tlm

It’s all a show of ambiguity. If they were really serious about ROC then they’d recognise them. Personally I don’t think we will know what the US or China will do until it happens. Also half of what Biden says is walked back by officials days or even hours later.

I’m not saying that this is likely. I’m just raising another possible outcome. There are many outcomes. It’s likely that if losing Taiwan to China that the US destroys TSMCs infrastructure and then migrates the talent to the US. As it stands the US state dep has already walked back what Biden has said again. Not to mention his own comments were contradictory in the first place. I don’t think anyone knows what the US will or will not do and I think that’s how they are playing it. End of the day you can’t just ignore an outcome as it doesn’t align with the western beliefs of China and it’s intention. Personally I am trying to think of every outcome and I can then place my bets accordingly to it playing out should it come. I think we can all agree on how severe the outcome would be world wide should Taiwan be taken and fought over with the US and with TSMC in the middle. Basically the world would go backwards for many many years. For now I will continue buying where I find value, keeping in mind portfolio allocation and hedging plays for different outcomes. If I’m wrong on TSMC it’s only a small portion and I’ll probably have a bigger issue living in Australia than a loss of capital.

Keep in mind there’s a scenario that if China does take Taiwan they don’t stop or change TSMC and everything keeps on going. I think China would prefer this. It’s only if it escalated into a war with the west would the right off occur.

Yeah I agree. I don’t see ASML as a hedge now. But a good play after the fact. It still looks interesting to look at. But I don’t think there is anywhere near as much value from a valuation point of view. Hedging is probably better with the likes of Intel.

I certainly hope so. But I'm not sure that it has much weight coming from Biden. It was almost like a dementia slip up that he has done before and is cleaned up by the press secretary after the fact (unsure if they have done so on this occasion). A statement like this shines light on exactly why TSMC has done so well. I created a thread for TSMC as there isn't much discussion about it. @zippy1 @Spekulatius Would love your thoughts on it. Planning on converting my research into a write up.

Well that’s what brought Japan into WW2. I think we should learn to not back someone into a corner especially if they have nukes. I agree if Taiwan falls in a way where China doesn’t export Chips using TSMC. Or even a hot war to invade will have severe supply chain ramifications. Potentially setting back humanity a long time. Even from a climate change perspective could be very bad. Maybe TSMC is the part of the equation that holds everything together. Let’s hope so.

Thanks for sharing such a person insight. I hope my comments were not taken to be offensive. I understand that many are like you. As I said I’d hate to see Taiwan not be what it is today. But in saying that should western countries go to war over it. As of the last world order it came under China. Taiwans strategic advantage is clearly an issue for China and US et al. Is it worth a world war? I’m not sure it is. As much as I don’t want to see it taken over I also don’t want to see millions of deaths. The question is what’s next for China and why. My personal conclusion is they aren’t a country that has shown it will invade the world. They are a superpower protecting its interests similarly to the US and British empire. If I thought that was the end goal then fighting early is the better play. I hope Taiwan can stays the way it is. I’m betting on TSMC so I believe it will be.

That’s like saying the people of China should decide for themselves too. For better or worse there civil war determined there communistic system. It will remain until it is over thrown or changed internally. Correct. Capacity would be the issue. Clearly there wouldn’t be any for long time. Apple, AMD, NVDIA etc would be right for a small piece. Inflation would be crazy high. But over time it would find the capacity to cater for them. I believe both AMD and NVIDIA already use Samsung nodes so some products already. Also correct. But they stated they are becoming a Fab they can’t turn away competition or it will hurt that side. I guess they will have to choose. Does make that scenario hard. That’s why I think Samsung is better for the likes of AMD and NVIDIA. Others will find Intel. Ironically TSMC makes chips for Intel too. Yeah I agree companies would likely go bust. Intel and Samsung would greatly benefit. Intel could be worth $150 in some years if Pat can turn things around. Personally I love TSMC as an investment but am thinking owning Intel as a hedge is the way to play this investment safely. Yes I agree Samsung and Intel could both buy these companies quite cheap.

I’m not saying I’d like that. I wouldn’t. I’d prefer it remain and it’s own country and break away from One China policy. But fact is there’s history here and it is part of China. Even the world including US and UK recognised PRC and not ROC. what I’m pointing out is that fact we want our cake and eat it too. we point the finger at China but do the same things as them and ignore the irony as it’s ok for us to do it but not others. Say China took over Taiwan peacefully. What would that look like? Personally I think TSMC would continue to flourish and the worlds chips continue to be shipped.

I was reading something from TSMC where they stated that their margins are 50% more outside the US. That’s a massive amount that clearly shows the US is not going to be competitive. If TSMC is not around then it probably doesn’t matter. But eventual these economic tailwinds will be utilised by another to once again overtake the US I believe.

They would be forced to use Samsung or Intel. But I’m doing so the tech would go backwards for some years before it court up with where it is now. It was very interesting that Apple moved away from Intel in favour of the M1 chip made by TSMC. They have put all their eggs in one basket. I would say they don’t feel like an invasion is extremely likely. On a side note question is the claim on Taiwan reasonable. Personally, I think it is but in saying that I don’t believe it should be done with force either. Post WW2 Taiwan was placed in the control on China as Japan held it from 1895. This was backed by the US and UK. In 1949 ROC fled to Taiwan to evade the RPC after it won the civil war. Putting aside my preference to democracy it doesn’t make a judgement different based on preference. The One China policy states that both the ROC and PRC both agree Taiwan is part of China but neither party agrees to which party rules. Clearly the US and allies don’t want to loose Taiwan to China now it is so important (Chips and strategic location) to the allies. But does that make it ok for us to impose our will. I don’t believe it does.

It’s actually much worse. Oil is all the same not matter where it comes from. Chips are not. TSMC is so big nations can’t even compete. The US passed the chips act with $50 B in incentives and TSMC spent $40B in CapEx in 2022 for expansion.

Apple would be severely hurt by this. Personally I would never short. But should an invasion occur then Apple would suffer greatly. Apple accounts for around 25% of TSMCs revenue. They are very reliant on TSMC. After moving away from Samsung many years ago (now also moved away from Intel for computers) and now that TSMC has the lead, Apple would have to go to Intel or Samsung and in doing so would take a step backwards in performance. Not to mention the lead time to get production going. Also from memory Samsung leading edge nodes don’t have the best yields.