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TSMC diversifies out of Taiwan with new Japan plant

41 Comments
By Natsuko Fukue

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41 Comments
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RE: (Japan is) quake prone.

I think the Taiwanese execs could be aware of that.

Taiwan is quake prone after all.

12 ( +13 / -1 )

This is fantastic news, and surely only the first plant in a long line (the article mentions a second, and possibly third/fourth).

Despite Japan's drop in overall semi-conductor market share, it's still extremely strong in things like chemicals/materials (e.g. photoresists), packaging tech and production equipment. And in terms of the broader ecosystem, companies such as these have world-class tech, and even more exciting research in the pipeline: JSR, Tokyo Electron, Renesas, Advantest, Screen Holdings, Lasertec, Canon, Nikon. So, the two countries' strengths complement each other extremely well.

Collaboration such as this, between two equal and respectful partners with a clear vision, is great to see.

11 ( +12 / -1 )

Japan has always been quake prone, That hasn't stopped the country from becoming a major economic power.

10 ( +12 / -2 )

Samit BasuToday 06:34 am JST

While Japan is more suitable than Arizona in terms of qualified worker supply and lower wages, Japan has a fatal weakness; it's quake prone and a quake can cost a month to restart the fab and throw out all wafers in production.

There is nothing wrong with the qualified worker supply in the US. TSMC was trying to union bust in Arizona and got terrible results accordingly.

9 ( +14 / -5 )

win win.

8 ( +8 / -0 )

The location certainly is a heck of a lot easier and quicker to visit for managers and engineers than Phoenix Arizona which requires a transfer in LA after a long trans-Pacific flight.

Now it's Japan's responsibility to educate enough talented engineers.

7 ( +10 / -3 )

GBR48Today 10:37 am JST

Good news for Kikuyo, but less so for Taiwan. Once the supply of chips has been offshored from Taiwan, the US will have little reason to defend it.

So then we will have to fall back on the reasons we defended it for 50 years before semiconductors.

7 ( +8 / -1 )

American workers are not suited to work with the needed precision, and with US salaries it’s simply cost prohibitive to manufacture anything in the US.

Sorry if I am wrong but I think only one nation has put humans on the moon.

7 ( +7 / -0 )

GBR48Today 10:37 am JST

Once the supply of chips has been offshored from Taiwan, the US will have little reason to defend it.

The most advanced processes and cutting-edge research are staying in Taiwan. Plus, TaiwanIsNotChina's answer.

HopeSpringsEternalToday 10:12 am JST

nobody truly believes in their future.

This statement is clearly nonsense. The 23 million people of Taiwan, and the people of the free world, don't simply give up and run away because Xi likes to murder people and steal things.

6 ( +7 / -1 )

Really good move from TSMC - shifting production to a guaranteed safe and stable democracy. Communist China cannot interfere in production based in Japan - whereas they can unfortunately disrupt operations in Taiwan due to their endless threats of attack.

Win-win for two great, freedom-loving nations - and if this move antagonizes the Chinese - even better!

6 ( +6 / -0 )

the funny part is, chinese commies is listing TSMC as china fortune 500 company. Next commies are going to list moon and stars as their belongings too

6 ( +7 / -1 )

deanzaZZRToday 03:03 pm JST

Taiwan certainly will return to the embrace of the 祖國 China. Whether that impacts the global supply of high end chips is another issue.

Not without Taiwan being destroyed they won't. Hence high end chips will take a nosedive in addition to all of the other economic fallout that Xi will have if he touches that hot coal!!!

6 ( +6 / -0 )

The labor disputes in Arizona were with construction related unions.

5 ( +7 / -2 )

Samit BasuToday 11:56 am JST

Taiwan is indefensible

Please provide evidence for this assertion.

It seems highly dubious that Taiwan is "indefensible," given that: 1) it has been preparing for possible invasion for decades, 2) it has the support of the world's most advanced military powers, 3) it is separated from mainland China by the 180km Taiwan Strait, 4) China has never performed an invasion on this scale, not fought a war in decades, and suffers from endemic corruption in its military.

So everyone is preparing for the day China invades Taiwan, currently estimated to be around 2027.

Please provide evidence for this assertion.

