Source below…
There's no sugar-coating this so I'll give it to you straight:
- We don't have a competitive domestic chip industry & we won't have it in the next 10yrs
- China will take 🇹🇼 & control TSMC
- We will keep buying chips from TSMC w/ CCP backdoors in them, & pretend it's fine.
The idea that we're going to just man up & re-shore leading-edge chipmaking is a fairy tale. The problems that got us here are all part of the larger off-shoring of US manufacturing over the last 30yrs, & will not be solved by a few tariffs & some billions for Intel.
We need a complete & total reboot of all US industrial policy, with chipmaking as one part of that bigger effort. But even if we can get it together to do this, the path to that goes through a long period when CCP has root on our domestic systems & steals or sabotages stuff.
They don't want to completely wreck us because they need someone to buy their stuff. We have to be functional enough to support their continued rise, & of course we supply some critical inputs to leading edge chip fabs that they'll need to run TSMC.
So keeping us alive & in second or third place is a win-win for them & for us. And we will accept that b/c there is no alternative. We can't very well take Apple, Google, NVIDIA, etc. out behind the barn & shoot them. We will keep buying TSMC output & pretending it's all 👍.
We will make it, but we'll get taken down a peg or two or three. Forget chips for a sec -- we shouldn't have given them our factories! So obviously & monumentally stupid. But here we are so we'll muddle through.
Regarding TSMC in specific: The Arizona fab was always going to be trailing edge & negligible in terms of impact on our domestic chip issues. How could it be otherwise!? Why on earth would they do anything material to lessen our dependence on them?! LOL
If TSMC is already low-key CCP-captured (very likely), then CCP would just be giving up eventual leverage over us by lessening our dependence on TSMC. And if it's not, there's no way Taiwan would want us to be /less/ likely to come to their aid when China moves on them.
No matter how you look at it, the Arizona fab was always whatever the industrial policy equivalent of security theater is. It was maybe a nice idea if we could've executed on it, but it was never a real plan to save us from being dependent on China for our transistor supply.
So this Intel catastrophe is very, very bad, & there's no real light at the end this tunnel that isn't an oncoming train. There's no quick fix or way to just throw a few (borrowed) billions at this issue really make a material difference in a short time. That's all fantasy.
We have to find the will to re-industrialize, and we're going to have to do it in a world where China is basically more advanced than we are. We're very fortunate that China has its own massive problems -- its own set of dominoes falling from decades fo bad decisions.
It's good to be bullish on America, but we're going to have to be bullish on ourselves as the underdog. We're going to have start a long journey of coming back from behind. If you don't see it yet, you'll get it eventually.
Since this thread is getting attention, ppl who recall my much earlier writing on this issue will recognize that what I've outlined in this thread is the least bad scenario. The far worse one is either US v. China war or TSMC doesn't survive invasion.
For the ppl saying we'll go to war w/ China and/or TSMC won't survive an invasion intact, you may well be correct! See the article in my prev tweet, where that was basically my position in that older piece. Today's thread is my later, more optimistic assessment.
But read my older substack article to understand why if we either go to war with China over Taiwan or TSMC gets taken off the chess board, you will wish that today's thread was how it had played out. This is honestly the path of least misery for the US & the world.
Source:
https://threadreaderapp.com/thread/1819764124047540229.html