This is exactly what TSMC does and they have taken money customers placed in escrow. NVIDIA's investment in Intel is a hedge against TSMC. The hyper-scalers are free to invest in a second source if they want.

I do wish Intel an Samsung would cooperate on open source EDA (etc) software to make switching to other fabs less risky and capital intensive.

Isn't that what Apple did originally with TSMC? Payed for capacity rollout?

>They can each give TSMC $10b now in cash and guarantee themselves wafers in 2-3 years that it takes to bring a new fab online.

This has always been the case. And the article is not well written, but generally speaking everything written about TSMC or any sort of manufacturing has been wrong most of the time.

Just ask Intel on what happen if they overbuilt capacity and their node didn't work. The most expensive Fab isn't the most advance one, but the empty one.

As a matter of fact, if everyone wants it so bad TSMC could bring up a whole new foundry within 18 months. With lots of pre-planning and assuming Taiwan Government in full support. The trouble is not a single big tech company are willing to bet it all by themselves either. Not until now.

I do not know if China could find a better window to take Taiwan,

Big tech manufacturers are treating consumers like crap by selling chips and memory to over-invested start-up companies that will go bankrupt, as these products will not be profitable due to the high costs (the technology that would make them profitable does not exist and has not even been conceived), in addition to the low long-term quality of what they offer.

The thing is, right now, billions of consumers around the world see how those big tech manufacturers are not serving them the pieces they need, and that such techs will not do in the near future with fair prices (prices abuse escalation, the consumers lost their strength).

Right now, if China takes Taiwan, 2026-2027, even if they lose the fabs, the billions of consumers in this planet will see this as a real f** you big techs, f** you overinvested startups hoarding, go go China, as we realize that we are third category citizens in this "first the riches" spiral, and will be no much difference of what is going on now.

If China takes his media news cards right, and makes know the consumers this is a revolution, and combine it with one of the numerous Taiwan's corruption scandals, I bet they will not find the opposition from citizens around the world that they would find in a different period of time.

In my humble opinion, China taking Taiwan, if done under Trump, will be the market buying event of the century.

It will tank the markets because people will assume a depression-level event and WW3. But Trump isn't like other presidents. He'll make a deal with China. And finally, the China/Taiwan cloud over the markets will go away for good and countries can start trading freely with China again. Markets will severely over react initially.

I can see TSMC benefiting hugely from this long term, as long as the reunification is peaceful no damage to any TSMC fabs or people. The reason is because TSMC will most likely be forced to open up to both Chinese and US customers. Right now, they can't serve the world's second largest market. Nearly half of their customers can't use them.

I'm making these assumptions:

1. China won't use force (or very very little) to take Taiwan.

2. There won't be WW3 that will come out of this. You'd have to be an idiot to think that Americans will die defending Taiwan or that Europe will send troops when China is quickly becoming their biggest trading partners and US has shown they're susceptible to annexing Greenland.

3. China will operate 1 country 2 system long term with Taiwan.

The US has shown that it can't handle any level of discomfort. The reason Trump is back in the white house is because grocery prices went up a little bit. Can you imagine the failure of the tech companies that are propping up the entire economy? That would happen under a Taiwan invasion scenario. China has a much high pain tolerance than US citizens at least. I'd argue they would outlast the US. Would they outlast the US military? I don't know. But it may not matter as given enough pain the US population will make itself heard.

Unpopular opinion: We don't really NEED these bleeding edge chips. What does humanity need? Clean air, clean water, healthy food, health care, compassion, education.

>most weapon systems use SoCs and microcontrollers that can be fabbed on "legacy nodes"

The argument is that existing weapons systems are essentially old tech, left over from previous wars in previous decades. Many of them are less useful in the modern battlefield, e.g. defense systems built to shoot down missiles are easily overwhelmed by drones.

If there's a real war, it will be fought with next-gen weapon systems - probably autonomous drones that will require high-end AI chips.

>If a US-China War was to arise, worst case we would probably see a mass reversion back to 2018-22 level technology, which isn't the end of the world.

