before Covid - the chart doesn't have after Covid numbers to work with). US production is up by a lot since 1960. However in 1960 the US population was lower, and your typical family only had one car (women often didn't even have a drivers license). Thus you see market share is down while production is up.
Can you explain how tariffs are an effective tool against foreign governments subsidizing industries? It has been my understanding that tariffs typically end up being tit-for-tat and relatively zero-sum.
Preaching to the choir, yes and:
> ...supply chains matter.
A corollary (?) is that competency matters too.
The outsourcing mania forfeited vertical integration to please Wall St. Collateral damage included knowledge, culture, and ability to innovate.
> ...not likely to be an efficient strategy
Per principle of no free lunch, greater efficiency at the expense of resiliency.
> ...tariffs and similar policy levers...
Yup. The Rudyard Kipling School of Economics doesn't acknowledge realpolitik, will to power, balance of trade, finance, labor relations, foreign interests, etc.
The Econ 101 glasses give a very myopic view of the world. It's just an introductory model for a very complicated system.
Do you have a source for this? In the past when I've been told this, the statistics referenced where based on whether a company was classified as being in in the manufacturing sector, not based on which jobs were classified as manufacturing. This included companies that were classified that way due to historical inertia, or based on their global industry but actually had little to no manufacturing in the US. Based on that I have a hard time knowing what to believe, and would love to be pointed to more accurate information.
If you go by manufacturing jobs, BLS seems to have the data going back to 1939. Peaks at 18.4m jobs in 1969. Currently at about 12.9m.
N.B. the current U.S. population is 1.6x the population of 1969.
Average productivity per manufacturing worker in the US grew on average by 3% per year in the 1950–1980s and 4% per year in 1990s (https://www.bls.gov/opub/mlr/2002/06/art4full.pdf), i.e. its current output is comparable with that of ~50m people working in 1969, so a 30% decrease in total manufacturing employment was probably well compensated for (putting aside the social welfare point of view).
There's a vibrant high-tech contract manufacturing segment of the economy, led by behemoths like Foxconn and several other Asian players who specialize in consumer electronics & computing gear (Compal, Pegatron, Quanta, etc). That doesn't mean manufacturing doesn't exist in the US, though, and there are still very large EMS firms with significant presence domestically, like Jabil, Flex, Celestica, Sanmina, and plenty of others. The difference between now and 25 years ago is that it hasn't been cost effective to manufacture high volume, low complexity electronics in the US for a full generation. But, the majoarity of high complexity, low volume (NPI, very large PCBs, PCBs with many complex layers) stuff is still made in the west, and there will always be meaningful demand for high tech manufacturing in regulated industries (defense, medical), too. For example, CGMs are made in Alabama & Ireland, avionics for Apache helicopters are made in Alabama, data center server racks for Meta are assembled in Finland, Germany & San Jose. Same for Netflix CDN racks.
It goes on and on. The majority of what has been outsourced to China (and Taiwan and Singapore and India and Vietnam) is the "face" of high tech electronics, and the majority of electronic piece parts components, but not final assembly and not much of the tricky stuff. I don't think we'll see a quick ramp of high-vol/low-mix mfg coming back anytime soon because too much of the supply chain is in Asia, but it could if there were sufficient demand.
How does this square with 5G radios being almost entirely made in Asia? As in the entire chain from antenna design to finished chip happens >90% in Asia by dollar value.
None of the things you mentioned come even close in terms of complexity, on a per cubic volume basis at least.
> Do you have a source for this?
There are reams of economic literature trying to estimate whether government intervention in the market was a good idea. Most of the time it doesn't turn out great. So the parent's suggestion "probably won't be a win for economic output" is a pretty safe bet.
Often governments will use "security" as an argument to keep steel, shipbuilding, etc, in the country. That argument is not really possible to evaluate on economic grounds.
> US manufacturing has pretty much been constantly growing
By dollar value, perhaps, but that mostly means the US makes lot of high-value microchips, a field that has made (well-documented) exponential progress over the past decades. It is still consistent with US manufacturing capabilities regressing in other key aspects, such as machine tools, injection molding, shipbuilding, consumer goods, and so on.
We were only temporarily good at shipbuilding in the world wars. The United States just don't have much of an aspiration to be world class in building ships.
Given that we have the largest navy in the world, it would behooves us to grow our shipbuilding capabilities to be at least competitive.
"There's only four things we do better than anyone else:
music
movies
microcode
high-speed pizza delivery”
-― Neal Stephenson, Snow Crash, 1992
> US manufacturing capabilities regressing in other key aspects, such as machine tools, injection molding, shipbuilding, consumer goods, and so on.
But this is exactly what Econ 101 tells you to expect to happen (and I teach Econ 101 ;) . Countries specialize to maximize comparative advantage. If you are the US and can manufacture high value items at a lower opportunity cost (or high value services at a lower opportunity cost), you will, but this means giving up on doing other things you could use the resources for.
The net result is that US manufacturing output in real dollars has increased 4x, in the past 70 years. At the same time, its share of the economy has shrunk (because other sectors have outgrown it), and many lower value manufacturing subsectors have been largely abandoned.
I think politicians hook onto manufacturing as an ideal of an industry which should pay well and has a low barrier to entry. If manufacturing grew 15% every year but employed 15% fewer people every year due to automation, it would be considered a catastrophe.
The reason most people want more manufacturing in the US is because they want manufacturing jobs. It is only within the last few years since the pandemic that we started to care about domestic manufacturing as a matter of national security
The real benefit of local manufacturing is that it makes related industries dramatically more efficient. For example electronics in the pearl river delta. You can buy everything locally and get prototypes in hours.
> I think this is a win for national security.
I think that's largely the point. Obviously, it's a balancing act, but when market forces create a situation that is incompatible with national security it really is the governments job to address the situation even if, as in the case with Chinese EVs, it means a bit of pain for consumers.
A lot of it stuck around. I grew up in the rust belt and tons/most of my friend's parents worked at one of the many factories that were, and are still around. Think dog food, plastic molding, car part manufacturing, and glue. Not the big stuff that people think of when they think of manufacturing though.
I think if you start to deep dive into the industries that left, you'll find the reasons were often more complicated than simple labor costs. American companies did get out-competed by foreign firms in a lot of key areas.
America is large, but they can't expect to be the best in the world at every industry. If an entire country focuses on a specific niche for long enough, it's possible they will become the best. Samsung and TSMC are incredible companies that didn't happen by accident. And yeah, the USA might not compete at that level on the global stage, but the American economy is also not so completely dominated by one megacorp either.
