Pay attention to the months of October and April
The months of October and April are known as the most dangerous months in Taiwan. These months are when the waters are calm and best suitable for an amphibious assault from invaders.

US Speaker Nancy Pelosi will arrive in Taiwan within a few hours from now (as of time of writing). Scrolling through Twitter, I've noticed that over the past few days alone, there's a surge in the number of videos of Chinese military vehicles entering the Fujian province, the Chinese province that is directly across from Taiwan. These videos reminded me of the months of videos of Russian tanks and military vehicles going to the Ukrainian border before the invasion.

While the media focuses on Ukraine, few people are paying more attention to Taiwan. If war happens, the world will be impacted in a detrimental way. Taiwan has 61% of the world's capacity to produce chips that are 16mm and smaller. Having the majority of chip production offline will make it difficult for the world to produce more electronics. And with tech being the main driver of global economic growth, seeing the sector grind to a halt could bring the world into the Great Depression.

$TSM is going to be the biggest business casualty as nearly all of its foundries could get destroyed if an invasion happens. $UMC will be another casualty.

As for $INTC $GFS and other foundry companies that don't have factories in Taiwan, they will see a surge in business from $NVDA $AMD $AAPL etc. But because their capacity is a lot lower than TSMC, these fabless chip companies will either pony up and pay a lot more to have their chips produced or risk not having any foundry willing to produce their chips when they can gain more profit producing chips for another firm.

$ASML $LRCX and other semiconductor equipment companies will see surging demand as foundry companies aggressively ramp up investment in building more factories.

While Pelosi's visit won't trigger an immediate invasion, it could inspire China to ramp up its military capacity in the Fujian province to the point where they are ready to launch an invasion in October.
Cameron McFarlane's avatar
The passing of the CHIP bill really shows the governments concern of a conflict in Taiwan.
Conor Mac's avatar
@moneyshark I believe @dylan522p has shared some good thoughts on that over on SemiAnalysis.
StockOpine's avatar
@moneyshark indeed. But isn't it counterintuitive to visit Taiwan and 'provoke' China after passing the CHIPS Act?
Conor Mac's avatar
What is the relationship between Taiwan and the US?
Dissecting the Markets's avatar
@investmenttalk Taiwan supplies the US with the majority of the chips. Also, the US is in support of Taiwan having autonomy, but it's playing the "strategic ambiguity" game to delay conflict for as long as possible. The US has done multiple arms deals with Taiwan over the past few years.
AverageInvestor's avatar
It looks like semiconductor ETFs are on the rise the last month. Is this due to changing supply constraints or the pricing in of potential conflict?
Dissecting the Markets's avatar
@averageinvestor that, I'm not sure. The conflict hasn't been covered much by the media, so I don't think it's about the potential conflict.

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