I highly doubt that "everyone" is preparing for this, and even those who think Taiwan will be invaded don't agree on "around 2027," so it's not "currently estimated" to be that at all.

5 ( +5 / -0 )

Samit BasuToday 11:56 am JST

@GBR48

Once the supply of chips has been offshored from Taiwan, the US will have little reason to defend it.

Taiwan is indefensible, Japan refuses to allow the US to launch intervention from Okinawa(If Japan allows, then China can legally launch 1,000 ballistic missiles toward Tokyo because Japan just became a direct enemy combatant), thus the US literally doesn't have the bases to launch a military intervention.

All the assets US have are three carriers, a dozen attack subs, and bombers based on Guam. This isn't enough to stop the Chinese invasion of force of 1 million.

So everyone is preparing for the day China invades Taiwan, currently estimated to be around 2027.

Boy it would be a shame if the US had 4000 anti-ship missiles in the form of modified JASSM-ERs. Those 1 million PLA members going to swim to Taiwan?

5 ( +6 / -1 )

Japan has a labor shortage in many fields. Are there enough people in Kikuyo to run the factory?

I'll let you in on a little secret : there is no labor shortage in Japan. If hourly rates are upped - to around ¥2000 and above - vacancies will suddenly be filled.

I'm sure the Taiwanese will pay around ~US$13/hr (¥2000) for these top-notch Japanese factory workers.

5 ( +6 / -1 )

Prudent move by the Taiwanese, makes perfect sense to move production-lines to friendly freedom-loving countries.

The UN has got to start making the tough call on China to stop the incessant tedious nonsense about "claiming" Taiwan for themselves - it has never been Chinese territory, and never will be. The Taiwanese have made themselves very clear that they are a free and democratic sovereign state, and have no wish to change that.

5 ( +5 / -0 )

@obldi

If China invades Taiwan, plants in other countries ensures that chip production will not be interrupted.

4 ( +6 / -2 )

@HopeSE: 12 am JSTTaiwan has serious "Going Concern" issue,

The above yet another straight out of the authoritarian's firehose of falsehoods playbook, tell a really big one then run away. Maybe the CCP and their pals want the gullible to believe their tales...

4 ( +5 / -1 )

As a consumer, I am happy with this change. However, does diversification of TSMC's assets make a Taiwan any less of a target for invasion?

3 ( +3 / -0 )

obladiToday  07:04 am JST

As a consumer, I am happy with this change. However, does diversification of TSMC's assets make a Taiwan any less of a target for invasion?

The purpose of putting assets outside of Taiwan is to prevent their destruction or takeover if Taiwan is invaded. It is not to prevent or diminish the possibility of such an invasion.

3 ( +4 / -1 )

Be in no doubt, very significate "all Nippon coup" for Japan business, geopolitical crucial hardware manufacturing, an undeniable 21st century semiconductor manufacturing $8.6 billion investment in Japan.

The new plant in Japan is "the most significant TSMC international investment to open in many years", said Chris Miller, author of "Chip War: The Fight for the World's Most Critical Technology."

It is an inspired trusted choice of location. A new first. Something to be proud of.

3 ( +3 / -0 )

Companies in Taiwan moving production to other countries make it less atractive for China to invade it. As the world will stop trade with China and China would not be able to use chip production to blackmail anybody.

3 ( +3 / -0 )

Before hiring anyone in these new plants in Japan and Taiwan,

PLEASE do a background check on new employees. They could be CCP spies.

Also, PLEASE beef up your cyber-security, esp the servers that hold the designs for the chips.

3 ( +3 / -0 )

Abe234Feb. 24 09:53 pm JST

I will also add the USA, France, the UK, and Russia all offered Ukraine the same security guarantees under the Budapest agreement if they agreed to give up their nukes. So security assurances and security guarantees can be interpreted very differently. Furthermore, the Mutual Defence Act between the US and Taiwan elapsed.

Yes, some countries interpret "respecting territorial integrity" as a license to invade.

And the New Taiwan /USA treaty was started around the 1980s and doesn't guarantee any military aid. I think the USA is a bit flakey regarding other people's wars. China could take Taiwan and put a sea/air exclusion zone in place, and these two massive nuclear states will not enter into a hot war. if anything I think this could reduce the reasons for the US to get involved if the CCP decide to take Taiwan.

