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If the cost includes the net present value of future risk impacts, is there an added value to supply chain diverse friendshoring? Especially when that analysis includes the damage to downstream industries, as one example we saw huge problems with vehicles in the past couple of years due to chip shortages.
50 years ago portfolio diversification and Black-Scholes revolutionized financial investments. Where is the equivalent taught to MBAs in how to manage companies?, and where in the accounting practices are the future value of risky decisions costed?
TSMC has been an outstanding success story, partially due to the stumbles of its competitors, but it has also become one of the most geo-insular companies to be a lynchpin of the world economy. It should have woken up to regional expansion a decade ago. All its competitors did.
It is a lot of money in play (about $50bn per year) but that is much less than we subsidize other critical parts of our economy. You could argue that the subsidy to fossil fuels intrinsic to not applying any cost for cleanup is around $4tn per year ($100 per ton CO2, which is far below any actual proven CCS cost). So, the scale of it for revising the supply chain diversity is by no means unexpected. The world economy is humongous - a billion here, a billion there, you might get something done.
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