CCP (Global Times): TSMC Arizona Lost $441MM USD in 2024

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**The Global Times is widely considered to be a newspaper that distributes propaganda for the Chinese Communist Party (CCP). It has a strong pro-CCP stance and is known for its nationalistic and conservative viewpoints. The newspaper is published by the People's Daily Press, which is a ministerial-level institution affiliated with the CCP. It also has a reputation for attracting a nationalistic readership.**

GT Voice: TSMC’s Arizona fab losses show pitfalls of ignoring market logic - Global Times

www.globaltimes.cn

 

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Search Labs | AI Overview

A semiconductor fab typically takes 5-7 years to break even. This period can vary depending on several factors, including the cost of the fab, production capacity, and market demand.

Here's a more detailed breakdown:

• Building the Fab:
  Constructing a state-of-the-art semiconductor fab can take 3-5 years.
  
  
• Production and Break-Even:
  Once the fab is operational, it can take another 2-3 years to reach break-even, assuming high utilization rates and favorable market conditions.
  
  
• Factors Affecting Break-Even Time:
  • Fab Costs: Building a fab can cost between $10 and $20 billion.
    
    
  • Production Capacity: High utilization rates are crucial for profitability.
    
    
  • Market Demand: Strong demand for semiconductors is essential for revenue generation.
    
    
  • Government Subsidies: Government support can shorten the break-even time.
    
• Longer Timeframes:
  If utilization rates are low, it could take significantly longer, potentially 10 years or more, to break even.
  

 

[benb]

I found this too fascinating not tp pass along. It seems TSMC Arizona success is of concern to the CCP. It highlights some of the difficulties TSMC faces (and solved, I think): Building a supply chain in the US from scratch, and high labor costs.

There is some truth in this propaganda. The US does not suppress labor wages as China does. Salaries are paid once a month in China, and sometimes the wages are not paid. The legal system in China, such as it is, does not take breach of contract seriously, so workers have no redress.

 

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Search Labs | AI Overview
Multiple sources suggest that wage arrears (employers withholding or failing to pay wages) are a significant problem in China, particularly affecting vulnerable workers like migrants. This can contribute to wage suppression. However, it's important to differentiate between intentional non-payment and general wage suppression due to economic factors.
Here's a breakdown of the situation:
Wage arrears and non-payment

• Widespread problem: Reports indicate that wage arrears are a chronic issue in China, particularly before the Spring Festival when migrant workers need to be paid before returning home.
• Vulnerability of migrant workers: Migrant workers are especially susceptible to exploitation, often working long hours in unsafe conditions with delayed or withheld wages, according to China Legal Experts.
• Examples: The construction industry is highlighted as one sector where wage withholding is common, sometimes for up to a year. Some employers have even secretly shipped away machinery or disappeared, leaving workers without severance pay, wages, or social insurance.
• Government acknowledgement: The State Council has recognized the seriousness of wage arrears around the New Year and called for targeted measures to resolve such cases, particularly those involving migrant workers. However, enforcement has been inconsistent, and companies sometimes flout regulations with impunity.

Wage suppression and broader factors

• Economic slowdown: Widespread pay cuts and slower wage growth are also linked to China's economic challenges and efforts to control inflation.
• Specific industries and groups affected: Finance workers, doctors, and civil servants have also faced wage cuts, according to Reuters. Some state-owned enterprises have also reduced wages and imposed layoffs, Radio Free Asia reports.
• Lack of enforcement and worker power: Some sources suggest that lax enforcement of labor laws and the lack of independent labor unions contribute to the suppression of wages and workers' inability to demand better pay and conditions, according to World Socialist Web Site.

In conclusion, while intentional non-payment of wages is a significant problem in China, wage suppression can also be linked to broader economic factors and challenges in enforcing existing labor laws.