It wouldn't be the end of the world if those 2018 chips came at 2018 prices and only impacted commodity stuff like phones, datacenters and laptops, but they'll be at 10x the 2018 price and impact critical stuff like automotive, the cars and trucks that gets your food delivered to the supermarket, and if those become impossible to buy or fix anymore, then your groceries will also get more expensive, triggering an end-of-the-world riot from taxpayers who can't afford food anymore.

People need to view this issue as not just being stuck with 2018 laptops and phones which isn't that bad, but has much wider societal implications.

Interesting point, although it's clearly not in TSMC's interest to land themselves in a monopsony situation by allowing Apple (e.g.) to squeeze all their competitors out of the market.

Tenstorrent managed to secure TSMC manufacturing capacity, I doubt many other RISC-centric fabless companies would have any issues aside from aggressive competition.

Im the EU there is Intel Ireland at least.

Yes. Dario Amodei is just using "china bad" to stave off competition. I highly doubt he cares one bit about anything else except his own wallet and power.

Another reason he wants fewer people buying AI chips is that less demands leads to smaller price, which would reduce the capex of his company.

This is likely. His concern is first and foremost the company. Geopolitics is primarily a potential tool in that capacity.

Yes. I think the article missed it. In fact, I expect it to happen this year when Nvidia overtakes Apple as TSMC's biggest customer.

It's going to start a wafer war in my opinion. Best way to secure wafer supply is to pre-pay.

I was thinking exactly this. The TSMC brake can only be a good thing if it constrains capacity on a wasteful industry and encourages research into efficiency.

If it also diverts workloads away from LLMs that we all know really belong elsewhere, more’s the better.

Some of us are old enough to remember the last time Intel was definitely, 100%, for-sure committed to offering foundry services, and then changed their mind and canceled the whole thing (it was in 2018) and want to see (a) someone else have success with 18A first and (b) intel show an actual long-term commitment to using their foundry for outside customers before we risk our companies' future on them.

There are risks with TSMC, but "TSMC just decides it's not interested in making chips for other people, and cancels the whole business" isn't one of them. The same cannot be said for Intel.

This is why: https://arstechnica.com/gadgets/2026/01/core-ultra-series-3-...

Intel doesn't have any spare capacity.

>intel's 18A nodes are significantly ahead of what TSMC is offering

A nice comparison table linked below. The best comparison imho is transistor density which is 313MTr/mm2 for TSMC's latest in-production process vs 238 for intel (higher is better).

https://en.wikipedia.org/wiki/2_nm_process

Also make sure to read the drama around https://en.wikipedia.org/wiki/Arrow_Lake_(microprocessor). Intel literally gave up making their own CPU on their own 20A process and instead utilised TSMCs fab.

Intel doesn't seem to be properly resourcing and supporting Intel foundry. A lot of it is cultural/political, intels fabs are used to working only for Intel and not having to worry about propriety details of fab processes leaking externally, so there's a distrust when working with the foundry team and external customers.

   intel's 18A nodes are significantly ahead of what TSMC is offering.

Further more, Intel's 18A yields are not where Intel needs them to be to be competitive.

Shewie, given all the replies to this, and my personal living memory/experiences with these kinds of things as they relate to said replies, sounds like buying intel stock is probably a pretty good idea.

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That's over-optimistic.

> Why do you think the US has encouraged TSMC foundries, now inside Arizona ? It's obviously to protect against the scenario that China takes Taiwan. In that case, give it 6 months or less for US TSMC foundries to produce the finest.

American business culture works pretty strongly against "give it 6 months or less for US TSMC foundries to produce the finest."

I think it's most likely those fabs will stagnate and the American MBAs running them will just milk them for short-term profits. Why invest in technology when you can buy back shares? After all, your only goal is number-go-up.

> China taking Taiwan will likely not result in the CCP getting any technology, certainly Taiwanese have "contingency plans" to vaporize all tech in the event they are invaded.

Not necessarily. Technology isn't so much the machines, it's the know-how. TMSC employees will still need jobs, post invasion, and I'm sure China will pay them very well. Some fraction will go to work for Chinese fabs, and teach them TMSC's tricks and knowledge.

