Short Taiwan?

[zippy1]

4 minutes ago, tlm said:

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. 

Most of Taiwanese prefer status-quo even under incessant Chinese threats...  Would it be reasonable to force Taiwan to become part of China?

[Spekulatius]

The US has no claim on Taiwan, but the people living in Taiwan should be able to decide for themselves.

 

As for the case that Taiwan falls in Chinese hands, how would NVDA or AMD etc ge access to Samsungs capacity. Specifically, why would give Samsung NVDA for example capacity? I don’t think they have much to spare and what they have would go first towards their own needs and their current customers. 
 

Or another example, why would Intel give AMD capacity in their own fabs? It makes much more sense for Intel to ignore AMD request for capacity since they basically would be out of business without any manufacturing  capacity and Intel could pick up the pieces.

 

I think a lot of companies would go out of business and bought up for pennies on the $ in this case, because if you can’t producing anything for a couple of years you are .

 

I think INTC would be a $150 stock on this case, they would make money hand over fist, gobble up AMD engineering assets and get a monopoly on CPU’s again. Likewise with NVDA. Perhaps Samsung would by them for a song. Any fabless semi company without LT contract with still producing fabs would be screwed.

Edited May 24, 2022 by Spekulatius

[tlm]

1 minute ago, zippy1 said:

Most of Taiwanese prefer status-quo even under incessant Chinese threats...  Would it be reasonable to force Taiwan to become part of China?

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. 

[tlm]

1 minute ago, Spekulatius said:

The US has no claim on Taiwan, but the people living in Taiwan should be able to decide for themselves.

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. 
 

3 minutes ago, Spekulatius said:

As for the case that Taiwan falls in Chinese hands, how would NVDA or AMD etc ge access to Samsungs capacity. Specifically, why would give Samsung NVDA for example capacity? I do t think they have much to spare and what they have would go first towards their own needs and their current customers. 

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. 

 

6 minutes ago, Spekulatius said:

Or a other example, why would Intel give AMD capacity in their own fabs. It makes much more sense for Intel to ignore AMD request for capacity since they basically would be out of business without any manufacturing  capacity and Intel could pick up the pieces.

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. 

 

8 minutes ago, Spekulatius said:

I think a lot of companies would go out of business and bought up for Pennie’s on the $ in this cars, because if you can’t producing anything for a couple of years you are .

 

I think INTC would be a $150 stock on this case, they would make money hand over fist, gobble up AMD engineering assets and get a monopoly on CPU’s again. Likewise with NVDA. Perhaps Samsung would by them for a song.

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. 

[rkbabang]

17 minutes ago, tlm said:

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. 

Yes, Samsung, Intel, or Global Foundries. The problem is that 1 those companies wouldn't be able to handle the volume for many years.  2) You can't just switch foundries. Every single product would need to be re-designed to target the new foundry's process.  This would be such an enormous process it would set the industry back decades.  My company has tens of thousands of parts, some of which still selling well designed decades ago.   We simply couldn't transfer all of them to a new manufacturer in any reasonable time frame.  I'm sure most semiconductor companies are in the same boat.  There would just be hundreds of thousands of chips in millions of end-products which simply wouldn't be available and may never be available.  Talk about "supply chain issues" this would be the mother of supply chain issues.

 

[zippy1]

2 minutes ago, tlm said:

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. 

Maybe I can also share my point of view as a Taiwanese.
My ancestors moved to Taiwan 200 years ago from China, well before the Japanese rule. 
Neither of my parents, now in their 80s, have been to China.  
I studied in US for my graduate degrees under a professor of German ancestry, lived and worked in US for 10 years before moving back to Taiwan. 
I spent 17 years of my life in US and not a single day in (mainland) China. 
Just like Americans of German ancestry do not think they are Germans.  I don't feel that I am a Chinese, to be frank.    

[Spekulatius]

29 minutes ago, rkbabang said:

Yes, Samsung, Intel, or Global Foundries. The problem is that 1 those companies wouldn't be able to handle the volume for many years.  2) You can't just switch foundries. Every single product would need to be re-designed to target the new foundry's process.  This would be such an enormous process it would set the industry back decades.  My company has tens of thousands of parts, some of which still selling well designed decades ago.   We simply couldn't transfer all of them to a new manufacturer in any reasonable time frame.  I'm sure most semiconductor companies are in the same boat.  There would just be hundreds of thousands of chips in millions of end-products which simply wouldn't be available and may never be available.  Talk about "supply chain issues" this would be the mother of supply chain issues.

 

Global foundries is way behind in tech, so they can’t replace TSMC. It is actually their business strategy to focus on trailing edge nodes/ processes since they couldn’t compete with TSMC on leading edge.

 

Anyways, any attempt of China trying to take Taiwan would likely destroy the fabs, so they would be worthless at that point.

 

US would retaliate by blockading Chinas sea routes with the Navy , so no ship would get into Chinese ports. US and rest of the world goes into really bad recession, but China would literally die on the vine with no access to oil, raw material or even do trade unless the US allows it. Really bad for the US, but suicidal for China. No way Xi takes a chance on this. 

Edited May 25, 2022 by Spekulatius

[tlm]

37 minutes ago, zippy1 said:

Maybe I can also share my point of view as a Taiwanese.
My ancestors moved to Taiwan 200 years ago from China, well before the Japanese rule. 
Neither of my parents, now in their 80s, have been to China.  
I studied in US for my graduate degrees under a professor of German ancestry, lived and worked in US for 10 years before moving back to Taiwan. 
I spent 17 years of my life in US and not a single day in (mainland) China. 
Just like Americans of German ancestry do not think they are Germans.  I don't feel that I am a Chinese, to be frank.    

