Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly.
What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical conclusion is that American consumers will end up paying the tariffs.
tw04 · 1h ago
>so the logical conclusion is that American consumers will end up paying the tariffs.
That’s been the point all along… they are significantly raising taxes on the bottom 90% of Americans and most are too stupid to even understand it. Gotta pay for those tax cuts for the wealthy somehow.
nosignono · 1h ago
It has nothing to do with stupidity. Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
This isn't some natural state that's unrecoverable. The people you describe have been given a highly addictive media environment tailor made to engender outrage and drive behavior. It shouldn't be a shock when most people cannot resist it. The first step to changing it is not writing them off or insulting them for being had.
Nevermark · 2m ago
> It has nothing to do with stupidity.
In addition to being rude, its not a particularly clear word.
So I have coined the term "antididact", to more specifically describe the problem of people who resist learning or being taught, in circumstances like this.
mattbillenstein · 50m ago
In a way it kinda does though - like definitely the information ecosystem distorts things, but some people do not have (or do not exercise) the critical reasoning skills to decipher what's true from what's not. Or what issues are actually important from those that are meant to just distract - not everyone can tell the difference and see how the incentives actually point to what's going on.
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bsoles · 26m ago
Those people may not be innately stupid in the sense of not being able to learn or understand things. But they have been rendered functionally stupid by the media, propaganda, and politics. I actually find that state quite unrecoverable.
roenxi · 17m ago
"Stupid" seems like a pretty fair way of describing that. If someone watches media that outrages them, misinforms them then causes them to make stupid decisions then the consequences are very much on their head. It is well know that the people peddling strong outrage are basically scumbags in it for the money and not the sort of people who should be listened too if you want to achieve long term success (which is mostly the domain of trusting optimists).
There are a lot of high quality media sources out there that don't promote outrage.
dfedbeef · 2m ago
It's what they call everyone else (shrug). Why mince words.
tw04 · 53m ago
> It has nothing to do with stupidity. Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
No. Someone refusing to spend 30 seconds understanding how a tariff works is the result of an idiot. My 10 year old figured out how they work in under 5 minutes. There’s literally no excuse for a grown ass adult to refuse to educate themselves on the subject.
“This media environment” doesn’t prevent them from typing “how do tariffs work?” in their search engine of choice and reading the first result.
hx8 · 40m ago
I just googled "How do tariffs work?" I got hit with several college level vocabulary words describing tariffs in both the AI summary and my first result. It might be less of a problem, if we had adequately funded schools.
slg · 29m ago
The full AI summary from DuckDuckGo for "How do tariffs work?"
>Tariffs are taxes imposed by a government on imported goods, making them more expensive to encourage consumers to buy domestic products instead. The costs of these tariffs are typically passed on to consumers, resulting in higher prices for imported items.
I don't see any "college level vocabulary words" and it directly says that it makes goods more expensive and the costs are passed on to consumers. Maybe Google's complicated answer is part of the "media environment" being criticized.
ethbr1 · 28m ago
>> What is a tariff? A tariff is essentially a tax imposed by a government on imported goods. When a product crosses a country's border, the importing company pays this fee to the customs authority before the product enters the domestic economy. (start of Google summary)
cnst · 1m ago
I'm guessing Google has a "be accurate" as its prompt, whereas DDG has a "be ducky"?
DiddlyWinks · 27m ago
At this point they're not "being had." They are deliberately and belligerently ignorant. It's way past time to stop giving anyone a free pass on supporting this malevolent clown.
heraldgeezer · 1h ago
Just like how overweight and obese people are "victims". Allow me to laugh.
At some point it is the individual. (I recently lost my COVID kilos, 10-15kg. Was easy. Stop drinking beer. Skip meals. Then again adhd brain makes it easy loll xd)
At some point the Trump voters need to suffer.
mrtksn · 23m ago
Yes it's a tax on consumption and when applied to everything the same way it's essentially a VAT. The admin keeps telling that EU will pay, India will pay but at best they can do is to weaken their currency so the goods become cheeper and it compensates for the tariffs US importers pay.
Arguably, US consumers are super consumers and maybe it will be better for everyone if Americans consume a bit less? I don't think that it should be necessarily bad for business, maybe it's time to switch to world building instead of consuming, maybe as so many people works so hard we as species should gradually move on to use our output for longer and enrich our lives with each new tool instead of consume more and more and keep working the same or more. Eastern Europeans are or used to be a bit likte that, have a slow paced life, have low GDP output, on paper economy and everything is bad but actually have a great life if you have a house with a garden and some stuff you bought 30 years ago and still functioning good enough.
mathiaspoint · 1h ago
If there's one product we have domestic alternatives to it's semiconductors. We're a couple nodes behind TSMC. Using US only foundries or paying a premium for TSMC is not the end of the world.
J_McQuade · 54m ago
More people need to hear this. Similar argument when they tried to stop China from buying certain types of silicon - "Oh well... anyway!".
I am not American, nor am I Chinese. Both of those countries have the capability to make enough compute to do whatever the hell they want. I am, however, European...
DiddlyWinks · 24m ago
Really? I was not under the impression that we had anything truly competitive. Could we make an iPhone, for example, using only U.S.-made chips?
saltcured · 5m ago
I fondly remember my weird Razr-i with an Intel Atom CPU..
I can almost imagine we would have more trouble getting domestic phone screens, but I'm not doing any research to validate that gut feeling.
I think the biggest problem would be whether we could automate assembly enough to avoid having high labor costs on each unit
mathiaspoint · 15m ago
We couldn't make an iPhone because apple would refuse to cooperate, not because of a technical limitation. We could make a similarly capable phone though.
ThunderSizzle · 3m ago
It's about time we tariff Apple as if it's a Chinese company anyway.
robertjpayne · 5m ago
iPhone performance and battery life would likely slide back 5-10 years if Apple was forced to use Intel chips instead of TSMC today.
Not just that, the raft of features that may have to be disabled until that performance and performance per watt gets back to where it is today.
croemer · 14m ago
There's no problem with having a trade deficit against one country. There's no need to balance each country, just as there's no need for people to have no imbalance in daily exchanges. It's as if you were going back to a barter economy where there was no money.
ezst · 4h ago
With this administration, it's probably just more blackmail, in the form of "it would be a pity if nobody came to the rescue when China eventually puts its Taiwan plans in motion! (Not that playing ball is a guarantee of anything either)".
Dr4kn · 1h ago
Every promise of this administration is worthless, so why even bother? Either they protect you, because they don't want the chip tech to fall to China or they don't.
Buying half of Intel isn't going to change anything
ethbr1 · 25m ago
The meta of Trump mercurialness is convincing counterparties they should do whatever they can to make him happy, even on unrelated matters.
I think it's a braindead, 4th-grade way to run international negotiations, but it is a way.
bit1993 · 3h ago
> it would be a pity if nobody came to the rescue when China eventually puts its Taiwan plans in motion!
Wouldn't that just mean that Taiwan has to choose between two villains, and China can take the advantage of this by changing its narrative and taking the position as a hero, protecting Taiwan from the US.
jfengel · 1h ago
Taiwan really, really does not want to be part of China.
Or rather, they see themselves as the legitimate government of China, which is undergoing a temporary Communist junta. The separation was extremely violent. I mean, you saw the Three Body Problem.
The US fosters this, to retain a toehold there. Taiwan doesn't exactly love us for it, but they know which side their bread is buttered on.
wahern · 1h ago
> they see themselves as the legitimate government of China
No, they don't. But formally renouncing that position[1] makes them officially secessionist in the eyes of Chinese conservatives, adding pressure to invade. The One China fiction matters, though how much it matters is definitely up for debate. But it's a local minima, and rolling the dice comes with significant risk.
[1] At the state level. AFAIU, it's been renounced by several of the major parties in Taiwan, and when in power they've made movements at low levels of government that arguably contravene the policy. But it still remains the official position and its still enshrined in the Taiwanese constitution. And, yes, the US adds pressure to maintain the status quo as it would (might?[2]) be on the hook for the defense of Taiwan. But the majority of the population isn't in favor of formally renouncing it, either; the potential negative consequences are existential, and the material benefit is slim to none.
[2] During Trump's first term it was claimed he privately admitted that if China invaded Taiwan he wouldn't intervene.
ahmeneeroe-v2 · 2h ago
This isn't blackmail. A security guarantee has value. Exactly what value is hard to say since the US is the only credible seller of such guarantees in this world order
cnst · 1h ago
Whose security are we talking about here, though?
Wouldn't the value of the security guarantee in this scenario be a negative one for Taiwan?
Like with Ukraine? Like with Iran? The US has proven its word is literally worthless and beholden to the whims of a dictator.
At this point, Taiwan would be foolish to not start working on a secret nuclear bomb program. North Korea has proven its the only way to actually protect yourself.
jamiek88 · 1h ago
Yep. Nukes for Taiwan is the only solution.
Nuclear proliferation and subsequent war is inevitable imo.
shkkmo · 39m ago
I'm pretty sure giving nukes to Taiwan would be seen as an act of war by China.
throw9394944 · 1h ago
Until you change president... Iran made several security deals with US...
_hyn3 · 2h ago
What would TSMC do if they couldn't sell chips to the USA? It cuts both ways, like most trade negotiations.
MBCook · 1h ago
Is “don’t buy stuff with TSMC chips” really a valid option we have?
Isn’t that basically “stop buying high technology” to a large degree?
1over137 · 43m ago
Sell to the other 95% of humanity I guess.
lanthissa · 25m ago
tsmc(taiwan) will blink for the same reason europe did and japan did, and for the same reason india and brazil did not.
when you take a step back and look at the deal breakdown, this is protection money not a trade negotiation.
xyst · 4h ago
> ... American consumers will end up paying the tariffs
This has always been the case. I have never heard of a company absorbing tariffs on behalf of consumers in the day and age of "trickle down economics".
duxup · 4h ago
So far indications are many companies are eating the tariffs, for now.
