Not trying to be over dramatic about it, but given there is a persisting strand of belief inside the Taiwanese political community that unification ON THEIR TERMS is a thing, I would think at this point an unreliable US partner, who asks your principle worldwide income stream to relocate is .. not the friend you hoped for.
The writing was on the wall when "make some of the chips onshore" happened, and now with packaging long line looping, the next logical step will be "do some of the packaging onshore" followed by "no packaging or fab from offshore"
I wonder if the US government will next ask ASML holding to also open plants inside the continental USA? if I was the EU, I would consider very hard what a response would be.
"we are witholding Novo-nordisk product from the USA until bilateral trade relationships return to normal" is unlikely I guess. as is "decent Brie will not be available in the USA for the forseeable future"
ASML's supply chain is critically linked to U.S. suppliers. (EUV was jointly developed between Americans and Europeans.)
TSMC built a massive plant in Arizona. It's been hitting rocks, from frustration over "rigorous working conditions," e.g. people being "called into work for emergencies in the middle of the night," to differences in manufacturing cultures, e.g. "employees were expected to pitch in with work outside their job descriptions because construction of the facility was behind schedule" which "did not sit well with everyone" [1].
[1] https://www.nytimes.com/2024/08/08/business/tsmc-phoenix-ari...
America literally failed to compete. We had fabs, even competitive and industry-leading ones, for several decades. But Intel didn't adopt EULV and whether or not you agree with their business decision, that left America without a leading node. TSMC and Samsung would take up ASML's EULV spec and the rest is history. America fell off the map with our "14nm+++++ Advanced TurboYield" technology, and the almighty belief in free market competition didn't provide us with a new champion.
The reason tariffs like this are necessary at all is because America cannot sell chips unless the government tips the scales with their fat meaty finger. Nobody wants our chips. Intel and Apple both gave up trying to make laptops on American silicon. AMD and Nvidia both orbit around the EULV suppliers because they're both cheaper and more advanced.
This is a temper-tantrum in response to realizing that government subsidy is the only other way to stimulate production.
Combine this with the other tariffs, killing green manufacturing and the chips act and infrastructure bills, threatening our allies, a freeze on all federal grants and loans (a couple hours ago, if you aren't keeping up), etc... how does this not result in a total collapse of the US economy?
Tech is a significant portion of our market. How could destroying our ability to source the most advanced hardware and driving a wedge in between a critical ally who literally cannot concede for their national security possibly lead to anything but a lack of trust or confidence in the US, increased costs, and a shrinking market for US tech?
In the long term, it does. It's crazy to read a history of tariffs and conclude that raising tariffs on everyone, everthing and everywhere doesn't hurt you. But in the short term, that demand must be sated, and that disruption creates opportunities.
> How could destroying our ability to source the most advanced hardware
It won't. Taiwan depends on us. They'll cave and we'll get a short-term win. What it also does is create a strategic imperative for Taiwan to balance its dependence on America. Those chickens, unfortunately, won't come home to roost for years.
Actually its the opposite. In the long term it incentivizes manufacturing chips in the US. Domestic manufacturing has bipartisan support (see Biden's CHIPS bill) and obvious nation security implications. That's not to say tariffs are the right solution but the end goal is good and uncontroversial.
It creates economic chaos in the short term because the supply of domestic chips is relatively low and the cost of foreign chips will increase dramatically. This will normalize over time as domestic production ramps up.
The grant freezes are just outright insane, how bad this will get depends on how long they last. The slight silver lining is that this order might just be so extreme that it'll fail and be overturned. This is not a carefully planned attack on the impoundment control act but they just flipped the table entirely.
Your best chance is that Trump might listen to the billionaire buddies that would lose money here instead of those that just want to see the government burn.
Art of the deal, Xi must have agreed to wait until 2028.
Next, tax free repriation of that $200B Apple has buried in Ireland to fund those fabs.
Obviously not the case here. Ahem.
The legacy of this administration may truly be so bad that people will be slapped by old ladies when this all over. Spit on.
