back to article America, Taiwan make semiconductors their top trade priority at first-ever 'Economic Prosperity Dialogue'

The USA and Taiwan have emerged from their first "Economic Prosperity Partnership Dialogue" with an agreement that co-operation around semiconductors is their top priority. The dialogue took place late last week with the US State Department billing the event as a natural extension of the already-close relationship between two …

  1. IGotOut Silver badge

    Yeah...

    ... Because the USA is well known for sticking to agreements.

    Granted UK not much better.

  2. Old Used Programmer Silver badge

    What about...

    ...water? I seem to recall that chip manufacturing takes quite a bit of it. Plentiful supplies of the same are not exactly what Arizona is famous for...

    1. DS999 Silver badge

      Re: What about...

      I don't remember the specifics, but I saw a post by someone who knew how much water modern fabs use and it was pretty small - the water used by a few months' worth of new housing construction would exceed it. So not really worth worrying about in the grand scheme of things.

  3. CheesyTheClown

    What happens when...

    One of the world’s top economies... heavily dependent on semiconductors is told that no one in the world is allowed to sell them semiconductors?

    The easy answer is, they invest massive amounts of money, time and resources to never need to buy semiconductors from another country.

    Then they build up enough manufacturing ability to produce semiconductors for every other country who doesn’t like the impending threat of being cut off.

    Then they do it for a lower cost than any other country.

    Then they weaponize their capacity and use extensive government grants to economically attack countries like Taiwan... after all, why not simply give semiconductors away for free until TSMC can no longer afford to keep their doors open?

    Of course, in order to stay competitive, that country will innovate as well. They will make sure they’re not just competitive, but after throwing money at racing to equal with publicly traded companies in the US and Taiwan, they will have a momentum already in place to also surpass them.

    So what happens when someone makes a decision that threatens many of China’s largest and most influential companies and treats them like this? You think if Biden gives a little and agrees to sell them chips again that China will just stop their almost space race like efforts to become entirely independent?

    1. llaryllama

      Re: What happens when...

      I'm extremely anti-CCP and angry with many things that the PRC has done to Taiwan and others in recent years, but still I agree that cutting them off from western technology is a bad idea.

      Having said that, Taiwan and South Korea have highly unique environments that are difficult to replicate just by throwing money and resources at the problem.

      China has been investing tens of billions, poaching top talent from Taiwan fabs and blatantly stealing American/Taiwanese technology but they are still a long long way behind the most advanced Taiwanese fabs. They have only just figured out volume production on 14nm chips and much of the critical technology involved was imported, not home grown.

      I don't see China making any seriously rapid advancements on home grown tech under the current political regime.

      1. IGotOut Silver badge

        Re: What happens when...

        "I don't see China making any seriously rapid advancements on home grown tech under the current political regime."

        Compare China of 10 years ago to today. I'll give it 5 years tops.

        1. llaryllama

          Re: What happens when...

          My point is I think they are about to hit a wall, if they haven't hit it already.

          Advancing from extreme poverty to China's current situation is more of a brute force undertaking. Run the country as an industrial machine, feed income back into the machine and continue until prosperous. The PRC has been successful in this undertaking, but now what?

          Progressing from a sub US$10k per capita GDP into a technological powerhouse takes more than a brute force approach of burning cash and throwing a billion people at the problem. China's core political system dictates how students are taught, in turn there is a massive weakness in creativity and logical thinking.

    2. prh_99

      Re: What happens when...

      Cause that absolutely won't be met with further retaliation by countries not keen on seeing their own companies undermined by China.

      As crude and out of wack as Trump's trade policies are he's not the only one annoyed by the way China does business. Namely, heavy reliance on government owned industry and subsidies while taking advantage of open markets and keeping their own restricted. Then there is the espionage problem.

      1. martinusher Silver badge

        Re: What happens when...

        > taking advantage of open markets and keeping their own restricted.

        That, believe it or not, is how large sectors of the US operate. If you want to see protectionism at work don't look at semiconductors, try watching Boeing. Sure, China and companies like COMAC are being hit, but then so is Airbus. Boeing isn't exactly a civilian products only company; it derives a lot of its business from military work.

        I think the whole "freedom and democracy" thing needs a review. We may have escaped by the thin of our teeth a direct attack on our democracy -- its still the best anyone can buy, though -- but we're not free to invest where we want -- capital and investment flows are controlled to the advantage of the US, inbound investment is controlled, I can't trade with many countries, there are tariff walls all over the place. Its a mess, and its anything but free and democratic.

  4. IGotOut Silver badge
    Joke

    Is the new TMSC fab...

    ... going to be next to Foxconns?

  5. John Jennings

    Greater East Asia Co-Prosperity Sphere

    By the US, perhaps?

    In any event, China is a real threat now - as to acquiring tech - they do that through poaching, and while our universities are more keen on recruiting internationa students (and the income they bring) and actively recruiting in the PRC, they will 'soon' have the gaps filled.

    Good luck getting a flow of IP going in the other direction.

    China plays long games - 10-20 year plans are typical. Western economies are based upon quick wins.

    1. martinusher Silver badge

      Re: Greater East Asia Co-Prosperity Sphere

      > they do that through poaching...

      I think it may be more to do with them churning out 35,000 engineers a year. We went through this "Orientals can't invent stuff" business with the Japanese years ago. Its true they copy -- the Japanese were once notorious for this -- but its the way everyone learns. Nobody could accuse the Japanese of making cheap knock-offs these days and likewise the Chinese have moved inexorably from 'copy anything you can get your hands on regardless' to 'we now know how to do this stuff' (and there's a lot of us and some of us are off the scale clever).

      It would be best if everyone got out of Cold War Part Deux mode and joined the modern world. The way things are going we're going to be left high and dry with our illusions while the rest of the world just marches off doing its collective thing.

      1. llaryllama

        Re: Greater East Asia Co-Prosperity Sphere

        I wish people would stop comparing Chinese apples with Japanese oranges.

        China is a strict authoritarian dictatorship whose education system is carefully managed and curated by the Chinese Communist Party. Japan has been a liberal democracy since 1947.

        I have had the somewhat unique experience of early education in the UK, Chinese and Taiwanese school systems. My experience with Chinese teachers has been very negative, you are expected to learn by rote with a very narrow focus and there is almost zero leeway for discussion or debate. You have a lot of smart kids getting 100% on algebra exams but with no critical thinking skills whatsoever.

        "We'd better get on board with China or get left behind" is an understandable but dangerous way of thinking if you value democracy. The PRC is currently doing some pretty awful things to its own people and Asia at large, and the Communist Party has openly stated that they wish to challenge western democratic systems and export Chinese autocracy around the world.

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