Array
(
    [content] => 
    [params] => Array
        (
            [0] => /forum/index.php?threads/tsm-and-china-tsm-the-ultimate-win-win-construct.15313/
        )

    [addOns] => Array
        (
            [DL6/MLTP] => 13
            [Hampel/TimeZoneDebug] => 1000070
            [SV/ChangePostDate] => 2010200
            [SemiWiki/Newsletter] => 1000010
            [SemiWiki/WPMenu] => 1000010
            [SemiWiki/XPressExtend] => 1000010
            [ThemeHouse/XLink] => 1000970
            [ThemeHouse/XPress] => 1010570
            [XF] => 2020970
            [XFI] => 1050270
        )

    [wordpress] => /var/www/html
)

TSM and China, TSM the Ultimate Win/Win construct

Arthur Hanson

Well-known member
It's not just the money, but the culture Morris Chang created that allows TSM to literally crush the competition. It not only has a very high growth rate but an equally high profit margin due to the inherent efficiencies and unmatched scale over which to spread its cost from research to capital expenditures. It also only builds capacity to orders on which deposits are made. TSM does not rest on its laurels, but constantly pushes the limits on advancing its technologies and the entire ecosystem of technologies and suppliers. It also hot rods its processes and equipment in a proprietary manner that others are not allowed to copy under strict agreements with its suppliers. 'Also, when you multiply TSM's profit margin by the sales growth rate you come up with a number that no other company in the foundry business can even come close to matching. TSM has literally achieved a scale and pace of innovation that is constantly increasing its lead which is attracting orders, capital, leading edge technologies at an unmatched rate. This has created a virtuous cycle of attracting the best talent, equipment, technologies, and customers. The only threat to this is China and if they try to take over Taiwan to get TSM, they have to realize this culture could never function under a communist system and would be totally destroyed by it. It is far better for China to be a customer than try and take over Taiwan and the sooner they realize this, the better for everyone. The sooner all sides realize everyone will win by collaborating and cooperating in the ecosystem Morris Chang created, the better place the world can be for everyone. Morris Chang has created one of the best win/win constructs on the planet and only the US Constitution and Bill of Rights are ahead of it. (I carry a pocket copy of this with me for I consider them the greatest documents ever penned and put into action by man). Comments and additions solicited and welcome for collaboration and cooperation are the greatest tools for mankind as the US and TSM, among others, have proven.

I posted a shorter version of this in Barron's in response to an article on TSM's massive capital spend compared to the competition this morning and hope it gets read by the right people in the financial community.
 
Last edited:

user nl

Member
................ Morris Chang has created one of the best win/win constructs on the planet and only the US Constitution and Bill of Rights are ahead of it. (I carry a pocket copy of this with me for I consider them the greatest documents ever penned and put into action by man). Comments and additions solicited and welcome for collaboration and cooperation are the greatest tools for mankind as the US and TSM, among others, have proven.
From https://sifk.uchicago.edu/news/the-romans-just-wars-and-exceptionalism/

Both the Americans and the Romans believed in the excellence of their form of government. Both also seem to have had some degree of belief in the religious sanctity of their nation and their foreign policies, and thought it their duty to export these benefits to other countries. Like the Romans, we are tied together by a largely shared politico-religious heritage upon which we have grounded the nature of our ethos as a nation and the nature of our moral uprighteousness. Unlike them, we don’t use sacred chickens. But we should realize that while national myths such as exceptionalism are valuable in many ways, not least in providing people with a sense of identity and pride in their country, such myths, in a globalized world, can stop us from hearing other people’s myths, or listening to their identities.


We know what happened to the Roman empire.............
 

Barnsley

Member
It's not just the money, but the culture Morris Chang created that allows TSM to literally crush the competition. It not only has a very high growth rate but an equally high profit margin due to the inherent efficiencies and unmatched scale over which to spread its cost from research to capital expenditures. It also only builds capacity to orders on which deposits are made. TSM does not rest on its laurels, but constantly pushes the limits on advancing its technologies and the entire ecosystem of technologies and suppliers. It also hot rods its processes and equipment in a proprietary manner that others are not allowed to copy under strict agreements with its suppliers. 'Also, when you multiply TSM's profit margin by the sales growth rate you come up with a number that no other company in the foundry business can even come close to matching. TSM has literally achieved a scale and pace of innovation that is constantly increasing its lead which is attracting orders, capital, leading edge technologies at an unmatched rate. This has created a virtuous cycle of attracting the best talent, equipment, technologies, and customers. The only threat to this is China and if they try to take over Taiwan to get TSM, they have to realize this culture could never function under a communist system and would be totally destroyed by it. It is far better for China to be a customer than try and take over Taiwan and the sooner they realize this, the better for everyone. The sooner all sides realize everyone will win by collaborating and cooperating in the ecosystem Morris Chang created, the better place the world can be for everyone. Morris Chang has created one of the best win/win constructs on the planet and only the US Constitution and Bill of Rights are ahead of it. (I carry a pocket copy of this with me for I consider them the greatest documents ever penned and put into action by man). Comments and additions solicited and welcome for collaboration and cooperation are the greatest tools for mankind as the US and TSM, among others, have proven.

