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I believe TSMC will diversify away from Taiwan and they will probably need to do it as quickly as they can. This is already happening; they are building in Ariz
by Clubber 3y ago
I believe TSMC will diversify away from Taiwan and they will probably need to do it as quickly as they can. This is already happening; they are building in Arizona, but it takes a while to build a foundry and get it running. They should have started a decade ago. Hong Kong was probably the catalyst today. Companies who rely on TSMC will also need to diversify as much as possible as quickly as they can incase TSMC can't. I'm not sure if Berkshire doesn't think they can do it, or just doesn't like the risk. They seem fairly risk-averse.
Once this happens China will probably feel more emboldened to take Taiwan because US industry won't be so reliant on it and less likely to intervene. I'm not saying the US won't, but they would be less incentivized economically and in regards to self interest. I don't think the populace has the stomach for a long protracted, potentially nuclear war over Taiwan.
China will become significantly more isolated on the global scale if this happens, but they seemed determined to do it. They've fallen into a single-man dictatorial power structure under Xi. The China global economic experiment seems to have failed. It's a waiting game.
- methodical 3y agoWant to point out that the global economic importance of Taiwan will decrease if TSMC is able to diversify away from Taiwan in any significant manner, meaning China stands to gain significantly less economically by invading Taiwan. Most of Taiwan's importance currently seems to be directly related to their position as the primary supplier of chips for global corporations.
- Clubber 3y agoYes, you are absolutely correct economically, but they deem it to be a national honor thing. Dictators turn to nationalism when they become unpopular. https://www.bbc.com/news/world-asia-china-59900139 https://www.bbc.com/news/world-asia-china-59900139
- newsclues 3y agoNo. China has wanted Taiwan since before TSMC was major factor. This is about geopolitics, and fulfilling the destiny of the Party/Nation that has for decades been embarrassed that their (in their eyes) territory was held by others and supported by the West.
- methodical 3y agoSorry, I should've specified that I was specifically talking about potential economic incentives for China. I am aware to a lesser degree that they wanted the land for alternate reasons.
- randomopining 3y agoPutin showed that the autocrats mean business. Xi is cut from the same cloth.