Also, a lot of manufacturing, especially the high tech stuff, is highly automated. So these massive factories don't generate the same number of jobs they once did. And the jobs they do generate are often technical. More maintenance and calibration of machinery, and less putting bottle caps on.
I mean, how are people supposed to afford all this high tech shit if they can't work decent paying jobs without a degree and the welfare state has been hollowed out? Manufacturing used to provide that.
Are companies just going to fight for a constantly shrinking middle class? Or just turn into gacha companies looking to hook a whale? Sell a single doll for $46,000?
Let me tell you a story:
Tektronix lifted the Portland Oregon region right up. Was called silicon forest.
At that time, Tek was funding startups its employees thought up after working for Tek, getting great education provided directly by the company as well as through college partnerships.
Tek also literally trained a workforce here by educating any of its employees and by doing programs with suppliers to do the same.
I am a product of that time.
A drive through this region in the 80's and early 90's was awesome! Shops of all kinds, Tek itself had COMTEK which could make damn near anything, and opportunities abounded!
Howard Vollem died and the MBA took over.
COMTEK was torn down, work was sent overseas, education stopped, startup funding stopped, and soon a drive through this region looked very different: hair nails and laundry.
While large scale manufacturing has grown, the rest has suffered huge!
Our military can't find the capacity it needs! And they, along with aerospace, are the best customers there are, with auto in some parts too.
The rest has been gutted.
That is what we need to fix. It matters.
If companies won't do what Tek did, and that is invest in the region and it's people, and they won't because getting max dollars at any cost matters more than sustainable business does, then we must have robust small to mid sized manufacturing.
Where else will our future skilled labor come from? And I left for higher end professional work and software. I can make anything I can draw, it was damn good at it too. Saw way too many places close and there's no way I can raise a family on that and I quit ... tons of us did.
The skills I have are rare and in high demand. Young people today can't get them like I did, and that adds right the hell up.
You think your arguments make sense. And you are not wrong. They do, but that is not the problem.
The problem is for your argument to make sense, a ton of people and manufacturing potential is lost and nobody seems to recognize the massive opportunity costs in all that.
And frankly if large companies aren't going to do it and get a return on that investment, then our government damn well should. We do really put our national security at risk doing otherwise.
> Our military can't find the capacity it needs!
This has a lot more to do with the stance of the past 30 years to manufacture defense materiel at relatively constant, small rates. There was no capital investment, because why pay to have a huge line that isn't being used. We spent our military dollars on wonder-weapons that would probably win a direct war quickly, but that we can't give to allies in a proxy conflict. Going so far was a strategic mistake.
> And they, along with aerospace, are the best customers there are,
Military are terrible customers, especially if you're a subcomponent manufacturer. Gravy might pour, it might not; it's very unpredictable. You spend a lot of effort and business just evaporates.
> Howard Vollem died and the MBA took over.
On the flip-side, can you imagine being the high-cost Tek of old in today's test equipment marketplace? Tek already struggles to compete against cheaper, adequate solutions. So much of that market has commoditized out.
> nobody seems to recognize the massive opportunity costs in all that.
Actually, that's exactly what I'm talking about, in both directions. Having a ton of manufacturing means we would have opportunity costs in the other direction. We've traded the manufacturing we had 50 years ago for other things. It's not possible to specialize in "everything."
And suddenly it wasn't 1960 and the PCBs were in mass production. Suddenly it was 1990 and only the true high end low volume (space and mil) paid for their own custom silicon and fabs. Finally it was the year 2010 and the front end of a scope was a mass produced part for pennies with an fpga and the scope was a hobbyist and auto mechanics tool.
Sure the scope did change, and Tek made those moves as they should have.
There was a great argument for trading some capability to continue to build new products on now current processes, with the same rapid feedback loop in place.
That should have happened rather than the very aggressive tear down and brain drain we actually saw.
The key point being ongoing and regular investment in the company and people would have yielded more and better products that would compete just fine, not just be the cheapest.
That organization would be smaller, but still potent and a lot more nimble, able to continue supporting technical engineering across many fields.
And as I have mentioned up thread, couple that with returns from smart spin-off investments and an ongoing innovation culture rather than just a cost cutting one and we would have seen more than we did.
I would also argue the big push to apply software was sexy, and took the air right out of hardware efforts. Lack of investment there was not about the lack of returns, and it still is not about that. They are just a different kind and over a longer time.
Ignoring those has bled the region of a lot of capability. It is much harder to make things and here we are trying to understand how the next generation makes it on hair, laundry and food.
Making things is important. And it is not the cheapest way of course. Having a large percentage of people unable to build lives is and will continue to be very expensive. Crime, need for government services and more abound.
Early on, the promise of new tech and automation was a reduced need to work as much and or at the least maintaining respectable standards of living.
Put simply, it was supposed to cost less to live and for the most part these things did not happen.
Something needs to.
Moreover, share of GDP has been falling because prices of manufacturing goods have been all falling vs inflation, pressured by foreign competition and by productivity improvements, while rest of the economy - services - face none of that: they usually (except corner cases like call centers) can't be outsourced abroad, and output there depends strongly on labor inputs (e.g. waiters) thus making productivity stagnant almost by definition.
So there isn't a problem about manufacturing, never has been. Problem is strictly about manufacturing employment, which is of course, inexorably falling and will continue doing so and every politician promising to reverse it is a blatant liar. It's falling much like farm employment has been falling 40-70 years ago, sure it's traumatic, ruins livelihoods of millions of families many of which will never recover, destroys not just their personal finances but their source of pride and sense of self in many ways. But just like it didn't result in decrease in food output back then (quite the opposite happened), it doesn't result in dearth of manufacturing products now.
> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.
Cuz letting it manage itself works so well
Agreed.
Even the premise that it was always cheaper to manufacture abroad is flawed in many respects as Congress subsidized offshoring over many years as part of an effort to encourage globalization.
Companies often receive massive tax breaks with write-offs to close US plants, tax credits, zero percent import duties, and lower overall tax rates by shifting their profits and losses through offshore banks.
In many respects profitability has most often been determined by the policies we subsidize. and for decades those policies were essentially all in for the benefit of offshoring.
Comparing the actual cost of production by location is far more complicated than just the cost of materials and labor when there are so many subsidies and policies involved.
Not to mention the demonetization of the working class(i.e. the dumb redneck stereotype) and the job class itself with the association of manufacturing jobs as dirty and unneeded with the goal of a service economy as the new future.
https://www.forbes.com/sites/stevedenning/2012/01/31/is-the-...
https://www.forbes.com/sites/stevedenning/2011/08/17/why-ama...
