I totally agree with that TSMC executive said and I believe it's highly related to cost difference.
"Extra" hard working came from peer pressure at work. Also the extra pressure to the suppliers.
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Intel warns Ohio factory could be delayed because Congress is dragging its feet on funding
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"Extra" hard working came from peer pressure at work. Also the extra pressure to the suppliers.
tooLongInEDA
Moderator
It's entirely possible that this really is the opinion of the expat Taiwanese workers. Perhaps there's some actual research on this subject ? Certainly not something I would write off as "nationalistic bigotry" without further investigation. I think we all know that some cultures are more successful than others in some industries. In my experience, the richer Western countries place more emphasis on leisure time than some of the Asian ones. That's not a criticism of either group. We have to choose our trade-offs here. Western Europe is at the high end of the leisure:work tradeoff - and has 2.8% of 300mm wafer starts (in Daniel's stats).
All that said, if there is a difference here I wouldn't expect it to show up in a large cost difference. It's more likely to show in customer service or faster or more reliable delivery.
China's tax holiday for IC industry is 10 years, and they keep extending it every time the previous one runs out. The moment IC development zone in Shanghai seen its first tenants coming to the end of its 10y tax holidays, they just renamed the program as a new one, and offered the tax holiday again. And the corporate taxes are BIG in the mainland China
There are big, and tangible differences in work culture. One which is nobody talks about, and one of biggest elephants is the seniority promotion culture. And under seniority, I mean literally age.
I really suggest banning Taiwanese recruiters asking for the date of birth on the resume, but not to defend elderly from discrimination, but the youngsters. I also suggest banning asking the graduation data, and work experience past 5 years.
Taiwan is extremely countermeritocratic. Singapore is even more so. The only way to promotion is to sit, sit, sit, sit, and sit tightly in your chair until you see competitors leaving the race from natural causes.
A ten year tax holiday for which type of tax?
Profit, + there is no capital appreciation tax by default
An income tax holiday for the entire company for ten years? If correct, for TSMC that would be worth tens of billions of US dollars over a decade, assuming a Taiwan tax rate of 20%. Really? I admit, I’m skeptical.
It is a third policy in a row which resets the 10 year profit tax exemption. Effective, all Chinese semi startups who got any semblance of "special tech zone" participation been nearly completely tax exempt since 2004-2005
That’s China, not Taiwan.
Got it. I specifically was specifically referring to TSMC and Taiwan, so we just got our signals crossed. No problem.
Tax incentives from Taiwan was exaggerated.
If you look at the Effective Tax Rate for the past few years.
For SMIC, the effective tax rate of 2021 and 2020 is around 5.2% (3.5% and 9.3% respectively)
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hist78
Well-known member
One of Pat Gelsinger/Intel taxpayers subsidies PR talking points is like this:
A. Fab construction cost is 50% cheaper in China and 30% cheaper in East Asia.
B. China, Japan, and Korea heavily subsidize fab construction cost and provide many subsidies to semiconductor companies.
C. In order for American semiconductor industry to compete against China, Korea, Japan, and Taiwan, US government must subsidize US semiconductor companies.
From B to C, Pat Gelsinger conveniently lumped Taiwan, China, Korea, and Japan together as countries offer subsidies to the semiconductor industry.
This is misleading. While Taiwan does have a strong foundry industry but Taiwan hasn't had a semiconductor subsidy scheme for years. And Taiwan's semiconductor foundries are years and generations ahead of China, Japan, and Korea (in logic ICs). If we have to identify which country is the real competitor of US semiconductor industry and learn something from their practice, should we look into how Taiwan grows her semiconductor industry without subsidy?
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I'm pretty sure it's not debt.
It's possible for TSMC build a new Fab in 18 months but takes Intel 30 months. For managerial accounting perspective, (not financial report accounting perspective), If Intel consider it as a 36 month project, TSMC Fab can produce 18+36 month vs Intel 36 month. The fix cost divided by 54 month or 36 month.......difference is roughly 33%. Above difference mainly comes from efficiency but not from subsidies which Pat was trying to mislead people.
Harvard Business School’s Professor Willy Shih said it's impossible to ask American workers to build Fab in X'mas holidays while in Asia they will for sure continue building it.
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hist78
Well-known member
Can you please elaborate it a little bit?
If the government doesn't hand out a subsidy, the company would have to borrow. But this is also true in US. It may be less effective in US because of local costs.
hist78
Well-known member
I'm not sure if I catched what you want to explain. A company, such as TSMC or Intel, can finance their capital investment by:
1. Operating profit and/or gains by selling assets
2. Cash flow generated by business and asset depreciation
3. Loans from financial institutions and/or selling corporate bonds or other financial instruments
4. Issuing additional shares
5. Government grants/subsidies/tax credits
TSMC or Intel can apply any combination of above methods to finance their new fabs. Debt is just one of the possible source and doesn't exclude other means and ways.