How Taiwan became the indispensable economy

[Daniel Nenni]

Fearing a potential conflict in Asia, Western companies are looking to move production out of Taiwan. But severing ties with the self-ruled island will come at a high price for manufacturers.

In the days after then-U.S. House Speaker Nancy Pelosi visited Taiwan last year, Taiwanese suppliers to U.S. tech giants including Apple, Google, Meta and Amazon were inundated with requests from their customers. Could they produce from outside Taiwan to secure supplies, in case Beijing went to war over the island?
Pelosi’s visit had sparked more than a diplomatic spat between Washington and Beijing, which responded to her trip with unprecedented military exercises around Taiwan. It triggered a tech industry crisis, which might now threaten the global electronics supply chain.

“If anyone hits Taiwan, or there is a serious disruption … the tech and electronics industry worldwide is basically screwed,” said Hsieh Yong-fen, founder of chip and material testing provider MA-tek.

Apple declined to comment. Meta, Google and Amazon did not respond to requests for comment.

Taiwan is best known for making cutting-edge semiconductors. But its companies also turn out other crucial components from printed circuit boards to advanced camera lenses, and they run huge device assembly operations in China.

This has created a triangle of critical interdependence between Taiwan, China and the U.S. that has deepened even as tensions between Beijing, Washington and Taipei have risen.....

How Taiwan became the indispensable economy

Fearing a potential conflict in Asia, Western companies are looking to move production out of Taiwan. But severing ties with the self-ruled island will come at a high price for manufacturers.

asia.nikkei.com

 

[benb]

As interesting as Taiwan is, approaching its third decade of democracy, Japan's stock market, the TOPIX, is on multi-decade highs now. Japan, it seems, is starting to be indispensable as well.

Dan, question: If you took TSMC out of Taiwan, but it had the same business culture, the development discipline and reliability, and customer service, would it work? Is there something special about TSMC in Taiwan that would disappear in larger countries, like the US or China? And if so, does this become an argument for a hands-off approach from China and US?

 

[Daniel Nenni]

Dan, question: If you took TSMC out of Taiwan, but it had the same business culture, the development discipline and reliability, and customer service, would it work? Is there something special about TSMC in Taiwan that would disappear in larger countries, like the US or China? And if so, does this become an argument for a hands-off approach from China and US?

Yes it would work due to TSMC’s market dominance. But, in Taiwan working for TSMC is a big deal. You are a rock star of sorts, not so much in the US. We prefer money over prestige. Back in the day, working for IBM or Intel was a big deal. My first job offers out off college from IBM and Intel were lower so I went with a smaller company with a bigger comp plan (stock).

 

[ta152h]

Yes it would work due to TSMC’s market dominance. But, in Taiwan working for TSMC is a big deal. You are a rock star of sorts, not so much in the US. We prefer money over prestige. Back in the day, working for IBM or Intel was a big deal. My first job offers out off college from IBM and Intel were lower so I went with a smaller company with a bigger comp plan (stock).

I got a job at IBM in the 1980s, and there was a ton of prestige in it. You're obviously old enough to know that it's looked at very differently today than it was back then. But, I can't equate it to Taiwan, since I don't know how much it's respected, but IBM sure was "back in the day". If someone found out you were working there, it was pretty much instant respect. Intel was never viewed at that level though. Nor was IBM after the 1990 debacle with the cookie monster.

But, for a while, there was IBM, and every other company in the country. And I completely understand your thinking, I left when the company changed, and my next job paid $25,000 a year more (which was a lot back then). On the other hand, if they had not changed, I would have stayed and been more than happy with the lower salary. But, all good things ...

 

[Daniel Nenni]

I got a job at IBM in the 1980s, and there was a ton of prestige in it. You're obviously old enough to know that it's looked at very differently today than it was back then. But, I can't equate it to Taiwan, since I don't know how much it's respected, but IBM sure was "back in the day". If someone found out you were working there, it was pretty much instant respect. Intel was never viewed at that level though. Nor was IBM after the 1990 debacle with the cookie monster.

But, for a while, there was IBM, and every other company in the country. And I completely understand your thinking, I left when the company changed, and my next job paid $25,000 a year more (which was a lot back then). On the other hand, if they had not changed, I would have stayed and been more than happy with the lower salary. But, all good things ...

Here in Silicon Valley Intel was a big deal and yes this was early 1980s. Having Intel on your resume could take you places. I can't think of a company today that carries similar respect. Google was a big deal in the 1990s but not so much now except that they pay very well. Different times...