I posted a shorter version of this in Barron's in response to an article on TSM's massive capital spend compared to the competition this morning and hope it gets read by the right people in the financial community.
Any particular reason you call TSMC , TSM all the time?
Or is it common practice to use stock signs when discussing companies?
 

Arthur Hanson

Well-known member
Any particular reason you call TSMC , TSM all the time?
Or is it common practice to use stock signs when discussing companies?
As a serious investor, I usually use stock symbols if they are similar to the name as do many others in the investing culture. But everyone has their own way of doing things and some stock symbols don't even resemble the name.
 

Portland

Active member
Tsmc is everything for semiconductors but breaking the island chain and controlling transit in the Pacific is more important for china.
 

mozartct

Member
I am no fan of exceptionalism. I bet a bunch of people carried the B of R with them as they decided that the US election was "rigged" and they stormed the Capitol.

We should learn to deal with the world as it is. We can't stop a nation of 1.5b which is a nuclear power to boot. How many countries has the US bombed since WW2? China? We are not a benign power, far from it.

That said, we are utterly dependent on each other, the sooner we realize it, the better. Yes, China is authoritarian and dictatorial in many ways (and I would not want to live there right now). Suicidal they are not.

As to our greatness (real or imagined), The B of R has not prevented us from reaching a total stasis. Eliminate the penny: no. Put the USPS on forward looking financial footing: no. Redirect "some" money from bloated DoD to "name your cause": no. Build a tunnel under the Hudson: no. Get rid of carried interest loophole: no. Tax carbon: no. You can talk about being great all day long, reality tells us otherwise. All China has to do is wait us out.

In the interim, our real governing class (i.e. money) is focused on lowering its (already vanishingly small) tax bill and cares not one hoot about TSMC, China, migrants, Afghanistan, Ukraine, climate change, "your favorite thing here", etc. intel did Wall Street's bidding (do not invest - give it to me instead) and look where that took them.

Two final points: TSMC is not the benevolent king you make it to me. Not long ago, a supplier published a letter in Taipei Times asking why tsmc was so successful when it was delinquent on its invoices (I am talking here millions). Situation was so bad that the government had to get involved and tell them to pay their bills, it was wrecking the entire island. Second point is that we should not assume that other companies won't be able to innovate and we should not assume that $40b+ can be spent profitably.
 

Lorien

New member
no offense to the op but you make a lot of threads that are either political or financial in nature. it's getting a bit exhausting.

but as far as this thread is concerned, mozartct summed things up pretty succinctly. democracy is ultimately just another experiment in governing and as much as the West has criticized China, it has so far defied all expectations for it to fail like USSR. meanwhile the state of the US makes me question if a democratic society can be successful at all. the Social Democracies in northern Europe are perhaps the most "successful" in terms of providing good quality of life and equality, and that comes with heavy taxation and sacrifice of a lot of freedom on the individual level that the average American may find hard to swallow. the uncompromising sense of self-centered individualism is how the US ended up in this polarized, tribalistic state and will likely be how we disintegrate unless we can truly rethink what it means to be a cohesive society.

just my two cents.
 

user nl

Member
My two cents: invest in your kids. We in NL seem to do, and some days those kids are grownups and may remember something from those boomers who raised them:

https://www.cnbc.com/2021/11/26/her...earned-from-parenting-in-the-netherlands.html

A UNICEF report published last year found that children in the Netherlands had the highest sense of wellbeing. The United Nations children’s agency analyzed data across 41 high-income countries, ranking the countries according to how they scored on children’s mental wellbeing, physical health, and the development of both academic and social skills.
The Netherlands was found to rank highest in the league table of the three wellbeing outcomes, followed respectively by Denmark and Norway.
Chile, Bulgaria and the U.S. were at the bottom of the table.



And remember we in NL were once an empire as well in our Golden Age, ended by our annus horribilis in 1672. Nevertheless, it seems the Dutch may have inspired some in US like your Declaration of Independence
https://www.arcadiapublishing.com/N...prising-Ways-the-Dutch-Influenced-Modern-Amer
 

hist78

Well-known member
I am no fan of exceptionalism. I bet a bunch of people carried the B of R with them as they decided that the US election was "rigged" and they stormed the Capitol.

