Economist says China must seize TSMC if the US tightens sanctions

[midian182]

WTF?! The importance of the Taiwan Semiconductor Manufacturing Company, better known as TSMC, to the global economy cannot be understated. The world's largest chip manufacturer has a 54% share of the global chip market, which makes an economist's call for China to seize TSMC if the US imposes harsh sanctions on the country all the more concerning.

Bloomberg reports that Chen Wenling, chief economist at the government-run China Center for International Economic Exchanges, said, "If the US and the West impose destructive sanctions on China like sanctions against Russia, we must recover Taiwan."

Chen singled out TSMC in the speech at the Chongyang Institute for Financial Studies at Renmin University last month. "Especially in the reconstruction of the industrial chain and supply chain, we must seize TSMC," she added.

TSMC is reportedly set to build six chip fabs in the US, though it has announced just one so far. "They [TSMC] are speeding up the transfer to the US to build six factories there," Chen said. "We must not let all the goals of the transfer be achieved."

Chen does talk about the scenario only taking place if the US hit China with Russia-like sanctions, which were put in place after it invaded Ukraine. Taiwan has long said it is an independent nation, while China insists it is part of its territory and has no qualms about using force to bring it under control.

Many in the industry are aware of the threat to TSMC should China ever invade Taiwan. Intel CEO Pat Gelsinger last year said, "Taiwan is not a stable place."

"Beijing sent 27 warplanes to Taiwan's air defense identification zone this week. Does that make you feel more comfortable or less?" Chipzilla's chief warned.

Intel's Fab 42 in Chandler, Arizona

Intel is currently building more fabs in the US and worldwide as part of its IDM 2.0 strategy that involves its newly formed Intel Foundry Services (IFS) division manufacturing chips for others, thereby lessening reliance on Taiwanese chipmakers. Elsewhere, President Biden has announced plans to put $52 billion into domestic semiconductor research.

Last week brought news that Taiwan was restricting the chips it exports to Russia to those with frequencies under 25 MHz and with performance under 5 GFLOPS.

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https://www.techspot.com/news/94856-economist-china-must-seize-tsmc-if-us-tightens.html

 

[yRaz]

I think it might be time to give fallout another playthrough.

 

[Eldritch]

After Ukraine war and seeing how Russia fared in it and how the Russian image got dented across globe, chances of China attacking Taiwan are at best, slim.

 

[scavengerspc]

𝐂𝐨𝐮𝐥𝐝 𝐨𝐯𝐞𝐫𝐫𝐞𝐥𝐢𝐚𝐧𝐜𝐞 𝐨𝐧 𝐓𝐚𝐢𝐰𝐚𝐧'𝐬 𝐜𝐡𝐢𝐩 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐩𝐫𝐨𝐯𝐞 𝐜𝐨𝐬𝐭𝐥𝐲?

To be honest, I think that ship sailed a while back.

 

[bviktor]

That's just some daily China for ya. Say no to Chinese products, period. Any penny spend on those empowers this regime.

 

[ScottSoapbox]

After Ukraine war and seeing how Russia fared in it and how the Russian image got dented across globe, chances of China attacking Taiwan are at best, slim.

Russia's image is only dented in the west.

The rest of the world is taking note of USA's bullying tactics AND the fact that Russia hasn't really been hurt by them. (Don't believe me? Google how the ruble is doing)

So powers like China are taking note of the possibility of standing up to the bully and walking away the winner.

 

[ScottSoapbox]

Maybe US politicians should stop trying to pick a fight with everyone in the world and focus on our own economic issues.

Although since US politicians caused our economic issues with their drunken spending, devaluing money with their Fed policies, and shutting things down for two years, I can understand their desire to focus the public on an exterior enemy.

 

[Irata]

Maybe US politicians should stop trying to pick a fight with everyone in the world and focus on our own economic issues.

Although since US politicians caused our economic issues with their drunken spending, devaluing money with their Fed policies, and shutting things down for two years, I can understand their desire to focus the public on an exterior enemy.

Very big doubt on the ‚our‘ part.

 

[yRaz]

Russia's image is only dented in the west.

The rest of the world is taking note of USA's bullying tactics AND the fact that Russia hasn't really been hurt by them. (Don't believe me? Google how the ruble is doing)

So powers like China are taking note of the possibility of standing up to the bully and walking away the winner.

the ruble is doing fine on paper, but their GDP is down nearly 75% since the start of the war.

But need I remind you, you are likely part of the west so whether you like it or not, if there is a war with China you are going to be a target of China. And, frankly, who's the bigger bully? China with suicide nets around their factories or the US?