The US was defending Taiwan for 50 years before semiconductors rose to prominence. There is the risk, though, that MAGA will turtle as always.

3 ( +3 / -0 )

deanzaZZRToday 03:03 pm JST

Taiwan certainly will return to the embrace of the 祖國 China.

Only in CCP propaganda. Not here in the real world.

Logic certainly suggests that the more TSMC expands production overseas lessens the strategic importance of Taiwan to Uncle Sam.

Why, exactly?

If the needed semi-conductor production is in Taiwan, and this is destroyed/stolen by China in an invasion, this would severely disrupt the US and other countries, and they'd almost certainly prioritize fixing their domestic economies over defending Taiwan. But if only part of production were in Taiwan, their economies wouldn't suffer nearly as much, and they'd be in a vastly better position to defeat China.

Whether they would fight China is a separate question (I believe they would), but it's certainly not the case that moving some production out of Taiwan lessens its strategic importance.

2 ( +3 / -1 )

Sorry significant, very exciting.

2 ( +2 / -0 )

Abe234Today 01:33 pm JST

Eventually when so few countries actually recognise Taiwan as a member country the UN, they could say ( I’m not saying they will) that Taiwan is t even a country that’s only recognised by so few.

The Vatican will always recognize Taiwan and there is nothing stopping the PRC from making such claims today.

Then they will use our right to free speech, and democracy to influence public opinion, against doing anything.

Historically it has take some time for the MAGA to surrender, but that time might be getting shorter and shorter.

The UN removed the ROC seat to the PRC. And it’s been down hill all the way. A big mistake by the USA, and the security council.

The US tried to mitigate it but our European friends were eager to dump Taiwan and begin bringing in the Yuan. Taiwan wasn't a democracy at the time, which didn't help.

Nixon also removed all nuclear weapons from Taiwan.( kinda similar to Ukraine).

Ukraine was duped by a deceitful Russia but the removing of nukes was probably to appease the PRC. We're no longer in appeasement mode. Biden at least remains very committed to the defense of Taiwan.

1 ( +1 / -0 )

Japan has a labor shortage in many fields. Are there enough people in Kikuyo to run the factory?

0 ( +3 / -3 )

TaiwanIsNotChinaToday  02:41 am

The US was defending Taiwan for 50 years before semiconductors rose to prominence. There is the risk, though, that MAGA will turtle as always

i agree. However, Kissingers theory that once China was brought into the fold, recognized, and become a rich country. The public in China would demand something else.Freedom, democracy and free speech. Sadly non have come to pass. This recognition by the US, and not towards Taiwan,(as it is locked out of many international organisations) has possibly encouraged The CCP to see things more politically and democraticly externaly by using our democracy and free speech and it china economic power to undermine Taiwans legitimacy. Eventually when so few countries actually recognise Taiwan as a member country the UN, they could say ( I’m not saying they will) that Taiwan is t even a country that’s only recognised by so few. Then they will use our right to free speech, and democracy to influence public opinion, against doing anything. I think Hong Kong is a good example of how we all believed Hong Kong might change china but that’s not reality. This isn’t just a military, logistics problem, its how china uses our freedoms to influence the narrative, long term that is. The UN removed the ROC seat to the PRC. And it’s been down hill all the way. A big mistake by the USA, and the security council. Nixon also removed all nuclear weapons from Taiwan.( kinda similar to Ukraine). And Carter basically de- recognised Taiwan and followed by Reagan forcing Taiwan to give up its own nuclear middle plans. So I see a gradual distancing from Taiwan over the decades.

0 ( +0 / -0 )

Taiwan produces roughly 90% of the world's cutting-edge semiconductors. Many seem confident the U.S. and Japan will protect Taiwan in the event of a crisis, since it is home to many chipmakers that are critical to their economic security, such as Taiwan Semiconductor Manufacturing Co. [https://asia.nikkei.com]

From this perspective, if TSMC moves out of Taiwan, the U.S. has less of an incentive to protect Taiwan in the event of a crisis, implying China would have a greater possibility of invading.

