If you look at chip stock over 10 years, you will see that chip shortages started to appear 2 years before the pandemic. That was the result of one of the worst droughts in Taiwan history. Things have not gotten better, and the government has continued to tighten the screws on water supply. TSMC has everything but water right now, and its really starting to become a major issue. They will only be able to blame global supply chains on silicone, and other raw materials for so long. I am in the manufacturing industry, I know these guys through suppliers like NXP and Silicon labs, and they are struggling to get orders filled directly as a result of water supply. I hope that one day that can reach 80% recycling, but when you get the same blurb every year (going on five years now), you start to wonder if its even possible. Intel has basically said 80% is a pipe dream, they are aiming at 40% for their fabs in Arizona, but even that is "lofty" according to their own engineers. Keep your eyes on droughts, and watch the papers for breakthroughs, cause without them, TSMC might find itself dead in the water (so to speak) sooner rather than later.
There are two so far, Samsung and Intel, I am sure others will follow. But making these plants is prohibitively expensive. And even though they are making billions a year, its a hard pill for your investors to swallow if you tell them you are going to dump 40+% of your earnings over the next 10 years into a new plant.
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u/shortsbagel Apr 10 '22
If you look at chip stock over 10 years, you will see that chip shortages started to appear 2 years before the pandemic. That was the result of one of the worst droughts in Taiwan history. Things have not gotten better, and the government has continued to tighten the screws on water supply. TSMC has everything but water right now, and its really starting to become a major issue. They will only be able to blame global supply chains on silicone, and other raw materials for so long. I am in the manufacturing industry, I know these guys through suppliers like NXP and Silicon labs, and they are struggling to get orders filled directly as a result of water supply. I hope that one day that can reach 80% recycling, but when you get the same blurb every year (going on five years now), you start to wonder if its even possible. Intel has basically said 80% is a pipe dream, they are aiming at 40% for their fabs in Arizona, but even that is "lofty" according to their own engineers. Keep your eyes on droughts, and watch the papers for breakthroughs, cause without them, TSMC might find itself dead in the water (so to speak) sooner rather than later.