Who's world do you really want to live in? Not saying the US's vision of how the world should be is perfect or even that good, but it's a whole lot better than the dystopia that is China.

 

[hahahanoobs]

The US needs China at least for the time being. I don't expect them to take things too far. TSMC is struggling to find competent engineers to work in their AZ fab, so there has to be at least some concern in Taiwan.

 

[Xex360]

After Ukraine war and seeing how Russia fared in it and how the Russian image got dented across globe, chances of China attacking Taiwan are at best, slim.

Only in the propaganda spread in western media the rest of the world just saw the hypocrisy of the US and their Allies, and their double standard. Most people in the world* are either neutral or with Russia, while being against the US given its terrorist activities.

 

[defaultluser]

After Ukraine war and seeing how Russia fared in it and how the Russian image got dented across globe, chances of China attacking Taiwan are at best, slim.

And even if they do, I'm surer a scorched-earth policy would mean several years rebuilding these things...assuming they can even get equipment from ASML

These fabs are quite fragile, and incredibly complex (not nearly as easy to resume production as a Steel mill)

 

[Dimitriid]

This is the kind of stuff that will actually spark an actual war with China: It's not for nothing that Biden momentarily fessed up and admitted he is willing to actually go to war over Taiwan and it's not because of the goodness of his heart (He has none) but just the knowledge of the strategic importance of giants like TSMC and what it would mean to lose that to China: if there's one thing imperialist forces like the US will not tolerate is other imperialist forces like China.

 

[scavengerspc]

Only in the propaganda spread in western media the rest of the world just saw the hypocrisy of the US and their Allies, and their double standard. Most people in the world* are either neutral or with Russia, while being against the US given its terrorist activities.

You get the award for biggest line of crap of the day. What world do you live in where most people are with or neutral on that toilet bowl known as Russia?

 

[gamerk2]

That's just some daily China for ya. Say no to Chinese products, period. Any penny spend on those empowers this regime.

So you favor more inflation then?

Consumers have been quite clear: Between empowering dictatorships and saving money versus paying more for domestically produced goods, they'll pick the former EVERY time.

 

[gamerk2]

Only in the propaganda spread in western media the rest of the world just saw the hypocrisy of the US and their Allies, and their double standard. Most people in the world* are either neutral or with Russia, while being against the US given its terrorist activities.

Tell me, what was the UN vote denouncing Russia's invasion of Ukraine again?

Oh right, facts. Now, the US is no shining angel either, but to say "most people in the world" are with Russia is a lie, plain and simple.

 

[gamerk2]

Maybe US politicians should stop trying to pick a fight with everyone in the world and focus on our own economic issues.

Although since US politicians caused our economic issues with their drunken spending, devaluing money with their Fed policies, and shutting things down for two years, I can understand their desire to focus the public on an exterior enemy.

The problem is twofold:

1: Economies are interconnected now; Russia invading Ukraine has interrupted the global Grain market, which has sent prices skyrocketing is just one obvious example. So the US can't just ignore the rest of the world, since the majority of the factors that affect the US's economy are in fact external to the US.

2: As for spending practices, spending money to get people back to work to address the immediate supply shortages (caused by so many not working due to the pandemic) was 100% the correct decision, even if it did lead to inflation in the short term.

The problem was the Fed should have also raised interest rates to contain inflation as this targeted aid was being delivered; this was done pre-emptively during the Clinton administration with great effect, but the current Fed waited about six months too long to raise rates even as it was clear job hiring was robust. [Although to be fair, the monthly reports through 2021 were quite uneven. The numbers released in March '22 showed that monthly hiring was much more stable then the early numbers indicated.]

Regardless, with the Fed being too slow to address inflation (and frankly, too tentative in their rate hikes; I would have gone right to 1%), combined with the sanctions on Russia knocking 10% of the worlds oil supply of the market, yeah, there's going to be problems. But what I don't hear is a lot of good alternatives; if you don't get people back to work addressing the supply shortages you still get inflation (albeit less) while having an Obama-like economic recovery that takes 4-6 years to get everyone back to work (as opposed to the 9 months it took Biden).

So yes, current situation not ideal. But with everyone more or less back to work, the supply glut more or less addressed (outside of factors related to the Ukraine war at least), and rates starting to go up, I'd expect inflation to fall through '22-'23 and be back to normal in time for the '24 election. The current recovery, frankly, looks similar to Raegan's 82-83 recovery, where he went from "most hated man in America" to "Electoral landslide" in just over 18 months.

