It doesn't goto nearly zero. TSMC has a large fab in Arizona and they are continuing to expand it. They also have a fab in Washington, and in Japan. [1]
The fab in Washington is very old (notice it's still equipped for 8 inch wafers) and so pretty irrelevant to Nvidia's business.
I'm not quite sure what process they run there but I believe it was an acquisition 10+ years ago, not built from the ground up by them.
Edit: their Japan fab is also a mature node so not very relevant here.
And their Arizona fab is a very very small portion of their volume and with far worse margin.
I agree. It's funny that this is one of the cited reason for the (relative) value suppression of tsmc, but the same factors should apply to Nvidia too.
It seems obvious to me this quickly escalates to a US nuclear first strike with the B2-Spirit on China manufacturing infrastructure.
It is economic MAD.
Or China can wait 20-30 years and the US will no longer care about Taiwan or have the resources to have much presence in the eastern hemisphere.
I think the saber rattling over Taiwan is just to get the US to spend themselves further into oblivion in the short term. We are in the war already and the saber rattling is an incredibly effective, asymmetric financial weapon. It builds up the Chinese military kinetic capacity long term while weakening the US military kinetic capacity long term by forcing the US to prepare for something that is never going to happen.
When China takes Taiwan it will be without firing a shot. I would bet the house on that because it kind of has to be that way to win the war and not just a self destructive battle.
China is achieving its objectives brilliantly. The US is increasingly isolated and this is the process of retreating into the western hemisphere. NATO is being destroyed without firing a shot.
From my perspective, the US is foot-gunning itself into geopolitical irrelevance through the destruction of its soft power and undermining the NATO alliance. For all its many, many faults, the CCP's actions around establishing itself as the Asian regional superpower are patient, strategic and consistent over the long term. They're playing it far too smart to get into a shooting war with the US, and I'm in agreement that they'll probably end up consolidating Taiwan peacefully in a decade or so.
Going to zero is one potential outcome. Equally plausible is it goes up 10% in a relatively quick battle or diplomatic outcome which ends the geopolitical uncertainty.
This is the beauty of Polymarket. Then bet on it. There are so many more outcomes possible to this conflict than what you see reported in the media. Don't be so reductive.
When people do this kind of predictions, they often driven by emotional reaction. Best thing to switch actual evaluation on certain hypothesis is to make actual risks cost something.
I think they are already hedging for Taiwan. 1. They just pseudo-acquired Groq, fully made in USA (GlobalFoundries) and with a diversified supply chain. 2. And they just announced they will be re-introducing RTX 3090 made in Korea (Samsung). 3. And they plan to produce chips in Intel's new US fabs soon.
I think the bigger problems of the AI bubble are energy and that it's gaining a terrible reputation for being the excuse for mass layoffs while suffocating the Internet with slop/brainrot content. All while depending on government funding to grow.
Arizona fabs don't work without TW's many sole source suppliers for fab consumables. They'll likely grind to halt after few months when stock runs out. All the dollar shuffling's not going to replace supply chain that will take (generously) years to build, if ever.
Yes, lots of other companies would be affected to a greater or lesser extent (even non-tech stocks), but specifically any company that relies on manufacturing all their product in Taiwan will be affected most of all.
I'd be curious how many of the design and verification (using computer vision) tools used at TI and Intel rely on on farms of stock GPUs thus chips still made in Taiwan. They might have in house chips just for such part of their workflows though, any insight appreciated.
The whole economy will crash. Probably won't be due to China invading Taiwan though. More likely because the president decided to delete their country's world reserve currency status (which is another word for a trade deficit).
Well, the reality is that most people don't want a bloodbath and it's increasingly looking like external support won't come, so what you gonna do... life is a very complex chess game, gotta play your pieces right.
At this rate, even if they can't get the Taiwanese population to consent, it probably makes more sense to wait anyway to see how low America can sink. The lower America goes, the better their chance for success.
Where do you see the pro china side getting more and more support? As far as I can tell it's sharply swung towards maintaining independence in the past decade or two with single digit support of unification with the mainland.
An EU type agreement will keep peace for some time. Remove all trade barriers between two countries, have a treaty preventing any side to be used militarily by third party, no attacking each other and free movement of all vessels through each other's seas. Maybe few more
Thats just buying China more time until they can get their chip manufacturing to at least a similar ballpark. Then Taiwan has no cards left to play. China can cripple TSMC depriving the west of chips while they continue onwards.
"buying China more time". China has no time-pressure to attack immediately, but all the upside right now of pretending to a stable, sensible world leader. Treaty with Taiwan will keep the ego of One China, prevent it from naval blockade by Taiwanese territories and will remove one of the major territorial issues raised against it.
I don't know about that...don't they have massive overcapacity in many of their industries as well as ~25% youth unemployment? For all the mess the US is going through at least we are seeing it out in the open. China seems to be going through their own messes right now but it is behind the great wall. Will a treaty be enough or will their leaders falter and try to push for more. Guess we will see.
I think Taiwanese elites can be bought, they say they can’t but I think that’s just part of the bargaining for a higher price. The overtures towards a costly and destructive invasion is Chinas attempt at lowering that price. As is the strategy of building up an indigenous chip manufacturing industry. The aggressive rhetoric from China has the added benefit of keeping the US on a self sabotaging aggressive posture.
China invading Taiwan makes zero sense, they just flex those muscles for domestic consumption. They will probably take over Taiwan, but they'll do it how modern major powers do anything: propaganda, influence campaigns, and soft power.
Russia invading Ukraine also made zero sense, given their actual capabilities and the likely (now realized) consequences. The leader doesn't always have the best information, it turns out.
Either that, or the leader does have access to the best information, and they just DGAF. That condition seems to be going around too.
