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TSM, The most important company in the world, world peace

Arthur Hanson

Well-known member
Not only is TSM the most important company in tech, but the most important in the world for its massive multi-trillion-dollar ecosystem and by becoming an indispensable force for any modern country, a major force for world peace. In this ever-increasingly technical world, TSM has become so key that no major country can do without them. This is forcing some degree of cooperation on all countries since if TSM were destroyed anyone of any intelligence at all knows the damage would send destructive reverberations throughout the entire world economy. TSM will become even more important as AI/ML come into being with many benefits, both seen and unseen at the present time. TSM is only increasing the value of its ecosystem customers and suppliers by hundreds of billions per year, becoming ever more important in increasing the demands for world peace on all, even if some don't want it, the alternative is far worse. Hat's off to Morris Chang and his forward-looking vision, I'm sure even he is amazed by his accomplishments.
 

lilo777

Member
Not only is TSM the most important company in tech, but the most important in the world for its massive multi-trillion-dollar ecosystem and by becoming an indispensable force for any modern country, a major force for world peace. In this ever-increasingly technical world, TSM has become so key that no major country can do without them. This is forcing some degree of cooperation on all countries since if TSM were destroyed anyone of any intelligence at all knows the damage would send destructive reverberations throughout the entire world economy. TSM will become even more important as AI/ML come into being with many benefits, both seen and unseen at the present time. TSM is only increasing the value of its ecosystem customers and suppliers by hundreds of billions per year, becoming ever more important in increasing the demands for world peace on all, even if some don't want it, the alternative is far worse. Hat's off to Morris Chang and his forward-looking vision, I'm sure even he is amazed by his accomplishments.
That's quite an exaggeration. Imagine for a moment that TSM is gone. Will the world collapse? No. Obviously there is a matter of capacity but let's put it aside. With Samsung (and soon Intel) we would have a slightly worse process (let's say what TSM had 1.5 year back). So what? Not a big deal. It's like staying with the same iPhone model for another year. I am not sure what world peace has to do with it either. I doubt China is going to go to war (although I heard an opinion of some expert a few days ago who used to think that the probability of the forceful unification was at 0% but now it was at 60% due to increased strength of Chinese military). The unification is inevitable one way or another. Let China deal with it, it's their problem. They got back Hong Kong and Macau and nobody noticed it. The same is likely to happen to Taiwan.
 

Arthur Hanson

Well-known member
That's quite an exaggeration. Imagine for a moment that TSM is gone. Will the world collapse? No. Obviously there is a matter of capacity but let's put it aside. With Samsung (and soon Intel) we would have a slightly worse process (let's say what TSM had 1.5 year back). So what? Not a big deal. It's like staying with the same iPhone model for another year. I am not sure what world peace has to do with it either. I doubt China is going to go to war (although I heard an opinion of some expert a few days ago who used to think that the probability of the forceful unification was at 0% but now it was at 60% due to increased strength of Chinese military). The unification is inevitable one way or another. Let China deal with it, it's their problem. They got back Hong Kong and Macau and nobody noticed it. The same is likely to happen to Taiwan.
The world has numerous challenges before us as we are a grossly overpopulated planet and need all the tech we can get while we still have a livable, but rapidly degrading environment around the world. To support our ever-growing population we will need to advance our tech and its application in almost all areas. TSM is the tip of the spear. Unification is not inevitable or even desirable as China has numerous and serious environmental and social challenges without even spending massively on its military. No one is threatening to invade China. Collaboration and cooperation will yield far more gains and benefits for people on all sides and tech holds the key to that in ways too numerous to list. It would be better for China to spend money on advancing tech and educating its people than the military, the same is true for most major powers. A major war between the powers will destroy any progress we have already made. If supply chains are bad now, they will be horrendous in a conflict in which everyone loses. Peace, collaboration and cooperation have huge dividends, lets collect them.
 

