Comment by phantomathkg 4 days ago
Selling the secret sauce to US definitely make Taiwan disposable. But I also bet TSMC doesn't have a choice as whoever in power in US can also impose sanction/tariff or whatever they can to make TSMC to compile.
How does this invalidate what I said?
Have you heard of Operation Paperclip? The moment China steps in Taiwan, all those vital TSMC engineers will be flown to the US along with the critical IP and given a blank cheque to replicate Taiwan operation on US soil ASAP. TSMC is preemptively building the infrastructure there in preparation for such an event, so it can outlive whatever happens to Taiwan. TSMC has little inventive to tie itself to Taiwan and its people who are not its employees. Every big company thinks and acts like this. Taiwan can't force TSMC to stay there if it doesn't want to.
Reminder that TSMC WANTs to stay in TW... they did not want to expand in US at all. Arizona fab annoucement after months rumormill was big surprise at the time since TSMC did massive TW capex expansion and had no $$$ for US fabs, and it was combination of CHIPS carrots ($$$) and US sticks that got Arizona greenlit. Morris Chang publically said CHIPS would fail to get US semi leadership, that US policy is "doomed" / "futile", that is not the words of someone who wanted to erode TW's silicon shield. IMO TSMC Arizona's current (likely ongoing) dependence on imported TW talent makes it pretty clear TW is keeping tight leash.
>Taiwan can't force TSMC
IIRC TW foreign minister said a few years ago it was pure American wishcasting to expect TSMC employees to be evacuated before TW women and children. Around the same time TW politicians rebuffed the idea that TW would destroy their own fabs. That's TW's leverage, they control who gets on and off the planes and boats. Reality is if PRC makes a move, they'll lock down the airfield and shores, that's PRC's leverage - to control if planes and boats get to leave in the first place. Ultimately, TW politicians knows locking semi talent on the island is leverage, especially if they lose, because most of them won't have a ticket off the island.
Not to mention paperclip is the victors getting the spoils, and US is far from assured any victory or there would be any TSMC employees left to paperclip if motivated PRC wants to deny. Or that TSMC is like 70k people excluding their families. 300k if you include other direct TW semi employment. More if you include indirect (supply chain), and ultimately there's considerable sole source semi suppliers on TW that TSMC US won't be functional just like how ASML can shut down hardware by stopping inputs for maintenance. It's not just packaging and domestic talent that's another bottleneck, TSMC Arizona stops with TW inputs as much as it doesn't without ASML ones. And so far there's no real public plan to reshore that supply chain in US.
It's about as close as you can get though to capital efficiently allocating itself
In the game betwen China and the US, the legal status and 'allegiance' of TSMC is not relevant. What is relevant is who controls the fabs, i.e. where the fabs are physically located.
It is also naive to think that governments (US and especially ROC/Taiwan) do not have influence over TSMC. This sort of thing is not necessarily measured by level of shareholding.
TSMC is a publicly traded company and like all publicly traded companies it has no allegiance to any country (other than historical legacy and emotions) and will always relocate to where it's most safe and profitable for providing returns to its shareholders, just like how many profitable companies moved to UK, US and Switzerland during WW2 and how many EU companies are doing the same thing today.
If the US will provide TSMC with better deals on all fronts than what the Taiwanese government can, then there's nothing that can stop them from slowly abandoning Taiwan and moving the HQ and vital operations to the US over time, especially that the Taiwanese government is not a major shareholder in TSMC.