3 ms·

Then what? Probably a fight that will result in one of the greatest blows to the global economy ever, as well as the collapse of China as we know it today. The

Then what? Probably a fight that will result in one of the greatest blows to the global economy ever, as well as the collapse of China as we know it today. The Taiwanese will destroy all the fabs before China can take them. We already have a chip shortage, can you imagine what it will be like to cut current supplies by another 40-50%? The resulting sanctions alone would cripple China. Hence, status quo will remain, and Taiwan will continue to be a prop for nationalist speeches in China and the US defense industry will continue to make a mint off selling them old gear.

dan-robertson 5y ago
If China invaded Taiwan then US companies would have a hard time moving manufacturing outside of China so maybe demand for semiconductors would go down. The problem would just be the supply of everything downstream falling off a cliff.
vimy 5y ago
I’m not sure the status quo will remain. The Chinese respond very emotional whenever Taiwan gets mentioned. Don’t bank too much on China acting rational.
- ethbr0 5y ago
  Chinese aggression toward Taiwan is inversely correlated with China's domestic economy and political stability.
dirtyid 5y ago
Destroying TSMC fabs is in neither US nor PRC or Taiwan's interest, it's the only point of consensus and mexican standoff leverage between all parties that prevents a TW war from escalating too far. IMO US and PRC would rather bargain some sort of sharing agreement over TSMC even in event of military actions in exchange for not glassing TW than have everyone lose access to the fabs. > imagine what it will be like to cut current supplies by another 40-50% And despite everyone's aforementioned desire to preserve TSMC, ultimately this is still a trivial amount if you consider that the East Asian semi supply chain accounts for 75% of global IC share and is completely within PRC missile range if there was ever an expansive east Asian theatre over Taiwan. Losing TSMC in war over TW will set the world back 1-2 nodes and 10 years, losing regional fabs and supply chains (in SK or JP) in a broader war over TW will knock out decades worth of capex. Global semiconductor industry is a 500B market, trillions in terms of industries affected, most of which benefits the west. PRC has massively more leverage in semi mutually assured destruction, so much so that TSMC is ultimately expendable if PRC is ever forced to act upon TW, because losing TSMC doesn't even scratch the surface of semi disruption PRC can cause US/West, who again are disproportionate beneficiaries of current IC status quo.
- another_story 5y ago
  Obviously no one wants to destroy the fabs, but realize they would be destroyed if it was evident that Taiwan would be taken. That is part of the Taiwan playbook. How would the PRC be forced to act on Taiwan?

dan-robertson 5y ago

If China invaded Taiwan then US companies would have a hard time moving manufacturing outside of China so maybe demand for semiconductors would go down. The problem would just be the supply of everything downstream falling off a cliff.

vimy 5y ago

I’m not sure the status quo will remain. The Chinese respond very emotional whenever Taiwan gets mentioned. Don’t bank too much on China acting rational.

ethbr0 5y ago
Chinese aggression toward Taiwan is inversely correlated with China's domestic economy and political stability.

dirtyid 5y ago

Destroying TSMC fabs is in neither US nor PRC or Taiwan's interest, it's the only point of consensus and mexican standoff leverage between all parties that prevents a TW war from escalating too far. IMO US and PRC would rather bargain some sort of sharing agreement over TSMC even in event of military actions in exchange for not glassing TW than have everyone lose access to the fabs. > imagine what it will be like to cut current supplies by another 40-50% And despite everyone's aforementioned desire to preserve TSMC, ultimately this is still a trivial amount if you consider that the East Asian semi supply chain accounts for 75% of global IC share and is completely within PRC missile range if there was ever an expansive east Asian theatre over Taiwan. Losing TSMC in war over TW will set the world back 1-2 nodes and 10 years, losing regional fabs and supply chains (in SK or JP) in a broader war over TW will knock out decades worth of capex. Global semiconductor industry is a 500B market, trillions in terms of industries affected, most of which benefits the west. PRC has massively more leverage in semi mutually assured destruction, so much so that TSMC is ultimately expendable if PRC is ever forced to act upon TW, because losing TSMC doesn't even scratch the surface of semi disruption PRC can cause US/West, who again are disproportionate beneficiaries of current IC status quo.

another_story 5y ago
Obviously no one wants to destroy the fabs, but realize they would be destroyed if it was evident that Taiwan would be taken. That is part of the Taiwan playbook. How would the PRC be forced to act on Taiwan?