Arthur Hanson

Well-known member
The world has numerous challenges before us as we are a grossly overpopulated planet and need all the tech we can get while we still have a livable, but rapidly degrading environment around the world. To support our ever-growing population we will need to advance our tech and its application in almost all areas. TSM is the tip of the spear. Unification is not inevitable or even desirable as China has numerous and serious environmental and social challenges without even spending massively on its military. No one is threatening to invade China. Collaboration and cooperation will yield far more gains and benefits for people on all sides and tech holds the key to that in ways too numerous to list. It would be better for China to spend money on advancing tech and educating its people than the military, the same is true for most major powers. A major war between the powers will destroy any progress we have already made. If supply chains are bad now, they will be horrendous in a conflict in which everyone loses. Peace, collaboration and cooperation have huge dividends, lets collect them.
Taiwan is not even remotely close to Hong Kong in any way. Hong Kong was a financial center and not a world-leading one, like many, many others. Also the Chinese have occupied Hong Kong for many years and just clamped down tighter. Taiwan is a tech powerhouse that has advanced numerous technologies and made them worldwide standards and has always pushed the limits of semi technologies to the cutting edge. This has enabled science and industry as a whole to advance at an ever-faster accelerating rate that has enabled the world to deal with challenges faster and cheaper than ever before. TSM will be key in automating discovery by leading in AI/ML which we will need on a massive scale to solve the numerous problems created by a severely overpopulated, damaged world. TSM has set a pace that has forced all others to accelerate their development or go out of business. TSM is the tip of the spear of progress and will continue to be, that is why everyone wants an independent Taiwan from China that has numerous problems caused by a country that revolves around a single man's vision by fear and force.
 

lorenso

New member
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tonyget

Member
Taiwan is a tech powerhouse that has advanced numerous technologies and made them worldwide standards

Can you name any technical fields besides semiconductor, where Taiwan is the global leader?As far as I know,Taiwan lags behind in almost all non-electronic industries. Aerospace/Quantum computing/Artificial Intelligence/Biotech/Ship buidling/Pharmaceutical/Advanced Materials/Clear Energy/Automobile etc. I have never heard of any world-class Taiwanese companies in those fields.

Mastering only a few fields dose not qualify a country “tech powerhouse”,nor does it an indicator of a nation's overall technical strength. North korea and Iran successfully launched satellite with domestic made carrier rocket,something Taiwan has yet able to achieve,South Korea attempted to launch a domestic rocket but failed just few days ago. We can say that North Korea and Iran are powerhouse in Aerospace, and Taiwan is powerhouse in semiconductors, rather than “tech powerhouse” in general
 
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prime007

Active member
Can you name any technical fields besides semiconductor, where Taiwan is the global leader?As far as I know,Taiwan lags behind in almost all non-electronic industries. Aerospace/Quantum computing/Artificial Intelligence/Biotech/Ship buidling/Pharmaceutical/Advanced Materials/Clear Energy/Automobile etc. I have never heard of any world-class Taiwanese companies in those fields.

Mastering only a few fields dose not qualify a country “tech powerhouse”,nor does it an indicator of a nation's overall technical strength. North korea and Iran successfully launched satellite with domestic made carrier rocket,something Taiwan has yet able to achieve,South Korea attempted to launch a domestic rocket but failed just few days ago. We can say that North Korea and Iran are powerhouse in Aerospace, and Taiwan is powerhouse in semiconductors, rather than “tech powerhouse” in general
Tony - I think you're underestimating Taiwan if you think it's ONLY TSMC over there. Here's the government of Taiwan's own view of the products and services they provide to the world.

Keep in mind that Taiwan's population is approximately 23.5 million...so yes they aren't world beaters in every industry. The Taiwanese have limited resources and focus on the areas they are good at. Like Japan and South Korea, Taiwan's economy is export-driven and many of its companies are leaders or competitive in their own niche markets. Companies like...
1. Asus - Computer and electronics (Motherboards, laptops, etc..)
2. Foxconn - Electronics contract manufacturing
3. Quanta Computer - Largest manufacturer of notebook computers in the world
4. E ink - Electronic Paper Displays
5. Medigen - Worked with the U.S. NIH to develop a homegrown Covid-19 vaccine. While still in Phase 3, It's expected to be "no worst than" the AstraZeneca vaccine. Taiwan's president (Tsai Ing-wen) choose to use Medigen's Covid-19 vaccine as a show of support.
6. Gogoro - Battery-swapping refueling platform for scooters, mopeds and motorcycles
7. PlayNitride - MicroLED startup
8. Evergreen Marine Corporation - 7th largest container shipping company in the world

Another point...China actively tries to limit Taiwan's growth economically through various means. Just google the "Comprehensive and Progressive Agreement for Trans-Pacific Partnership" to learn of one such example. The growth and success of their economy is a testament to the Taiwanese people...as well as the active support they receive from the United States, Europe, Japan and their allies.

