TSMC begins producing 4-nanometer chips in Arizona

No, its a global product silicon chips, america ships em to 100+ countries and will lose its edge if it doesnt stay at the top.

Margins are crucial for this, the driving factor that made US lose its industrial base, is red-tape, red-tape, red-tape, red-tape, political interference, militant unionism (unions are good and fine, militant unions are not), and foolish gov laws which did not make sure that labour standards are consistent for all products in american market, to make sure slave-labour or extremely shoddy labour standard based countries do not erode away great american jobs and its industrial base.

Margins are fine, and good. Unfair competition, rules and red-tape for domestic manufacturers but none for foreign companies, is what killed it.

It’s cheaper for a chinese company to ship to american households than it is for a local american company to an american household… , this is purely because of crazy gov regulations.

Companies in every country have this mindset.

Even Taiwan has largely offshored packaging to ASEAN, China, and India. And Taiwan got packaging because the Japanese manufacturers offshored to there.

Indeed, Apple* seem to be one of the only companies with the long term vision to integrate vertically and improve industry as a result. The short term pennies-on-the-dollar of outsourcing is just brain-dead and non-innovative.

*this is an observation from someone who has never bought a new apple product due to their increasingly closed eco-system

Are you proposing that the United States should operate factories without regard to margin?

As long as they don't have two microwaves in their household*

* humor

At least the fabs can recycle the majority of their water. Unlike farms which use more than is needed and are likely producing animal feed for international animals.

I get your point, but not all farms are created equal. Is it really so bad to shut down farms that grow feed for Arab race horses to produce computer chips?

Arizona and California have outdated water management laws that basically mean that big agriculture gets free water.

Until recently Saudi Arabia was using these laws to grow alfalfa in the desert.

In California, water intensive crops like almond trees get free water.

https://youtu.be/XusyNT_k-1c

https://www.nytimes.com/2023/10/03/climate/arizona-saudi-ara...

The US is a major food exporter with a supply around 125%. Shutting down a few farms in the desert seems worthwhile.

This is an extremely over-simplified take. It depends on entirely on what the farms are producing, their water efficiency, etc. Nobody would seriously suggest that people go hungry so that we can have more chips, so responding as if that's the actual suggestion is unwarranted.

A fair amount of that farm water is to grow alfalfa for the Saudi's dairy industry. So it's not all essential to US food security...

The place is a desert. Growing crops in a desert takes a lot of water, as you might imagine. A smarter thing to do is to not try to grow crops in a desert where it needs so much irrigation. The US has plenty of non-desert land for growing essential crops.

theres not exactly a lack of food in this country

> Who needs food when you have 4nm chips.

Who needs logic and reason when you have false dichotomy?

Before Phoenix the city was founded, there was a canal built by the indigenous people who live there in the lower Sonoran.

That canal became the basis for Phoenix, and eventually, the big canal that transport water long range through the state.

The other is that, with sufficient water, you can grow year round.

Not that I think industrial ag is good for society.

Phoenix itself is a metro area whose primary economic driver is real estate speculation. Many older citrus orchards has been surrounded, and sometimes bought and redeveloped.

It's sunny for a lot of the year. Ex. you can get an extra harvest of alfalfa per year compared to other climates.

https://www.youtube.com/watch?v=owieQnPYfT8

Farming isn't really that large of an industry in Arizona today, maybe 2% of GDP tops. But my understanding is that surface water rights were allocated over a hundred years ago and naturally those rights were allocated to the people that wanted them then, i.e. agricultural landowners.

> Is there any historical reason why farming is a big industry in a state associated with deserts?

California is a desert too.

Farming isn't an industry. It's just how you have a civilization when population density is higher than a hunter-gatherer lifestyle can support. People have been farming in Arizona for several thousand years.

I am sure that some people will question some of the historiography there, but Cadillac Desert is a book all about the history of water management of the great plains, from Kansas onwards.

TLDR: America has spent a whole lot of money trying to make land more productive for farming, including land where it probably doesn't make much economic sense once you account for the infrastructure costs.

I guess the Mexican border has something to do with it?

Yes, It's from farming. To state the obvious, it's the volume of water you'd have if a foot of rain fell on an acre of field.

So, it's the unit that gets used when discussing irrigation. Or water usage that competes with irrigation. :P

It is specifically for reservoirs and by extension municipal water supply systems because it's relatively easy to determine the surface area and height of a reservoir

We'll use anything but metric lol. It's about 1,233 cubic meters of water.

https://en.m.wikipedia.org/wiki/Acre-foot

> The acre-foot is a non-SI unit of volume equal to about 1,233 m3 commonly used in the United States in reference to large-scale water resources, such as reservoirs, aqueducts, canals, sewer flow capacity, irrigation water,[1] and river flows.

Seems to be.

Specifically in the desert west, yes.

We measure our land in acres and water is the limiting resource for using it. Water requirements for crops are expressed in feet/year (or inches/day). Combine the two and you get acre-feet.

m^3 would be a less useful unit in terms of calculating water needs out here, the metric equivalent would be hectare-meters (10,000 m^3).

