Comment by themodelplumber | Hacker News Reader

Comment by themodelplumber | Hacker News Reader

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themodelplumber

> What do people expect plays out over the next few years?

China fantasy version: China takes Taiwan and TSMC and everybody minds their own business. China miraculously converts this move into de facto monopoly. America can't get chips and tries to negotiate with China's tight new ally Mexico, losing California in the process! Holy sh*!

Maybe more real: China takes TSMC like a chess piece, tries to put it back on the board like in Xia...Shogi (sorry, my Japanese is better here). Except somehow (sanctions, brain drain, sabotage, etc) the piece metaphorically crumbles to ash. Buffett is still so very glad to be out.

Another one: Taiwan and foreign partners with lots to lose like US, Japan, and SK successfully turn Taiwan into a meat grinder. TSMC becomes a godforsaken piece of charred land. Miraculously a very-TSMC-like corporation appears split between those countries with some kind of Taiwanese stake as well.

Lots of possibilities to think about. Could happen in the next 5-20Y rather than a few though. WW2 for example had a very long build up from expeditionary moves to the bigger strategic conflict stuff if you look from the Japanese perspective, and this pattern has a lot of benefits to China given factors like US administration churn, etc.

Interesting how none of these imagined scenarios involve China not attacking Taiwan. Like, for example, Xi dies slightly earlier than expected and the next, younger, head of state doesn't have the "Oh god I need to cement my 'legacy' before I turn 90 years old" problem and can indefinitely kick the Taiwan can down the road.

That would be a great scenario but people were hoping that about Putin and unfortunately it didn’t happen in time to save Ukraine.

Also we don’t know if whoever follows Xi will be better or worse.

The fact that Putin and Xi are close and Putin made a move unthinkable a few years ago shows that these autocrats mean serious business. It's not some fiction novel story anymore.

Or China invades Taiwan and Twaiwan beats them back. As we have seen it isn't always as easy as one might think.

In context of the article, I think this scenario would still be expected to bring the market cap of TSMC to near-zero. I believe GP's second scenario was intended to capture the predicted realities of a Taiwanese military victory.

If you think China's leadership will become less bellicose after it's current dictator dies, than you are a very optimistic person.

Ahhh, I mean there has historically been an ebb and flow in the focus of Chinese leaders. Some are outward focused, some are more domestically focused, some are more interested in legacy, some are more interested in financial overhauls. Yada yada.

Yesterday, I read something in the FT where it was suggesting a lot of Chinese leaders resent the west for goading it into attacking Taiwan. The problem is the west isn't doing that, but when China acts as though it is, it escalates tensions, and the west responds in-kind. The obvious solution for China is don't attack Taiwan, but Xi thinks he's entitled to be the leader that reunifies China. He lacks Deng Xiaoping's patience.

Taiwan's chip fabs are not the only reason that Taiwan is strategically key to any country that is not CCP. Enormous amounts of shipping, especially to/from Japan sail through those straits, and ceding control to CCP is not a viable strategic option.

Even if TMSC and other fabs are entirely moved off Taiwan, or reduced to Bhakmut-style smoking rubble, CCP will still have a serious fight on it's hands to gain control of Taiwan.

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