I think the statistics he cited actually make that case
...compared to what? Growth is just one way of representing market health, and it's one that is typically pushed by capital for obvious reasons.
If you're talking about efficiency or productivity, you don't need markets for either of these, you just need any kind of economy to work with. Industrialization only intersects with markets (or capitalism for that matter), they aren't the same thing.
RE: National Security see his sobering thoughts on the supply chain: https://timculpan.substack.com/p/what-supply-chain-security-...
> I think it was a big case of corporate welfare that will result in somewhat increased chip production in the US.
I see two issues with this:
One, this is the same kind of subsidies and meddling with the markets that we accuse China of doing. If we are adopting state-led approach, it can be done in a serious manner without being hypocrites. But that would also require admission of some mistakes.
Two - why is it seen as okay to give tax breaks to an engineering company, why not give tax breaks to engineers themselves instead? Companies are imaginary, people are real, why not give incentives to individuals?
At least that money won’t be squirrelled away in tax heavens.
> One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster.
> ...I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.
I think the problem you're having is you're thinking of manufacturing in terms of dollars, like an aloof economist.
Yeah China has only ever really been a major player for about 3 decades. In a third of a century it has Actually SHRUNK American manufacturing to the point where there was genuine knowledge loss. It was cheaper to manufacture things in China so we used China, and now America doesn't even have the capacity to manufacture anything on the scale of China.
>just its share of GDP has fallen as other sectors have grown faster
I think this is inn-accurate. You're looking at a century of data but China only took 1 decade to overtake the US. We're now three decades in and the overall decline of American manufacturing is pretty evident.
I see empty factories in Shenzhen and Donguan, and massive unemployment in Guandong in September 2024. And I raise you full factories in Vietnam.
> I think this is a win for national security. I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.
National security and global freedom of navigation are essential preconditions for our current level of economic output and quality of life. In the long run, it’s not an either/or.
Well maybe your quality of life but for the common man in the US? There only seems to be hopelessness on the horizon. It makes you think, who are we really fighting for?
As someone who also feels like the future is trending downward, I hope we can at least get some crumbs from the top.
Well, sure. The essential tradeoff is always figuring out how much to economically kneecap yourself in the short term to maintain economic independence in the long term.
And, of course, if you overshoot and the other guys outgrow you as a result, that limits your ability to be secure as well.
Just about all "made in USA" products today are "assembled in the USA from global materials/components." This usually means that the absolute bare minimum of work is done in the USA in order to claim US origin. For example, pillows that are sewn over seas from foreign fabric and the only part that is done here is inserting the filling and closing the final stitch.
The US was once a global leader in textiles and now virtually all of that industry is gone. The same goes for many many other industries.
From the 1930s until the 1990s, Rawlings Sporting Goods produced high quality sporting goods in Missouri. In my home town they made hand-stitched Baseball Gloves, Footballs and starting in the 1980s, Injection Molded baseball helmets. They also made all of the team jerseys for little league and high school sports in another town near by. They employed ~200-300 people in my town and probably 1000 more in a couple of other factories in other towns. In the late 90s all of that was moved to China. The same thing happened with hundreds of companies across almost every industry. Anyone who claims that industry in the USA wasn't totally gutted in the 80s and 90s is using some creative accounting or just flat out lying.
This might be true, but the number of jobs has fallen. It kind of comes from our measurement of GDP. If you have a high-tech factory that employees 10 people to make a $10,000 unit price electronic, that can easily become more GDP per factory than one that sells nails and screws for a penny each with 100 employees.
"just its share of GDP has fallen"
The little "just" does a lot of work here. It means people in the manufacturing industry are being left behind.
This might be true, but the rust belt is called that for a reason.
I also wonder what's the share of non-disposable products in US and other Western countries manufacturing.
> This might be true, but the rust belt is called that for a reason.
> > as the actual manufacturing has moved towards higher value items and greater degrees of automation.
US manufacturing has moved away from things like primary metals, which the steel belt had focused on, and towards things further up the value chain.
https://www.nist.gov/sites/default/files/styles/2800_x_2800_...
Manufacturing fell from 25% of GDP in 1947 to 12% in 2015... but real GDP increased by 10x. So, the value of manufacturing output went up by ~4x over that span.
https://www.stlouisfed.org/on-the-economy/2017/april/-/media...
What really went away were the jobs.
> "I don't think ... probably won't be a win"
Accidental double-negative, right?
that US manufacturing has pretty much been constantly growing for the past century;
Really? Every time I see this claim its based on some citing some statistical mismash that the person citing does not understand and cannot explain.
How much tonnage of merchant shipping does the USA build in 2020s versus the 1960s?
How many TVs and computer monitors does the United States make in 2020s versus 1990s?
How many tons of steel does the USA make in the 2020s versus the 1970s? Of tool steel?
How many nuclear reactors are produced in the USA in 2020s versus the 1970s?
How many railway rails graded for high-speed trains are produced in the USA in 2020s versus 1980s?
How many CNC mills are produced in the USA in the 2020s versus the 1980s?
How many artillery shells are produced in the USA in 2020s versus the 1980s?
How many jet engines are produced in the USA in the 2020s versus the 1980s?
How many car engines blocks are produced in the USA in the 2020s versus the 1980s?
How many computer hard drives are produced in the USA in the 2020s versus the 1990s?
How many motherboards are produced in the USA in the 2020s versus the 1990s?
(Also, adjust all the comparisons above for population growth, we should be comparing manufacturing production per capita)
If you think that these comparisons are misleading because there are 'quality changes' please tell me exactly how you quantify these changes in quality.
Ignoring the thrust of the argument above, and missing the entire subthread where the nuance of how the US has redeployed its economy for comparative advantage is discussed and debated, to type that over and over was a bit of a waste of your time, IMO. Reading it wasn't a good use of mine.
If you read the surrounding argument and want to discuss some further point not covered, I'm here.
I've read the thread and have been very familiar for decades with these debates.
There are two separate questions:
1) Has USA manufacturing increased or declined in its output (measured in things, not $)?
2) If output has declined in terms of things, is this ok because of comparative advantage? Is this ok because the US mains a competitive edge in the highest value most technically advanced products?
