The fate may be the same, Trump and Foxconn today, may be Biden and TSMC tomorrow.
In 2017, Foxconn was fooled by Trump to go to the United States to build a factory, saying that he would give Foxconn subsidies and bring manufacturing back to the United States, and then Gou immediately went to the United States with money, planning to invest $10 billion to build American factories.
At the time, Trump held Gou's mobile phone and said Gou was "the greatest businessman in the world" and that Foxconn's new factory was "the eighth wonder of the world." In the end, Trump stepped down, and Foxconn's American factory was in ruins!
And when Biden took office, it was TSMC who flickered, hoping that TSMC would go to the United States to build factories, and the United States would give subsidies and bring chip manufacturing back to the United States.
Then TSMC also agreed, decided to build a 5nm chip factory in Arizona, USA, and later planned to build 3nm as well. The company plans to invest USD 12 billion in the initial period, which will later be increased to USD 40 billion (about USD 280 billion).
TSMC's Arizona factory Fab21 induction ceremony, very lively, Biden delivered a speech, saying that this is a big victory for American manufacturing...
In addition, US Secretary of Commerce Raimondo and other politicians were all present, as well as AMD Chairman and CEO Su Zifeng, NVIDIA founder and CEO Huang Jenxun, Apple CEO Cook, TSMC President Wei Zhejia and other bigwigs, all present...
But now, only a few months later, TSMC's US factory is already in crisis, and some media even predict that maybe TSMC's US factory may become the next Foxconn American factory.
Why? First, the construction cost is too high, because due to labor costs, licenses, compliance with regulations and inflation, the cost of TSMC to build a factory in the United States is at least 3-4 times that of Taiwan, and the progress is seriously backward, which is very unsatisfactory.
The second is that the United States cannot recruit hard-working employees, American workers are bohemian and freedom-loving, disobedient, overtime is even more impossible, wages must be high, skills are not familiar, it takes a lot of costs to train, the media predicts that even after the construction of the factory, taking into account materials, workers, etc., its wafer production cost will be 2-3 times higher than in Taiwan.
The third is U.S. subsidies, which will have restrictions that may require a share of profits, and under the latest policy, companies that receive more than $150 million in U.S. chip subsidies must hand over a portion of the excess cash flow or return to the U.S. government if their returns exceed an agreed threshold initially expected, up to a maximum of 75 percent.
After these various conditions are calculated, TSMC went to the United States to build a factory, and the final result is that it spent 3 times the cost to build the factory, and finally spent 3 times the cost to manufacture the chip, which has no competitive advantage at all.
I thought I could get back a little bit through subsidies, and I might end up keeping 75% of the profits in the United States. Then 5nm and 3nm technologies will also remain in the United States, and for TSMC, technology and money cannot be saved.
Even the US media directly said that TSMC's $40 billion investment was a bad decision. It can be said that this time the US side tore off all disguise, and even the coincidence was gone, only the robbery remained.
Next, let's see, will TSMC's US factory, like Foxconn's US factory, fail to become a miracle, but become a joke?