 

[m3tavision]

Only in the propaganda spread in western media the rest of the world just saw the hypocrisy of the US and their Allies, and their double standard. Most people in the world* are either neutral or with Russia, while being against the US given its terrorist activities.

That is not what 200+ Countries said at United Nations..

Who..? Nobody supports Russia bombing its neighbor because than can. The whole entire world stands against Russia. Your propaganda only works in Russia.

 

[AlaskaGuy]

Tell me, what was the UN vote denouncing Russia's invasion of Ukraine again?

Oh right, facts. Now, the US is no shining angel either, but to say "most people in the world" are with Russia is a lie, plain and simple.

Is the UN still a thing these days?

 

[wiyosaya]

The rest of the world is taking note of USA's bullying tactics

Even with the BS Colin Powell unwittingly spouted about WMD in Iraq, I think the rest of the world agrees that the world, and Iraq, is better off without Saddam Hussein in it.

I'd put Russia's "war" on the Ukraine much lower on the "right thing to do scale" than the US' Invasion of Iraq.

I am far from saying the US is perfect, however, Russia's actions are the equivalent of war crimes especially when they are targeting civilians including women and children.

IMO, Russia is the bigger bully and they are giving themselves a black eye.

 

[wiyosaya]

Hopefully, tech companies like Google, Apple, AMD, and others are listening to this. I know Intel is, however, the fact of the matter is Apple can afford to build a few fabs at least for its own stuff if not for others. Google could also afford to build a few fabs.

Unfortunately, the "tech Gods" will probably ignore what is going on until it all blows over, or blows up in their faces. The latter, IMO, they, except perhaps Intel, are unprepared for it

NY State is semiconductor manufacturing friendly - however, I think most of this is university or researched based. The industry needs to wake up from their "we can get it cheaper out of the country" slumber. https://www.ny.gov/americas-microch...-developments-semiconductor-industry-new-york

 

[AlaskaGuy]

Hopefully, tech companies like Google, Apple, AMD, and others are listening to this. I know Intel is, however, the fact of the matter is Apple can afford to build a few fabs at least for its own stuff if not for others. Google could also afford to build a few fabs.

Unfortunately, the "tech Gods" will probably ignore what is going on until it all blows over, or blows up in their faces. The latter, IMO, they, except perhaps Intel, are unprepared for it

NY State is semiconductor manufacturing friendly - however, I think most of this is university or researched based. The industry needs to wake up from their "we can get it cheaper out of the country" slumber. https://www.ny.gov/americas-microch...-developments-semiconductor-industry-new-york

NY state has a 7.25% business tax rate so goodluck with that.

 

[Axeia]

the ruble is doing fine on paper, but their GDP is down nearly 75% since the start of the war.

But need I remind you, you are likely part of the west so whether you like it or not, if there is a war with China you are going to be a target of China. And, frankly, who's the bigger bully? China with suicide nets around their factories or the US?

Who's world do you really want to live in? Not saying the US's vision of how the world should be is perfect or even that good, but it's a whole lot better than the dystopia that is China.

Suicide rates at foxconn are 4.7 per 100.000 people.
Source: https://www.statschat.org.nz/2011/08/18/foxconn-suicides/
That is well below the global average of pretty much any modern country. Any skyscraper will have the same nets, any bridge that ends up being a hotspot for it as well. But hey if you want to compare to the US. That's apparently 13.48 per 100.000
Source: https://afsp.org/suicide-statistics/

Even if the numbers were different. How are you going to avoid not having your purchases go to China. If it's not made there there will be at least some components or raw resources being bought there. Not only is China basically the factory of the world they're also the key player in a lot of raw resources. If anything the pandemic has showed us that the world is extremely reliant on international trade and manufacturing.
On the bright side, some industries and companies like Intel here as a result are trying to reduce this dependency.

Not sure how much it helps Germany sinking that many billions into a US company. Then again the EU semi conductor manufacturing industry is pretty much dead and has been for a long time.

 

[wiyosaya]

NY state has a 7.25% business tax rate so goodluck with that.

And good luck with the race to the bottom in terms of cost. That race is why we are where with are with companies finding the absolute cheapest place to manufacture things. The model is not, and has not been working for some time - unless you count that people like to pretend it works when they can buy things for less.

 

[waclark]

Only in the propaganda spread in western media the rest of the world just saw the hypocrisy of the US and their Allies, and their double standard. Most people in the world* are either neutral or with Russia, while being against the US given its terrorist activities.

"Most of the people in the world"? Hardly. I think most of the world is against Russia invading the Ukraine. They may not be "with" the US, but they are most certainly not for Russia and what it's doing.