TSMC's Arizona fabs (edit: need to qualify this with "today" and in the near future) are wholly inadequate to shift wafer volume out of Tawian if that were to ever happen. TSMC themselves have been candid about this - both the fact there is insufficient skilled labor and insufficient economics (materials supply chain, construction costs/process, subsidies, OPEX). If TSMC was serious about this they'd have invested heavily both in staff pipeline (university programs and hiring onramps), domestic executive function and supply chain - aside from taking subsidies and building tiny fabs that trail their Taiwan process nodes considerably, they've done little to diversify their fabs.

90% of TSMC's capacity is still in Taiwan. A substantial amount of global high end chip capacity is also in South Korea and Japan, which would likely get pulled in.

A war would not wipe out chip production, but the squeeze would be immense for many years.

In 6 months TMSC US foundries would grind to a halt without consumables from TW who still has many sole source suppliers. The reason for CONUS TSMC fabs is because that's all US industrial policy can really manage, CHIPS never pretended to be able to reshore the entire semi supply chain (unlike PRC) and until US does, or at least reshores everything sole source off TW, will remain exquisitely vulnerable.

Also TW politicians have objected to notion they'd vaporize their fabs / golden goose. That meme started by US Army War College + Colby who said US should blow up the fabs, as in it shouldn't be a TW decision. Which TW have rebuked said they will defend against US attacks. Also other shenanigans like when US suggest they would paperclip TW semi engineers, and TW basically said there's no way they'd send semi engineers to safety before children. AKA TW not retarded, they know not to toast their golden goose, because golden goose for PRC still gives TW leverage even if TW forced to capitulate. They'd still rather be wealthy semi producers than pine apple farmers under PRC.

>In that case, give it 6 months or less for US TSMC foundries to produce the finest.

It's really a blind belief in american exceptionalism that makes you think this is even possible.

No, the chip factory that has had dozens of years of experience and local talent scaling up to make the most complicated products in human existence doesn't magically get up to par in 6 months. At best in 6 months they've figured out how to be less sensitive to vibrations and reach a low yield. The US doesn't have the trained workforce for this job, nor the infrastructures _around_ the fab (specialized hardware, electronics and engineering schools, various bits and bobs).

US TSMC doesn't get properly running in less than 5 years, and even that would be a miracle. You're also assuming that US TSMC has the current N2P or even N3E processes, and that agent orange doesn't burn bridges with europe hard enough that ASML stops selling to anyone related to the US.

I don't even know what it means. "even without an invasion"? The author think China will destroy TSMC just because? To slow down AI progress?

> if we got to a situation where only the U.S. had the sort of AI that would give us an unassailable advantage militarily, then the optimal strategy for China would change to taking TSMC off of the board.

Lmao it's not. The author doesn't know what they're talking about at all. Let's be realistic: the current TSMC technology will be accessible to China, likely via espionage. The question is just how soon. It has already happened before. China's 7nm process was developed with the help from one of the highest level ex-TSMC researcher[0].

[0]: https://en.wikipedia.org/wiki/Liang_Mong_Song

The Arizona fab's not supposed, per wiki, to start producing 3nm until 2028. Are you suggesting that the only reason it can't be done by summer is a lack of motivation and resources?

>China taking Taiwan will likely not result in the CCP getting any technology, certainly Taiwanese have "contingency plans" to vaporize all tech in the event they are invaded.

He didn't suggest anything like that, did he?

The overwhelming bulk of production, in a massively oversubscribed industry, is in Taiwan. If Taiwan's production went offline, there would be enormous turmoil.

"certainly Taiwanese have "contingency plans" to vaporize all tech in the event they are invaded"

Given the way things are going, a rationalist would surmise that Taiwan is likely in talks with China for a peaceful reunification, Hong Kong style. The old way is very much over, the US is a worthless if not negative-value ally, and it's pretty clear to every living human with a functioning brain that this is going to be China's century.

Indeed, the article casually says "Taiwan is claimed by China, which has not and will not take reunification-by-force off of the table", which is technically true it isn't contextually informative. For those not fully up to date on the history of this conflict, for decades Taiwan claimed all of China (and most Western countries treated Taiwan as the singular government of all of China), and held out for reunification-by-force. This isn't as simple and straightforward like Trump's "we have a military ergo we get to steal better countries because they make us look bad".

https://www.youtube.com/watch?v=pF-ZN11DRSE

He hasn't offered any production services to third parties whatsoever (seems to end at patents/standards gifting) - I wouldn't expect a fab open to third parties at all - if anything it'll be reserved for tesla/space-x/x.ai usage and candidly I don't think there's enough demand there to justify the capex involved in a fab.