As for 1), you say "The net result is that US manufacturing output in real dollars has increased 4x, in the past 70 years." Are you familiar with the term "researcher degrees of freedom"? "manufacturing output in real dollars" is an impossibly complicated statistical construct with infinite researcher degrees of freedom. There are infinite opportunities for "Getting Eulered" https://slatestarcodex.com/2014/08/10/getting-eulered/ That is why I insist on starting with the most straight-forward numbers -- how many cars? How much steel? And then layering on adjustments on top of that. If steel is down but it is compensated by some other high value product being up, OK, but show me the calculation, show me the work. Otherwise your argument boils down to "Trust the US government's impenetrable statistical calculations, we are getting richer comrade"
As for 2), when I first heard that argument from the most prestigious and credentialed economists twenty-five years ago, my toys and clothes said "Made in China" while advanced technical products like my computer motherboard was made in the USA. Now it's OK that the motherboards are all made abroad and because the most technically sophisticated motherboards are made in the USA. Well, it seems to me like the areas where the USA has comparative advantage in making the most technically advanced products is becoming a smaller and smaller every year. Just this year we are made aware of how much Boeing has lost ground to Airbus. Seems to USA is increasingly reliant on low-tech exports like soybeans, or worse, exporting dollar bills. It seems to me like our trade deficit is gaping wide, which means our real export is living off our status as the global reserve currency. Which feels nice until ones military might is no longer able to support that status (see 16th century Spain). Seems to me that the US is losing ground on military relevant manufacturing -- particularly drones but also steel, ships, etc. And without that, it will not be able to maintain its status as reserve currency in the long run.
Whether manufacturing grows, on its own or as % of GDP, has nothing to do with any particular segment of manufacturing has grown or declined, or emerged or disappeared.
As a thought experiment, you can do the same analysis with any number of technologies from the 20th century—typewriters, vacuum tubes, plate-based printing presses, analog telephones—and the point is obvious.
I didn't include typewriters on my list of goods. I only included items like cars and motherboards that were as economically relevant at the beginning measurement point as they are at the endpoint.
If you think that the manufacturing output in some of the things I listed declined or stagnated -- but it is countered by the fact that US manufacturing of other newly invented goods has increased -- then please specify what those goods are. Seems to me like the US manufacturing also lags in newly invented goods -- like drones.
> US manufacturing has pretty much been constantly
Middle class manufacturing jobs have fallen off a cliff and completely destroyed huge swaths of our country. Take a tour around Bridgeport, CT sometime as a great example. The northeast is littered with towns like this. These executives and their buddies in Congress mortgaged our middle class for profits by sending all our industry to Asia.
> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.
We've got China cheating with their massively deflated currency, so how the market allocates capital is already screwed.
you probably didn't read news lately. your CNY deflation theory is no longer being cooked by your MSM for a good reason - if the CNY deflation claim is true, then it means the Chinese economy has probably already surpassed the US economy not just in PPP but in real term as well. That would cause huge load of issues for the US which is never prepared to be the No.2.
> transferring knowledge from TSMC to a US workforce.
No, no it's not.
When semiconductor manufacture moved to Asia, this was generally done under a "technology transfer agreement", which was an explicit agreement for US companies to transfer their (usually older) tech to an independent local company who would then be allowed to manufacture it and develop it. This is how TSMC started, by doing a deal with Philips to manufacture for them but also to trained on the tech and to be allowed to use it themselves.
This TSMC US fab (and Samsung's new fab) are not under such an agreement, it is directly run by TSMC with no explicit goal to transfer technology. I think it was a mistake for the US CHIPS act funding to go to such a venture without a clause for technology transfer back to a US company.
The workers can walk away with whatever is in their heads
These workers didn't create the fab equipment and don't know how to design or create the machinery used there. They also don't have access to the software source code. Most US workers hold maintenance or managerial positions, while those with the deep technical expertise come from Taiwan. There will be no knowledge transfer, aside from how to operate the fab, which is something Intel US employees already know.
Fab equipment is made by other companies. Such as ASML:
Arizona has enforceable non-compete contracts, so they may walk away with the knowledge but they might not be allowed to use it.
The US workers are almost certainly limited to people who are low to mid level techs who don't know anything useful. Everyone with actual cutting edge knowledge is from Taiwan and almost certainly under the tightest of NDAs and NCAs.
Even high level people in the plant still aren't that useful. What's useful are the insanely expensive, insanely complicated extreme-ultraviolet lithography equipment from ASML. Nobody in the world makes the stuff they do. At least, that we know of. It wouldn't surprise me if the NSA has funded designing and building an EUV lithography system, or just stole the designs from ASML. We know they do a lot of their own ultra-miniature silicon, so they have a strong interest in this sort of tech.
American companies already know how to manufacture older chips. It’s not like TSMC is light years ahead of Intel. They’re ahead, but not by so much that their older generation tech would be transformative.
TSMC and intel are more directly comparable than, say Sony CMOS image sensors.
TSMC is ahead because it adopted ASML's EUV tech earlier than Intel (huge blunder by Intel). The real tech breakthroughs came from ASML, and Intel now has that technology too (and is trying to leapfrog TSMC by being the first to get the new High-NA EUV from ASML, though it won't actually producing sub-3nm chips with it until 2025 or maybe 2026).
Aren’t Philips and ASML both effectively under American control anyway? Is the TSMC part of the stack that special in terms of actual IP (versus more squishy organizational know-how)?
> Aren’t Philips and ASML both effectively under American control anyway?
IDK about Philips but ASML follows US export restrictions due to a deal it agreed to when it bought a US company a few decades ago, yes.
> Is the TSMC part of the stack that special in terms of actual IP (versus more squishy organizational know-how)?
I don't want to go into too many details as I work in the Intel Foundry but it's certainly both. We'd be very happy to know how TSMC does some specific things, let me put it that way. At the same time, our execution has been dubious since 10 nm.
Philips as far as im aware doesnt contribute that much anymore. NXP split off forever ago. Philips may have build TSMC together with the taiwanese government but its hardly relevant nowadays.
Philips spun off both NXP and ASML years ago, so all their relevancy in chip manufacturing disappeared and went to both companies. Same happened with LED manufacturing, going to Signify NV.
Philips has only kept its expertise in medical devices and a large pool of patents for many technologies (MPEG-2, H264, Ambilight, BluRay, OLED, etc.)
I actually think the extreme density and breadth of manufacturing in China is going to continue to outpace US manufacturing. They have multiple enormous manufacturing hubs connected by high speed rail lines over a wide geographic area. The US has no equivalent to the likes of Shenzhen and Guangzhou, where you can finish a PCB design in the morning and have the prototype in hand that evening. You can go to the Huaqiangbei Electronics Market and find exactly the right motor and controller for your specs, pick up specialized sensors, and build your next rev overnight.
