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Comment by madeofpalk | Hacker News Reader

It appears they both equally need each other.

If TMSC rejects Apple, what is Apple going to do? Use Intel chips in iPhones?

Say "OK, for now!", and then drop some of its gigantic cash pile into helping another supplier that it part-owns become a real competitor

I don't think you can just drop a pile of cash and create a competitor to TSMC. Even some state actors can not achieve that. I think TSMC has leverage here, and it will have for long time to come.

It may take time, and it may take more money than people want to spend, but I don't see how it can cost much more than half a trillion dollars, since you could just buy TSMC for less than that.

1) TSMC is not for sale. It's of national importance to Taiwan.

2) There is only one TSMC. If you could just buy one for 500bn the EU would have bought 3 already. Building your own TSMC from scratch takes a decade, if not longer.

If it takes a decade the time to start is now.

I bet if you try the US and EU quietly tell you to stop, because Taiwan without a TSMC monopoly would be very scared.

And why do the US and European governments care more about how scared Taiwan is than the security of their access to high-end semiconductors?

Cynically I'd say it's because high-end semiconductors aren't as important to national security as people think they are.

Of course you can. China is doing it right now without ASML even. There is nothing special about TSMC here. It's just funding and time. If Apple wanted to I wouldn't doubt they could reach cutting edge tech level within 5 to 10 years. It would cost enormous amounts of money and would probably be a very bad business move. But technically there is no problem.

China is proof that you can not just create competitor to TSMC. China throws billions for decades and it still behind TSMC. They already lost chip war, that's why they are trying to catch up in some other new technologies - nuclear (fusion), AI, space etc.

China is proof you can just create a competitor of TSMC. It's simply a matter of poaching their underpaid talent.

> China throws billions for decades

PRC's first pseudo-serious semi push was 2014 big funds, so far they've spent about 50B, over 8 years. That's less than annual R&D of western semi sector. And basically for first 5 years it wasn't a very serious effort until Trump's Huawei sanctions. PRC semi poached about ~3000 semi engineers from TW, a few hundred top talent from TSMC, and that was enough to realize the recent 7nm breakthrough on DUV in the last couple years once PRC semi started to get serious. US companies wouldn't have any issue accessing western equipment and US could absolutely pressure TSMC / TW into further semi capitulation. So maybe dropping cash and add political sticks to brain drain TSMC. The secret isn't to recreate TSMC, but to paperclip all their people and get to to build US-SMC state side.

> lost chip war

That remains to be seen, so far there hasn't been any sector PRC couldn't successfully indigenize in relatively short order once central gov started turning the screws. It might not be leading edge, or even commercially competitive, but it will likely be enough. They could also destroy critical East Asian semi supply chain before US can reshore in next few years and be the only country with the most comprehensive indigenous semi supply chain even if on older nodes. Still lots of ways chip war can play out.

China is proof that you can do it within a decade. China at worst started a decade ago and for the majority of that time wasn't pushing hard, until Trumps sanctions hit. Now they have 7nm DUV. I don't see how this is anything but a huge success for China.

Intel is doing exactly this. Apple can sign a second huge deal with them and change the market overnight. TSMC knows this.

It would be probably possible, just take 5+ years

Just because you have money, doesn't mean you can magic resources organisation and training out of nowhere.

This sounds like the same neoliberal fantasy that trapped Europe into an energy crisis.

The Chinese government, whose cash piles are even larger, has been unsuccessfully trying to do that for decades (i.e., produce semiconductors on the Chinese mainland high-end enough to go into a notebook computer that can compete on the global market).

China has near cutting edge nodes. And that's without EUV. So I really wouldn't call it unsuccessful.

Where can I buy a performant laptop or desktop with a CPU fabbed in China?

You can contact the vendor here: https://miner-va.com/

They are not desktop or laptop chips though. Targeted at miners. If you are willing you could probably reverse engineer them and do some fun stuff. But they are definitely not general purpose.

They’re not quite equal. Apple needs TSMC but not newest node tsmc. TSMC needs apple to fund newest node. But apple can’t walk away entirely, because they need something from TSMC.

Apple is probably weaker because it’s likely someone else can fund the newest node for TSMC, just might take more work.

I'm half expecting Intel to start producing chips for others in the coming years. However I doubt that it's as simple as sending Intel the blueprints for the M3, there has to be some re-tooling on both ends I believe.

> I’m half expecting Intel to start producing chips for others in the coming years.

They announced they would do that in March 2021 (https://www.techpowerup.com/280085/intel-to-enter-third-part...) and have customers:

- QualComm and Amazon AWS: https://www.theverge.com/2021/7/26/22595002/intel-qualcomm-c...

- MediaTek (https://www.tomshardware.com/news/intels-foundry-services-la...)

Intel page: https://www.intel.com/content/www/us/en/foundry/intel-foundr...

The conspiracy theorist in me wonders if they’ll join a secret lobby agitating for war between China and Taiwan, if Apple can’t get 6% off TMSC then no-one can. Then build a US based plant subsidized with taxpayer money.

A futuristic, high-tech variant of how Nestlé, United Fruit, and Dole use(d) gunboat diplomacy to create banana republics.

In that scenario how does Apple source all the parts made in China? They would be better off paying the 6%

It’s not just 6% it’s also losing a negotiation which is much much worse. Other suppliers will start to play hard ball, it’ll never end.

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