  I strongly suspect some sort of fab built by Elon associated companies will be announced soon. Almost all supply can be bought by Tesla and xAI.

Right now, it costs TSMC roughly $25-$40b for each N2 fab. It's going to cost $50b - $80b for an A14 fab 4 years from now. And then $100b - $160b again.

You need many customers in order to justify the cost. Tesla and xAI themselves won't be enough.

Standing up a modern-node EUVL fab is harder than rocket science. Tesla and xAI don't have the capex to do it, and the silicon they manufacture would be competing against much more experienced fabs like Samsung and Intel.

Frankly it is hopeless, I would be dumbfounded if Elon ever walked through the doors of ASML.

It's not that people forget that Intel exists, it's that they are effectively irrelevant to the foundry business.

> Becoming a meaningful customer of Samsung or Intel is very risky: it takes years to get a chip working on a new process, which hardly seems worth it if that process might not be as good, and if the company offering the process definitely isn’t as customer service-centric as TSMC.

TSMC is a reliable supplier and there are no doubts about conflicts of interest. The same cannot be said for Intel and Samsung. If Intel's AI chip business faces chip shortages (like what may already be happening), can their foundry be depended on to ship your chips?

No one wants to be the idiot who staked their future on Intel and then gets wiped out when Intel doesn't deliver.

No one forgets that. Intel will get some customers. It's inevitable because according to the article, TSMC had severely underestimated AI demand in 2023 and 2024 by not drastically increasing capex in those years.

The UV light source that ASML uses for its lithography machine is technology that was acquired in the 2013 acquisition of San Diego-based Cymber. The tech stack for the advanced light source dates back to the "EUV LLC Initiative," led by DARPA in the mid-1990s.

US origins of the key technology here give the US a veto here regardless of ASML's Dutch headquarters.

jmyeet:

"Putin is in the wrong here but there are no good guys. US rhetoric on this has predicted a full-scale invasion that hasn't come to fruition multiple times and the media just laps it up. It's reminiscent of the WMD justification for invading Iraq. It's straight up Manufacturing Consent [1]. However, Putin has a point: extending NATO membership to Ukraine is an overtly hostile act by the US and NATO member states. Putin no more wants NATO bases in the Ukraine than the US would want Chinese or Russian military bases in Canada or Mexico.

But Russia is not and never was going to launch a full-scale invasion of Ukraine. It would destroy Russia. Trying to do this in Afghanistan, a substantially smaller and less developed country, played a significant factor in the collapse of the Soviet Union.

Russia wants a buffer between it and NATO and access to the Black Sea. That's it."

https://news.ycombinator.com/item?id=30421629

TW doesn't have any munitions that can remotely breach gravity dam like three gorges, i.e. bunker buster, which even if they did, they wouldn't have survivable platform to deliver it (strategic bombers, too heavy for TEL). US MOP tier 30000kg penetrator munitions isn't designed to crack three gorges, TW missile inventory are like 1500kg, at most they'll inflict scabbing or break exposed components like power infra, lock gates, which is not nothing, but not remotely compromise structural integrity of dam. This not to mention TW missile trajectory is geographically constrained and overflies the densest IADS environments on earth, assuming their TELs are survivable in the first place. They're much better off trying to threaten PRC coastal nuclear, but either way gets them the Gaza treatment.

A conventional missile or even missiles is not going to destroy a huge gravity dam like that. They are incredibly tough structures and missile warheads aren’t big. We’re talking concrete hundreds of feet thick.

Could the chinese construct a sufficient anti-missle defence?

It's because Xi has demanded that China's military be ready to invade and conquer Taiwan by 2027. It's because Xi has made reunification with Taiwan a test of the legitimacy of the CCP's rule over China. The combination of those two things gives you a "China scare" with respect to Taiwan, out of Xi's own mouth.

It's easier to explain if we knew your country. But in general: limited resources, us vs them, etc. Same thing as Rome vs Carthage.

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I think the west is scared of China trying to take over the world by force like the USSR.