Comment by CMay
24 days ago
The more complex the process becomes, the harder it is to have equivalent competition so you're bound to have issues where a single company's investment decisions have widespread impacts.
My perspective on the China risk differs some, though. China wouldn't benefit much from attacking TSMC. This is the first time I've heard anyone suggest that they might. At best they'd like to have it in-tact if they do take Taiwan, but there have been talks about machines being rigged to explode to deny them from China, or the US striking them in that scenario.
If neither we nor China get to work with TSMC, then we're still ahead in relative terms. If China did attack TSMC, they set the norm that the fabs (including their own) are now a fair target which would be a larger disadvantage for them than it would be for us since China's physical power projection remains pretty regional outside of Chinese nationals abroad engaging in sabotage.
That is one of their biggest weaknesses. Yes they have a lot of manufacturing capacity and a large population with many talented people, but in a way we have lent them the power to scale up to see what they'll do. We are already putting some pressure on that scale now that they've shown who they are, but if it came to war it would be very doable to start reversing their scale and their capacity to do the same to us would degrade as ours increases.
Even if all the AI in the world was destroyed, that's how it would play out. The problem is that Taiwan remains in close proximity to China so similar to Ukraine it would likely come down to how long they're willing to throw everything at it.
If Russia and China wanted to be powerful, it's just idiocy to show the existing superpower that you cannot be trusted with the power you have. If they fancy a merit based society, they forgot that merit isn't omnipotence and you still need the right ideas to be at the top to accompany the merit. For China maybe they need AI for that alone, but western societies at least have ways for the right ideas to make it to the top without the strict need of AI.
I do not know if China could find a better window to take Taiwan,
Big tech manufacturers are treating consumers like crap by selling chips and memory to over-invested start-up companies that will go bankrupt, as these products will not be profitable due to the high costs (the technology that would make them profitable does not exist and has not even been conceived), in addition to the low long-term quality of what they offer.
The thing is, right now, billions of consumers around the world see how those big tech manufacturers are not serving them the pieces they need, and that such techs will not do in the near future with fair prices (prices abuse escalation, the consumers lost their strength).
Right now, if China takes Taiwan, 2026-2027, even if they lose the fabs, the billions of consumers in this planet will see this as a real f** you big techs, f** you overinvested startups hoarding, go go China, as we realize that we are third category citizens in this "first the riches" spiral, and will be no much difference of what is going on now.
If China takes his media news cards right, and makes know the consumers this is a revolution, and combine it with one of the numerous Taiwan's corruption scandals, I bet they will not find the opposition from citizens around the world that they would find in a different period of time.
By "consumers" you mean by people buying top tier gaming PCs (and either without one already or unwilling to wait). That's far less than billions if not even millions than more like thousands.
Besides, if you want to optimize for pure consumerism, you can just look at how roman slavery worked out for roman freemen in the late republic.
> By "consumers" you mean by people buying top tier gaming PCs (and either without one already or unwilling to wait).
Good try. We are talking about a window of X years were the average normal consumer, average people, will not be able to buy tech, and should not buy tech, due the prices will put, has already put, average low-end technology at prices of extra mega top tier technology, anything with a memory or disk or CPU ( too expensive, this is an abuse, it is better to wait given the current terms).
This pause were the tech supply is not destined to the average consumer (who is being abused due this) is the perfect window for China to take Taiwan if they plan the strategy well.
And it is not needed even to predict, Chinese government just need to follow/observe the prices and discomfort, and if the pattern follows, it is the moment. The average consumer, the people, even will aim them.
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Seems like China is entering every industry. This week they just launched their attempt to take over the ice cream market in the US. Its amazing to see how much overinflated every product in the US has become, everything from cars, to computers to now even freakin coffee or ice cream.
[0]: https://www.youtube.com/watch?v=Kcae6aiV1vs
Imagine if China has a foothold in every industry. Sure the US can tariff itself but the rest of the world is not really competing in most of those industries and so consumers will be able to see that they dont have to settle for overpriced junk anymore. What will American/European or even other sian companies do? In America most companies have financialized so much that the underlying product that made the company famous have rotten in quality.
I recently was blown away Laifen's P3 Pro electric razor. I always thought I would be a loyal Panasonic customer for life (since I had family work for the company) but here comes this Chinese company from nowhere and they produce such an amazing device at an amazing price. I never thought having a CNC milled pocket razor using some sort of tiny linear motor would be something I would want but now I can't see life without it.