Space? Electric vehicles? No Taiwan doesn't lead there...but they are now planning on entering the market.

A non-electronic industry where Taiwan leads? How about bicycles? Taiwan is home to Giant...the world's largest bicycle manufacturer.
 

Portland

Active member
It's not only tsmc and architecture in semiconductors. It's electric motors becoming more efficient and powerful because of new architecture that is changing the world.
 

peter

New member
Meh, Asus, Foxconn, Quanta, so forth, they're not exactly huge value added companies. Not exactly huge profit margins for their business, and they mostly compete with each other down to the last cent. If you're going to list strong Taiwanese companies, better off mentioning Formosa Plastics/Chem/Nanya or AUO and Innolux rather than EMS companies. As for Gogoro, only a few countries that can accommodate scooters as a primary transportation method, I personally find it quite strange that a developed country like Taiwan has still embraced mopeds and scooters on the scale it has. How much they can grow, beyond the few countries that use such transportation methods is questionable. Playnitride, let's revisit when they actually make an impact, I'm very interested to see how they do, but let's face it, they're a mere blip in the display industry at the moment. Not saying they won't be impactful, but they don't seem to be any further ahead of anyone else in terms of yields and costs either. Evergreen, with their proximity to the biggest container shipping ports in the world, that's like an award for participation. Medigen, well, as pointed out, without US support from NIH and Dynavax Technologies...you get the idea. I still believe the nation as a whole is too reliant on the success of one company, but that's just my opinion of course. But in any case. the op's incessant posts about TSM this TSM that sounds no different from propaganda and doesn't add anything to the conversation. Again, just my opinion.
 

prime007

Active member
Meh, Asus, Foxconn, Quanta, so forth, they're not exactly huge value added companies. Not exactly huge profit margins for their business, and they mostly compete with each other down to the last cent. If you're going to list strong Taiwanese companies, better off mentioning Formosa Plastics/Chem/Nanya or AUO and Innolux rather than EMS companies. As for Gogoro, only a few countries that can accommodate scooters as a primary transportation method, I personally find it quite strange that a developed country like Taiwan has still embraced mopeds and scooters on the scale it has. How much they can grow, beyond the few countries that use such transportation methods is questionable. Playnitride, let's revisit when they actually make an impact, I'm very interested to see how they do, but let's face it, they're a mere blip in the display industry at the moment. Not saying they won't be impactful, but they don't seem to be any further ahead of anyone else in terms of yields and costs either. Evergreen, with their proximity to the biggest container shipping ports in the world, that's like an award for participation. Medigen, well, as pointed out, without US support from NIH and Dynavax Technologies...you get the idea. I still believe the nation as a whole is too reliant on the success of one company, but that's just my opinion of course. But in any case. the op's incessant posts about TSM this TSM that sounds no different from propaganda and doesn't add anything to the conversation. Again, just my opinion.
Peter (or are you actually Tony?) - the original argument from Tony was that essentially Taiwan did not lead any any technical fields except semiconductors and that it wasn't a "tech powerhouse". I listed Taiwanese companies that were mostly leaders, competitive or up-and-coming in their "niche markets" to make MY argument that Taiwan is indeed a "tech powerhouse". Further, I introduced Tony to Giant Bicycles...a world-class company that leads in a non-electronic industry.

Now let's go back to your post. The profit margins for a company is determined by various factors in the market (competitors, supply/demand, etc.) Just because a company doesn't have "huge profit margins for their business" does not necessarily mean they aren't leaders at what they do. Now let's talk Gogoro...you indicated that only a "few countries" can accommodate scooters as a primary transportation method. Fair enough...but just look at the countries with the highest percentage of motorbike use. Countries like Thailand, Vietnam, Indonesia, Malaysia, China and India could more than sustain the explosive growth of Gogoro. That company is projected to grow revenues by more than 50% for the next three years (source) and it has good profit margins!

