American Economics Thread

[MortyandRick]

Productivity is output per hour and in typical American fashion, technological advancements and innovation mean that the U.S. can produce substantially more per unit labor hour than anyone else. Improvements at the intensive margin of work hours are fools gold (with all kinds of other deleterious effects elsewhere); extensive margin improvements are far more desirable

Not really
The TSMC fab is run by Taiwanese engineers. Their productivity matches the main fab in Taiwan due to that fact, not due to supposed Americans productivity.

If TSMC didn't build a fab, the Americans couldn't be able to make 7 nm or below and would have not productivity advantage.

So this is not a sign of strength rather weakness as the Americans can't do to themselves and had to get outside help to teach them. This fab represents TSMC productivity not Americans productivity. Actually reveals the weakness in Americans domestic chip production and lack of technological advancement that they don't have a domestic foundary able to compete with TSMC.

 

[chgough34]

Not really
The TSMC fab is run by Taiwanese engineers. Their productivity matches the main fab in Taiwan due to that fact, not due to supposed Americans productivity.

If TSMC didn't build a fab, the Americans couldn't be able to make 7 nm or below and would have not productivity advantage.

So this is not a sign of strength rather weakness as the Americans can't do to themselves and had to get outside help to teach them.

Having an attractive business investment for FDI is a strength since FDI is wonderful - it provides competition, scale effects, jobs, and technology and knowledge transfers from other countries

This fab represents TSMC productivity not Americans productivity.

TSMC is manufacturing in Arizona and paying taxes to the State of Arizona and the U.S. Treasury with workers resident in the United States. It absolutely is America’s productivity

Actually reveals the weakness in Americans domestic chip production and lack of technological advancement that they don't have a domestic foundary able to compete with TSMC.

Well now it’s built in the U.S. Problem solved.

 

[HighGround]

Productivity is output per hour and in typical American fashion, technological advancements and innovation mean that the U.S. can produce substantially more per unit labor hour than anyone else. Improvements at the intensive margin of work hours are fools gold (with all kinds of other deleterious effects elsewhere); extensive margin improvements are far more desirable

What leads you to believe that US engineers would be more productive than Taiwanese engineers?

TSMC is at the bleeding edge in this field. If anything, I would expect US fab productivity to be significantly behind TSMC's fabs in Taiwan.

 

[Phead128]

Productivity is output per hour and in typical American fashion, technological advancements and innovation mean that the U.S. can produce substantially more per unit labor hour than anyone else. Improvements at the intensive margin of work hours are fools gold (with all kinds of other deleterious effects elsewhere); extensive margin improvements are far more desirable

Well, 50% of the new hires at Arizona TSMC are Taiwanese engineers from Taiwan itself, so it's highly likely the ASML EUV is operated by senior Taiwanese engineers, not Americans, who can't operate EUV if their lives depended on it (see Intel's implosion).

TSMC has already hired more than 2,200 of the 4,500 staff it plans to employ there once the two fabs are in production. But almost half of those hired so far are assignees sent from Taiwan.

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Americans are supply low-level technicians that are sent to Taiwan for basic training, but Taiwan TSMC is supplying the senior engineers with expertise to operate these ASML EUV equipment. Nobody in the US knows how to operate ASML EUV effectively, so it's hilarious to take credit when Americans are desperately throwing billions at TSMC for their knowledge and expertise.

 

[MortyandRick]

Having an attractive business investment for FDI is a strength since FDI is wonderful - it provides competition, scale effects, jobs, and technology and knowledge transfers from other countries

Ahh yes so you admit the US couldn't have done this by their own merit, and needed foreign companies to help with technology transfers. I thought you said the US was the most advanced high tech country above and beyond all other countries? Seems pretty hypocritical

Any even though there is possible tech transfer, it's still TSMCs IP. Lots of foreign companies also invest FDI into china but china still had to work to produce their own IP.

TSMC is manufacturing in Arizona and paying taxes to the State of Arizona and the U.S. Treasury with workers resident in the United States. It absolutely is America’s productivity

No. You said it shows American ingenuity and productivity. But this is actually Taiwan's productivity and ingenuity that you are trying to pass as the US own self sustaining abilities, which it is not.