Even making them visible has drawn the ire of Trump a few times already.
But I generally agree that it can't go on forever / not how it works historically.
cnst · 1h ago
I'm actually surprised that some prices are even lower now than they've previously been.
I don't think most people actually have a solid understanding of what is and is not affected by which tariffs.
If I understand correctly, most of the tech stuff is effectively exempt; and Canada/Mexico tariffs don't apply to most items that are covered under "the rules of origin" certifications under USMCA (the successor to NAFTA).
I think the biggest hit has been the elimination of the de minimis rule, which now makes it difficult and/or impossible to get anything directly from China by USPS, be that cheap clothing or small electronics.
duxup · 36m ago
I don't think companies know what is affected and when... except when the invoice comes. The tariffs have been a moving target, some announced and never occurred.
asadotzler · 2h ago
Eating the tariffs by firing workers means more out of work with less purchasing power and prices are going up too. It's fail all the way down.
snarf21 · 2h ago
A lot of them are "eating" them in the margins of the unreasonable "inflation" increases they used to see how much the public was willing to pay for their products. (Normally, this would be okay in a functioning capitalist market except we've let way to many companies gain a monopolistic position with no real market competition to force a reasonable middle ground between profit and elastic demand.)
Supermancho · 10m ago
The baseline of no trade deficit between all countries and the US makes no sense, since countries are not uniform in resource or production. eg Lesotho/Bangladesh won't achieve a trade balance with the US when they produce what the US wants and don't consume enough to balance it out. https://www.youtube.com/watch?v=Ah9SrbCB7-k&t=1147s
Let's say this was the starting point. Almost immediately, this strategy of trade balance was dispensed with, leaving most countries with some random tariff rate that wasn't strategically decided.
Many recognizable countries, specifically the ones that the administration targeted for political reasons, ended up with adjusted tariffs based on politic. This was due to the administration figuring out they had overstepped or thought that they were too soft, when the influence wasn't effective. When it became clear the economics were being ignored, Trump called them some epithet that meant "unreasonable" and abandoned the tariff tactic in all but rhetoric.
What was the point? The most predictable sequence of IMMEDIATE events were likely the point. I believe the point was to try to convert the global crises (political, economic, and social) that existed around the world to purely economic concerns for simplicity. This was paired with jamming up the entire global trade system, which would allow the administration to listen for the squeakiest wheels. It was supposed to be an efficient way to prioritize immediate problems such that the administration would not have to learn about and weigh all the problems in the world.
Short and long term, the tariffs have accelerated the de-dollarization of the world economy, they has amplified income inequality, and have destroyed supply chains across multiple sectors. The replacements are necessarily less efficient (value is cannibalized by tariffs). It was a lazy and poorly considerer tactic, but it might have achieved the goal, given my assumption of purpose.
The issues that were raised to the administration were largely, left unsolved. The most prominent of which are the Ukrainian, Taiwanese, and Palestinian fronts and the weakening of the US hegemony due to trade conflicts. The good trade relations with traditionally friendly nations have been damaged, long term. Canada, India, China, most of the EU have made moves to distance themselves from the US chaos. Some strange side effects, like this weird buy in to american companies is a side effect of the show, rather than a specific intent. I can concede it wasn't all bad. The US did see some new corporate inroads into a few countries. Notably concessions from Mexico, who was willing to meet the US goals in achieving a trade balance (more or less).
Overall, it's possible the tariffs succeeded as a self-serving tool of the administration, but failed in serving the US as policy. Maybe I'm just wrong, but maybe Trump is just this simple minded and his administration is playing into the fallout, as it advances their 2025 goals (or whatever).
YetAnotherNick · 3h ago
> Not buy TSMC made chips? Obviously that is impossible
Why do you think that? Trump clearly wants them to use Intel's 18A which is likely similar to TSMC 2 year old N3P, which is not an impossible option.
That's 14A, not 18A, and it's not being axed, but questioned in what appears to be a game of chicken.
tester756 · 1h ago
18A is not getting axed, they'll use it.
fh973 · 3h ago
Them? Nvidia and AMD? RTX 7xxx would then be based on an old Intel process? Would buy these?
MBCook · 1h ago
All of Apple’s stuff?
even if Intel’s processes worked just as well, there’s no way they have the capacity to take over for all that stuff.
We’d be back in a huge shortage.
YetAnotherNick · 3h ago
I would buy that if I could get it in 30% lower price.
Rohansi · 3h ago
Just buy hardware that's a few years old and you'll basically get the same thing.
estebarb · 23m ago
I don't get it. Isn't it like forcing the foreign competitor into buying your only chicken that produces golden eggs. I really don't understand the logic behind this.
msgilligan · 10m ago
Well, to be fair, Intel stopped laying golden eggs years ago.
phkahler · 4h ago
On the surface, buying 49 percent of Intel wouldn't infuse the company with any capital. It would just bail out investors.
fuzzylightbulb · 4h ago
"Heads I win, tails you lose" combined with "I'm altering the deal. Pray I don't alter it any further." This is what passes for American diplomacy these days apparently.
No comments yet
cyphertruck · 1h ago
It actually wouldn't. The sale price will be pretty close to the current market price, maybe %10 more. If the Government kicks in funds to underwrite the deal (say a loan to TSMC) then the deal would likely happen exactly at market price.
That means investors who sell are getting the current low market price or a little bit higher--- they will still be down the massive amount.
This is really bailing out current management-- letting them be replaced by the more capable TSMC people and getting an attaboy for helping the US government strengthen the alliance with Taiwan, keeping peace in the region.
delfinom · 4m ago
But TSMC isn't a design house. Intel has both fab and design. TSMC's management could only help out on the fab side.
cyphertruck · 1h ago
This is like an old fashioned Civilization game trade. Taiwan gets a significant ownership in a blue chip US company, TSMC should then take %51 control over intel, and turn it around. The US gets a stronger position with China such that china attacking Taiwan would be like bombing Apple or Google. The USA will go to war over that.
Only the willingness to go to war, stops aggressors. War is terrible and economic competition is the path to peace, but if you can't defend yourself you will get destroyed.
Nevermark · 19m ago
> Taiwan gets a significant ownership in a blue chip US company
Blue chip, Intel is not:
> "[...] known for its stability, consistent earnings, sound financials, and long-standing reputation." [0]
Fortunately for TSMC, Intel really isn’t worth that much anymore. $50B doesn’t seem so bad, and maybe it could lead to a deep partnership and sharing of tech and factories.
Herring · 4h ago
> It may be dangerous to be America's enemy, but to be America's friend is fatal.
2OEH8eoCRo0 · 17m ago
Post the rest of the quote
ldoughty · 5h ago
I'm kinda of shocked that chip & many tech companies play ball..
They are a required / no alternatives industry by so much of the USA, with limited alternatives. Is it really more cost-effective for each of these companies to spend hundreds of billions of dollars to avoid tariffs when they could easily pass on these costs because we have no alternatives?
CGMthrowaway · 4h ago
>I'm kinda of shocked that chip & many tech companies play ball..
The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.
meragrin_ · 31m ago
> The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
How so? There was no mention of the government taking action against the company to cause the company to fail. If a company is failing without government contracts, that is on them and not the government.
sleepyguy · 4h ago
Bernie died in prison because he didn't want to give them access to Worldcom so the story goes.
seanmcdirmid · 3h ago
Bernie was released a month before dying. Don't ask me how I had this fact in the back of my head (I looked at Worldcom and Enron a few weeks ago for another HN story).
duxup · 4h ago
I think people in power are pretty fond of non democratic systems, they like them. They make friends and get favors. Far easier than competing.
And what's the alternative for many of them? Lawsuits?
SCOTUS has quit doing their job. The checks and balances are out the window. There is no leadership / anyone in power at the national level when it comes to democracy in the US at this time.
assword · 5h ago
> they could easily pass on these costs because we have no alternatives
Now imagine the same scenario, but one side is willing to destroy themselves as collateral if they don’t get the result they want.
tick_tock_tick · 1h ago
> when they could easily pass on these costs because we have no alternatives
The administration has made it clear they will take such actions personally.
The USA by and large figuratively controls the world. All of Europe is one step away from a protectorate and if Taiwan doesn't want to conquered by China they need the USA in the way.
If the USA ever sours on the relationship it means China will take Taiwan so they do whatever they need to do to appease the USA.
platevoltage · 53m ago
After pretty much every company with a public profile threw money at Trump's inauguration fund, this doesn't surprise me at all.
duped · 3h ago
Because they know that Trump is full of shit and a personal bribe in millions of dollars with some public copy of a public bribe of billions (that will never happen) will get him off your back.
dismalaf · 4h ago
Honestly, this is a win-win for TSMC.
Intel isn't dead. They've made some bad choices and investments but they're still huge. They have $30 billion in gross profit per year on an utterly boring, non-hype based business model. Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
On top of it already being a shrewd business deal, doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
Fade_Dance · 4h ago
Intel is not profitable. They have negative eps and negative free cash flow. The cash flows from existing products can't be considered in isolation. If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
They also have 50 billion dollars in debt, and their cash flow situation has gotten so desperate that slices of future fab revenue have been pawned off to private equity, who now has a senior claim on the assets (as do the bondholders).
An equity stake and Intel is not something that a TSMC would want without coercion. It's just not a very attractive place to be an equity holder.
>Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
As if it was that easy. The company has now been through multiple CEOs attempting to mix up these ideas in various ways. The last CEO tried to do a Hail Mary to improve the foundry business, but the balance sheet can't support it. Now the new CEO is essentially writing off those investments and putting them on the back burner. Considering that, getting rid of the dead weight will be difficult, considering the company itself is largely dead weight... The quality of their employees is not good, or at least not nearly at the level that needs to be (18A yields are alarmingly low, and that's the critical product that basically determines the company's future. 14a is already looking more and more distant despite it being the purported savior not even a year ago).
Realistically, their financial situation puts them right at the precipice of needing to shed the fabs, and/or permanently continue down the path of more Brookstone-like partnerships where they can spread the burden (which then caps the equity holder upside).
