US 50% China Semiconductor Tariff

[S. Petrukhin]

These "investments" may not all be about $, these might include country security/wellbeing/future as well. Ever wonder what's behind the TSMC 2 fabs being built in Arizona???

You might be surprised, but we in Russia are already feeling what you call "not only $". 
You're probably going to have the same thing.

It is very sad that humanity has fallen back to the construction of medieval castles... 

[rstofer]

The US .gov is pumping a lot of money into new onshore semiconductor plants including a new TSMC factory.  It seems reasonable to create a market for these plants by driving the price of offshore chips higher.

These new plants are considered vital to our national security.

To unerstand the scope of .gov involvement Google for 'us govt funding new semiconductor plants'.  Every hog is munching at this trough full of money.

[globoy]

As someone who both buys parts from China and who manages small scale foreign production runs of PCB assemblies I can say the following two things:

1. I already see my vendors preparing for this.  One production vendor has the ability for me to add the import duty to my orders and then they do the paperwork and pay the logistics company who manages the trip through customs.  The distributor LCSC is making sure I understand when I place orders that I may be required to pay import duties with a new notification.
2. This is going to be hard on people like me and make me less competitive.  The US board and assembly houses are still significantly more expensive and the cynic in me doesn't think that these import duties will cause them to reduce their prices.  On the contrary, they'll probably go up as they feel they have a more captive market.

I will, of course, be looking to see how companies work around this.

[soldar]

https://en.wikipedia.org/wiki/Tariff_engineering
Ford Motor Company imported the Ford Transit from Spain as complete passenger vehicles, including rear seat, rear seat belts, and rear glass windows, in order to avoid a 25% tariff on cargo-duty vehicles, known as the Chicken tax, and instead pay the lower tariff of 2.5%. Once the vehicles arrived in the United States, Ford converted the Transit into its cargo van by removing the rear seats, rear seat belts, and sometimes replacing the rear glass with metal panels.


https://en.wikipedia.org/wiki/Chicken_tax


https://en.wikipedia.org/wiki/Ford_Transit_Connect
To circumvent the 25% "chicken tax" on imported light trucks, all examples have been imported as passenger vans, with cargo vans converted to the intended configuration after their importation.

[wraper]

The US .gov is pumping a lot of money into new onshore semiconductor plants including a new TSMC factory.  It seems reasonable to create a market for these plants by driving the price of offshore chips higher.

These new plants are considered vital to our national security.

To unerstand the scope of .gov involvement Google for 'us govt funding new semiconductor plants'.  Every hog is munching at this trough full of money.

Except most of semiconductors that will be hit by this tax won't even be produced there. Also CHIPS money comes with a lot of bullshit involved, so companies who started building those factories would be happy to pull out of that. https://thehill.com/opinion/4517470-dei-killed-the-chips-act/
https://www.theguardian.com/business/2023/aug/28/phoenix-microchip-plant-biden-union-tsmc

[tautech]

The US .gov is pumping a lot of money into new onshore semiconductor plants including a new TSMC factory.  It seems reasonable to create a market for these plants by driving the price of offshore chips higher.

These new plants are considered vital to our national security.

To unerstand the scope of .gov involvement Google for 'us govt funding new semiconductor plants'.  Every hog is munching at this trough full of money.

Yeah but none of this is why it is being built.

mawyatt gave us clues to why with this:
6) What benefits/subsidies do different fab/facilities location provide?

Research where TSMC originates from and where its other fab plants are.
This is a 'you rub my back and we'll rub yours'


Then who earlier said the Asian manufacturers were subsidised.
Of course they are just as any other company worldwide generating export income for their country.

[mawyatt]

The US .gov is pumping a lot of money into new onshore semiconductor plants including a new TSMC factory.  It seems reasonable to create a market for these plants by driving the price of offshore chips higher.

These new plants are considered vital to our national security.

To unerstand the scope of .gov involvement Google for 'us govt funding new semiconductor plants'.  Every hog is munching at this trough full of money.

TSMC is building 2 SOTA fabs in Arizona, capable of 3nm feature CMOS, and planning on a 3rd fab!! TSMC will be investing more than $65B of their own $, so not all funded by USG as many believe!!

https://pr.tsmc.com/english/news/3122

The direct benefits of these fabs will the Apple and Nvidia, as their most advanced chips are in TSMC 3nm CMOS, Apples M4 chip as example.

Amazingly you can get the new Apple M4 3nm 25 Billion Transistor CMOS chip today in the new iPad!!!