Yes, TSMC is Taiwan's world-beating champion. But even without TSMC, I would argue that Taiwan would still punch above its weight economically. It's the people there that make Taiwan special. Frankly, Google sees this and is investing BIG in Taiwan. Of course, you're free to believe in whatever you want.

I'm a TSMC shareholder and am married to a beautiful Taiwanese woman so of course...my opinion is somewhat bias. :)
 

peter

New member
Peter (or are you actually Tony?) - the original argument from Tony was that essentially Taiwan did not lead any any technical fields except semiconductors and that it wasn't a "tech powerhouse". I listed Taiwanese companies that were mostly leaders, competitive or up-and-coming in their "niche markets" to make MY argument that Taiwan is indeed a "tech powerhouse". Further, I introduced Tony to Giant Bicycles...a world-class company that leads in a non-electronic industry.

Now let's go back to your post. The profit margins for a company is determined by various factors in the market (competitors, supply/demand, etc.) Just because a company doesn't have "huge profit margins for their business" does not necessarily mean they aren't leaders at what they do. Now let's talk Gogoro...you indicated that only a "few countries" can accommodate scooters as a primary transportation method. Fair enough...but just look at the countries with the highest percentage of motorbike use. Countries like Thailand, Vietnam, Indonesia, Malaysia, China and India could more than sustain the explosive growth of Gogoro. That company is projected to grow revenues by more than 50% for the next three years (source) and it has good profit margins!

Yes, TSMC is Taiwan's world-beating champion. But even without TSMC, I would argue that Taiwan would still punch above its weight economically. It's the people there that make Taiwan special. Frankly, Google sees this and is investing BIG in Taiwan. Of course, you're free to believe in whatever you want.

I'm a TSMC shareholder and am married to a beautiful Taiwanese woman so of course...my opinion is somewhat bias. :)
No disagreement there, I just wouldn't have picked the companies you mentioned to make your point, that's all! Again, just my opinion, but profits matter in the big picture since it shows how specialized the value being added is along the pipeline. Hence my rationale for picking the companies I mentioned where it's original technology being developed and refined, rather than assembly companies. That's not to say the assembly business isn't difficult or specialized either, but the bar does seem to be relatively lower...the strength of Taiwanese EMS companies is more their outsized scale but that can be penetrated with brute force which is exactly what the Chinese are trying to do. It also helps when the Chinese companies are some of the biggest customers in those fields. It's easier for Chinese to replicate EMS type business rather than, say, display technology or memory/semiconductors...and even then, we can see companies like BOE and Tianma in the display sector and YMTC in memory begin to make strides. Of course most of that was from poaching top personnel from current leaders...but I digress, those are in my opinion, the traits of what makes leaders and a tech powerhouse.

Gogoro, I'm well aware of their growth, used it a few times whilst there and makes perfect sense for the environment there. I just find it interesting that Taiwan seems to be the outlier high income nation that actively supports such mobility devices. Great that they've found a niche and fulfilling it. Perhaps they are best off at this scale and not producing batteries for EVs or utility grade ESS devices and maybe that's their best pathway for profitability and survival?

As for Giant and bicycles, yes, they're the biggest. They're also how I would perceive as a company like Asus was prior to the Pegatron spin off, mostly assembly and doing ODM/OEM for multiple international brands. It's also interesting how they trail Shimano greatly in market cap and revenues. Granted Shimano isn't only involved in bicycle components, but I just find those facts interesting to note, as it goes to show why just being the biggest manufacturer doesn't always generate the most value...when pretty much every single Giant bicycle uses Shimano shifters, derailleurs and brakes. I suppose Giant makes frames and wheels so they do have some original components and designs. Again, just different metrics in the definition of what is a leader, I'm not disagreeing by any means, I just find it interesting that a country like Taiwan with all its talented workforce and technology, they really don't have too many businesses outside of semis, assembly and components and bicycles that are considered world class.

