[Winblows11]

> U.S. government has proposed three potential cooperation options to TSMC

> 2. TSMC joining other firms as investors in Intel Foundry Services (IFS), a division being spun off from Intel, with TSMC transferring its technology as part of its shareholder role.

> On the other hand, if TSMC rejects the proposals, the U.S. government could impose a 100% tariff on chips made in Taiwan

When US can't compete, they have to blackmail/steal/sanction to rescue their failed corporations. The same stealing accusation they level at China.

[JumpCrisscross]

> When US can't compete, they have to blackmail/steal/sanction to rescue their failed corporations

Obsolete framing. This would be happening even if Intel were competitive. We’re shifting into a nationalist (possibly kleptocratic) economic footing. Previously, we were friendshoring. This administration doesn’t discriminate between friend and foe.

[fransje26]

> We’re shifting into a nationalist (possibly kleptocratic) economic footing.

From that point of view, it is probably in TSMC's best interest to not hand over their IP..

[delusional]

I think it's a framing from somebody outside the US. The current US administration didn't just happen. When you could no longer compete under the terms you yourself set. You decided to elect a nationalist leader that would flip the table.

It's a framing that doesn't let the American public distance themselves from their own elected officials. He is your president.

[selectodude]

In fact we seem to be keeping our enemies closer.

[moogly]

OK if you want to be isolationist and retreat to a haughty vantage point in your ivory tower, but to isolate in ignominy by purposefully pissing off all your friends and acquaintances is so strange to me.

Is it America First or America Alone?

[palmotea]

> Previously, we were friendshoring.

Of all the places to "friendshore," Taiwan is probably the worst due to its location and vulnerability.

[netcan]

> On the other hand, if TSMC rejects the proposals, the U.S. government could impose a 100% tariff on chips made in Taiwan.

Seems like a bluff... at least taken literally. Is the US really going to put a 100% tax on the core component of the computing industry?

If this actually played out it would be pretty bad for the US economy.

I suppose the unstated implication us that the US could just take the IP by force.

[bradchris]

> I supposed the unstated implication is that the US could just take the IP by force

Isn’t that what China’s stated plan is?

[newsclues]

If the US bluff is give us what we want or we pull our security guarantee and China invades and you are forced to blow the fabs and move your engineers.

That hurts the US access to chips, short term. But then who is going to fill the demand and where will the talent migrate, and who else is going to build the capacity ($$$)?

[outside1234]

I mean, we have a total moron as a leader, so I wouldn't rule out totally insane things like a 100% tax.

[alephnerd]

Taiwan added similar ToT clauses when they backed TSMC, UMC, PSMC, and others back in the 1980s-2000s.

Intel is absolutely lobbying for this to hamper TSMC, but Taiwan's industrial policy ain't a saint either. At least this spurs some amount of Capex spending in the US.

[fritzo]

Agreed. I learned much from Joe Studwell's book "How Asia Works" (2013), where he argues that among countries in the Asian region, those whose economies flourished were those with protectionist trade policies and export discipline, leading to the creation and honing of domestic industry.

[SecretDreams]

Yeah. TSMC is the best right now. But they achieved that for a variety of reasons, including a very supportive Taiwanese government. The other major reason was Apple really saved their ass when they moved over from Samsung. The third reason is Intel really did fuck up under the Brian years.

[ericmay]

> When US can't compete, they have to blackmail/steal/sanction to rescue their failed corporations.

Name a country where this doesn't occur. The US is not the only country in the world by a long shot that doesn't take measures to protect their failing corporations or export products.

> The same stealing accusation they level at China.

Well they've leveled the accusation against China and nothing changed. So what should the United States do? Continue to let it happen or do something about it? Unfortunately global fair/free trade requires all participants to participate in good faith. If the second largest economy is going to actively undermine that system it just won't work.

[snailmailstare]

The US spent a long time arguing for globalization and free trade, proposing all the treaties, etc, but the US isn't a real republic so anything its signature is on is worth dirt.

[impossiblefork]

Hardly any countries do this. It's only really the US which has had the soft power to behave in this way.

[richardw]

Ok go ahead and impose the tariffs. That will be the shortest, sharpest lesson in economics and leverage, transferring tech profits to government and forcing allies to realign. TSMC is not TikTok.

[fransje26]

Fingers crossed they do.

It's going to be a costly, painful lesson for everybody involved, but it could be a salvatory action that helps slow-down the frightening nonsense building up in the US.