Well now it’s built in the U.S. Problem solved.

Not really. The fab may produce chips on US soil but the advancements and research and innovation which allowed TSMC to advance to the cutting edge still likely lies with their main fab in Taiwan. The US may lot able to replicate that and keep them at the bleeding edge. I mean just look at Intel and global foundries

 

[HighGround]

You guys do realize that there've been plenty of Fabs in United States right? And not just like, in the last 100 years, but Intel has been at the bleeding edge up until 2018 or something.

I don't agree with @chgough34 thesis that American workers are going to be more productive than TSMC's, because it is TSMC who has been at the bleeding edge for the last... 6 years or so, but you could certainly have made that case in 2016 and 2014 and 2010. Intel foundries made an enormous amount of silicon and were at the bleeding edge at the time.

 

[lube]

You guys do realize that there've been plenty of Fabs in United States right? And not just like, in the last 100 years, but Intel has been at the bleeding edge up until 2018 or something.

I don't agree with @chgough34 thesis that American workers are going to be more productive than TSMC's, because it is TSMC who has been at the bleeding edge for the last... 6 years or so, but you could certainly have made that case in 2016 and 2014 and 2010. Intel foundries made an enormous amount of silicon and were at the bleeding edge at the time.

The basic logic is.

• US economy more productive, therefore means US workforce is more educated, efficient, productive.
• US workforce able to absorb learnings from TSMC more efficiently because US workforce is so productive.
• Since US workforce is already productive + learnings from TSMC, US TSMC fabs destined to be more productive than Taiwanese Fabs
• A>B, therefore A+C > B+C. A being America of course.

There's a certain simplicity to the logic here.
But there's some potential pitfalls in this logic chain.

Starting with comparative advantage....
The original sin, however, is not breaking down what makes up the concept of productivity and instead reducing this 'value' into single number.

 

[chgough34]

What leads you to believe that US engineers would be more productive than Taiwanese engineers?

TSMC is at the bleeding edge in this field. If anything, I would expect US fab productivity to be significantly behind TSMC's fabs in Taiwan.

I’m explaining a scenario in which it is unnecessary for American workers to do 12hr days and still be competitive vis-a-bis tsmc

 

[chgough34]

Ahh yes so you admit the US couldn't have done this by their own merit, and needed foreign companies to help with technology transfers. I thought you said the US was the most advanced high tech country above and beyond all other countries? Seems pretty hypocritical

Indeed. The U.S. is generally on the technological frontier, not always. And plus, economic growth is not a zero-sum game. Trade & investment are mutually beneficial and win-win. Saying an economy is not real because it attracts FDI is ridiculous. What’s more - remaining open to FDI helps keep the U.S. on the technological frontier through multiple channels - capital deepening, competition, scale effects, driving inefficient firms out of the market place, and of course, technology transfers. And regardless, national origin discrimination and xenophobia are bad - it doesn’t matter where a technology comes from, so long as said technology is being used to fund tax revenues for the U.S. treasury and contribute to TFP growth in the United States

Any even though there is possible tech transfer, it's still TSMCs IP. Lots of foreign companies also invest FDI into china but china still had to work to produce their own IP.

The U.S. is a far more competitive and desirable location to do the FDI than China

 

[Phead128]

You guys do realize that there've been plenty of Fabs in United States right? And not just like, in the last 100 years, but Intel has been at the bleeding edge up until 2018 or something.

I don't agree with @chgough34 thesis that American workers are going to be more productive than TSMC's, because it is TSMC who has been at the bleeding edge for the last... 6 years or so, but you could certainly have made that case in 2016 and 2014 and 2010. Intel foundries made an enormous amount of silicon and were at the bleeding edge at the time.

That was the era of DUV, now we are in era of EUV, which is why US govt is bending over backwards to court TSMC expertise. Intel has the same Low NA EUV as TSMC and Samsung, but still cannot master the basic version of EUV to compete effectively. In otherwords, Intel excellent productivity at DUV does not translate to mastery or productivity with EUV without significant foreign expertise contribution.