I didn't downvote you, but

(1) TSMC is building fabs in both the US (Arizona) and Japan (Kumamoto). (2) China is unlikely to invade Taiwan anytime soon; the country is working on more of a diplomatic takeover a la Hong Kong. (3) I don't know any reasonable argument for AMD not needing TSMC.

OK, I'll bite. What is this "diplomatic takeover" of Taiwan you speak of?

The historical circumstances of HK and Taiwan are nothing alike. Furthermore, the mainland communist party doesn't have any sway on Taiwanese politics, as far as I can tell ...other than as a common nemesis to unite against in relation to any issues that could affect the island's autonomy.

Taiwan has a subgroup of the population that wants peaceful reintegration with the mainland. They’ve dropped in numbers following the situation in HK, but they do still exist.

Peaceful coexistence? Sure.

Closer coordination and cooperation in a socioeconomic context? Also on the table.

But _integration_ with the communist PRC? Uhmm... yeah no, that's a pretty disingenuous characterization of the KMT side of Taiwanese politics.

Peaceful coexistence is the status quo. PRC is currently Taiwan's #1 trading partner:

https://www.worldstopexports.com/taiwans-top-import-partners...

(I believe even South Korea and Japan export more to PRC than they do to USA)

Yes, of course that's correct, and it has been like that for many years.

What is your point?

It's not KMT but a different group. Those who want reunification exist and often hold powerful positions.

China wants more of these people and are actively employing soft power in Taiwan to convert more to their side. I'm not sure what the intended time frame for success is, but China is in this for the long-haul.

Perhaps if things goes China's way, the PRC can strike a deal with the KMT for some sort of local governance, likely along with a name and flag change - or a third party could rise up and supplant KMT. Of course, either situation would kill off the DPP.

I'm not questioning the existence of such elements in Taiwan — including some group apparently so formidable that you can't/won't even mention its name.

No, what I find highly implausible is the notion that such an extreme "unification at any costs" ideology has any significant popular support. More so still in the aftermath of the PRC's recent suppressive tactics in Hong Kong.

I'm sure the scenarios you hint at are indeed explored at great lengths among Beijing-funded think tank strategists, but I can't see Xi & co being naive enough to elevate such an approach as their most viable course of action.

PRC is currently Taiwan's #1 trading partner:

https://www.worldstopexports.com/taiwans-top-import-partners...

(I believe even South Korea and Japan export more to PRC than they do to USA)

Not exactly true AMD is still doing a little bit of manufacturing at Global Foundries but that place threw up their hands in the air and quit innovating! So stuck at 10-12nm ...

The same could be said about Apple. All their chips are made by TSMC.

After recent events, that will not happen.

Sanctioning Russia is easy for the West. Sanctioning China is a non-starter.

Disagree. War with China is worse than sanctioning China. Abandoning Taiwan means deatabilizing the region (Japan militarizes, China opposes Japan. NK does whatever they want. South china see conflict leads to vietnam,philipines joining,etc...).

China is very important but the shipping lanes to SE asia and regional stability is more valuable. You can sanction China and get in a sanction war with them until one side gives in. Or a trade war like trump tried.

Their focus however is to win the war before it starts unlike the US which is to win the war after it starts (imo).

If it gets to a full in sanction like russia, the western economy will tak a massive hit, but it isn' beyond recovery and might actually be good to force resilent supply chains. Especially with silicon fab.

War with China is worse than sanctioning China, but likewise, war with Russia is worse than sanctioning Russia. There's a reason why NATO is content to stand by and do nothing.

I can't tell you what will happen if Taiwan is invaded tomorrow, next year, or twenty years from now, but I can tell you that the US will think long and hard about whether or not it will want to get involved. And it might well choose not to.

NATO can only do something if NATO is attacked first. It can't do pre-emptive attacks. It depends a lot on the party in power in the US as well as the sentiment towards China. A lot of working class people might see it as a way to prove why shipping jobs and manufacturing there was a bad idea.

NATO absolutely can attack without being attacked first.

https://en.wikipedia.org/wiki/Operation_Unified_Protector

I had no idea. Thanks

> force resilent supply chains

How many years do you think it would take to build up those resilient supply chains? 5 years?

That's 5 years without most products from AMD, Nvidia, Tesla and every other TSMC customer. Samsung can absorb some of that business, but not much. Intel will shoot to the moon in that scenario.

TSMC is already planning multiple factories in the US, India,etc... So is Intel. Raw materials are what are most concerning. Either way, it would be bad for the economy but war is profitable and war time powers can bend a lot of rules/companies.

The vast majority of TSMC manufacturing will still be in Taiwan. The US fabs are mostly for national defense products that legally need to be completely domestically sourced from what I can tell.

Maybe, but Taiwan has a treaty with the US and other countries meaning it’d escalate out of the gate. Ukraine, sadly, had none.

Taiwan does not have any treaties with the United States, because the United States does not recognize Taiwan as a country, or have normal diplomatic relations with Taiwan, ever since the Taiwan Relations Act of 1979.

The US _did_ have a mutual defense treaty with Taiwan, but it was terminated by the Taiwan Relations Act after the US initiated diplomatic relations with the People's Republic of China on Jan 1st, 1979.

It seems like TSMC building a US based foundry may become a mitigating factor.

The $12B Fab which TSMC builds in Phoenix, will be outdated when it will open in 2024 and it is too small for AMD or Apple. It is likely it is mainly build to secure chip supply for the US military in case China invades Taiwan and the US does not have access to the TSMC Fabs in Taiwan any more. Apple and AMD will probably not be able to sell products for 1 year till they migrated to Intel or Samsung production in case TSMC fabs in Taiwan are not available for them any more.

The TSMC fab in Phoenix is build for 5nm and will open in 2024. The TSMC 3nm process should go into mass production in 2023, it is expected that the 2023 iPhone will use a 3nm SoC. The fab will only produce 20k Wafers per month, the TSMC gigafabs in Taiwan produce 100k Wafer per month each.

Details about TSMC Phoenix fab: https://www.cnbc.com/2021/10/16/tsmc-taiwanese-chipmaker-ram...

> Apple and AMD will probably not be able to sell products for 1 year till they migrated to Intel or Samsung production in case TSMC fabs in Taiwan are not available for them any more.

Thanks for your assessment on this. Would you please share how you arrived at one year of a product sales gap?

Do you think it is possible for the US to bring 3nm process to the US while that is still relevant?

of course not. why would Taiwan give up its leverage like that, they dragged their feet on the AZ plant too.

That's 20k 5nm dies that you don't have to make in Taiwan and can instead make +20k 3nm dies instead.

I’m skeptical of that. Yes, TSMC will have a plant or two left but a) AMD isn’t going to be first on line for whatever of the diminished capacity is left and b) I have to imagine it’ll be at least disruptive to operations to have the rest of the company disappear.

That plant is two years away at least.

What are the implications of this plant if it is spun up successfully on a two year timeline?

What planned or potential pipeline of other new non-Intel chip fabrication plants on US soil do you foresee?

Looks like someone else already answered this better than I could have.