This is more about national security and business continuity than cost. Costs matter most when things are running smoothly. However, COVID has taught us a hard lesson. When SHTF, you better have a back up plan. Making money on IP alone while someone else handles all of the manufacturing and integration work looks great on a spreadsheet. Then some state actor cuts off the supply chain (or a virus) and your genius MBAs start to not look so smart after all.
With any luck, COVID (and tariffs) has transformed business for the future.
> With any luck, COVID (and tarrifs) has transformed business for the future.
Until we're far enough removed from the situation, everything is comfortable again, and the MBAs start saying "you know, if we just offshored fabrication..."
Samsung is probably more accurately described as a multinational company in this context. The location of a company's headquarters is not a primary determining factor for all different types of geopolitical risk. Like other multinationals, they have some ability to pick the jurisdictions they operate, and each of those locations have their own geopolitical contexts.
However, in this case, South Korea is also a close US ally. There is little risk to the US that the headquarters of Samsung is in South Korea.
But TSMC isn't necessarily a multinational company, which can also be said about other notable Taiwanese companies like Foxconn, whose business model depends on exploiting young, cheap, unskilled laborers from rural China and who had been far less successful in operating oversea operations outside China, such as in Brazil or Wisconsin, US.
As insinuated in the pessimitic tone of in the interview, TSMC also appears to be very reluctant to expand beyond Taiwan and China, and is certainly less worried about geopolitical threat from China. I think it's important to note that not everyone in Taiwan is dead set against the CCP. In a pre-pandemic Pew Research Center poll[1], at least 1/3 of Taiwanese still longed for closer economic and political ties with the mainland China. I don't have any recent data, but I doubt it changed much since.
For these risks physical location matters more than the organizational structure. If something (perhaps a conflict, perhaps something else) disrupts manufacturing or shipping around East Asia, supply from the Samsung fabs in Korea and TSMC fabs in Taiwan would be disrupted, but any manufacturing capacity that's physically located in the West would be still available.
With any luck, COVID (and tariffs) has transformed business for the future.