There is nothing "easy" about the current situation. Maybe without the 50 billion in debt, but nearly all of remedial paths are running into nasty balance sheet constraints. There's no more room to spend quarters rejiggering the thing.
dismalaf · 4h ago
> Intel is not profitable.
Did I say they were? Google gross versus net margin.
> If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
Current assets are $43 billion. Total assets are $192 billion. $30 billion yearly in gross profit. Debt is only $50 billion. They still hold 75% market share. Repeat, they still sell 3 times more chips than AMD.
Yes, their balance sheet isn't as good as some fabless competitors but if TSMC helps them with their 14a yield then it looks like a good investment.
Also, having TSMC on board will surely help with their fab business. Again, between the US government needing them to survive, TSMC on board, plus the fact they still do have a decent core business, I think Intel (and TSMC's investment) will be fine.
adgjlsfhk1 · 4h ago
It's actually better than that. TSMC wouldn't help intel with their 14a node. They would kill it, fire all of Intel's foundry R&D, and just build TSMCs 14a node.
dismalaf · 3h ago
I mean, it's the same thing... So yes.
phkahler · 4h ago
>> doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
They already built fabs in the US. The thing about protection money is the bully keeps asking for it again and again.
ldoughty · 4h ago
But the US government has proven to be unreliable in maintaining commitments -- even words on paper are meaningless as it doesn't seem to stop them from changing the deal later and demanding more ("I have change the terms of our agreement, pray I do not alter them further"), and then another request demanding more. Would TSMC be doing the government a favor and gaining protection, or are they being extorted? ("would sure be a shame if we doubled your tariffs again...")
throwup238 · 4h ago
Does it really matter? Does TSMC have a choice either way?
They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
phkahler · 4h ago
>> Does it really matter? Does TSMC have a choice either way?
Sure. Go home and make chips. Pass the tarrif costs on to customers. Would US customers have a choice?
throwup238 · 1h ago
EUV was developed with in a Cooperative Research and Development Agreement between the US Department of Energy, Intel, ASML, and so on - giving Congress control over who ASML sells the EUV technology to.
So yes, US companies do have a choice. They can lobby Congress to cut off TSMC from their main hardware and parts supplier entirely, crippling it altogether, except for their Arizona plant which is ripe for nationalization for natsec.
seanmcdirmid · 3h ago
Taiwan is too dependent on the USA ATM to make that choice. If they were to go it without the USA, the only choice would be to become an actual bonafide province of China, they aren't going to exist on their own. Almost everyone else outside of eastern Asia, however, can make a different choice.
impossiblefork · 1h ago
I think there's reason for the EU to ensure that there's no semiconductor manufacturing monopoly.
So the EU offering something like nuclear weapons sharing à la that which Germany etc. would probably be reasonable if the US bullied Taiwan too hard. But I don't think it's happening, I think people want good relations with China.
Matticus_Rex · 4h ago
If it were a win-win relative to their other options, they wouldn't have to be forced into it. They may have been able to make the best of it, but let's not pretend value is being created.
btian · 1h ago
I don't know if any of that is true. Even if it's true, why TSMC?
Will Apple, AMD, and nVidia continue to trust TSMC if it owns half of Intel?
dismalaf · 46m ago
> Will Apple, AMD, and nVidia continue to trust TSMC if it owns half of Intel?
It doesn't matter because none of them have much choice. None of them own fabs and Samsung's capacity is significantly less than TSMC's. Plus Samsung also designs chips.
nevi-me · 11m ago
There's going to be a lot of undoing actions that were taken because of an old bully who thinks the world is a celebrity game show.
Surely tariffs for 3 more years are less damaging than buying a sinking ship?
South African right wing farmers sold a story of a genocide and reverse racism, now they wish losing business because their exports are more expensive from the very tariffs that are a negotiation tactic to get their government to abolish or repel sine laws.
molticrystal · 3h ago
I understand the push to build fabs in the US to avoid tariffs, as the US likely sees this as a strategic hedge for the global chip supply in case China disrupts Taiwan or Japan, or some other rare catastrophic event occurs.
Whether it is correct or not, Trump seems to view the US as a larger version of Mar-a-Lago, so he'll always feel he can charge a premium for access to its consumer base and market while offering discounts to those he sees as ingratiating themselves.
But it is supposed to be a free market that should reward efficiency and competence, not prop up companies that don't have their act together. If the goal is domestic chip production, funneling funds to TSMC's proven fab operations and to build more US fabs makes more sense than bailing out Intel, regardless of whether it is improper to demand such concessions at all.
charlieyu1 · 1h ago
TSMC tried to build fabs in US, it doesn’t work, turns out you can’t hire top PhDs and pay them 30k and tell them it’s a lot of money
jpalawaga · 51m ago
doesn't tsmc have a 4nm plant in arizona that is cranking out chips today?
melling · 5h ago
Intel only up 4%. Seems unlikely.
hunglee2 · 4h ago
Unprecedented rapacity by the United States - not only forced tech transfer, and then having to pay for the privilege of being robbed; the hegemon is consuming its vassals, as it withdraws from its commitments.
phkahler · 4h ago
Well China has been forcing tech transfer for 30 years now.
Herring · 3h ago
Look at Intel's history. Concentration of power (monopoly) generally leads to corruption/abuse and stifled innovation. It's bad even for the monopolist.
The second China becomes powerful enough to throw their military around like the US is when I start supporting tech transfers the other way. A more distributed power structure is much better for overall progress.
threatofrain · 3h ago
> The second China becomes powerful enough to throw their military around like the US
This would be late timing.
Herring · 3h ago
Go look up "world's happiest countries 2025". There are lots of places that are absolutely thriving despite not having the biggest guns (and perhaps because of it).
seanmcdirmid · 3h ago
China is on a path to having the biggest guns anyways (I totally expect them to pass the USA in military power in my lifetime).
thorncorona · 3h ago
Unsurprisingly, this correlates with antidepressant usage.
cmdli · 4h ago
And China is becoming increasingly isolated from the rest of the Western world. I'm amazed that the US is following suit.
tonyhart7 · 4h ago
why you acting like this is bad thing????
const_cast · 3h ago
Because nobody can explain why its a good thing????
phkahler · 26m ago
Trade deficits are bad. See Greece a while back.
taylodl · 4h ago
I'd tell the bully "no deal" if I don't get controlling interest, and thus full control of the board.
CoastalCoder · 1h ago
As much as I'd like to see bullying firmly rebuked, I'm not sure that approach would work here.
Because even if TSMC managed to get that initial deal, they'd still be at risk of Trump revisiting it.
jimbob45 · 1h ago
I'm not sure anyone but Intel is against that. Both US parties are most likely furious that the CHIPS act was a massive waste of money. TSMC would love to outright buy a massive US presence with valuable IP. The US desperately needs Intel to turn things around to remain a strategic advantage. Only Intel in their cesspool of hubris would want to keep the status quo of mediocrity.
But TSMC, please please please, get Intel out of Oregon. I'm so tired of that loser state holding back companies from reaching their true potential.
duxup · 5h ago
This whole economy by corruption and coercion is not going to work out.
araes · 4h ago
The article pretty much says it right in the opening section
> investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint
TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.)
Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme.
Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad.
They could do the China[1] / EU[2] strategy of announcing they'll do it, but never following through with it. When your opponent has the attention span of a drunken gnat, it's a surprisingly good strategy.
What part of any plan they have had tells you they are likely to stop losing money any time soon? They are basically selling for asset price right now...because the market doesn't believe they are worth more than their assets.
Gud · 2h ago
No plan, but wouldn’t be the first time a juggernaut is turned around.
j_walter · 2h ago
Wouldn't be the first time they became obsolete either...and I think even with the US governments help they are too far down the drain to come back.
cyphertruck · 1h ago
That money will be provided via a loan, from the US Government, at a reasonable interest rate. USG doesn't lose money, TSMC gets to expand into all of Intels fabs (when they raise the money to buy a controlling interest in INTC down the line.)
Or the entire thing can be done by a stock swap, with whoever diluting themselves however amount is necessary, etc.
achempion · 3h ago
Why would they buy exactly 49% and not 51% of Intel? If these extra 2% are not available, why buy 49% then and not just 2-5%?
bathtub365 · 3h ago
They don’t want a successful foreign company to have a controlling interest in their failing domestic company
tremon · 2h ago
Is your "they" the same as the parent's "they"? Seems like you're talking about different parties.
seanmcdirmid · 3h ago
They want to ensure that TSMC doesn't have a controlling stake.
sct202 · 2h ago
The remaining 51% would be highly fractured unless it was like the US government on the otherside. One of the publicly traded companies I worked at effectively got taken over with <20% of regular shares by an activist billionaire.
seanmcdirmid · 1h ago
Ya, they would have to make their stake non-voting regardless, then what would be the point? I don't think Trump thought this through.
csomar · 3h ago
They are $50bn in debt.
Waterluvian · 1h ago
I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like).
I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
nosignono · 1h ago
The collapse of an empire is correct. USA is absolutely an empire, and we're clearly seeing unprecedented contractions and spasms of our government as it ineffectually attempts to govern while doing everything it can to foment civil agitation.
antonvs · 1h ago
This could still be turned around, with some luck and effort. But it won't happen if the voters don't get out of frog-being-slowly-boiled mode, clinging to normalcy bias.
So in the end your assessment is probably correct. It's probably going to be a long, slow decline though.
exasperaited · 1h ago
> I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like).
It feels to me like it's more like the beginning of an empire, in the sense of existing under an emperor.
> I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
I think it very interesting that one of the things the USA is going to have to grapple with, in the middle of the most contentious presidency in its history, is the semiquincentennial of independence itself.
The bicentennial of independence in 1976 was I think largely an uncontentious thing even though the Vietnam conflict had ended only a couple of years beforehand and the presidency was in the hands of a guy who had taken over the job from, and pardoned, a crook who was forced to resign. Internationally people were pretty kind and generous to the USA.