Back to TSMC. Given the choice between TSMC, IFS, Samsung Foundry, and GF, which would you choose to work for? TSMC, absolutely. Especially if you are just starting out in the industry. TSMC is great for the resume.

 

[soAsian]

As interesting as Taiwan is, approaching its third decade of democracy, Japan's stock market, the TOPIX, is on multi-decade highs now. Japan, it seems, is starting to be indispensable as well.

Dan, question: If you took TSMC out of Taiwan, but it had the same business culture, the development discipline and reliability, and customer service, would it work? Is there something special about TSMC in Taiwan that would disappear in larger countries, like the US or China? And if so, does this become an argument for a hands-off approach from China and US?

Taiwan is important 'cause its location. its smack in the middle of the first island chain. China take Taiwan then it open up the pacific ocean for Chinese. for one thing, Japan and South Korea will face some problem 'cause China can block any ship going to/out Japan and South Korea.

given the bad history between China, Japan and CCP always use "national pride" to gig up its citizen for hates. if Japan and China goes to war over shipping or navigation. US will get involved 'cause the treaty it have with Japan. the cost of losing Taiwan is far greater then keep it in the first island chain. whether Taiwan have TSMC or whatever. its location is far too important

of course it won't matter. if USA don't care

 

[benb]

TSMC and Samsung are both very elite jobs in their respective countries. Samsung brand has more cache in the USA.

I agree with Dan's list, if you are going into Foundry fab engineering, TSMC in the US is a great option. Second would be Intel.

Speaking of Apple: I would say Apple is the new IBM, in analogy to how IBM stood apart for decades. What do you all think?

 

[nghanayem]

I think from a prestige point of view, I think the peak prestige in the US today would be Boeing, or maybe NASA just because of how much pride we derive from their former accomplishments and how people will assume your a genius if you work there. In the case of Boeing you also have the company that competes with a pan European consortium on making some of the world’s most advanced machines, as well as being a key supplier for the USAF and USN (which in their own rights seem to be more prestigious here than most countries’ armed forces are in their home nations).

Apple I think is number 3. I also think Google and Microsoft would probably be close to that prestige level, but not quite as high as those three prior companies/organizations.

 

[Daniel Nenni]

TSMC and Samsung are both very elite jobs in their respective countries. Samsung brand has more cache in the USA.
I agree with Dan's list, if you are going into Foundry fab engineering, TSMC in the US is a great option. Second would be Intel.
Speaking of Apple: I would say Apple is the new IBM, in analogy to how IBM stood apart for decades. What do you all think?

I think Apple has the best brand but I honestly can't think of a company in the US that has the prestige of IBM et al of the 1980s. I remember a saying in the IT world "you can't get fired for buying IBM". IBM probably started it but it had legs.

 

[TICin852]

I think from a prestige point of view, I think the peak prestige in the US today would be Boeing, or maybe NASA just because of how much pride we derive from their former accomplishments and how people will assume your a genius if you work there.

Apple I think is number 3. I also think Google and Microsoft would probably be close to that prestige level, but not quite as high as those three prior companies/organizations.

I would say from a prestige point of view today, maybe SpaceX?

 

[Daniel Nenni]

I would say from a prestige point of view today, maybe SpaceX?

SpaceX definitely does have the cool factor. Nvidia would be it for the semiconductor world. AI will consume us and Nvidia will be right there.

 

[VCT]

I got a job at IBM in the 1980s, and there was a ton of prestige in it. You're obviously old enough to know that it's looked at very differently today than it was back then. But, I can't equate it to Taiwan, since I don't know how much it's respected, but IBM sure was "back in the day". If someone found out you were working there, it was pretty much instant respect. Intel was never viewed at that level though. Nor was IBM after the 1990 debacle with the cookie monster.

But, for a while, there was IBM, and every other company in the country. And I completely understand your thinking, I left when the company changed, and my next job paid $25,000 a year more (which was a lot back then). On the other hand, if they had not changed, I would have stayed and been more than happy with the lower salary. But, all good things ...

True. TSMC is not as prestigious as IBM.

However, semiconductor impact in 2023 is much larger than IBM mainframe impact in 1980s.

Similar thing happened to TSMC.
"Nobody ever got fired for buying IBM."
If QCOM take too much risk betting on Samsung GAA or Intel 18A and things turn out not as expected, he might get fired.

 

[Arthur Hanson]

It was sad to see IBM fall, but they did it to themselves. By the late eighties they were cutting corners and grossly over charging for many services. I bid on a job that I considered really, really fat and the customer at the end of the job showed me the IBM quote for six hundred percent more. I also saw corners cut on safety by IBM firsthand. This was just the tip of the iceberg. A company I have no respect for.