These are direct in line day-to-day benefits of having a SOTA fab next door!!

Best

[S. Petrukhin]

These new plants are considered vital to our national security.

Who is attacking the US? Who is threatening?
Even if there is a threat, will you eat 3nm chips or the capitalization of companies?

[KE5FX]

These new plants are considered vital to our national security.

Who is attacking the US? Who is threatening?

No comment

[S. Petrukhin]

These new plants are considered vital to our national security.

Who is attacking the US? Who is threatening?

No comment

Why?

[coppice]

These new plants are considered vital to our national security.

Who is attacking the US? Who is threatening?

No comment

Why?

He could tell you, but then he'd have to kill you.

[S. Petrukhin]

These new plants are considered vital to our national security.

Who is attacking the US? Who is threatening?

No comment

Why?

He could tell you, but then he'd have to kill you.

Gentlemen to take their word for it? 

[themadhippy]

Coming soon,china imposes tarriffs on usa imports,closely followed by butt hurt  americans  complaining about how china increasing there tariffs have hit there business.China should  just stick 2 fingers up and cash in the near trillion dollars of debt  they  hold,28 days terms  or we send the bailiffs in.

[mawyatt]

These new plants are considered vital to our national security.

Who is attacking the US? Who is threatening?
Even if there is a threat, will you eat 3nm chips or the capitalization of companies?

The US is under constant "attack" 24/7/365, maybe not physical attacks with guns/tanks/cannons/missiles and such but more of Cyber, IP, Infrastructure type.

National Security involves much more than protecting one's Physical Borders, but IP Borders, Cyber Borders, Financial Borders and Infrastructure Borders as well.

It's well known that Advanced Technology Companies are prime targets for IP theft, and have been for a some time, even from so called "friends" (Remember the 1982 Hitiachi IBM technology theft case, which Hitachi pleaded guilty).

No Government could ever hope to develop the advanced chips we have at our fingertips today, they are far too complex and difficult for any government, even the prestigious DARPA were passed many decades ago in creating advanced CMOS semiconductor technology and general purpose processor chips. So governments are relying on commercial chips, often lots of them, to implement the various forms of "National Security" and protect all the various "Borders". Same goes for Advanced Technology companies which have their own internal structures to prevent IP leaks and theft, many with government "assistance".

Best,

[m k]

China should  just stick 2 fingers up and cash in the near trillion dollars of debt  they  hold,28 days terms  or we send the bailiffs in.

Biden can ask the Fed to mint few coins and be done with it.

[BrianHG]

I remember the US D-Ram tariffs for Japanese memory in the late 80s/early 90s.  Here in Canada, it was finally cheaper to ship in memory direct instead of getting it from US distributors.  It was a mess if you wanted to ship PCs from Canada to the USA.

[mawyatt]

I remember the US D-Ram tariffs for Japanese memory in the late 80s/early 90s.  Here in Canada, it was finally cheaper to ship in memory direct instead of getting it from US distributors.  It was a mess if you wanted to ship PCs from Canada to the USA.

Wasn't that when Japan was accused of "dumping" on the DRAM chips?

Best,

[BrianHG]

I remember the US D-Ram tariffs for Japanese memory in the late 80s/early 90s.  Here in Canada, it was finally cheaper to ship in memory direct instead of getting it from US distributors.  It was a mess if you wanted to ship PCs from Canada to the USA.

Wasn't that when Japan was accused of "dumping" on the DRAM chips?

Best,

Those were the 'political' words being used.  It might have been true, if so, it would have cost the manufactures and the Japanese government hundreds of millions.  And during that time, this would be a truly significant figure.

The Japanese, I believe at the time Fujitsu, switched to a new all CMOS process for their new 1mb drams while everyone else was still using partial bi-polar process which had too low yield.  The USA just couldn't compete with that cost efficiency.

[S. Petrukhin]

The US is under constant "attack" 24/7/365, maybe not physical attacks with guns/tanks/cannons/missiles and such but more of Cyber, IP, Infrastructure type.

National Security involves much more than protecting one's Physical Borders, but IP Borders, Cyber Borders, Financial Borders and Infrastructure Borders as well.

It's well known that Advanced Technology Companies are prime targets for IP theft, and have been for a some time, even from so called "friends" (Remember the 1982 Hitiachi IBM technology theft case, which Hitachi pleaded guilty).