I don't think anyone, anywhere on the planet, is prepared diplomatically for how it will play out this time. Next year is going to be a heck of a year.
nosignono · 1h ago
The US president has been an emperor in all but title for generations at least.
exasperaited · 1h ago
I think this will have been news to Biden and especially to Obama, who didn't even get the deference about the new suit.
nosignono · 1h ago
If you think Obama wasn't overseeing an empire, I don't know what to tell you. Maybe you should ask the people of Pakistan, Yemen, Somalia, Afghanistan, Iraq and Libya about the US drone strikes there.
exasperaited · 58m ago
Oh, that isn't what I mean, and I am willing to accept your view. (And I was joking a bit anyway)
What I mean about the beginning of an empire is, as I said -- the beginning of a true individual, not simply unitary, emperor. That the executive is transforming into l'état, c'est moi, which no US president has had the luxury of ever before, because Congress wouldn't ever have handed over the influence and authority they had.
lazyeye · 3h ago
This is how China has been operating since forever. They don't seem to be doing too badly.
duxup · 3h ago
This is one of those situations where much like manufacturing jobs in the us ... that's not what I want. I don't think most people want that.
I don't think becoming China would be a success.
seanmcdirmid · 3h ago
China forced 49-51 JVs. But Intel is a public company, not a JV.
rchaud · 3h ago
Who knew "Running America like a business" had so much in common with the Chinese Communist Party? Banning books, blocking access to websites and apps, protectionist tariffs to support local business and now forcing foreign competitors into joint ventures with failing local companies.
ModernMech · 3h ago
The through line is authoritarianism. Whether it’s Chinese communist authoritarians or American fascist authoritarians, the result is corruption.
tsol · 2h ago
Are they? But Silicon Valley is in the USA and not China. I would imagine the legal and business environment has something to do with that.
newsclues · 3h ago
Been working for a long time just like that though.
duxup · 3h ago
The amount matters a great deal IMO.
newsclues · 3h ago
Visibility is the difference.
It happened before, and perhaps even worse (more competent people were corrupt).
Now, people are just making it public.
duxup · 3h ago
The existence of any corruption really has nothing to do with the amount. The amount matters.
coreyh14444 · 4h ago
Banana Republic shit.
davidw · 4h ago
Just last week, the director of the Bureau of Labor Statistics was fired because the jobs numbers didn't look good and that upset the person in charge.
xnx · 4h ago
I've heard this described as the coach firing the scoreboard after they lost the game.
throwawaylaptop · 2h ago
Or was he fired for getting it wrong first?
mandevil · 1h ago
So first of all, Erika McEntarfer is a she.
Second of all, revisions are incredibly common with BLS numbers, it's normal. They are trying to balance accuracy with speed, and this is how they do that.
They survey about 50,000 companies out of the 12 million registered US companies. Since the pandemic, response rates on their surveys have gotten worse. It is now about 50% at the end of the first month, slowly rising to about 90% two months later, so they update their results as the surveys get completed. The waiting is especially important because the speed of survey returns turns out to not be randomly distributed, the bigger the business, the faster it returns a survey, so small businesses are more likely to respond later. The BLS attempts to counter for that in their initial reports by inflating the small business returns that do come in early enough to account for their under-reporting, but the later returns are just incredibly valuable for getting accurate data.
Even with all of that, under normal economic circumstances revisions generally are small (they exist, but generally they cancel out thanks to the BLS inflation of the small business numbers, some of the businesses are higher than expected, some are lower, it all cancels out). Large revisions, either up or down, are generally associated with the economy changing course (lots of small businesses miss in the same direction, pretty good sign that the economy is changing)- large revisions down are often seen as a leading indicator of a recession, and large revisions up are often seen as a leading indicator of an economic improvement.
This is all true at least in the previous regime, where the BLS was trusted to be non-partisan. That reputation has definitely taken a hit; we will have to see how much trust remains in that organization going forward.
antonvs · 1h ago
Pro tip: don't parrot government talking points if you're not familiar with the issues.
platevoltage · 49m ago
"he"
throwawaylaptop · 28m ago
Does it matter who it is specifically? And does it matter if it's a man or woman?
platevoltage · 54s ago
It doesn't matter, it just shows how grossly misinformed you are.
duxup · 4h ago
I honestly expect that if things go bad enough we will get Trump on TV live at the white house berating his cabinet members and firing them like the farce you got with Hugo Chávez.
silverquiet · 2h ago
"You're fired", was indeed his catchphrase for the farcical reality TV show he stared in portraying a competent business owner.
neves · 4h ago
Perhaps we'll see him humiliating a head of state live.
tremon · 2h ago
Like he tried to do with Zelensky?
tremon · 2h ago
But why on TV? Didn't we basically see that happen with ol' Musky on Xitter?
saalweachter · 4h ago
... is that not a thing that already happens?
davidw · 4h ago
Mostly not, because they are all 100% on board. They have shown cabinet meetings where they all take turns effusively praising him in the most sickeningly sycophantic way, though.
saalweachter · 3h ago
He went through a half dozen attorneys general, because they wouldn't do what he wanted, and the thing driving the stock market crazy lately is the persistent rumor he's about to fire the chair of the Fed, whom he appointed.
quesera · 3h ago
Wait, are we still talking about North Korea?
FirmwareBurner · 5h ago
I don't see how it can't work at least short term, when the US is by a long margin the world leading military and economic power.
Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove?
I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely.
UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together?
What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
A_D_E_P_T · 4h ago
> I don't see how it can't work at least short term, when the US is by a long margin the world military and economic power.
The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
neves · 4h ago
USA spends more in their military than the rest of the world combined. Also the only country which used nuclear weapons of mass destruction. You must fear them.
Tadpole9181 · 3h ago
The US spends more on everything, those numbers need to be cost adjusted for "cost of a rifle for America v cost of a rifle for China", but never are.
alfiedotwtf · 3h ago
The US’ playbook in 2025 is that they were the high school bully who was also the quarterback scoring four touchdowns in a single game.
There are other ways to assert power other than how big your nuclear arsenal is - Japan did just that by threatening to offload their US bonds only two months ago, and Europe’s trade negotiators will outclass Trump’s B-Team.
The world has moved on from “I have lots of nukes”.
couscouspie · 2h ago
> Europe’s trade negotiators will outclass Trump’s B-Team
Hardly matters. As long as von-der-Leyen remains head of commission the European Union stays devoted to the US no matter the consensus of commission, parliament, national governments or the people.
oezi · 4h ago
When all your military spending can't help you win against a third-world country (USA in Afghanistan) or a single country 1/3 your size (Russia in Ukraine), it really makes you wonder if all that spending is justified to uphold one big bluff.
msabalau · 1h ago
The Bush administration was looking to "win" in the Afghanistan by doing nation building, which was never going to work, and certainly wasn't going to be accomplished by military means. Obama and Trump both chose to kick the can the road, to not pay the political cost for "losing", Biden ended the conflict, and paid the political price.
But if the US had a different objectives, every human settlement in Afghanistan could have have been radioactive ash by September 12, 2001. Or, more realistically, the US could have gone in, killed all (for some value of all) the local elites as a warning to leaders elsewhere about the costs of harboring terrorists, and then immediately left the country in the same sort of chaos that they eventually did a couple of decades later. Kabul delenda est was always accomplishable.
The only people who should be ashamed of the their performance in Ukraine are the Russians, and the Europeans, for failing to be able deter or respond to the Russia on their own despite having an economy five times the size.
US interests are perfectly well served by seeing the Russian military mauled for a generation at the cost of aid, much of it material that was going to be decommissioned anyway, that costs roughly what Americans spend on golf in a given year (Once you throw in the costs of drinks on the 19th hole.)
Anyway, US arms sales are up since the start of the conflict, Russian sales have cratered.
AnimalMuppet · 4h ago
We aren't pointing "all our military spending" against Russia in Ukraine. Not by a long shot (no pun intended).
notahacker · 4h ago
Of course not. But I think it's also true to say if the US hasn't been willing or able to effectively use its military power at the margin to stop a historic enemy from annexing its neighbours with impunity, your average regional power doesn't have to worry about the US using its military power to dominate world trade.
Alupis · 3h ago
Nothing will change in the US if Ukraine falls tomorrow.
People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
If Ukraine is so important to the world order, why has Europe (you know, Ukraine's actual neighbors) not stepped up with their full military power? Why is Europe not threatening troops, missiles, aircraft, tanks, etc... even nuclear obliteration if Putin doesn't yield? Why is it the US has to swoop in, from half a world away, and save the day (again, and again, and again...)?
The US is not currently willing to send our citizens to die in Ukraine. Maybe Europeans should?
coryrc · 1h ago
> People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
There's a difference between the US invading Iraq and US aiding a country being invaded.
Alupis · 1h ago
> US aiding a country being invaded
Why can't the Germans send troops into Ukraine? Or the Brits (for all their grandstanding and bluster)?
Why must it be the US?
If "everyone" thinks Putin isn't going to stop with Ukraine, then it would seem Europe has an existential crisis to deal with - not the US, thousands of miles away...
hvb2 · 2h ago
Just to state a fact.
Article 5 of NATO (an attack on one is an attack on all) has only been invoked once, by the US.
So why did NATO members send their militaries to Afghanistan?
The real reason is that most conflicts never happen. Or are resolved before ending in a full war. Either the US or a European NATO country sending in troops would muddy the conflict so much that the risk of escalation is huge.
alfiedotwtf · 3h ago
> The US is not currently willing to send our citizens to die in Ukraine
The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump. So much has happened that we’ve collectively forgotten that it was Zelensky said “No” to Trump on the phone when wanting to find any dirt on Joe Biden helping Hunter in business deals.
Alupis · 50m ago
> The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump
That totally explains why Biden kept slow-walking support packages...
ModernMech · 3h ago
> Nothing will change in the US if Ukraine falls tomorrow.
