13 Comments
Jan 26, 2023·edited Jan 26, 2023

I think you are perhaps excessively worried about Anwar and his coalition being Pro CCP and therefore investments in Malaysia are a security risk. The country is a democracy has political cleavages, this government may not even last a whole term it doesn't even have a true majority. post election there was crisis in forming the government A new govt may form and pivot on policy. Essentially if you worry about investments in any country in Asia, then to some extent using that logic all of them are at risk including the closest that isn't Taiwan, Singapore (South Korea and Japan are treaty allies). No state in Asia is particularly thrilled about having to make a choice between security and economy, which is the choice they feel they are being forced to make by US China competition. LAM according to this piece seems fairly savvy and made a decision based on competitiveness. The way to deal with that is as you have laid out previously in other posts is ensure the US can compete as a destination by any and all means necessary.

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The point is not so much CCP or China or Chinese workers, as some of the comments pointed out. Let's not ignore the fact that Lam's customers are not consumers, they are TSMCs UMCs Samsungs Microns etc, and the bulk of their fabs are almost all located in Asia except probably Intel. Why didnt Applied Materials move as well? I don't know, maybe it is planning something too. As regard to skilled work-force, TSMC made similar comments on their delayed fab construction in Arizona. I am not sure policy tax or education is help much quickly, even if all the politicians can be persuaded to move in unison. There's a much easier solution: giving more immigration visas, encouraging young skilled engineers and workers to move their family from Asia to US or even Europe, if one plans to build fabs there. Lure them with higher income, better healthcare, better work conditions, freedom and better education for their kids.

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I think you have missed something in the analysis. Manufacturing tools in Malaysia makes it easier for LAM to continue to supply the Chinese market in the face of American export controls

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The key point for LAM in Malaysia is that almost all (but probably all) key workers will be Mandarin speakers as well as being ethnic Chinese.

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