No Government could ever hope to develop the advanced chips we have at our fingertips today, they are far too complex and difficult for any government, even the prestigious DARPA were passed many decades ago in creating advanced CMOS semiconductor technology and general purpose processor chips. So governments are relying on commercial chips, often lots of them, to implement the various forms of "National Security" and protect all the various "Borders". Same goes for Advanced Technology companies which have their own internal structures to prevent IP leaks and theft, many with government "assistance".

Thanks for the detailed answer! It is very interesting to get an opinion, not from the biased media.

I understand the anxiety about cyber attacks. I am not a country, but my home router was attacked so often that I refused the real IP.

But as for technology. Weren't American companies themselves looking for more favorable conditions in Asia and moving production there, refusing to pay americans a large salary? After all, they acted according to market laws - chose more favorable conditions.

I'm sorry, I have a lot of questions. If you think it's possible, please respond. I really want to understand what's going on.

Why are modern chips so important? Was life bad in America 30 years ago without them?
Why is there a threat of losing their production in Asia? Is there a lot of stealing?
Why didn't you want go to Mexico, for example?
Why does this threaten national security, and not a separate commercial company? Especially the one who does not know how to manage risks and does not know how to play a competent, far-sighted game in the market. He does not know how to protect himself from theft.
Why doesn't this threaten, for example, the open core, which is licensed to be produced by anyone who wants to? One successful USA company did not want to depend on Intel anymore and chose an open core - created own M1 processor.
Why is the protection of their companies in China causing a negative reaction?
Why is it important to be at the top and own the world, and not live quietly, enjoying the successes of others and buying the products of others?

Once again, I'm sorry for the many naive questions.
If you answer, there will be more understanding in the world, which is necessary for all of us.

[S. Petrukhin]

Wasn't that when Japan was accused of "dumping" on the DRAM chips?

What's wrong with being able to buy DRAM cheaper for yourself? You have a lot of money left for other needs. Isn't that how the market works? Isn't that how American companies sold cheap printers with expensive inks? Why is the similar behavior of other countries dangerous for the United States?

[ebastler]

Once again, I'm sorry for the many naive questions.
If you answer, there will be more understanding in the world, which is necessary for all of us.

If anybody is inclined to answer, may I suggest that this be done via PM. This thread is deep into the territory which, in his opening post, Dave had explicitly asked us to avoid.

[S. Petrukhin]

Once again, I'm sorry for the many naive questions.
If you answer, there will be more understanding in the world, which is necessary for all of us.

If anybody is inclined to answer, may I suggest that this be done via PM. This thread is deep into the territory which, in his opening post, Dave had explicitly asked us to avoid.

Of course! Welcome! My participation in the forum implies that you are free to write to me without any permissions.

[coppice]

I remember the US D-Ram tariffs for Japanese memory in the late 80s/early 90s.  Here in Canada, it was finally cheaper to ship in memory direct instead of getting it from US distributors.  It was a mess if you wanted to ship PCs from Canada to the USA.

That was a period when the US was accusing all sorts of people of dumping all sorts of things, many of them Japanese. Those accusations were based on US companies claiming how much various parts of the value chain cost them, with the implicit accusation that nobody could actually be cheaper than "the American way". This was really bogus in many cases, based on highly bloated US figures, especially for things like admin overheads.

[S. Petrukhin]

I remember the US D-Ram tariffs for Japanese memory in the late 80s/early 90s.  Here in Canada, it was finally cheaper to ship in memory direct instead of getting it from US distributors.  It was a mess if you wanted to ship PCs from Canada to the USA.

That was a period when the US was accusing all sorts of people of dumping all sorts of things, many of them Japanese. Those accusations were based on US companies claiming how much various parts of the value chain cost them, with the implicit accusation that nobody could actually be cheaper than "the American way". This was really bogus in many cases, based on highly bloated US figures, especially for things like admin overheads.

Not so long ago, one senator asked why a package of simple bushings costs $90 000 (!) for the US army, although there is a maximum of $100.

[S. Petrukhin]

If anybody is inclined to answer, may I suggest that this be done via PM. This thread is deep into the territory which, in his opening post, Dave had explicitly asked us to avoid.

You know what's the matter... This is not a political forum, there are sensible people, educated engineers - those who are able to have their own opinion, and not repeat politicians and propaganda. Therefore, this opinion is very interesting. The situation has divided us into different sides. Personally, I am interested in the opinion from the other side. Perhaps my opinion will be interesting too. We live on the same planet...