It certainly will when Putin moves on to invading Poland or Finland. The whole point of holding the line at Ukraine is because everyone believes Putin won’t stop there.
tick_tock_tick · 1h ago
I mean we rolled over Afghanistan the problem is fighting a war "humanely". Hard to accomplish anything with both hands tied behind your back. Just like in Vietnam the USA's ability to wage war is only limited by what it's local population thinks is "fair".
vaidhy · 4h ago
Winning is different from taking over.. Russia wants to rule over Ukraine, not destroy it.
US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
lostlogin · 4h ago
> Russia wants to rule over Ukraine, not destroy it.
Can’t it be both? It’s hard to argue they aren’t trying to destroy it. It has been attempted in the past during the Holodomor.
The context of post-civil war stalinism and food/industrial policy was a little different from modern Russian empire-building.
Russia's end goal here is a cultural genocide.
No comments yet
duxup · 4h ago
I'll nitpick here and say that Russia's plan was more likely to topple the government and put a puppet in place and then leave, but they botched that.
watwut · 3h ago
Russia destroys its colonies. It wants to destroy ukraine. And it wants cultural genocide.
No comments yet
nemomarx · 5h ago
China seems to be working on catching up, and if you remove all of your soft power maybe they look more attractive?
notahacker · 4h ago
Absolutely. Everything the OP mentions as a reason to continue trading with the US is also a reason for Europe to trade more with China. Historically the argument for not doing that is "look at their very different values and how they bully and threaten their neighbours, and remember that if you do business there their government will happily crush you with its arbitrary power as soon as you step out of line and even at the import/export any trade deals they do make will be them openly trying to screw you" The US isn't exactly in a strong position to continue making those arguments about why the world's other superpower is different with a straight face.
The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
teamweightloss · 1h ago
Europe is not going to trade more with China, if anything, they want to trade less with China, if you look at the recent events.
- China is in a great depression. Their only economic engine is export, and Europe is steadily putting up tariff walls.
SpicyLemonZest · 3h ago
More than what? Europe trades a tremendous amount with China in the status quo. The argument you mentioned is real, but the EU never subscribed to it in the first place; they've consistently stated (e.g. https://ec.europa.eu/commission/presscorner/detail/en/STATEM...) that trade with China is very important and they have no interest in decoupling, although they'd like to lower the trade deficit.
notahacker · 3h ago
Well yes, and so does the US. But Europe has certain significant restrictions on trade with China in sensitive areas, and levies its common external tariff on Chinese imports. China would love those restrictions to be removed and to get a broad trade deal.
And other countries that consider themselves broadly aligned with the West have considerably less decision-making inertia than the EU
SpicyLemonZest · 2h ago
I don't think China would love to get a broad trade deal. Analysts in both Europe and the US generally agree that the Chinese government cultivates unbalanced trade as a matter of policy. (Indeed, one of the things that's supposed to happen as part of the US-EU "trade deal" is joint action on metals to counteract persistent Chinese overcapacity.)
notahacker · 1h ago
A broad trade deal would be unbalanced in China's favour; they manufacture more and at lower cost. But the US isn't exactly selling the message of being the better partner right now.
exasperaited · 4h ago
Oh and TSMC is on an island they claim is their own. Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
dismalaf · 4h ago
> Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
Marsymars · 48m ago
> What can they do now, when the US holds all the cards?
Negotiate and follow through in bad faith, because there's no upside to acting in good faith when the opposing party is pursuing a lose-lose agenda.
duxup · 4h ago
No magic that keeps your businesses efficient or running if the government is picking winners and using tariffs. Quite the opposite.
ben_w · 4h ago
The US margin on economic power isn't all that great, by GDP/PPP it's a long way behind China.
Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry.
> Ally with China, Iran and Russia to fight the US?
Replace Iran with the EU, and yes, some or all of them.
> EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia,
Urgent, but affordable.
> no cheap energy, no tech industry,
Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale
> ageing population, economic stagnation or even decline,
Like everyone else, including the USA
> collapsing welfare system
News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power?
But also, not a unified welfare system over all member nations of the EU.
> illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship.
Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
neves · 4h ago
US is a lot richer than China. GDP/PPP does not count the number of citizens.
ben_w · 3h ago
If per capita was what mattered, the US would be kowtowing to each of Luxembourg, Singapore, and Ireland. The US does not, because "per capita" isn't as important as "per government".
The mean wealth/income per person in the USA is indeed higher than China.
If anything, it shows the opposite of what you are saying.
exasperaited · 4h ago
It will not work out over the long run. This is corruption; it breeds corruption, and corruption creates victims. Victims don't put up with it forever and as the old cold case appeal spiel goes, "alliances shift over time".
More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right?
Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere?
If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables.
Not least because acquiescing even to buying 49% paints a target on my back.
Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
paganel · 4h ago
TSMC is not going to get over the 50% threshold because it has no free will in this whole matter, as the very existence of Taiwan, and hence of TSMC, depends on the political will of the US.
Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
exasperaited · 4h ago
But they have to try, right? Otherwise as you say, they are essentially operating under Rubio and Trump's control as a tool of the State Department.
The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest?
Trump has created a powerful victim here.
HarHarVeryFunny · 4h ago
Why would China annexing Taiwan have any direct effect on TSMC ?
I'd imagine they would be happy to have TSMC still selling to NVidia, Apple and AMD, and therefore a powerful lever in case of future US export controls/etc.
adgjlsfhk1 · 4h ago
because even without deliberate sabotage a war in Taiwan would shut TSMC down for at least a decade. Changing the toilet paper supplier can drop yield by 20% until they sort it out. How do you think a warzone will affect it?
HarHarVeryFunny · 3h ago
TSMC built a fab in Arizona that in 2 years was up and running delivering chips to Apple, so it doesn't take that long ...
Obviously a protracted or nasty war would have a severe impact, but it's hard to see why China would want to harm TSMC, even if worse case for US they stopped them from exporting.
adgjlsfhk1 · 2h ago
you're assuming way less action from the US than there would actually be. it's not about the exports, it's about the supply chain to supply a fab. they need euv machines, wafers, thousands of specifically sourced chemicals etc.
it's not about what China wants, it's just not feasible to operate a fab in a warzone
vkou · 5h ago
It won't work out because the people in charge are the dumbest motherfuckers imaginable. They are utterly convinced that every one of their stupid ideas is brilliant, that they know everything, and that the way forward is to liquidate anyone who has the audacity to say 'no' or 'you're wrong' to them.
That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing.
The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
AnimalMuppet · 4h ago
I'm not sure they're convinced that every idea is brilliant. They're convinced that they have to convince everyone else that every idea is brilliant, because if they don't, everyone else will wake up and realize that many of their ideas are in fact not all that bright.
vkou · 4h ago
I don't think at this point it's safe to say that they are actually playing 3-dimensional chess. There is plenty of evidence that indicates that they are stupid enough to believe their own bullshit.
wrs · 3h ago
It seems like the tariffs are at least one-dimensional chess. The supposed rationale for the numbers was widely ridiculed, but now it’s clear that the numbers didn’t matter as long as they’re large. The tariffs have no rational basis as tariffs, they’re just a convenient stick for extortionate demands like this one.
xyst · 4h ago
The economy of "corruption" and "coercion" is Neoliberal Economics 101. Send your regards to pseudo economic theory from the Chicago School of Economics (ie, Milton Friedman); and to Reaganomics/trickle down economics.
olalonde · 4h ago
Both Friedman[0] and Reagan[1] were strongly opposed to tariffs and most forms of government intervention in the economy. Hard to imagine either of them supporting the current administration's policies.
Literally the opposite of reality. Not sure how it’s possible to get this so backwards
slt2021 · 4h ago
Rome Republic is over, time for the Roman Empire.
The surest sign of it will be the DJT running for the 3rd term
sdsd · 3h ago
The Roman Empire began with a corrupt Senate murdering Caesar for being a dictator. Based on Rome's history, the surest sign would be for JD Vance to murder Trump, declare democracy saved, and then Trump Jr to become emperor of NATO.
slt2021 · 3h ago
I have a feeling that Barron will be the one running, when his time comes, not jr
cyphertruck · 1h ago
This isn't corruption or coercion. This is a deal. These are terms being offered. They can say no, or counter. But these terms benefit all parties-- TSMC can eventually buy out intel, get lots of top end fabs, bring their superior processes to those fabs and meet the huge demand in AI chips-- that they currently can't grow fast enough to cover. ASML machines take years to build... a better TSMC process on existing ASML machines in Intel fabs is an easy %30 win for the entire world.
Plus, china kept at bay, peace increased, intel's bad management gets to bail out saving face, TSMC gets rewarded for their hard work, Trump gets a win, Intel's employees get better management, and get rich from their stock options winning hugely....
Capitalism is where everyone wins like this.
Even china, because china loses if it goes to war, but china feels it has to go to war.
fooker · 5h ago
It has historically worked pretty well, for several centuries at a time.
Are you saying there’s something different this time ?
duxup · 5h ago
I don't know what you're thinking of.
exasperaited · 4h ago
Well, I am British and have studied a tiny bit of my own country's history... so I do.
But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen.
The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
ben_w · 3h ago
> and retail prices can be cut by more than 100% and remain positive.
I've missed this story. Can you elaborate?
nemomarx · 2h ago
It's not much of anything - Trump said he would get pharma prices down 500 percent or such.
exasperaited · 1h ago
He said it more than once on more than one occasion though. Which, as with all these things, means either:
- this is his wonky understanding (and he is pretty famously innumerate)
- he's saying it as a power game despite the pushback because people around him feel they have to smile, agree and retcon stuff to make it believable
Or indeed both.
nemomarx · 1h ago
I do kinda expect he saw the number on a paper and has latched onto it, personally. I doubt he can interpret tables or charts.
exasperaited · 1h ago
The most charitable explanation is that -- because as a malignant narcissist his grasp of past, present and future is really kind of broken -- he's talking about reversing hypothetical gains, and because the numbers sound big he doesn't care that it doesn't make any sense to the listener, and his team will twist themselves into pretzels to make it true anyway.
