Comment by rwmj
18 hours ago
It goes to nearly zero if China invades Taiwan, and that seems like it has at least a 10% chance of happening in the next year or two.
18 hours ago
It goes to nearly zero if China invades Taiwan, and that seems like it has at least a 10% chance of happening in the next year or two.
It doesn't goto nearly zero. TSMC has a large fab in Arizona and they are continuing to expand it. They also have a fab in Washington, and in Japan. [1]
[1]https://www.tsmc.com/english/aboutTSMC/TSMC_Fabs
The fab in Washington is very old (notice it's still equipped for 8 inch wafers) and so pretty irrelevant to Nvidia's business.
I'm not quite sure what process they run there but I believe it was an acquisition 10+ years ago, not built from the ground up by them.
Edit: their Japan fab is also a mature node so not very relevant here. And their Arizona fab is a very very small portion of their volume and with far worse margin.
WA fab is verrry old and makes commodity products, think like small microcontrollers etc. 160-350nm processes.
I agree. It's funny that this is one of the cited reason for the (relative) value suppression of tsmc, but the same factors should apply to Nvidia too.
Going to zero is one potential outcome. Equally plausible is it goes up 10% in a relatively quick battle or diplomatic outcome which ends the geopolitical uncertainty.
There's approximately 0% chance that China will ship leading edge wafers from captured TSMC to the West.
Not true, it might be something they compromise on to restore relations
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This is the beauty of Polymarket. Then bet on it. There are so many more outcomes possible to this conflict than what you see reported in the media. Don't be so reductive.
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If China does invade Taiwan, I feel like most people are going to have bigger problems than the Nvidia stock price.
I think they are already hedging for Taiwan. 1. They just pseudo-acquired Groq, fully made in USA (GlobalFoundries) and with a diversified supply chain. 2. And they just announced they will be re-introducing RTX 3090 made in Korea (Samsung). 3. And they plan to produce chips in Intel's new US fabs soon.
I think the bigger problems of the AI bubble are energy and that it's gaining a terrible reputation for being the excuse for mass layoffs while suffocating the Internet with slop/brainrot content. All while depending on government funding to grow.
But then again what won't? Non tech stocks?
Yes, lots of other companies would be affected to a greater or lesser extent (even non-tech stocks), but specifically any company that relies on manufacturing all their product in Taiwan will be affected most of all.
Industrial military complex and government contractors.
Don't they also depend on chips for a lot of components?
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Jets, tanks, drones and data centers for intelligence services, even design, are full of electronics but what's the share of those not made in Taiwan?
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Gold stocks, basic materials, MSCI world and emerging market indexes. Look at their prices and see how very smart people are positioning their money.
Yes, but that’s not because of AI, it’s because of the Orange Wizard of Tarrifs.
The whole economy will crash. Probably won't be due to China invading Taiwan though. More likely because the president decided to delete their country's world reserve currency status (which is another word for a trade deficit).
What does the US gov't do in response? Wouldn't they throw globs of money at Intel and Nvidia?
They already have.
Idk the pro china side is getting more and more support, at this rate they’ll vote themselves into mainland
Well, the reality is that most people don't want a bloodbath and it's increasingly looking like external support won't come, so what you gonna do... life is a very complex chess game, gotta play your pieces right.
At this rate, even if they can't get the Taiwanese population to consent, it probably makes more sense to wait anyway to see how low America can sink. The lower America goes, the better their chance for success.
China is capable of taking long term view, beyond single election cycle. And currently USA really seems to be heading down faster and faster.
If something even more drastic happens. China might even attempt unification with some reasoning like protecting Taiwan from USA or other nations.
Where do you see the pro china side getting more and more support? As far as I can tell it's sharply swung towards maintaining independence in the past decade or two with single digit support of unification with the mainland.
https://esc.nccu.edu.tw/PageDoc/Detail?fid=7801&id=6963
https://esc.nccu.edu.tw/upload/44/doc/6963/Tondu202512.png
An EU type agreement will keep peace for some time. Remove all trade barriers between two countries, have a treaty preventing any side to be used militarily by third party, no attacking each other and free movement of all vessels through each other's seas. Maybe few more
Thats just buying China more time until they can get their chip manufacturing to at least a similar ballpark. Then Taiwan has no cards left to play. China can cripple TSMC depriving the west of chips while they continue onwards.
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I think Taiwanese elites can be bought, they say they can’t but I think that’s just part of the bargaining for a higher price. The overtures towards a costly and destructive invasion is Chinas attempt at lowering that price. As is the strategy of building up an indigenous chip manufacturing industry. The aggressive rhetoric from China has the added benefit of keeping the US on a self sabotaging aggressive posture.
I mean that's obviously the best outcome for the Chinese government. Same thing that happens/ed to Hongkong. War is bad for everybody.
but they're expected to have 8 or 9 aircraft carriers by 2035, doesn't it make sense to wait until then?
It’s only about 200km across the straight. They have over a thousand fighters and a couple of hundred bombers capable of crossing that gap.
If the US is fighting with Europe and South America, China might not that many.
US blows up the fabs on the way out!
/s (unless???)
NVIDIA has been producing Blackwell in Arizona since October. Don't be dramatic.
There would be a supply crunch but a lot of dollars will be shuffled VERY fast to ramp up production.
Arizona fabs don't work without TW's many sole source suppliers for fab consumables. They'll likely grind to halt after few months when stock runs out. All the dollar shuffling's not going to replace supply chain that will take (generously) years to build, if ever.
They definitely made at least one wafer in Arizona in October.
Packaging? Assembling onto boards?
Can outsource to China. Only partial /s
China invading Taiwan makes zero sense, they just flex those muscles for domestic consumption. They will probably take over Taiwan, but they'll do it how modern major powers do anything: propaganda, influence campaigns, and soft power.
Russia invading Ukraine also made zero sense, given their actual capabilities and the likely (now realized) consequences. The leader doesn't always have the best information, it turns out.
Either that, or the leader does have access to the best information, and they just DGAF. That condition seems to be going around too.
I guess I see Chinese leadership as more rational than that, but maybe you're right.