We should learn to deal with the world as it is. We can't stop a nation of 1.5b which is a nuclear power to boot. How many countries has the US bombed since WW2? China? We are not a benign power, far from it.

That said, we are utterly dependent on each other, the sooner we realize it, the better. Yes, China is authoritarian and dictatorial in many ways (and I would not want to live there right now). Suicidal they are not.

As to our greatness (real or imagined), The B of R has not prevented us from reaching a total stasis. Eliminate the penny: no. Put the USPS on forward looking financial footing: no. Redirect "some" money from bloated DoD to "name your cause": no. Build a tunnel under the Hudson: no. Get rid of carried interest loophole: no. Tax carbon: no. You can talk about being great all day long, reality tells us otherwise. All China has to do is wait us out.

In the interim, our real governing class (i.e. money) is focused on lowering its (already vanishingly small) tax bill and cares not one hoot about TSMC, China, migrants, Afghanistan, Ukraine, climate change, "your favorite thing here", etc. intel did Wall Street's bidding (do not invest - give it to me instead) and look where that took them.

Two final points: TSMC is not the benevolent king you make it to me. Not long ago, a supplier published a letter in Taipei Times asking why tsmc was so successful when it was delinquent on its invoices (I am talking here millions). Situation was so bad that the government had to get involved and tell them to pay their bills, it was wrecking the entire island. Second point is that we should not assume that other companies won't be able to innovate and we should not assume that $40b+ can be spent profitably.

"TSMC is not the benevolent king you make it to me. Not long ago, a supplier published a letter in Taipei Times asking why tsmc was so successful when it was delinquent on its invoices (I am talking here millions). "

Can you please provide a news link to this? Thanks.
 

mozartct

Member
@hist78 No. Was in the Chinese version as I recall. Perhaps 7 years ago, maybe less. I lived in Taiwan at the time and it was well known (then) that tsmc was in no hurry to pay their bills (to local suppliers - I mean ASML was not affected!). We liked to say Korea had one king and a few princes while Taiwan has one king and everyone else ate dirt. I am certain that things changed since but they are not and never were a paragon of virtue. tsmc is great company but that's all they are, a company.

They have a strong internal culture (but remember that they make massive use of contractors). It often veers into the ridiculous. I was once at fab14 when i took an emergency call from my wife telling me that my son was in surgery after a life threatening incident. Now i knew that one should not take call in the lobby (in fact, wireless is actively blocked) but still... The lobby clerk let me have it as she handed me my badge and this even after my escorts explained the very unusual situation. Nothing would do. She nearly called security. That was the dao and there was no room for any other way. All was well in the end, my son lived and I just blamed it on a culture that left no room for changing circumstances.
 

hist78

Well-known member
@hist78 No. Was in the Chinese version as I recall. Perhaps 7 years ago, maybe less. I lived in Taiwan at the time and it was well known (then) that tsmc was in no hurry to pay their bills (to local suppliers - I mean ASML was not affected!). We liked to say Korea had one king and a few princes while Taiwan has one king and everyone else ate dirt. I am certain that things changed since but they are not and never were a paragon of virtue. tsmc is great company but that's all they are, a company.

They have a strong internal culture (but remember that they make massive use of contractors). It often veers into the ridiculous. I was once at fab14 when i took an emergency call from my wife telling me that my son was in surgery after a life threatening incident. Now i knew that one should not take call in the lobby (in fact, wireless is actively blocked) but still... The lobby clerk let me have it as she handed me my badge and this even after my escorts explained the very unusual situation. Nothing would do. She nearly called security. That was the dao and there was no room for any other way. All was well in the end, my son lived and I just blamed it on a culture that left no room for changing circumstances.
Thank you. I can't find anything related to TSMC payment issues you mentioned from either English or Chinese search.
 

kvas

New member
> It is far better for China to be a customer than try and take over Taiwan and the sooner they realize this, the better for everyone.

I'm not sure if the semiconductor industry is among the chief reasons for China to want Taiwan. AFAIK, this is a long story that started way before semiconductors were invented. In any case, China would be happy to be among the customers of TSMC but US is interfering (remember Huawei?).

> The sooner all sides realize everyone will win by collaborating and cooperating in the ecosystem Morris Chang created, the better place the world can be for everyone.

I'm totally with you here, but I think putting all the blame on China is not fair. US is responsible for first agreeing to "One China" thing when it was politically expedient and now weakening the Silicon Shield by not letting TSMC sell advanced nodes to China, also kind of selfishly.
 
Top