[coliveira]

The problem for TSMC is that they're in a weak position. They cut themselves from China, so what other options they have other than do what the US wants? A smart person could see this result from a mile ahead, first with Biden's insistence that it set plants in the US. The whole idea was always the forced IP transfer to US companies.

[outside1234]

It is just a matter of time before Trump punches himself in the face

[MangoCoffee]

"Real men have fabs." – Jerry Sanders.

TSMC - "You don't need to manage your own fabs. Let us do it for you and just focus on what you do best."

Intel kept its fabs, which certainly gave it many advantages, until Intel's tick-tock model failed. Now, America is crying about its own failures and wants to punish others for their success.

It makes America look bitter.

[tmaly]

Intel cannot afford to create a new fab on the newest technology.

[palmotea]

> When US can't compete, they have to blackmail/steal/sanction to rescue their failed corporations. The same stealing accusation they level at China.

I'm glad the US is learning some positive lessons here. China has shown that joint ventures and forced technology transfers are the way to go, and the US has shown that an uncritical embrace of the free market/free trade sets you up on a glide path to national vulnerability and eventual irrelevance (while a few dudes get very rich in the process).

[AtlasBarfed]

"Free market" has disappeared from right wing political discourse for decades now. It was used to get both achieve desired deregulation and simultaneously regulatory capture to attain cartel/monopoly status in almost all markets.

The free trade era is definitely ending. I though Zeihan was nuts saying piracy and sea security would degrade back to mercantilist/privateer days, but it does appear that will happen especially with the Ukraine war showing littoral theater dominance of cheap drones.

Also, free trade and free seas was predicated on the US needing oil. With shale oil, alt energy, and the rise of the EV, the strategic significance of oil will plummet over the next decade. Why have a dozen carrier groups? Why have three?

[osnium123]

If proposal 2 goes through, it means that Intel will shut down any development activity in Oregon and rely only on TSMC for next generation technology. It might be warranted given Intel abysmal track record for developing nodes but still unfortunate for the thousands of engineers who will get let go.

[bastardoperator]

Is this the same China that requires the government to do source code reviews on technical products being manufactured in China? Or the one that forces you to share the majority of your company with a Chinese partner? I hear you, but both are bad.

[HDThoreaun]

> The same stealing accusation they level at China.

If you cant beat 'em join 'em. Makes sense to me.

[refulgentis]

Something tells me it's not the entire US that's making this decision

[Spooky23]

This is a republic of sovereign states, not a democracy.

[Moto7451]

It’s worth noting that this is just the current winds of change with the current administration and not how the US has always acted. Every major economy uses tariffs. This particular use of tariffs is the Trump Administration v1 and v2’s preferred magic hammer for whatever nail they want to hit.

[coliveira]

The US will justify any means to achieve its goals. If it doesn't work through democracy, human rights, capitalism, it will invent other more sinister methods to attempt to subjugate other nations.

[lenerdenator]

> When US can't compete, they have to blackmail/steal/sanction to rescue their failed corporations. The same stealing accusation they level at China.

That's all of the countries.

EDIT:

Downvote me all you want, I can pull plenty of examples. Nothing pisses off a voting constituency more than a major regional employer shuttering, so governments do something about it. That, or the government wants to build/maintain a hegemony, so they float companies to outlast competition.

[throwway120385]

No, this is straight up how China built what it has. And stealing technology from established players in Europe and the UK was how the US came to ascendancy in the late 1800's. Before that we were just a backwater.

Go back far enough and everyone will have done this with their nascent industries.

[coliveira]

The US wants to have its cake and eat it too. It wants to be considered a democratic, competition-friendly, rules conforming country but will act as an autocratic anti-competitive bully against other nations when it sees fit. Of course, I never fell for the propaganda, but it is time for people wake up and realize this is a facade.

[adrian_b]

"That's all of the countries", for the countries that have enough leverage to do this.

However in none of those countries but USA will you see in almost any published text or discussion thread a lot of people weeping that the competitors from China are too strong only because their government either subsidizes them or forces foreign companies to transfer IP, or they do not enforce the environmental regulations.

The contrast between these continuous complaints of the US citizens and what the US government really does, by subsidizing all significant private investments with tax breaks and by blackmailing foreign companies to give various advantages to US companies is funny.

[Leary]

This is weak sauce. America should limit chips to other countries and then make Taiwan sell them to the US with the 100% tariffs.

Oh wait, that's what the AI diffusion rules do.