(I haven't yet heard them make the claim that he means reversing gains, but I would expect them to. Heck if it was my job to make his Truth Social messages make sense, that is what I would say.)
But honestly his grasp of fractions and percentages has long been known to be worse than early era ChatGPT.
The most worrying aspect of the Trump era for the markets should be that he treats numbers as entirely flexible according to his mood, when the market needs them to at least be consistent.
But then they knew this before he was elected the first time; he is famous for admitting he assesses the value of future business at any time based in part on how he feels about it (which is reminiscent of the way Musk assesses future valuations, future delivery dates for full-self-driving, future sales of robots etc.)
So it's not a political thing at all. He hasn't always been a Republican but he has always been like this with numbers, and anyone who has ever subjected his words to any kind of scrutiny should know it.
Matticus_Rex · 4h ago
Something working well* (at least for well-connected people, relative to the general populace) when world GDP was two orders of magnitude lower does not mean it works well (for the general populace) today.
exasperaited · 4h ago
How is that Tiktok forced sale going though?
The longer Trump creates a legal black hole carve-out for Tiktok, the less anyone will want to buy it. Because he is and this action is transparently corrupt, and it taints the buyer.
And that is true of the participants of any of these forced transfers; they paint targets on their back for future manipulation by the Trump executive. (Which increasingly feels like it should be described as a regime)
analog31 · 4h ago
It seems like we're forcing the rest of the world to print dollars.
herbst · 4h ago
A swiss news paper wrote something along "so far the main effects seem to be the rising prices of Swiss goods in America, not really a falling market"
He is threating Switzerland with 250% tariffs on meds while his people still suffer under horrendous health care prices. That man is beyond crazy
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Havoc · 2h ago
Someone with a gun to their head is the only party that would buy it.
Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously:
And doesn't sound like their next or next next nodes are in good shape either
bangaladore · 9m ago
I just bought my first AMD chip in years (a 9950X3D), the last one I had was from the early FX series. After how poorly those FX chips performed, I swore off AMD for a long time.
Ryzen definitely caught my interest when it first came out, but Intel still had the edge in performance and stability back then, so I stuck with them.
That started to change with the 7800X3D, and now with the 97/9950X3D lineup, AMD is clearly ahead. I'm not even going to mention the "new" Intel chips.
Funny how things shift. I'm firmly in the AMD camp now.
And everyone I know is in the same boat. Probably 3-5 years ago Intel was the only "real" option for the people I know, now it's the exact opposite.
tester756 · 55m ago
>Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously:
That makes you think that this data is representative?
Havoc · 6m ago
Mindfactory is widely used as proxy because its pretty much the only public data source on this that publishes monthly
If you have a better source I'm all ears
IshKebab · 2h ago
That's not how it works. The fact that Intel are doing abysmally is already priced in.
throwawayoldie · 4h ago
"If we pay the Dane, certainly he won't ever come back for more Danegeld."
tonyhart7 · 4h ago
isn't that just monopoly???
idk how we got to do this, like single producent of high end chips is not good for everyone
jokoon · 3h ago
China said they are going to invade in the next 5 years or so, so TSMC might agree to anything, but that goes a bit too far
nly · 4h ago
If tariffs really raised money in the way Trump pretends then the US government could surely just grant Intel a direct share of all tarrif revenue raised from sales in to the US from Tawain?
Of course the reality is you're just taxing Americans to subsidise Intel at that point, since tarrifs are a tax on Americans and not foreigners.
OutOfHere · 4h ago
This is setting up TSMC to also fail. As for Intel, it still will fail anyway.
xyst · 4h ago
If US steps in to buy a troubled asset such as Intel after failing to convince TSMC to buy, this country is cooked.
Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
duxup · 4h ago
I think 2008 showed ... how it works.
The unfortunate part is that the GOP has now repealed whatever protections were put in place on banks after that.
WorldPeas · 4h ago
when I read "how it works" I assume you mean that it was a success? bailing out GM in the way they did pushed their novel vehicle platform technologies to fall to the wayside and for them to refocus on combustion. New brands were on the horizon, there was a hope for a new modern vehicular order but the midrange of the market was squatted by GM's insufficient vehicles. I don't think 2008's bailout worked, at all.
nemomarx · 2h ago
It worked for GM, and therefore for the politicians who got favors and influence from doing it, etc. A particular sense of "worked".
tick_tock_tick · 1h ago
The government made a shit ton of money from 2008 by not letting them fail and buying preferred shares. Hell fannie mae and freddie mac throw off tons of cash for the government to this day.
dclowd9901 · 4h ago
Didn't we _not_ let industries fail during that time? How about the Big 3 bailouts and the emergency infusions for banks? And these actions decidedly helped save our economy.
Whether it's good from a moral perspective or a long term perspective I guess is another matter, but I suspect if the government hadn't stepped in, we'd still be in the throes of the subprime crash even today. This is speaking as someone who is deeply anti-corporate.
wmf · 4h ago
This is akin to letting all US banks fail and then saying we'll just use foreign banks for everything. Intel is a strategic company for the US.
leptons · 4h ago
>Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
2025 says "hold my beer"
antonvs · 1h ago
If by "we" you mean anyone in the current administration, the answer is an obvious no. Learning is not their thing.
No comments yet
catlikesshrimp · 4h ago
Taiwan is under a tremendous pull by China, both non violent and violent. Any push by the US is a push towards China.
Trump has no idea what he is doing. HE can not replace Brazilian coffee, but at least it is "only" coffee. Not being able to replace a fab is a precarious situation.
Is he imagining invading Taiwan? China would consider that an invasion to its territory.
duxup · 4h ago
I don't think Trump cares if it "works" economically long term. He cares about what he can extract personally and what he got upset about on twitter when he woke up. That's it ...
He was quoted regarding environmental concerns something to the effect of "I'll be dead by then".
I think that's really his POV. If you plan to live longer than Trump, he's really not for you.
ujkhsjkdhf234 · 4h ago
Trump's tariffs forced a historic trade deal between Japan, China, and Korea, three countries that historically hate each other. If Trump managed to accidentally force Taiwan and China to settle their differences, it might be a sign of the rapture.
Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly.
What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical conclusion is that American consumers will end up paying the tariffs.
That’s been the point all along… they are significantly raising taxes on the bottom 90% of Americans and most are too stupid to even understand it. Gotta pay for those tax cuts for the wealthy somehow.
This isn't some natural state that's unrecoverable. The people you describe have been given a highly addictive media environment tailor made to engender outrage and drive behavior. It shouldn't be a shock when most people cannot resist it. The first step to changing it is not writing them off or insulting them for being had.
In addition to being rude, its not a particularly clear word.
So I have coined the term "antididact", to more specifically describe the problem of people who resist learning or being taught, in circumstances like this.
There are a lot of high quality media sources out there that don't promote outrage.
No. Someone refusing to spend 30 seconds understanding how a tariff works is the result of an idiot. My 10 year old figured out how they work in under 5 minutes. There’s literally no excuse for a grown ass adult to refuse to educate themselves on the subject.
“This media environment” doesn’t prevent them from typing “how do tariffs work?” in their search engine of choice and reading the first result.
>Tariffs are taxes imposed by a government on imported goods, making them more expensive to encourage consumers to buy domestic products instead. The costs of these tariffs are typically passed on to consumers, resulting in higher prices for imported items.
I don't see any "college level vocabulary words" and it directly says that it makes goods more expensive and the costs are passed on to consumers. Maybe Google's complicated answer is part of the "media environment" being criticized.
At some point it is the individual. (I recently lost my COVID kilos, 10-15kg. Was easy. Stop drinking beer. Skip meals. Then again adhd brain makes it easy loll xd)
At some point the Trump voters need to suffer.
Arguably, US consumers are super consumers and maybe it will be better for everyone if Americans consume a bit less? I don't think that it should be necessarily bad for business, maybe it's time to switch to world building instead of consuming, maybe as so many people works so hard we as species should gradually move on to use our output for longer and enrich our lives with each new tool instead of consume more and more and keep working the same or more. Eastern Europeans are or used to be a bit likte that, have a slow paced life, have low GDP output, on paper economy and everything is bad but actually have a great life if you have a house with a garden and some stuff you bought 30 years ago and still functioning good enough.
I am not American, nor am I Chinese. Both of those countries have the capability to make enough compute to do whatever the hell they want. I am, however, European...
I can almost imagine we would have more trouble getting domestic phone screens, but I'm not doing any research to validate that gut feeling.
I think the biggest problem would be whether we could automate assembly enough to avoid having high labor costs on each unit
Not just that, the raft of features that may have to be disabled until that performance and performance per watt gets back to where it is today.
Buying half of Intel isn't going to change anything
I think it's a braindead, 4th-grade way to run international negotiations, but it is a way.
Wouldn't that just mean that Taiwan has to choose between two villains, and China can take the advantage of this by changing its narrative and taking the position as a hero, protecting Taiwan from the US.
Or rather, they see themselves as the legitimate government of China, which is undergoing a temporary Communist junta. The separation was extremely violent. I mean, you saw the Three Body Problem.
The US fosters this, to retain a toehold there. Taiwan doesn't exactly love us for it, but they know which side their bread is buttered on.
No, they don't. But formally renouncing that position[1] makes them officially secessionist in the eyes of Chinese conservatives, adding pressure to invade. The One China fiction matters, though how much it matters is definitely up for debate. But it's a local minima, and rolling the dice comes with significant risk.
[1] At the state level. AFAIU, it's been renounced by several of the major parties in Taiwan, and when in power they've made movements at low levels of government that arguably contravene the policy. But it still remains the official position and its still enshrined in the Taiwanese constitution. And, yes, the US adds pressure to maintain the status quo as it would (might?[2]) be on the hook for the defense of Taiwan. But the majority of the population isn't in favor of formally renouncing it, either; the potential negative consequences are existential, and the material benefit is slim to none.