And it is people that make any country special, no disagreement there. But it's also the system that makes countries and the people what they are. It's like the interview with Park Yeon Mi, the North Korean defector points out, the people of South Korea and North Korea have a common culture and a past. But it's their respective systems that have allowed the countries to go on two divergent paths. But back to the original point of the op, I don't see any relevance to world peace. And Tony's response was in response to the Arthur's post saying "Taiwan ... has made them worldwide standards," and I agree with Tony, I don't think Taiwan sets worldwide standards. Most standards in place are from Japan, Korea or the US or Europe, what standards off the top of your head come from Taiwan? JEDEC, ITU, ISO, IEEE, ANSI, IEC, DIN, JISC, etc. etc., I don't see too many Taiwanese companies being top contributors to any of these, but that's my two cents. Maybe he means worldwide standard in some broader context, I don't know.
 

prime007

Active member
Peter - You make good points and thank you for sharing your thoughtful views. You are right...China is moving up value chain and becoming more of a threat to many incumbent companies. The Chinese firms have the advantage of built-in large domestic market, government subsidies and Chinese protectionist policies. It'll be interesting to see if China's application to the CPTPP will force it to make any changes (I highly doubt it).

If Gogoro and its partners in China, India and Indonesia are successful in expanding their network of recharging stations and adding subscribers, it could be big and perhaps set a "standard" for battery-swapping for the scooter industry. Yes, it could be yet another Taiwanese company leading another niche market. Their subscription model is the key to both their profitability and survival as they may or may not bring their smart scooters to those foreign countries.

I think Arthur is referring to TSMC being Taiwan's Silicon Shield. It's an interesting question...will the US/Japan and its allies step in to protect Taiwan against a possible Chinese invasion? Now I'll politely disagree with lilo777 when he states "unification is inevitable" and nobody will notice...but that is of course, my opinion.

As for Taiwan setting worldwide standards, I'll defer to Arthur. I was thinking perhaps e Ink (electronic ink) and TSMC (process nodes) as examples where Taiwan has a technological lead...but I don't know if those would count as "worldwide standards".
 

peter

New member
Peter - You make good points and thank you for sharing your thoughtful views. You are right...China is moving up value chain and becoming more of a threat to many incumbent companies. The Chinese firms have the advantage of built-in large domestic market, government subsidies and Chinese protectionist policies. It'll be interesting to see if China's application to the CPTPP will force it to make any changes (I highly doubt it).

If Gogoro and its partners in China, India and Indonesia are successful in expanding their network of recharging stations and adding subscribers, it could be big and perhaps set a "standard" for battery-swapping for the scooter industry. Yes, it could be yet another Taiwanese company leading another niche market. Their subscription model is the key to both their profitability and survival as they may or may not bring their smart scooters to those foreign countries.

I think Arthur is referring to TSMC being Taiwan's Silicon Shield. It's an interesting question...will the US/Japan and its allies step in to protect Taiwan against a possible Chinese invasion? Now I'll politely disagree with lilo777 when he states "unification is inevitable" and nobody will notice...but that is of course, my opinion.

As for Taiwan setting worldwide standards, I'll defer to Arthur. I was thinking perhaps e Ink (electronic ink) and TSMC (process nodes) as examples where Taiwan has a technological lead...but I don't know if those would count as "worldwide standards".
Agree on all points. I doubt CPTPP will do anything to force it to make any changes, they've always been a bit of a thug when it comes to fair trade.

I'd love to see Gogoro succeed. I just wonder if they have enough of a reach to set the standard for hot swap batteries for scooters in those other markets. They're certainly doing a good job growing the ecosystem around the hot swap battery concept and integrating it, but whether that's unique enough to add that much value in those other countries or get the funding to rapidly expand into those markets to give them a formidable market share advantage is the million dollar question. I don't find their smart energy solution to create much value in Taiwan itself, I think their latest model has a battery pack of 2.6kwh, combined with 30 packs only provides 78kwh of reserve capacity for the grid, which is like a drop in the bucket for a microgrid in Taiwan. There are scooter companies in India that have similar business models so it'll be interesting to see how it all plays out. I don't think China would be too thrilled about a Taiwanese company having explosive growth within its borders, I doubt Gogoro will even bother with the mainland. Only other question is how protective of a market Indonesia and Vietnam turns out to be.