I have lived in the Bay Area my entire adult life. We used to have Halted/HSC, we used to have Weird Stuff. We used to have Triangle Machinery Co in Santa Clara. Now everything is gone.
I think it’s great that we built a semiconductor manufacturing plant. That’s important for strategic manufacturing. But we’ve so thoroughly destroyed our manufacturing base, let the factories rot, and financialized property value that the “weird place with random electronics” can no longer even afford to do business. Starbucks makes more money, so in it goes.
US politicians love to shout about manufacturing. “Manufacturing jobs jobs economy growth.” But these people DO NOT understand how things get made. They have no serious industrial policy. They do not know the value of a high speed train connecting manufacturing centers. And even if they did, the entire apparatus of our government is set up to stop it.
Manufacturing workers need education. They need housing, transit, health care, maternity and sick leave. They need secure jobs and extra income that allows them time off to take classes to learn new skills.
I’m glad we passed the inflation reduction act, and the CHIPS act. We need that investment. But it’s going to take much more than that to “bring manufacturing back” and I’ve have seen time and time again that we do not have the vision or capability to move in the ways that would be required.
I hope manufacturing comes back. We desperately need it. But I’m quite frustrated that despite some marginal progress, the serious changes we need are not on the horizon nor seemingly beyond it.
I came here to say something like this. I've worked in product development in the Bay Area for 30+ years and brought numerous products to market, mostly manufactured in China. There's nothing like the density and ability of manufacturing that's in China (and more broadly in other parts of Asia). In the US I've worked with great molders and toolers, PCB fab, machine shops, CMs, etc. but the ability to turn on a dime and get stuff done quickly in southern China is insane. In the Bay Area you see billboards for esoteric SaaS products and credit cards for startups, in parts of China, they are for molding machines and CNC tools. You drive by rows of roll up doors in the base of apartment blocks and each stall/shop is filled with bar stock, plastic pellets, CNC machines, injection molding machines, etc.
You'll also see people doing complex repairs of mobile phones sitting on a stool on the sidewalk. The level of skill and access to tools/spare parts that is endemic there is completely different than the US.
Perfect comment, it's important to celebrate but more important to keep in mind it's a tiny piece of the public infrastructure and government inertia we need to do this correctly. We need exactly what you describe, and I want to bolster the mention of education. China produces 2x the stem phds we do every year. Sure, bigger population, but they also have a growing share of citations. (source for both is suleyman's book "the coming wave")
> and financialized property value
Do you think China has not?
I suspect that the extent to which they have done so, and its impacts, vary significantly from how things have gone in the US.
> They have no serious industrial policy.
Ignoring how we define "serious", they do have an industrial policy. You just may not agree with the wisdom of the outcomes wrought by the regulatory regime. I don't know how you ever compete with the developing world that has a surplus of people and comparatively lax regulatory framework for everything from labor to the environment.
The policy is to move all the dirty work to someone else's back yard. It seems to work as long as the shipping lanes stay open and the other economies have something to gain (room to grow and raise standards of living).
> The policy is to move all the dirty work to someone else's back yard.
Whose policy? Like, which politicians and what exactly is their policy?
Because that sounds more like the kind of thing people say they are trying to do, while hiding the fact that they are doing something different.
I've long been of the belief that, much like uranium enrichment, supply chain integrity of semiconductors will become a national security issue. We've seen it already in reverse with export controls being placed on GPU cards, and of course there is a reason the NSA operates its own chip fab. The threat to western economies of (for lack of a better term) "poisoned" chips making their way into phones, laptops, industrial SCADA equipment, etc. is real if nascent.
On-shoring top-tier manufacturers like is absolutely a win not just for the high-tech manufacturing sector but also for the US and allied countries.
>This is great news, and we should celebrate.
Couldn't agree more.
I wonder how Taiwan feels about this. From their perspective jobs are getting offshored from their country because of massive subsidies, and the strategic shield of having most critical semiconductors coming from them is getting getting thinner. At the same time they can't complain because only the US could defend them from China.
I've always thought there's some geopolitical chess at here. The US can't abide being completely dependent on the island of Taiwan. So if TSMC wasn't willing to do this, the US might fund an alternative. This could leave Taiwan no leverage at all.
Now, with some US based production, TSMC is still in charge, and more resilient to disruption. So it may still be a very strong move.
I am not sure if Taiwan has any real leverage. If Taiwan is destroyed or otherwise compromised by China, the US would probably seize the American branch of TSMC, force the sale of the American branch to a western company, or force TSMC America become an independent company.
Isn't this better for Taiwan because it strengthens their ally, The USA?
If China would just wipe out Taiwan's ability produce chips, and disables part of the US information tech supply chain, then it would be bad for Taiwan right?
Agree that TSMC is good news.
> US manufacturing is about to be reinvigorated
I’d suggest you post a small/medium quantity machining RFP on MFG.com with a medium to high complexity. I’ve been quite discouraged that US vs China price differences are 5-10x. (My part was a custom M0.8 screw in quantity ~500.)
It seems that without a vibrant base of small businesses, it will be very challenging to truly reinvigorate US manufacturing. And that would require reforming the finance sector/allocation of capital that currently is skewing really heavily towards “scale”.
One can only hope that the US learned from its mistake, and doesn't allow chip manufacturing to go offshore to that degree again in future peaceful times.
It wasn't really a mistake. At the time Taiwan and South Korea were advancing into semiconductors, the US was more concerned with Japanese domination of the industry so having 2 small countries as alternatives to compete with Japan in some sectors of the industry was beneficial.
One of those small countries has a belligerent neighbor to the north, and the other is coveted by a much larger superpower that thinks it still owns it.
The NK situation was obviously widely known at the time, but that the US population/government didn't forsee or take seriously enough the rise of China is perplexing to some of its allies.
It's a lot harder to go to war when countries depend on each other economically.
Tell that to Russia, its economy is - military production aside - in shambles due to Western sanctions and especially the brain drain.
The idea of economically enforced peace only works for democratic countries where the government has to show at least a bare minimum of respect towards its citizens, but not in countries that follow the whims of their respective Dear Leader.
This was famously the argument made in the book The Great Illusion, 5 years before the outbreak of the First World War.
https://en.wikipedia.org/wiki/The_Great_Illusion
Wars are often irrational.
> US learned from its mistake, and doesn't allow chip manufacturing to go offshore to that degree again
I don't think USA made any mistake. It was always heavily invested in South Korea and Taiwan. Neither of them would even exist today without USA's investment, interest, and stewardship.