Yeah, not uncommon at all in most scenarios where water volume is large enough.

They sold land rights to the Saudis who then siphoned off the water (now revoked said rights).

"[The Saudis] used sprinklers to grow alfalfa in La Paz County and exports it to feed dairy cattle in Saudi Arabia. The company did not pay for the water it used under the old agreement."

https://www.cbsnews.com/news/saudi-arabia-water-access-arizo...

Water rights in the western US are mercenary. There's a healthy market in prior appropriation rights.

Just because people don't like what the water is used for doesn't mean the water isn't priced appropriately. You'll still get farmers growing thirsty / pricey crops in the desert if it covers the cost of irrigation.

We pay about $130/mo for water in north phoenix even if we don't use a drop.

priced -> rationed

Angstroms aren’t imperial, but they are non-SI, so if we want to be petty they’d probably be the way to go.

Scientific notation would be to logical. Instead they'll make a new tiny unit that subdivides the inch into 1/81975489347.7 of an inch.

"Eschew flamebait. Avoid generic tangents."

https://news.ycombinator.com/newsguidelines.html

Americans need to stop measuring things in feet :)

Per square banana please. This is the internet.

Bruh, you're never gonna be a good trad wife as a man. You're just not that pretty.

Sure, but coming dead last behind Taiwan, Korea, US, Japan and China in the race to cutting edge semiconductor manufacturing is nothing to brag about. That's like celebrating for coming last.

This means you're getting the lowest industry margins, meaning less profits, less money for R&D, less wages and also less geopolitical leverage. This is nothing to celebrate but should be an alarm clock for our elected leader to wake the f up.

A lot of semi research is done in the EU, like at IMEC in Belgium, but few of it ends up commercialized by EU companies, so EU taxpayer money gets spent but other nations get to reap the rewards.

What are the obvious reasons?

electricity is not "material" it is energy input.

Top 5 Countries That Produce the Most Semiconductors:

    1 Taiwan
    2 South Korea
    3 Japan
    4 United States
    5 China

Germany has 22

France has 5

Spain has 1

UK has 16

Ireland has 3

Italy has 2

Sweden has 1

Finland has 1

It's simpler than that. The USA holds the majority of the IP.

The United States possessed approximately 12% of the world's global chip manufacturing capacity as of 2021. This is a notably lower percentage of global capacity than the US enjoyed just a few decades previously (37% in 1990, for instance), before countries such as Taiwan and China ramped up their semiconductor production capabilities. Despite this decline, the semiconductor industry remains quite lucrative in the US. According to the Semiconductor Industry Association (SIA), semiconductors exports added $62 billion (USD) to the US economy in 2021, more than any product other than refined oil, aircraft, crude oil, and natural gas. Many of these imported chips return to the US in the form of finished consumer electronics.

Although the US held just 12% of the world's total semiconductor manufacturing capacity in 2021, US-based companies held approximately 46.3 percent of the total semiconductor market share. This seeming discrepancy can be explained by both the dollar value of imported US semiconductors, outlined above, and the fact that many US-based companies own and operate semiconductor fabrication plants in other countries, such as Japan. In such cases, the manufacturing capacity is added to that country's capacity rather than the capacity of the US, but the profits typically count as part of the US economy.

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do you really think fabs are labor-intensive, or that they discharge toxic waste?

Firstly, you don't need to spend America levels (more than than the next world powers combined) to have an efective military deterrent, since currently most EU member states barely spend 2% GDP on defense which is too little. You can have a strong military AND welfare services if you're smart about your state finances which many EU members are not(looking at you Germany), especially since defense investments create more jobs and innovations flowing back into the state coffers. Switzerland is a good example.

Secondly, America's defense is way more expensive than it needs to be due to a lot of high level corruption and lobbying from the military industrial complex profiteering when it comes to purchasing decisions, where a 10$ bag of bolts is bought by the military for 50K$, shovelings taxpayer money into the right private industry pockets. EU can achieve similar results with way less cost if it wanted to by minimizing this style of corruption but that's easier said than done. The only one rivaling America's military inefficiency is Germany who spends more than France, a nuclear power with aircraft carriers, but can't afford to issue underwear and dog tags to new conscripts.

Thirdly, America's lack of social services is not due to its powerful military, but due to political choices and inefficiencies. It could easily have better welfare if it wanted to since it can afford it with the world's largest GDP, but it chooses not to, since the current status quo is enriching a lot of private enterprises and parasites, while the concept of even more welfare is usually not a popular topic with the US voters which see welfare recipients as lazy and an unnecessary money sink funded by higher taxes on the middle class which they don't want. So their issue is social and political, not economical.

But being the "policeman of the world" has helped with preserving dollar's status as the major currency for international transactions between third countries, and in particular for oil, which in turn makes the dollar a desirable currency, because everyone has and wants to have dollars, and has allowed the federal central bank to print the trillions of dollars it had been printing over and over without it losing its value. Any other country's currency would have been super-inflated if they did the same.

