What the USA wanted was TSMC's high end chip
manufacturing expertise shifting from Taiwan to Arizona. The second
motive was decimating the competition of TSMC, Samsung and other foreign
chip manufacturers, so that the USA will reign supreme. The USA forgot
about China, Huawei and SMIC, thinking Chips Alliance will take care of
that. Arrogance is not a good thing.
The promised subsidy of
US$15 billion dangled in front of TSMC by Joe Biden came with stiff
conditions, including passing over sensitive technical details, customer
information and the sharing of profits with the USA Government, an
unheard of thing. Imagine having to share profits on top of paying taxes
on the residual profits, TSMC might as well give up the factory. But,
fret not, because TSMC reaped what they sow.
TSMC subsequently
decided not to apply for the subsidy, putting paid to the trap set by
the USA. High tech information that the USA was hoping to snarl from
TSMC failed to materialise. By the way, the USA had all the years been
accusing China of stealing tech under deals and agreements signed with
USA companies, so what do we call those deals they had with TSMC? It
takes a thief to catch a thief.
What will be the consequences
facing TSMC is not yet known, but there will be consequences. And it
certainly will not be rosy. TSMC has invested lots of money and effort
in the USA. Added to that is losing market share in China with the rise
of SMIC.
Anonymous
Even if TSMC can now escape the trap set by the USA, it is already looking a jaded bet in the eyes of the Chinese. TSMC is no more the chosen one that the Chinese used to look up to. That adulation is gone for good. And that same fate is going to befall Foxconn for trying to decimate China by running to India, and getting clobbered. There is no turning back and getting stuck and trying to be gung ho by telling the world it is in India to stay. Luxshare Precision Industry and possibly others are getting into the void it left to service Apple in China.
ReplyDeleteNow, TSMC is no longer in the good books of China and having given the USA the cold shoulder by not passing on their high end chip manufacturing expertise, is going to suffer a double whammy.
Life is not going to be the same for TSMC, Samsung or even those USA chip manufacturers. The Wheel of Fortune is turning.
China has started to ban iPhones. More bans would be coming.
ReplyDeleteThis is China's message to Apple and Foxconn that they can start to pack up from manufacturing in China.
When you dance with the devil, you know where you will to go.
ReplyDeletePutting it succinctly, Hell hath no fury like Satan scorned. TSMC can just wait for the retaliation.