As for the Silicon Shield, I too don't agree with what lilo777 states, this isn't the same as Hong Kong where we knew inevitably that control would go back to the hands of Beijing, that was stipulated in the agreements made back in the 19th century, whereas there is nothing of the sort with Taiwan. Hong Kong and Macau were "peaceful" transitions due to legally binding agreements, I don't like how Beijing sped up the timeline of integration, but nobody can say we didn't see it coming, it was only a matter of when. With Taiwan, it'll take full on invasion to take by force. It's not a few hundred square miles we're talking about. Every country will notice, the only way I can see it not being the outbreak of another global scale conflict is if China seizes control decisively, immediately. Many Taiwanese would rather TSMC be sabotaged and destroyed than let it get in the hands of Beijing.

Japan can't constitutionally help even though the Japanese people want to come to Taiwan's defense, they'll have to make changes to their constitution immediately with the outbreak of a conflict. Korea's in an uncomfortable position of being a stone throw's away and would probably want to avoid getting involved at all cost due to its close proximity, not sure they can stomach the collateral damage. Much of SE Asia is in China's pockets so I'm afraid they might keep their distance. The rest of the Western powers are in Europe and with their stretched thin military budgets and geographical distance, I wonder how effective their aid would be. Australia, definitely closer than the European peers but their navy is barely a fledgling blue water navy and their air force...zero bombers, zero long range fighters, not much to contribute. Where Russia and India stand would be interesting, India might take advantage of the situation to take some contested territory, and Russia...I don't see them wanting to aid the Chinese either.

My friends in Taiwan highlight how little and lacking the training is as a conscript in Taiwan. The amount of ammunition to hone their shooting skills is less than civilian gun owners here use at a day at the range. The flagship of Taiwan's Navy are destroyers US decommissioned back in the 1990s, Air Force mostly made up of F-16s delivered throughout the 90s. Interesting thing is Taiwan spent twice as much per capita as South Korea did on their military in 1988 and come 2019, it's exactly the opposite, South Korea spends twice as much per capita on their military as Taiwan. Taiwan had a few years head start on economic development as it proclaimed independence in 1945, started off much wealthier than South Korea with the KMT having moved immense amount of historical artifacts and gold among other things of value from the mainland whereas South Korea started from the ashes of the Korean War in 1953 and had literally nothing to start with. That might explain why Taiwan has better numbers as a net creditor nation vs South Korea. Even though South Korea had the benefit of being recognized as an independent nation in many organizations and trade groups, they never took it for granted and invested in a blue water navy, having some of the most powerful destroyers, developing advanced non nuclear subs, home grown strike aircraft, long range ballistic missiles and rockets, own design nuclear reactors, etc. etc. I'm a bit disappointed Taiwan didn't invest enough in itself to defend itself, they don't have any good excuse. The people you see being interviewed when asked what they think if China were to attack, their response feels like they're relying too much on America coming to their aid. Taiwan did create indigenous military hardware in decades past, but they've become too passive in beefing up their defenses and I really wonder if they have the wherewithal to defend themselves in the initial onslaught if China decides on a military option.

On the other hand, that's probably where I do agree with lilo777, if TSMC is gone, will the world collapse? No, it'll disrupt supplies and be an immense nuisance, but the world will move on, because what's the alternative? As he points out, Samsung and Intel will gladly fill its shoes, it'll take time to ramp up production and it might set back the clock a year or two on the most advance process, but that's about it. I agree with him that it has absolutely nothing to do with world peace. The fallout, nuclear or otherwise, from China's military option would have far bigger implications than whether TSMC is around or not. I'd hate to admit it, but from an American protectionist view, knocking out TSMC entirely so that it doesn't fall into Beijing's hands would be to America's advantage.
 

prime007

Active member
Peter - Thanks again for the thoughtful write-up.

Well...you'd be pleasantly surprised that Gogoro has partnered with two of China's motorbike makers (Yadea and Dachangjian Group) to open 45 battery swapping stations in Hangzhou (source). It also announced a few days ago that is partnering up with Indonesian ride-hailing app Gojek to enter Indonesia (source). However you're absolutely right about Vietnam being protective of its market (source)

You've obviously thought a lot about a potential Chinese invasion of Taiwan. I think any hope of a peaceful unification with Taiwan died the moment China implemented its National Security Law in Hong Kong. You're right that Taiwan has underinvested in its defense forces and is just now attempting to rectify the issue...but we all know Taiwan wouldn't stand a chance against China if a attack were to happen today or tomorrow regardless. The only question is...would the US intervene to protect Taiwan? The answer to the question is problematic to both the US and China.