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. 

Edited May 25, 2022 by tlm

[tlm]

3 minutes ago, Spekulatius said:

Global foundries is way behind in tech, so they can’t replace TSMC. It is actually their business strategy to focus on trailing edge nodes/ processes since they couldn’t compete with TSMC on leading edge.

 

Anyways, any attempt of China trying to take Taiwan would likely destroy the fabs, so they would be worthless at that point.

 

US would retaliate by blockading Chinas sea routes with the Navy , so no ship would get into Chinese ports. US and rest of the world goes into really bad recession, but China would literally die on the vine with no access to oil, raw material or even do trade unless the US allows it. Really bad for the US, but suicidal for China. No way Xi takes a chance on this. 

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. 

[Spekulatius]

1 hour ago, tlm said:

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. 

That’s why I believe Biden’s somewhat offhand comment that China messing with Taiwan will get a military response from the US was a very real wink with a 4x4 to China to not even try.

 

I think they know already with the Ukraine unfolding  that it’s a no win proposition for them.

[zippy1]

2 hours ago, tlm said:

 

I hope Taiwan can stays the way it is. I’m betting on TSMC so I believe it will be. 

Thank you for your support.  
All of us, who work at TSMC shall do our best.  We come to work everyday knowing that how we perform at our jobs matter very much to our families, friends and our society.

[tlm]

2 hours ago, Spekulatius said:

That’s why I believe Biden’s somewhat offhand comment that China messing with Taiwan will get a military response from the US was a very real wink with a 4x4 to China to not even try.

 

I think they know already with the Ukraine unfolding  that it’s a no win proposition for them.

 

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). 

 

1 hour ago, zippy1 said:

Thank you for your support.  
All of us, who work at TSMC shall do our best.  We come to work everyday knowing that how we perform at our jobs matter very much to our families, friends and our society.

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. 

 

[rkbabang]

14 hours ago, Spekulatius said:

Global foundries is way behind in tech, so they can’t replace TSMC. It is actually their business strategy to focus on trailing edge nodes/ processes since they couldn’t compete with TSMC on leading edge.

 

Don't underestimate the vast number of chips in use in our modern economy still being manufactured, and still being designed, on those older processes.  Many people think the semiconductor industry is all about huge ARM chips on cutting edge processes, but look at any circuit board there are tens (and sometimes hundreds) of other chip around those big ARM chips and they are all necessary for the product.  Global Foundries doesn't have anywhere near the capacity to handle all of the chips on those old processes in a world without TSMC, and it isn't even close.

[rkbabang]

I've been looking at TSMC (it is getting cheap and I don't think China is going to do anything anytime soon), but also ASML.  While TSMC is ASML's largest customer, if TSMC was no longer around ASML would be the obvious supplier to other companies building fabs to take up the slack.  Although if China ever did attack Taiwan ASML would likely tank and that would be the time to buy it, so I'm not sure buying it now is a hedge against that type of event.

 

[tlm]

10 hours ago, rkbabang said:

I've been looking at TSMC (it is getting cheap and I don't think China is going to do anything anytime soon), but also ASML.  While TSMC is ASML's largest customer, if TSMC was no longer around ASML would be the obvious supplier to other companies building fabs to take up the slack.  Although if China ever did attack Taiwan ASML would likely tank and that would be the time to buy it, so I'm not sure buying it now is a hedge against that type of event.

 

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. 

[tlm]

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. 

[Spekulatius]

9 hours ago, tlm said:

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. 

Even without US involvement , a military conflict with Taiwan would likely destroy TSM production facilities. I don’t think people who think that China can just grab an island nation like Taiwan and everything will be fine and keep going think this through.

[Ulti]

https://finance.yahoo.com/news/china-premier-gives-dire-growth-100938085.html

 

Hopefully Xi has got enough on his plate but who knows

[rkbabang]

1 hour ago, Spekulatius said:

Even without US involvement , a military conflict with Taiwan would likely destroy TSM production facilities. I don’t think people who think that China can just grab an island nation like Taiwan and everything will be fine and keep going think this through.

Yeah, hopefully China thinks it through before acting. 

[tlm]

2 hours ago, Spekulatius said:

Even without US involvement , a military conflict with Taiwan would likely destroy TSM production facilities. I don’t think people who think that China can just grab an island nation like Taiwan and everything will be fine and keep going think this through.

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. 

[Spekulatius]

So, Biden made it clear that the US would defend Taiwan, if China would attack the island.

https://www.cnbc.com/2022/09/19/biden-says-us-forces-would-defend-taiwan-in-the-event-of-a-chinese-invasion.html

[tlm]

1 hour ago, Spekulatius said:

So, Biden made it clear that the US would defend Taiwan, if China would attack the island.

https://www.cnbc.com/2022/09/19/biden-says-us-forces-would-defend-taiwan-in-the-event-of-a-chinese-invasion.html

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. 

Edited September 19, 2022 by tlm

[UK]

https://www.bloomberg.com/news/articles/2022-09-20/biden-s-vow-to-defend-taiwan-makes-us-policy-shift-explicit

[Gregmal]

Biden meddling again? You dont say. 

[Spekulatius]

On 9/19/2022 at 9:29 AM, tlm said:

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. 

 

Nothing that has been thought said can ever be taken back.

Friedrich Durrenmatt

FWIW, I think the Republic of Taiwan will be recognized by the US and many other countries this decade as a sovereign country.

Edited September 20, 2022 by Spekulatius