Intel is the one that made the mistake.
On top of that, the US outsourced of a very very ecologically damaging part of industry. The remains of Silicon Valley, literally named after the hotbed of what was manufactured there, are the largest concentration of Superfund sites in the US.
Meanwhile we're offshoring all of our software engineering jobs at a breakneck pace with no regard for the consequences on our future.
The whole same story is going to play out again and in 20 years we'll be panicking because nobody in the US will know how to write software anymore.
The free market actually works great under the assumption of governments not acting irrationally.
However, since China has expressed interest in war with Taiwan (not a thing advised by the free market), someone needs to address that.
In terms of economics, this is a net loss, but then again, the effects of war in Taiwan would be worse.
The free market is an innocent scapegoat that never existed in any government. As long as the State makes the laws, it is a form of state planning. The only different between Soviet Russia and modern Western countries is how heavy the hand of the state tries to move the needle of the market.
But I agree on the sentiment: everybody seems to have decided the state should control the market even further than it did three decades ago. Free market was never given a chance.
What are you doing with these 70TB of storage? I was meant to ask the other day when you reached the front page, but someone asked me a question during the meeting I was in.
(Your comment made me giggle so I went looking for more banter on a potential blog, sorry for creeping up)
I've answered that question here below the picture: https://louwrentius.com/71-tib-diy-nas-based-on-zfs-on-linux...
This is a move with swinging geopolitical implications. But the value and urgency of the reinvigoration of the American manufacturing centre cannot be overstated.
China's gonna be a bit salty though.
What I really want them building in America though is low-end AMD chips for development boards.
4-Core/8-Thread CPU, 4-Core GPU, 16 GB ram, sane IO, and however many of Xilinx's FPGAs they can put on it without overdoing it.
People would be able to make some pretty decent things with that.
Notably, this was started in 2020 with a $12B investment - https://www.tsmc.com/static/abouttsmcaz/index.htm
Then in 2022, TSMC invested another $18B and received $6.6B from the CHIPS act.
My bet, is TSMC was given a “you build in the US or we wont give you defense contract work” in 2018-2020 timeframe lol
Does it matter? They played pretend opposition like they always do. Democrats can pass this stuff no problem but people elected the opposition party to advance meaningful democratic reforms like better health care, dealing with housing, increasing minimum wage. They haven't done anything. Its blatantly obvious this chips bill was a giant handout to corporations. Sure the plens get a few breadcrumbs but its pointless to point to republicans when both sides are not really enacting fundamental change for the common man.
> My bet, is TSMC was given a “you build in the US or we wont give you defense contract work” in 2018-2020 timeframe lol
My bet is that TSMC recognizes they are a crazy geopolitical pawn. And is frankly playing their part.
Once China develops chip production abilities similar (but not necessarily better) to TSMC, they’re free to destroy Taiwan. Then they’ll be the sole cutting-edge producer, meaning that everyone will continue to do business with them despite their behavior.
TSMC and the US recognize this. If TSMC bring their tech to America, they’ll at least be safe to continue manufacturing (“for the shareholders”). It also is self-serving because it changes the geopolitical game. It increases the risks to China of an invasion, and favors to the US increase the odds of US intervention (good for their patriotism).
Finally, it’s pretty well established that the US defense industry prefers local factories for security purposes. They’re obviously interested in preserving this ability domestically, and most companies recognize that and accommodate.
> My bet, is TSMC was given a “you build in the US or we wont give you defense contract work” in 2018-2020 timeframe lol
TSMC is in an extremely precarious geopolitical situation; China's hardball is a lot scarier than Trump's. Expanding their geographical redundancy through billions in handouts is pretty appealing to investors.
TSMC improves the geopolitical situation of Taiwan by building here, too. China doesn't have the possibility of being "the best logic manufacturer left standing" after an invasion and TSMC being destroyed, if some of TSMC's world-class fabs are also located in North America.
I think you are overly optimistic, this is an older process, which means that next iphones will need to source their CPUs from TSMC fabs in Asia, not from US. There also will be no knowledge transfer, that was not part of the deal. It's more of a national security political message than a real change. I guess it's better than nothing. I wouldn't call it a significant win, but it’s a step in the right direction.
And fabs are not enough:
https://www.bloomberg.com/opinion/articles/2024-09-03/us-nee...
You can't lead in the energy transition or produce chips without the supply chain and critical minerals:
https://www.wsj.com/world/asia/china-harnesses-a-technology-...
https://www.politico.com/news/2024/08/29/biden-minerals-pric...
https://www.politico.com/news/2024/09/13/steelmaker-biden-cl...
There's still a lot more to do to actually make it work before you can celebrate a win.
...transferring knowledge from TSMC to a US workforce. This is a significant win for the US...
I get what you're saying and I agree, but there's some heavy irony in saying that considering that's exactly how TSMC started out but from the opposite side; Transferring knowledge from "the west" (RCA from US and Philips) with ITRI it evolved into a project of Taiwanese state which culminated in TSMC.
It's also terrible/impossible news from a USD perspective if the US produces things nationally in a significant way (importing less, selling less printed USD in exchange for goods).
Printing insane amounts of USD to allow for systemic government over-spending and huge untenable government debt doesn't go hand in hand with not importing most goods. You can't keep your currency strong if you can't force others to buy your currency.
If you have a lot of production in the US, this is going to cause hyperinflation to come sooner.
In the long term it won't matter, the end result is the same, but if production significantly moves back to the US it will be very scary from a currency perspective.
I don't see the argument here. Importing less leads to selling less USD (yes), somehow leading to devaluation of USD? Is the implication that the dollar is strong because the US government "forces others" (foreign manufacturers) to buy it? Isn't that the opposite of the first thought, which implied that "selling less printed USD" was the reason that domestic manufacturing would be inflationary? I don't understand the causality, and it doesn't match my mental model ("a country that can build things domestically at a competitive price point should be deflationary because now there is more supply of stuff and equal supply of money"), so I think this could do with some expanding.
> we in the US are going to be building our own future both for chips and for energy security.
> just the beginning of the amazing industrial policy
Isn't intel one of the biggest companies in the world, makes chips for everyone and everything and based in the US?
If the marker for industrial success is supplying Apple Inc, Intel did until 2022?
It also helps TSMC, i think. More "allegiance" with the US while China is scrambling to catch up
> US manufacturing is about to be reinvigorated, and we in the US are going to be building our own future both for chips and for energy security.