On the other hand,

Control of TSMC’s foundries in Taiwan might thus appear a decisive factor both in Beijing’s readiness to risk attempting unification through force, and for other states deciding whether to take a strong stance against this. [https://thediplomat.com]

From this perspective, if TSMC moves out of Taiwan, China has less of an incentive to invade.

My question (above) was, which effect is greater?

-1 ( +0 / -1 )

Good for Japan..

Good for Taiwan..

Good for China..

-2 ( +0 / -2 )

American workers are not suited to work with the needed precision, and with US salaries it’s simply cost prohibitive to manufacture anything in the US.

I say this as American who has worked in manufacturing in both the US and Japan.

This was a good choice by Taiwan.

-3 ( +2 / -5 )

I think this move may weaken Taiwan's position because there is less of a compelling reason to come to Taiwan's aid. Once China has developed its carrier fleet, and the US is distracted by another war, or a recession, or China's economy takes a turn for the worse, China may take Taiwan and Taiwan will be left it its own devices. I will also add the USA, France, the UK, and Russia all offered Ukraine the same security guarantees under the Budapest agreement if they agreed to give up their nukes. So security assurances and security guarantees can be interpreted very differently. Furthermore, the Mutual Defence Act between the US and Taiwan elapsed. And the New Taiwan /USA treaty was started around the 1980s and doesn't guarantee any military aid. I think the USA is a bit flakey regarding other people's wars. China could take Taiwan and put a sea/air exclusion zone in place, and these two massive nuclear states will not enter into a hot war. if anything I think this could reduce the reasons for the US to get involved if the CCP decide to take Taiwan.

-3 ( +0 / -3 )

Good news for Kikuyo, but less so for Taiwan. Once the supply of chips has been offshored from Taiwan, the US will have little reason to defend it.

-5 ( +2 / -7 )

Taiwan has serious "Going Concern" issue, nobody truly believes in their future. So TSMC and others in industry and citizens will continue to pull out, diversify their risks.

Makes sense as it's the underlying objective of China.

-7 ( +0 / -7 )

Taiwan certainly will return to the embrace of the 祖國 China. Whether that impacts the global supply of high end chips is another issue.

Logic certainly suggests that the more TSMC expands production overseas lessens the strategic importance of Taiwan to Uncle Sam. It is what it is and Taiwanese understand this as this is their business certainly not Japanese or expats living in Japan.

-7 ( +0 / -7 )

No one including China want to see disruptions in supply of chips, in particular the advanced ones. So, from now on there will be less deterrence against China's ambition of "fully integrating Taiwan", and less incentive for US to defend "the island". Is that what increased operations of TSMC outside Taiwan implies? Will Japan give up Taiwan if US gives up? Questions, questions...

-7 ( +0 / -7 )

@GBR48

Once the supply of chips has been offshored from Taiwan, the US will have little reason to defend it.

Taiwan is indefensible, Japan refuses to allow the US to launch intervention from Okinawa(If Japan allows, then China can legally launch 1,000 ballistic missiles toward Tokyo because Japan just became a direct enemy combatant), thus the US literally doesn't have the bases to launch a military intervention.

All the assets US have are three carriers, a dozen attack subs, and bombers based on Guam. This isn't enough to stop the Chinese invasion of force of 1 million.

So everyone is preparing for the day China invades Taiwan, currently estimated to be around 2027.

-8 ( +0 / -8 )

@garymalmgren

I think the Taiwanese execs could be aware of that.

Taiwan is quake prone after all.

1) Taiwan's quakes aren't as severe as Japan's.

2) The second fab TSMC's constructing in Japan is 7 generations beyond the best Japan constructed on its soil and its node size is incredibly tiny, no one knows the effect the moderate to severe quakes that TSMC will encounter on Japan will have on these incredibility tiny nodes. What is known is that once a line stops, significant chunk of wafers in stages must be thrown out and start anew.

-9 ( +0 / -9 )

While Japan is more suitable than Arizona in terms of qualified worker supply and lower wages, Japan has a fatal weakness; it's quake prone and a quake can cost a month to restart the fab and throw out all wafers in production.

-12 ( +4 / -16 )

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