"I don’t want to be a wet blanket here, but, well, I’m going to be a bit of a wet blanket."
From "TSMC in Arizona, Arizona Challenges, Realities and Motivations" ($) posted Wednesday to Stratechery subscribers:
Start with the announced switch to 4-nanometer chips: as I’ve noted previously, TSMC’s 4-nanometer chips, branded N4, are just an evolved version of the company’s 5-nanometer process, which was first introduced in 2020 with the iPhone 12; calling it 4-nanometer is pure marketing...
In short, if that first fab comes online in 2024 (which is no sure thing — more on that in a moment), it will be, in the most generous interpretation, 2 years behind 4-nanometer production in Taiwan, and if we’re being honest, 4 years behind the 5-nanometer generation that said factory will be producing...
What is somewhat ironic about this 2~4 year delay in leading edge nodes is that it roughly mirrors the delay that Washington D.C. has traditionally put on foreign chip manufacturing, particularly in China. It’s a testament to how the U.S. has fallen behind on the leading edge that being granted two to four-year-old technology on U.S. soil calls for all of this pomp and circumstance.
That pomp and circumstance is, though, clearly the biggest driver here: notice how all of these announcements are coming from the White House, not TSMC; TSMC, if they had their druthers, would certainly not be building these fabs at all...
From what I have heard the culture clash between US-sourced employees and Taiwanese ones is massive; TSMC has the advantage of being a very prestigious and well-paying job in Taiwan, which helps compensate for the intense work hours and always being on call. It’s not a culture that most U.S. employees are used to, which in part undergirds the point that the reason the U.S. has fallen behind on chip manufacturing does, in many respects, rest more on the “manufacturing” part than the “chip” part...
And yet, here we are: TSMC is investing more in a location it doesn’t want to, to build chips that will be more expensive than those built in Taiwan, and everyone is celebrating.
My take: I defer to Thomson, who is well-placed to write about this stuff from his home base in Taiwan.
Words are cheap to say this path is flawed. But TSMC is planning to invest 43 BILLION dollars! That isn’t cheap! So reconcile for me this allegation of a flawed path forward if the parties involved plan to invest 43 Billion???? Something doesn’t make sense.
1) TSMC is a Taiwan pillar in every sense. Investing into the US at the US’ insistence (and carrot dangling) intertwines further US support of Taiwan and its existence, extending, not weakening Taiwan’s “silicon shield” status as an important independent country and tech powerhouse. IMO, this is a long play for both Apple and TSMC for their own supply chains as well as US domestic appeasement, same with Samsung and Intel building new fabs in the US.
I’ll note that neither Samsung nor Intel (nor Global Foundries) will be building bleeding edge fab processes in the US either because neither one has that even close to operation now or in the near future in their current fabs, both still working out major bugs and production yield issues.
IMO, TSMC is still retaining its most advanced future processes (with ASML’s help) for Taiwan development and deployment because it has the tightly controlled infrastructure, IP, knowledgeable and skilled engineering & labor force, plus Taiwanese government and nationalistic support to make it work. For the Arizona project, TSMC is REPLICATING a working, up and running N4e process to ensure successful, hopefully on time and on-budget completion, rather than trying to CREATE a bleeding edge (at least initially) still working out the bugs 3nm process in both Taiwan and the US, thus splitting and diluting their considerable talent.
You can’t divide an army and fight on two fronts and expect to win unless you have all the supply lines, logistics, reliable tools (weapons) and most importantly, the workers (soldiers) who are properly trained, ready, and willing to be led in the manner they can be led. Even with that, a second front is always a gamble. TSMC is trying to maximize its opportunities for relative success in AZ.
Today, 3 buildings, and R&D center, maybe a small TFT manufacturing building and an affiliate company building occupy the site. Foxconn renegotiated it’s agreement with Racine County for smaller tax incentives in exchange for less job creation requirements and NO specific requirement on what, if anything, Foxconn would make there.
Details here:
theverge dot com /23030465/foxconn-lcd-factory-wisconsin-alan-yeung-trump-scott-walker-wisconn-valley-dome-decoder-interview
The only question for Apple investors is whether TSMC can retain its lead, while complying with the US and global political exigencies. The answer: YES. Apple retains its lead too.
“ Plus schools like Purdue has started program last summer to help with engineering talent to operate such a plants.”
What this highlights for me is the continued critical importance of “wetware” (i.e., hardware or software systems with a biological component), aka people.
In Sacramento, we have a major population of homeless, as in much of California. That shouts louder than words that the problems we’re having “staffing” these facilities is something far more systemic than having a population who will work hard for what we consider low pay.
Training is another word for education.
What President Biden and Democrats in general strongly believe in is lifting people up. Yes, Ben: It seems like the money the US is spending is misdirected. But nothing could be further from the truth. This is the first step in a long journey of elevation by education.