Now suppose the worst case scenario happens and China does invade and conquer Taiwan devastating much of the country. I tend to believe it could devastate much of the world economy. We've seen the frustration and economic damage caused by the current chip shortage. Now imagine if more than 50-60% of the fabs in the world (TSMC, UMC, PSMC, Vanguard, Macronix, Foxconn, etc.) all get taken offline permanently (source). Almost every single major company and country in the world will feel the impact. Trillions of dollars could potentially be lost. Does Intel and Samsung have the fab capacity to meet the demand? I'm a bit skeptical of the math...I tend to believe Samsung and Intel are currently 2-3 years behind TSMC and neither of them appear to have good yields for their most current node process (EXAMPLE: Samsung's 3nm GAE planned for 2022 is projected to be inferior to TSMC's N5 which was released in 2020). What about fabs for mature nodes? Sure I can see the world moving on eventually...but the economic recovery will be extremely slow and messy. Or how about an alternative nightmare scenario where China takes control of TSMC's fabs and gains access to some of the world's most cutting-edge designs? Of course what I'm thinking of is absolutely the worst cases...but it just illustrates the stakes.
 

peter

New member
Appreciate your thoughtful replies as well!

Gogoro, yes, I'm aware they just signed up with the two manufacturers in China and the partner up with Gojek. They've gotten funding from Temasek so I figure it should be ideal for them to enter Malaysia too, not much of a captive market in Singapore I'd imagine. That's why I mentioned how quickly they can move; if the funding is sufficient, they can definitely have a first mover's advantage in the respective markets. But yeah, I certainly hope they can succeed in some markets outside of Taiwan.

As for the scenario of the fabs being wiped out, I certainly don't want to downplay how much of an impact there will be worldwide. My stance is, we'll have more important things to worry about than the latest gadgets for the average consumer and the latest server for the corporate customer. I agree the impact would be tremendous, oh absolutely!

I've played the scenario in my head and one, I wonder if the other companies you mentioned would be as severely affected. UMC is sizeable but PSMC, Vanguard and Macronix, not so much. They are key players in fabbing very specific chips, so I'm sure there will be an outsized ripple effect on the electronics industry, but also certainly not impossible to replace. But they're also not the key companies that would be the target for the Chinese to destroy nor acquire either. Beijing wouldn't be gung ho on going in there guns blazing and setting the island on fire, and I can't imagine the Taiwanese being particularly worried about the core technology of those companies getting into Chinese hands. Some might even welcome Foxconn being taken. But I do wonder if the Taiwanese...and the United States, would be willing to sit by and let China take the crown jewels, or destroy it.

As for the notion trillions of dollars would be lost, yep. But frankly, you could remove all the Taiwanese fabs from the equation and it would still hold true. If war broke out, two things China has to do to have any chance: 1. have energy security and 2. withhold commodities. I'm just assuming a non-nuclear scenario. US has energy security but will have a larger logistical issue to get it out to the west Pacific. China has a shortfall of 10mbbl per day for petroleum vs domestic production, but can they pull enough strings with OPEC and others to keep the supplies coming in the event of a war? They certainly have enough coal to provide energy for decades. As for commodities, here's where it gets tricky. Biggest steel producer in the world? China, produces more than all other countries combined. Aluminum? Same thing. Many rare earth metals, basic commodity chemicals, so on and so forth. The cost of DEF urea in Korea went from roughly $6 per 10 liters to over $50 per 10 liters in the course of this year, it's in such short supply that truckers can't move products within the country. Reason? All of it is imported from China as they ceased urea production domestically not too long ago. If we can have a supply chain problem like that right now even without a war and wartime trade barriers, semiconductors are the least of my worries~
 

prime007

Active member
Thank you again for an enjoyable conversation and your insightful views! Looking forward to reading more from you in the future! 👍
 
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