Don't count on it. For every high-end chip you need hundreds of commodity parts to support them, and nobody is investing in US factories to make $0.001 capacitors or $0.10 connectors. You just can't compete with cheap Chinese labor, so the US supply lines will never be able to equal a city like Shenzhen.
Unless the US is willing to get rid of capitalism and switch to a plan economy, most of those expensive high-end chips will just be shipped to Asia for assembly. So much for building your own future.
Or how about instead of 0.001 caps and 0.10 connectors we pay the little bit extra and not sacrifice living wages and environmental regulations?
You don't need a planned economy to legislate that all of you source material must be produced in accordance to local laws.
> most of those expensive high-end chips will just be shipped to Asia for assembly
I get the first part of your comment, but why wouldn't all the missing components be imported for assembly in the US? SMT lines in particular don't need that much cheap labour to operate. Even Brits can assemble PCBs!
Either you ship one component to Asia where it'll be combined with thousands of parts made by factories literally in the same city, or you're shipping all those thousands of parts over the US for assembly. Even with zero labor cost for assembly it's not hard to guess which option is cheaper and easier to manage.
>and we have top tier production here in the US
TSMC's process that they are bringing to the US is 2nd tier. The crown jewels are being kept at home.
If Intel can get their act together, then we will have top tier in the US.
That's not really true, afaict. This press release[1] states that Fab 21 (Arizona) phase 1 is 4nm, which is not the best but clearly is enough to manufacture the A16, phase 2 opening in 2026 will be 3nm, and phase 3 will be 2nm or better. I'm not a semiconductor engineer so maybe there's some process nuance that I don't know, but it certainly seems that this is at or near the top of TSMC's process list.
Those are decently advanced nodes, but if 3nm isn't coming until 2026 then this is absolutely a last-gen fab. For reference, Samsung is considered a "last-gen/trailing gen" fab, and they'll be shipping 2nm in 2026 on their roadmap.
Taiwan's TSMC will have a process and sampling edge for the foreseeable future, unless they change the roadmap.
I feel like you are running around high fiving everyone for a job well done and the first chips aren't even off the line yet.
This is a huge milestone, but it seems a little premature.
> After all the wailing and rending of clothes, the industrial policy worked out great and we have top tier production here in the US, transferring knowledge from TSMC to a US workforce.
> This is a significant win for the US, and just the beginning of the amazing industrial policy passed over the past few years.
I'm not sure these conclusions are justified. It's the 'seen vs unseen'.
Maybe you should visit the rust belt/midwest before SV starts patting itself on the back for single-handedly re-invigorating the economy.
I get the spirit, but flyover country is not doing great. Unemployment is rising and there is a severe lack of decent paying jobs. Chips are great, but everything else is made in Asia. Increased automation is making a ton of jobs obsolete and there is no solution in sight yet. Chips ain't gonna do it.
Maybe you should look at actual stats for what's going on in the economy before being completely cynical.
The investment in factories is absolutely massive over the past few years. The Inflation Reduction Act is bringing massive amounts of manufacturing into the US, starting with the lowest value add of assembly, and after that additional suppliers lower down the chain will be built up too.
It is not SV reinvigorating the economy, it's not happening in SV, it's happening in small towns all over the country. It's happening due to the bills that Democrats passed over Republican opposition, but because of politics, it's not being trumpeted as a partisan win in the towns where factories are being built.
> The investment in factories is absolutely massive over the past few years.
The fascinating thing is people don't want to believe this. They'll make every excuse before admitting that it's true. They want to be in a declining empire when the reality is the opposite.
Bro I fuckin live in it. I don't care what stats you have, people in the Midwest are struggling to afford groceries and housing. Come visit.
This is (only a few years later than the rest of the world's) state-of-the-art manufacturing, built only with the expertise of a Taiwanese company, that relies on the technology of a Dutch company, that in turn purchased (and has since monopolized) its IP from another US company, twenty years ago, and only then because a number of other companies (notably Canon and Nikon, both in Japan) were excluded from using it.
It is not something to be celebrated. What TSMC and ASML are doing is amazing, but we could be so much further ahead.
If you look at it from a geopolitical angle, it's much to be celebrated. It means US can rely on its democratic like minded friends to help protect the supply chain of cutting edge chips, against the now very visible alliance of dictatorships (Russia, China, North Korea, Iran).
And make no doubt about it, there is a democratic alliance vs dictatorships here. Russia is aggressively sourcing artillery shells from North Korea, ballistic missiles from Iran, and financing and weapons from China. China incidentally is the economic caretaker of Iran and North Korea.
US accuses China of giving ‘very substantial’ help to Russia’s war machine https://www.politico.eu/article/united-states-accuse-china-h...
China’s Double Threat to Europe: How Beijing’s Support for Moscow and Quest for EV Dominance Undermine European Security https://www.foreignaffairs.com/china/chinas-double-threat-eu...
> If you look at it from a geopolitical angle, it's much to be celebrated.
I'm not sure. Taiwan is already a democratic ally. They are relying on the chip manufacture to keep them safe politically. Without that they'll quickly get "absorbed" by China.
The US decoupling and isolating technologically/economically from the rest of the world, likely makes war more likely. Not less.
Ah, ok. If we're going to be throwing in personal takes on geopolitics, then here's mine.
Less of the "democracies vs dictatorships". It's more like "western imperialism (essentially US & vassals) vs the rest of the world (who wants out of imperialism, endless sanctions, endless wars, the odd genocide or two)"
Sadly the State Dept.'s moral panic over a non-aligned Military Complex rings somewhat hollow against the backdrop of 'very substantial' support in an on-going genocide.
Coincidentally, it was Chinese intervention that brought an end to the last genocide the State Dept. was facilitating; the delineation of allies likely warrants reflection
This also lowers the Taiwan risk, which was increasingly high after the China chip ban.
I think it falls back on lots of elites feeling that only “one special group” can do a thing. The pendulum swung too far into the “globalist”agenda and now it’s swinging back. I’m sure it will overshoot and we’ll be back to globalism within a decade, but I for one welcome anchoring more things to the domestic economy; the US is a huge country with lots of resources and lots of untapped potential (despite not being China big) and we could use some of that trickle down economy that the globalists have been hoarding for a while now.
Why did it take the United States government having to invest in US labor?
Why wasn’t the “free market” Capitalism allocating resources to the United States if in fact, it is the best place for this to happen?
Or is this just garden variety realpolitik nationalism?
You’re missing the forest for the trees. The cause to celebrate is not that Apple chips are being made. It’s to celebrate that chips of such high calibre are being made.