[2] During Trump's first term it was claimed he privately admitted that if China invaded Taiwan he wouldn't intervene.
Wouldn't the value of the security guarantee in this scenario be a negative one for Taiwan?
https://news.ycombinator.com/item?id=31012442
https://news.ycombinator.com/item?id=35171512
At this point, Taiwan would be foolish to not start working on a secret nuclear bomb program. North Korea has proven its the only way to actually protect yourself.
Nuclear proliferation and subsequent war is inevitable imo.
Isn’t that basically “stop buying high technology” to a large degree?
when you take a step back and look at the deal breakdown, this is protection money not a trade negotiation.
This has always been the case. I have never heard of a company absorbing tariffs on behalf of consumers in the day and age of "trickle down economics".
Even making them visible has drawn the ire of Trump a few times already.
But I generally agree that it can't go on forever / not how it works historically.
I don't think most people actually have a solid understanding of what is and is not affected by which tariffs.
If I understand correctly, most of the tech stuff is effectively exempt; and Canada/Mexico tariffs don't apply to most items that are covered under "the rules of origin" certifications under USMCA (the successor to NAFTA).
I think the biggest hit has been the elimination of the de minimis rule, which now makes it difficult and/or impossible to get anything directly from China by USPS, be that cheap clothing or small electronics.
Let's say this was the starting point. Almost immediately, this strategy of trade balance was dispensed with, leaving most countries with some random tariff rate that wasn't strategically decided.
Many recognizable countries, specifically the ones that the administration targeted for political reasons, ended up with adjusted tariffs based on politic. This was due to the administration figuring out they had overstepped or thought that they were too soft, when the influence wasn't effective. When it became clear the economics were being ignored, Trump called them some epithet that meant "unreasonable" and abandoned the tariff tactic in all but rhetoric.
What was the point? The most predictable sequence of IMMEDIATE events were likely the point. I believe the point was to try to convert the global crises (political, economic, and social) that existed around the world to purely economic concerns for simplicity. This was paired with jamming up the entire global trade system, which would allow the administration to listen for the squeakiest wheels. It was supposed to be an efficient way to prioritize immediate problems such that the administration would not have to learn about and weigh all the problems in the world.
Short and long term, the tariffs have accelerated the de-dollarization of the world economy, they has amplified income inequality, and have destroyed supply chains across multiple sectors. The replacements are necessarily less efficient (value is cannibalized by tariffs). It was a lazy and poorly considerer tactic, but it might have achieved the goal, given my assumption of purpose.
The issues that were raised to the administration were largely, left unsolved. The most prominent of which are the Ukrainian, Taiwanese, and Palestinian fronts and the weakening of the US hegemony due to trade conflicts. The good trade relations with traditionally friendly nations have been damaged, long term. Canada, India, China, most of the EU have made moves to distance themselves from the US chaos. Some strange side effects, like this weird buy in to american companies is a side effect of the show, rather than a specific intent. I can concede it wasn't all bad. The US did see some new corporate inroads into a few countries. Notably concessions from Mexico, who was willing to meet the US goals in achieving a trade balance (more or less).
Overall, it's possible the tariffs succeeded as a self-serving tool of the administration, but failed in serving the US as policy. Maybe I'm just wrong, but maybe Trump is just this simple minded and his administration is playing into the fallout, as it advances their 2025 goals (or whatever).
Why do you think that? Trump clearly wants them to use Intel's 18A which is likely similar to TSMC 2 year old N3P, which is not an impossible option.
https://www.reuters.com/business/retail-consumer/intels-new-...
even if Intel’s processes worked just as well, there’s no way they have the capacity to take over for all that stuff.
We’d be back in a huge shortage.
No comments yet
That means investors who sell are getting the current low market price or a little bit higher--- they will still be down the massive amount.
This is really bailing out current management-- letting them be replaced by the more capable TSMC people and getting an attaboy for helping the US government strengthen the alliance with Taiwan, keeping peace in the region.
Only the willingness to go to war, stops aggressors. War is terrible and economic competition is the path to peace, but if you can't defend yourself you will get destroyed.
Blue chip, Intel is not:
> "[...] known for its stability, consistent earnings, sound financials, and long-standing reputation." [0]
[0] https://www.investopedia.com/terms/b/bluechip.asp
They are a required / no alternatives industry by so much of the USA, with limited alternatives. Is it really more cost-effective for each of these companies to spend hundreds of billions of dollars to avoid tariffs when they could easily pass on these costs because we have no alternatives?
Have you heard of this story? https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished...
The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.
How so? There was no mention of the government taking action against the company to cause the company to fail. If a company is failing without government contracts, that is on them and not the government.
And what's the alternative for many of them? Lawsuits?
SCOTUS has quit doing their job. The checks and balances are out the window. There is no leadership / anyone in power at the national level when it comes to democracy in the US at this time.
Now imagine the same scenario, but one side is willing to destroy themselves as collateral if they don’t get the result they want.
The administration has made it clear they will take such actions personally.
The USA by and large figuratively controls the world. All of Europe is one step away from a protectorate and if Taiwan doesn't want to conquered by China they need the USA in the way.
If the USA ever sours on the relationship it means China will take Taiwan so they do whatever they need to do to appease the USA.
Intel isn't dead. They've made some bad choices and investments but they're still huge. They have $30 billion in gross profit per year on an utterly boring, non-hype based business model. Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
On top of it already being a shrewd business deal, doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
They also have 50 billion dollars in debt, and their cash flow situation has gotten so desperate that slices of future fab revenue have been pawned off to private equity, who now has a senior claim on the assets (as do the bondholders).
An equity stake and Intel is not something that a TSMC would want without coercion. It's just not a very attractive place to be an equity holder.
>Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
As if it was that easy. The company has now been through multiple CEOs attempting to mix up these ideas in various ways. The last CEO tried to do a Hail Mary to improve the foundry business, but the balance sheet can't support it. Now the new CEO is essentially writing off those investments and putting them on the back burner. Considering that, getting rid of the dead weight will be difficult, considering the company itself is largely dead weight... The quality of their employees is not good, or at least not nearly at the level that needs to be (18A yields are alarmingly low, and that's the critical product that basically determines the company's future. 14a is already looking more and more distant despite it being the purported savior not even a year ago).
Realistically, their financial situation puts them right at the precipice of needing to shed the fabs, and/or permanently continue down the path of more Brookstone-like partnerships where they can spread the burden (which then caps the equity holder upside).
There is nothing "easy" about the current situation. Maybe without the 50 billion in debt, but nearly all of remedial paths are running into nasty balance sheet constraints. There's no more room to spend quarters rejiggering the thing.
Did I say they were? Google gross versus net margin.
> If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
You sure? https://www.intc.com/financial-info/balance-sheet
Current assets are $43 billion. Total assets are $192 billion. $30 billion yearly in gross profit. Debt is only $50 billion. They still hold 75% market share. Repeat, they still sell 3 times more chips than AMD.
Yes, their balance sheet isn't as good as some fabless competitors but if TSMC helps them with their 14a yield then it looks like a good investment.
Also, having TSMC on board will surely help with their fab business. Again, between the US government needing them to survive, TSMC on board, plus the fact they still do have a decent core business, I think Intel (and TSMC's investment) will be fine.
They already built fabs in the US. The thing about protection money is the bully keeps asking for it again and again.
They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
Sure. Go home and make chips. Pass the tarrif costs on to customers. Would US customers have a choice?
So yes, US companies do have a choice. They can lobby Congress to cut off TSMC from their main hardware and parts supplier entirely, crippling it altogether, except for their Arizona plant which is ripe for nationalization for natsec.
So the EU offering something like nuclear weapons sharing à la that which Germany etc. would probably be reasonable if the US bullied Taiwan too hard. But I don't think it's happening, I think people want good relations with China.
Will Apple, AMD, and nVidia continue to trust TSMC if it owns half of Intel?
It doesn't matter because none of them have much choice. None of them own fabs and Samsung's capacity is significantly less than TSMC's. Plus Samsung also designs chips.
Surely tariffs for 3 more years are less damaging than buying a sinking ship?
South African right wing farmers sold a story of a genocide and reverse racism, now they wish losing business because their exports are more expensive from the very tariffs that are a negotiation tactic to get their government to abolish or repel sine laws.
Whether it is correct or not, Trump seems to view the US as a larger version of Mar-a-Lago, so he'll always feel he can charge a premium for access to its consumer base and market while offering discounts to those he sees as ingratiating themselves.
But it is supposed to be a free market that should reward efficiency and competence, not prop up companies that don't have their act together. If the goal is domestic chip production, funneling funds to TSMC's proven fab operations and to build more US fabs makes more sense than bailing out Intel, regardless of whether it is improper to demand such concessions at all.
The second China becomes powerful enough to throw their military around like the US is when I start supporting tech transfers the other way. A more distributed power structure is much better for overall progress.
This would be late timing.
Because even if TSMC managed to get that initial deal, they'd still be at risk of Trump revisiting it.
But TSMC, please please please, get Intel out of Oregon. I'm so tired of that loser state holding back companies from reaching their true potential.
> investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint
TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.)
Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme.
Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad.
[1] https://en.wikipedia.org/wiki/TSMC
[2] https://www.nasdaq.com/market-activity/stocks/intc/instituti...
[3] https://www.nasdaq.com/market-activity/stocks/intc
[1] https://archive.ph/sAFWP
[2] https://paulkrugman.substack.com/p/fossil-fool
Or the entire thing can be done by a stock swap, with whoever diluting themselves however amount is necessary, etc.
I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
So in the end your assessment is probably correct. It's probably going to be a long, slow decline though.
It feels to me like it's more like the beginning of an empire, in the sense of existing under an emperor.
> I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
I think it very interesting that one of the things the USA is going to have to grapple with, in the middle of the most contentious presidency in its history, is the semiquincentennial of independence itself.
