Comment by epistasis

> 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.

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'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.

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.

So the free market was the enemy all along, what we needed was state planning?

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

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.

> 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.

>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.

Hold your horses — this will only produce a fraction of the chips, and probably at a much higher cost.

It's a step in the right direction for the policy goals, but they've really just entered the woods with this one.

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.

Wave the flag and have colourful fireworks with hand at the heart and tears in the eyes, this is a glorious moment the children will cheer its glory in glorious essays!

> 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.

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.

This also lowers the Taiwan risk, which was increasingly high after the China chip ban.

Yep. We should be investing our tax dollars in our economy and our people.

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.

Not only that, the US now also has some backup when China will invade Taiwan and take over TSMC.

> US manufacturing

America is a continent.

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?

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"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 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.

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.

> 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.