> but there is a large financial cost to always being ready for war. The US has spent 80 years being the "policeman of the world" for good or bad.

The US has never gone through the stage of being "ready for war" and instead went for the "living from one war to the next"

> takes for granted the open seas

The open seas is a myth. It is the American seas unless you have a lot of nuclear weapons.

> that come at a great cost to Americans in reduced social services like health insurance and higher education

But also brought lots of business and investment too. On total it's positive, otherwise the US would not do it. *I am not saying the distribution of the incoming wealth was equal.

> Lots of bad decisions but the world also takes for granted the open seas, etc. that come at a great cost to Americans in reduced social services like health insurance and higher education.

Thanks for the laugh

Nonsense, Americans pay the most for health insurance. It's merely about how you use the money. Same with education. The American economy is so great it could afford an entire second military industrial complex and still have enough money left for healthcare and education.

You should update your information.

> Many commenters on HN have this weird idea that if Taiwan is slightly ahead of competition, US would defend Taiwan against a country with nukes. Or that TSMC superiority is Taiwan's national security issue.

Well... TSMC is definitely a component of Taiwan's national security. It's called the "Silicon Shield" for a reason.

And the US definitely has more reasons to go to war, and more importantly, threaten war to prevent one breaking out, over Taiwan if it knows there will be a massive economic impact.

And China definitely knows that if Taiwan is important for the US, it's almost certain the US would defend it.

The US would probably defend Taiwan if the CCP invaded it. I don't think we would ever use nukes.

Why do you think it's a weird idea? It's a strategic asset as much as oilfields are.

They want war? Someone else’s, at that?

Crazy.

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water is a non-issue. The main issue in deciding where a factory should go is which state will give you the most to do it.

People already pay a premium on Macs to be honest. Every hard drive upgrade is ridiculously overpriced.

"Minecraft proves that the children yearn for the mines"

Marginal cost added probably isn't that much. How many manhours does a mac take to build?

Got any more of that hyperbole? Or maybe outdated xenophobia?

The average manufacturing salary in China is around $13,000 a year, in a country where cost of living is 50% lower than the US and rent is 75% lower.

China is actually a place with relatively high manufacturing labor costs these days, but it's a production center for a lot of industries and holds a lot of the ecosystems and institutional knowledge (not unlike all the automotive parts suppliers in the American Midwest).

Unfortunately the USA doesn't have religious prisoners who can be coerced into a factory as slave labor.

None of the people assembling Apple products in China are 10-year-olds making $0.18 an hour.

Humanoid robot workers are going to have a massive impact on industries like this. 'cheap labor' will no longer be isolated to certain regions.

Selling the secret sauce to US definitely make Taiwan disposable. But I also bet TSMC doesn't have a choice as whoever in power in US can also impose sanction/tariff or whatever they can to make TSMC to compile.

> Taiwanese sovereignty as disposable

Your are describing the statu quo as almost no country officially recognizes Taiwan

Short of nuclear weapons, I'm not sure what would allow Ukraine to "win". Even given all the hardware, Ukraine doesn't have the staff or experience to field a full NATO air wing and integrate it to fight according to NATO combined arms doctrine -- if that even WOULD produce a "win" (there is an untested assumption that a NATO-standard military could trounce Russia)

TSMC being 2-4 years ahead of Samsung/Intel has nothing to do whether US would be willing to go on a nuclear war and move the entire world decades if not millenias back. No one can go on a direct war with a country with nukes unless they are ready for mutually assured destruction.

the current regime will make choices based on what's profitable for the companies involved. It's unlikely that losing TSMC will improve profits for American companies, so having this redundancy is for short term applications.

The business interests _are_ the political landscape today.

> they’ll be willing to let China have the islands now too

The islands are Chinese. The US back Taiwan as an anti-communist and anti-China (divide and conquer) tactic, including because its location. If the communists had lost the civil war, the mainland and Taiwan would all have remained under ROC control and it would have been interesting to see what the US would have come up with, instead (academic and thought experiment but interesting to imagine nonetheless).

In Ukraine the US don't want to be dragged in a war against Russia and things have played well for them so far (really the US are the only winners so far).

> "invade" = western propaganda

> The proper word is "reunite", as it was agreed with the US

So the US and the PRC had some milquetoast diplomatic correspondence which did not include Taiwan. If the PRC now occupies Taiwan against the will of its people and population, presumably under fire from the Taiwanese army, it' just a "reunification"?

Be easier just for Arizona to stop growing alfalfa. Its popular because they can grow two crops. According to the feds, there is 300,000 acres of alfalfa in Arizona. Cut that you have enough water saved for tens of millions of people. growing water hungry crops in the desert doesn't make sense.

https://www.nass.usda.gov/Statistics_by_State/Arizona/Public...

Why not a place like Washington State or Oregon with abundant water and hydropower