I’ve been following the fab news long enough that I think 90% of the FUD stems from an anti-American attitude in which Americans are intellectually or constitutionally incapable of running fabs to TSMCs standards or stem from the psychic damage that this current administration has done something (reshore manufacturing) the previous administration couldn’t.
I don’t know if it makes me more or less cynical but I think a considerable amount of it is that writing stories shitting on things is fun and more people read them when they’re negative and sensational.
“Things are going mostly to plan” isn’t very interesting.
> this current administration has done something (reshore manufacturing) the previous administration couldn’t
Except, they could. Reshoring manufacturing was already accelerating before the Chips Act etc with some seasonal back and forth. [1] The increase in labor costs in China and the pandemic have been US Administration independent in causing reshoring, the US shale oil revolution making electricity and many manufacturing inputs globally competitive in price was influenced by successive Administrations including Trump, but the trade war with China motivated a chunk of reshoring and that still animates policy today and that was started by Trump.
> The factory investment charts speak for themselves.
Except it doesn't. Factory building isn't the only metric for progress of reshoring manufacturing and graphs do not interpret themselves. In that chart the overall trend of factory building investment remains elevated through the Trump administration over the previous administration even though the fervor of the shale revolution and the subsequent reshoring was cooling off. Why? The factors that I previously mentioned.
The Intel AZ fab in Chandler typically has the best yields out of all Intel fabs. TSMC likely thought they were tapping into that labor market when building in Phoenix. However they built on the other side of the metropolitan area. It’s an hour drive from the Chandler Intel facility to TSMC without traffic. With traffic, it’s an hour and a half. Any established Intel engineer isn’t going to give up their 30min daily commute for a 3 hour round trip commute.
I’ve also heard that the electrical unions will only work 9-5, M-F, and demand a 3 day lead time. Intel has just learned to incorporate that into their planning, while TSMC attempted to bypass the union. Expect TSMC is either adapting, or the AZ politicians have interceded with the unions.
I suspect they realized how long the drive was. Siting a fab is difficult and subject to a lot of constraints. The first and most important constraint is having land to actually build anything. Intel is built right up against the tribal boundaries. The west parking lot is actually on tribal land. The TSMC campus would have required bulldozing an entire block to fit in city limits. Notice how the location chosen is along one of the few borders not constrained by tribal boundaries?
Intel also has a special deal with Chandler to get SRP water. Both Chandler and SRP as a whole probably couldn't afford the same for TSMC. They currently have a complicated deal with Phoenix to take that water from CAP, Groundwater, and the non-SRP allocation Phoenix gets. The difference is supposed to be made up with reclamation.
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[ 4.2 ms ] story [ 26.1 ms ] threadhttps://restofworld.org/2024/tsmc-arizona-expansion/
“Things are going mostly to plan” isn’t very interesting.
Except, they could. Reshoring manufacturing was already accelerating before the Chips Act etc with some seasonal back and forth. [1] The increase in labor costs in China and the pandemic have been US Administration independent in causing reshoring, the US shale oil revolution making electricity and many manufacturing inputs globally competitive in price was influenced by successive Administrations including Trump, but the trade war with China motivated a chunk of reshoring and that still animates policy today and that was started by Trump.
1. https://reshorenow.org/content/pdf/2022_Data_Report.pdf
The factory investment charts speak for themselves.
https://fred.stlouisfed.org/series/C307RX1Q020SBEA
Except it doesn't. Factory building isn't the only metric for progress of reshoring manufacturing and graphs do not interpret themselves. In that chart the overall trend of factory building investment remains elevated through the Trump administration over the previous administration even though the fervor of the shale revolution and the subsequent reshoring was cooling off. Why? The factors that I previously mentioned.
I’ve also heard that the electrical unions will only work 9-5, M-F, and demand a 3 day lead time. Intel has just learned to incorporate that into their planning, while TSMC attempted to bypass the union. Expect TSMC is either adapting, or the AZ politicians have interceded with the unions.
Intel also has a special deal with Chandler to get SRP water. Both Chandler and SRP as a whole probably couldn't afford the same for TSMC. They currently have a complicated deal with Phoenix to take that water from CAP, Groundwater, and the non-SRP allocation Phoenix gets. The difference is supposed to be made up with reclamation.