This whole economy by corruption and coercion is not going to work out.
coreyh14444 · 16m ago
Banana Republic shit.
duxup · 7m 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.
saalweachter · 6m ago
... is that not a thing that already happens?
FirmwareBurner · 49m 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 · 44m 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.
oezi · 33m 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.
AnimalMuppet · 10m ago
We aren't pointing "all our military spending" against Russia in Ukraine. Not by a long shot (no pun intended).
vaidhy · 27m 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.
nemomarx · 48m ago
China seems to be working on catching up, and if you remove all of your soft power maybe they look more attractive?
exasperaited · 32m 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 · 11m 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.
duxup · 43m ago
No magic that keeps your businesses efficient or running if the government is picking winners and using tariffs. Quite the opposite.
ben_w · 35m 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?
If anything, it shows the opposite of what you are saying.
exasperaited · 40m 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 · 34m 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?
HarHarVeryFunny · 2m 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.
exasperaited · 28m 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.
vkou · 46m 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 · 6m 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.
xyst · 21m 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 · 1m ago
Friedman and Reagan were both opposed to tariffs... and pretty much any sort of government intervention in the economy. They would not have been fans of this administration for sure.
slt2021 · 5m ago
Rome Republic is over, time for the Roman Empire.
The surest sign of it will be the DJT running for the 3rd term
fooker · 47m ago
It has historically worked pretty well, for several centuries at a time.
Are you saying there’s something different this time ?
Matticus_Rex · 29m 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.
duxup · 44m ago
I don't know what you're thinking of.
exasperaited · 24m 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.
Herring · 30m ago
Compare red and blue states. It has been a bad policy for a very long time. To the point that it's written in our DNA.
exasperaited · 33m 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)
ldoughty · 50m 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?
duxup · 41m 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.
CGMthrowaway · 23m 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.
sleepyguy · 19m ago
Bernie died in prison because he didn't want to give them access to Worldcom so the story goes.
assword · 47m 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.
dismalaf · 41m 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.
phkahler · 21m 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.
Fade_Dance · 23m 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.
Matticus_Rex · 33m 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.
ldoughty · 30m 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 · 23m 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 · 17m 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?
hunglee2 · 29m 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.
howmayiannoyyou · 9m ago
Yeah, cry harder. You think TSMC got where it was without the full weight of the Taiwanese government behind it? Do you think Samsung or Huawei achieved success independent of their nation's policies and support. The days of the US competing with one or both hands tied behind our backs are mostly over, at least until 2028.
phkahler · 9m ago
Well China has been forcing tech transfer for 30 years now.
cmdli · 4m ago
And China is becoming increasingly isolated from the rest of the Western world. I'm amazed that the US is following suit.
cherryteastain · 29m ago
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.
ezst · 20m 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)".
xyst · 20m 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 · 5m 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.
phkahler · 25m ago
On the surface, buying 49 percent of Intel wouldn't infuse the company with any capital. It would just bail out investors.
Herring · 10m ago
> It may be dangerous to be America's enemy, but to be America's friend is fatal.
brokencode · 45m ago
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.
taylodl · 37m ago
I'd tell the bully "no deal" if I don't get controlling interest, and thus full control of the board.
melling · 46m ago
Intel only up 4%. Seems unlikely.
analog31 · 43m ago
It seems like we're forcing the rest of the world to print dollars.
herbst · 13m 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
throwawayoldie · 33m ago
"If we pay the Dane, certainly he won't ever come back for more Danegeld."
OutOfHere · 26m ago
This is setting up TSMC to also fail. As for Intel, it still will fail anyway.
nly · 40m 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.
xyst · 24m 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 · 16m 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.
howmayiannoyyou · 12m ago
The USA competes against countries and companies that are state owned and/or state infiltrated. This positions stockholder & management interests against foreign national interests and that places the US at a disadvantage in sectors with a national security nexus. Chip fab is one such sector.
So, to all the majority of haters in this thread (and all those who will soon downvote me) I say this... if you're an American think carefully about whom you want defining the economic & strategic reality your children will inherit. If you're not an American, or if you're larping as one, the game is over. There is bipartisan and widespread support for the US reasserting itself. We're not going out without a fight, if we do go down we're taking you with us, and more liklely than not - we're going to prevail and the world will avoid a flagrant dystopia for something still unpleasant, but far less so than a CCP, Qatar or Moscow run vision of the future.
AnimalMuppet · 1m ago
Do I want the US defining the reality my children will inherit? Sure.
Do I want Trump defining it? No way. Especially not the economic future. I don't trust his knowledge of economics as far as I could throw Trump Tower.
catlikesshrimp · 39m 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 · 27m 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.
ujkhsjkdhf234 · 24m 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.
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.
US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
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.
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?
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?
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.
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.
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.
The surest sign of it will be the DJT running for the 3rd term
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.
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)
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?
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.
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.
Now imagine the same scenario, but one side is willing to destroy themselves as collateral if they don’t get the result they want.
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 already built fabs in the US. The thing about protection money is the bully keeps asking for it again and again.
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.
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?
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.
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.
He is threating Switzerland with 250% tariffs on meds while his people still suffer under horrendous health care prices. That man is beyond crazy
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.
So, to all the majority of haters in this thread (and all those who will soon downvote me) I say this... if you're an American think carefully about whom you want defining the economic & strategic reality your children will inherit. If you're not an American, or if you're larping as one, the game is over. There is bipartisan and widespread support for the US reasserting itself. We're not going out without a fight, if we do go down we're taking you with us, and more liklely than not - we're going to prevail and the world will avoid a flagrant dystopia for something still unpleasant, but far less so than a CCP, Qatar or Moscow run vision of the future.
Do I want Trump defining it? No way. Especially not the economic future. I don't trust his knowledge of economics as far as I could throw Trump Tower.
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.