The bicentennial of independence in 1976 was I think largely an uncontentious thing even though the Vietnam conflict had ended only a couple of years beforehand and the presidency was in the hands of a guy who had taken over the job from, and pardoned, a crook who was forced to resign. Internationally people were pretty kind and generous to the USA.
I don't think anyone, anywhere on the planet, is prepared diplomatically for how it will play out this time. Next year is going to be a heck of a year.
What I mean about the beginning of an empire is, as I said -- the beginning of a true individual, not simply unitary, emperor. That the executive is transforming into l'état, c'est moi, which no US president has had the luxury of ever before, because Congress wouldn't ever have handed over the influence and authority they had.
I don't think becoming China would be a success.
It happened before, and perhaps even worse (more competent people were corrupt).
Now, people are just making it public.
Second of all, revisions are incredibly common with BLS numbers, it's normal. They are trying to balance accuracy with speed, and this is how they do that.
They survey about 50,000 companies out of the 12 million registered US companies. Since the pandemic, response rates on their surveys have gotten worse. It is now about 50% at the end of the first month, slowly rising to about 90% two months later, so they update their results as the surveys get completed. The waiting is especially important because the speed of survey returns turns out to not be randomly distributed, the bigger the business, the faster it returns a survey, so small businesses are more likely to respond later. The BLS attempts to counter for that in their initial reports by inflating the small business returns that do come in early enough to account for their under-reporting, but the later returns are just incredibly valuable for getting accurate data.
Even with all of that, under normal economic circumstances revisions generally are small (they exist, but generally they cancel out thanks to the BLS inflation of the small business numbers, some of the businesses are higher than expected, some are lower, it all cancels out). Large revisions, either up or down, are generally associated with the economy changing course (lots of small businesses miss in the same direction, pretty good sign that the economy is changing)- large revisions down are often seen as a leading indicator of a recession, and large revisions up are often seen as a leading indicator of an economic improvement.
This is all true at least in the previous regime, where the BLS was trusted to be non-partisan. That reputation has definitely taken a hit; we will have to see how much trust remains in that organization going forward.
Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove?
I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely.
UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together?
What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
There are other ways to assert power other than how big your nuclear arsenal is - Japan did just that by threatening to offload their US bonds only two months ago, and Europe’s trade negotiators will outclass Trump’s B-Team.
The world has moved on from “I have lots of nukes”.
Hardly matters. As long as von-der-Leyen remains head of commission the European Union stays devoted to the US no matter the consensus of commission, parliament, national governments or the people.
But if the US had a different objectives, every human settlement in Afghanistan could have have been radioactive ash by September 12, 2001. Or, more realistically, the US could have gone in, killed all (for some value of all) the local elites as a warning to leaders elsewhere about the costs of harboring terrorists, and then immediately left the country in the same sort of chaos that they eventually did a couple of decades later. Kabul delenda est was always accomplishable.
The only people who should be ashamed of the their performance in Ukraine are the Russians, and the Europeans, for failing to be able deter or respond to the Russia on their own despite having an economy five times the size.
US interests are perfectly well served by seeing the Russian military mauled for a generation at the cost of aid, much of it material that was going to be decommissioned anyway, that costs roughly what Americans spend on golf in a given year (Once you throw in the costs of drinks on the 19th hole.)
Anyway, US arms sales are up since the start of the conflict, Russian sales have cratered.
People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
If Ukraine is so important to the world order, why has Europe (you know, Ukraine's actual neighbors) not stepped up with their full military power? Why is Europe not threatening troops, missiles, aircraft, tanks, etc... even nuclear obliteration if Putin doesn't yield? Why is it the US has to swoop in, from half a world away, and save the day (again, and again, and again...)?
The US is not currently willing to send our citizens to die in Ukraine. Maybe Europeans should?
There's a difference between the US invading Iraq and US aiding a country being invaded.
Why can't the Germans send troops into Ukraine? Or the Brits (for all their grandstanding and bluster)?
Why must it be the US?
If "everyone" thinks Putin isn't going to stop with Ukraine, then it would seem Europe has an existential crisis to deal with - not the US, thousands of miles away...
Article 5 of NATO (an attack on one is an attack on all) has only been invoked once, by the US. So why did NATO members send their militaries to Afghanistan?
The real reason is that most conflicts never happen. Or are resolved before ending in a full war. Either the US or a European NATO country sending in troops would muddy the conflict so much that the risk of escalation is huge.
The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump. So much has happened that we’ve collectively forgotten that it was Zelensky said “No” to Trump on the phone when wanting to find any dirt on Joe Biden helping Hunter in business deals.
That totally explains why Biden kept slow-walking support packages...
It certainly will when Putin moves on to invading Poland or Finland. The whole point of holding the line at Ukraine is because everyone believes Putin won’t stop there.
US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
Can’t it be both? It’s hard to argue they aren’t trying to destroy it. It has been attempted in the past during the Holodomor.
https://en.m.wikipedia.org/wiki/Holodomor
Russia's end goal here is a cultural genocide.
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The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
- Europe signing trade deal with US
- China: We can’t afford for Russia to lose Ukraine war https://www.yahoo.com/news/russia-cannot-lose-war-ukraine-09.... In other words, China is attacking Europe via Russia.
- China is in a great depression. Their only economic engine is export, and Europe is steadily putting up tariff walls.
They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
Negotiate and follow through in bad faith, because there's no upside to acting in good faith when the opposing party is pursuing a lose-lose agenda.
Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry.
> Ally with China, Iran and Russia to fight the US?
Replace Iran with the EU, and yes, some or all of them.
> EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia,
Urgent, but affordable.
> no cheap energy, no tech industry,
Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale
> ageing population, economic stagnation or even decline,
Like everyone else, including the USA
> collapsing welfare system
News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power?
But also, not a unified welfare system over all member nations of the EU.
> illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship.
Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
The mean wealth/income per person in the USA is indeed higher than China.
So what?
If anything, it shows the opposite of what you are saying.
More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right?
Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere?
If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables.
Not least because acquiescing even to buying 49% paints a target on my back.
Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest?
Trump has created a powerful victim here.
I'd imagine they would be happy to have TSMC still selling to NVidia, Apple and AMD, and therefore a powerful lever in case of future US export controls/etc.
Obviously a protracted or nasty war would have a severe impact, but it's hard to see why China would want to harm TSMC, even if worse case for US they stopped them from exporting.
it's not about what China wants, it's just not feasible to operate a fab in a warzone
That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing.
The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
[0] https://www.youtube.com/watch?v=zv5SiQpG6sg
[1] https://www.youtube.com/watch?v=gFMyB8WMuDU
The surest sign of it will be the DJT running for the 3rd term
Plus, china kept at bay, peace increased, intel's bad management gets to bail out saving face, TSMC gets rewarded for their hard work, Trump gets a win, Intel's employees get better management, and get rich from their stock options winning hugely....
Capitalism is where everyone wins like this.
Even china, because china loses if it goes to war, but china feels it has to go to war.
Are you saying there’s something different this time ?
But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen.
The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
I've missed this story. Can you elaborate?
- this is his wonky understanding (and he is pretty famously innumerate)
- he's saying it as a power game despite the pushback because people around him feel they have to smile, agree and retcon stuff to make it believable
Or indeed both.
(I haven't yet heard them make the claim that he means reversing gains, but I would expect them to. Heck if it was my job to make his Truth Social messages make sense, that is what I would say.)
But honestly his grasp of fractions and percentages has long been known to be worse than early era ChatGPT.
The most worrying aspect of the Trump era for the markets should be that he treats numbers as entirely flexible according to his mood, when the market needs them to at least be consistent.
But then they knew this before he was elected the first time; he is famous for admitting he assesses the value of future business at any time based in part on how he feels about it (which is reminiscent of the way Musk assesses future valuations, future delivery dates for full-self-driving, future sales of robots etc.)
So it's not a political thing at all. He hasn't always been a Republican but he has always been like this with numbers, and anyone who has ever subjected his words to any kind of scrutiny should know it.
The longer Trump creates a legal black hole carve-out for Tiktok, the less anyone will want to buy it. Because he is and this action is transparently corrupt, and it taints the buyer.
And that is true of the participants of any of these forced transfers; they paint targets on their back for future manipulation by the Trump executive. (Which increasingly feels like it should be described as a regime)
He is threating Switzerland with 250% tariffs on meds while his people still suffer under horrendous health care prices. That man is beyond crazy
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Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously:
https://www.reddit.com/r/pcmasterrace/comments/1mfu3cq/this_...
And doesn't sound like their next or next next nodes are in good shape either
Ryzen definitely caught my interest when it first came out, but Intel still had the edge in performance and stability back then, so I stuck with them.
That started to change with the 7800X3D, and now with the 97/9950X3D lineup, AMD is clearly ahead. I'm not even going to mention the "new" Intel chips.
Funny how things shift. I'm firmly in the AMD camp now.
And everyone I know is in the same boat. Probably 3-5 years ago Intel was the only "real" option for the people I know, now it's the exact opposite.
That makes you think that this data is representative?
If you have a better source I'm all ears
idk how we got to do this, like single producent of high end chips is not good for everyone
Of course the reality is you're just taxing Americans to subsidise Intel at that point, since tarrifs are a tax on Americans and not foreigners.
Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
The unfortunate part is that the GOP has now repealed whatever protections were put in place on banks after that.
Whether it's good from a moral perspective or a long term perspective I guess is another matter, but I suspect if the government hadn't stepped in, we'd still be in the throes of the subprime crash even today. This is speaking as someone who is deeply anti-corporate.
2025 says "hold my beer"
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Trump has no idea what he is doing. HE can not replace Brazilian coffee, but at least it is "only" coffee. Not being able to replace a fab is a precarious situation.
Is he imagining invading Taiwan? China would consider that an invasion to its territory.
He was quoted regarding environmental concerns something to the effect of "I'll be dead by then".
I think that's really his POV. If you plan to live longer than Trump, he's really not for you.