It’s only a start, but it’s a huge deal in an economic, technological and geopolitical context.
Yeah, that's great, but it will be a lot better when they're making high-caliber chips for multiple customers, not just one.
Absolutely astounding to credit the guy on whose watch this literally did not happen for something that's happening now.
Is this like the people that credited current infrastructure improvements to his infrastructure week that didn't happen?
Something like 40% of Republicans believed Obama was 'responsible' for 9/11 in 2015/16
(failed to prevent, not personally perpetrated)
There is a lag between policy and results, I don't think you can fairly say that because it's happening NOW it's biden's doing (though i'll give credit to Biden for now ending the changes Trump enacted). But Trump should get credit for completely reorienting our trade policy.
Actually you can, the CHIPS act and the IRA lead to a massive boom in factory construction.
It's a horizontal line going supersonic [0]
In 2016-2020 the economy was good, jobs were plentiful and there was mostly peace. Then the Democrats mismanaged COVID and the Munich peace conference in 2022, then doubled down and sent Pelosi to stir up the pot in Taiwan.
Now we have cold or hot war everywhere, and a TSMC plant is built for election purposes.
Trump absolutely started the U.S. manufacturing drive, sometimes he does not push things through. Still, the world would be in a much better shape had he been elected in 2020.
Well, one of the three fabs did. The newer two fabs, including the one with the most advanced processes, started in '22 and '24 respectively; that was thanks to the Biden Admin, per TSMC.[0][1]
Biden, Democrats and the moderate Republicans that came together to support this deserve the credit here. It's game changing stuff, a big chunk of which could be on the chopping block if the extreme takes power again.
"US manufacturing is about to be reinvigorated"
Oh i'm going to be downvoted into oblivion for this one.... but I think this is a win we can give to Trump. It was a hard focus of his, I think he put the right people in place to do it, and I think time is going to prove he was right to do it.
I didn't vote for him in 2016, but I think it's important to acknowledge it.
This is because of the CHIPS act. Other than Trump's constant whinging about China, he didn't have anything to do with this.
I understand, but I was commenting specifically around the comment "US Manufacturing is reinvigorating" which it is, and which is more general than chips.
I think when the Trump admin renegotiated trade policies (and I'll given Biden credit for keeping them) the economic incentives were rebalanced. I think the result is complex/low volume manufacturing is starting to return to the US, and simple high volume manufacturing is moving to Mexico (which we have a very good relationship with... i'll discredit Trump for being so stupidly aggressive with them in the first few months of his administration though)
>This is a significant win for the US, and just the beginning of the amazing industrial policy passed over the past few years.
I don't consider it a win. I consider it a loss. This is a desperate move by the US. Intel making better chips then TSMC is a win. The government strong arming Taiwan with "protection" from China in order to gain this technology is a display of American incompetence.
But then again maybe is't not about fair play. If the US wins by unfair means, it's still a win? A pathetic win but a win none the less.
As an American I care because it’s shameful and rather pathetic.
And remember stuffing a rotting carcass with imported fresh meat doesn’t actually fix the rotting carcass.
I look at where all the talent is going in the US and it’s all full stack software engineers and gen AI.
Someone in the thread mentioned "China's gonna be a bit salty though."
I see what salty China looks like now.
I’m an American though. But yes, of course China will be pissed. I suspect China wants this though. Once the US has Taiwan semiconductor technology there’s no need to protect Taiwan and China can move in. Symbolically Taiwan represents more to China than some island that makes great chips.
I still think it’s better if intel was able to pull it off, but i don’t think us Americans have the capability.
You really think it's a success to force Apple to lose money to make US politicians look like they are "doing something" about a world economy that is increasingly leaving the US in the dust?
Meanwhile in China, 1000 engineers (to one in the US) are building all kinds of electronics and embedded systems on shoestring budgets that truly force them to learn engineering. China's industrial policy architects are likely laughing at this big folly on the part of the US.
The worst is the 100% tariff on EVs which keeps the US in an artificial economy of gigafactory, high-end nonsense when the rest of the world will be getting true economies of scale from EVs which are actually simple, reliable and low cost.
It's deeply embarrassing that the US must suffer poltical rule of its economy along with the double embarrassment of seeing other nations do it so much more effectively.
Industrial policy should be measured in terms of person months of career acceleration (experience) per dollar. The US focuses on helping prolong the dominance of internal combustion engines and taxing high profile, high-end companies that do not offer skills that transfer well into the rest of the economy. How many Apples are there? Will forcing manufacture in the US suddenly result in another company doing 2nm process and competing with Apple? It's absurd.
I know of a variety of small and medium sized US tech companies (aerospace and 3d printing / robotics) that were almost sunk by US "industrial policy" becasue they relied on a small number of China-manufactured inputs that suddenly became unavailable, forcing unplanned re-engineering and work the companies could not afford. Sadly, one went under. Meanwhile, the US firms that import finished goods are thriving selling Chinese manufactured gear -- Chinese companies didn't have to pay US tariffs on the same inputs. Utterly absurd.
Politicians should stay out of the economy and focus on moving us closer to nuclear war and promoting the religion of American Exceptionalism.
> Industrial policy should be measured in terms of person months of career acceleration (experience) per dollar
Sounds about right but how would you come close to measuring that?
>“It's deeply embarrassing that the US must suffer poltical rule of its economy along with the double embarrassment of seeing other nations do it so much more effectively.”
The Chinese Communist Party exerts far, far more control over all sectors of their economy than US politicians do over the US economy.
https://www.cbsnews.com/news/xi-jinping-china-capitalism-60-...
That's what I meant by this:
> other nations do it so much more effectively
China hsa an actual strategy, not just an attempt for politicians to pay lip service and win a few rust belt states.
Also, China had a policy for years of dramatically suppressing its economy, so of course a few small changes result in massive growth (once some of the suppression was removed).
> This is great news, and we should celebrate.
On the other hand, this is a protectionist policy that has been straining US' relations with its allies. That development means the US empire is a little less mutually beneficial, and a little more beneficial to the core.
Its success requires these allies not to reciprocate, and this is a long-term prospect that only time will confirm.
After all the wailing and rending of clothes, the industrial policy worked out great and we have top tier production here in the US, transferring knowledge from TSMC to a US workforce.
This is a significant win for the US, and just the beginning of the amazing industrial policy passed over the past few years.
US manufacturing is about to be reinvigorated, and we in the US are going to be building our own future both for chips and for energy security.
This is great news, and we should celebrate.