They are doing it to every industry. I always accepted things like 3D printers were gone thanks to Bambu but I now have to consider every industry at risk.
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In my humble opinion, China taking Taiwan, if done under Trump, will be the market buying event of the century.
It will tank the markets because people will assume a depression-level event and WW3. But Trump isn't like other presidents. He'll make a deal with China. And finally, the China/Taiwan cloud over the markets will go away for good and countries can start trading freely with China again. Markets will severely over react initially.
I can see TSMC benefiting hugely from this long term, as long as the reunification is peaceful no damage to any TSMC fabs or people. The reason is because TSMC will most likely be forced to open up to both Chinese and US customers. Right now, they can't serve the world's second largest market. Nearly half of their customers can't use them.
I'm making these assumptions:
1. China won't use force (or very very little) to take Taiwan.
2. There won't be WW3 that will come out of this. You'd have to be an idiot to think that Americans will die defending Taiwan or that Europe will send troops when China is quickly becoming their biggest trading partners and US has shown they're susceptible to annexing Greenland.
3. China will operate 1 country 2 system long term with Taiwan.
1. You won't know the detailed plans or goals of China's top leaders; nobody knows, not even the mouthpieces within the Chinese system. 2. There's a significant chance the US will intervene militarily in Taiwan, while Europe is highly unlikely to do so, as it hasn't even taken significant action in the Russia-Ukraine war. Japan, however, is very likely not to stand idly by. 3. Public opinion in Taiwan is already predominantly pro-independence, and a large portion of the remaining non-independence supporters are simply afraid of war. Europeans (at least European media or commentators) are very unreliable; when the Russia-Ukraine war broke out, Europeans actually thought, "Wow, so there can be war in Europe too." Why would Europe be immune to war? There's no reason why Europe should be guaranteed to avoid war. If there is, then that reason is a "compensatory" one, using compromise with other evils to avoid war.
1. I generally agree that China has a better chance with hybrid tactics that escalate in ways that meter western response, but Taiwan can force escalation too once it reaches a threshold and it would be within its right to.
2. If Russia, North Korea, South Korea and Japan join in there is a lot of potential for it to scale up. Whether it would become an all out horrific war like a World War or stay a little bottled up, it does risk becoming a huge conflict. Many Americans love South Korea and Japan, though they're less informed about Taiwanese. If South Koreans and Japanese are dying, we will be involved in one way or another.
3. No it won't. Look at what happened with Hong Kong, it broke its promise, just like the CCP breaks many of its promises. Not sure how bad they are compared to Russia in that regard, but it's pretty bad. Besides, if China wants to expand the way it seems like they want to, they need to take Taiwan so I doubt they would slow roll it.
2. Americans don't love South Korea and Japan enough to go die for them. You'd have to be insane to believe that.
3. Hong Kong is still a different system last I visited (2024).
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Interesting theory, and all three of your assumptions are plausible, as is your conclusion. However, would you agree that the world you're describing is a world where the US Empire essentially comes to an end? I suppose you're saying it would be a graceful end, at least at the geopolitical level.
> 3. China will operate 1 country 2 system long term with Taiwan.
Um, based on the HK experience I would revise this to "2 countries 1 system".
How so?
The US has shown that it can't handle any level of discomfort. The reason Trump is back in the white house is because grocery prices went up a little bit. Can you imagine the failure of the tech companies that are propping up the entire economy? That would happen under a Taiwan invasion scenario. China has a much high pain tolerance than US citizens at least. I'd argue they would outlast the US. Would they outlast the US military? I don't know. But it may not matter as given enough pain the US population will make itself heard.
I think you're conflating different contexts and scenarios. People aren't used to war being brought to the US itself. Look at Pearl Harbor and 9/11, both rallying the country pretty well. Attacking the US mainland is a losing strategy.
If people generally understand that we're intervening in a China/Taiwan conflict for the right reasons, and China attacks us at home it would only accelerate the west. If you look at Vietnam, the logic around that war fell apart and it no longer made sense to continue it. The people were right to push back. Iraq and Afghanistan went on for a long time without much fuss.
Some kind of conflict in South East Asia would likely largely be a naval and resource war, with many casualties being naval rather than mainland. Most losses on both sides will probably be drones, AI or not.
If it came down to attrition, it would maybe be AI machine attrition or drone/missile attrition which is in a way a resource war which the US could win even without TSMC, but from where we're standing today it would take more ramping up which is a process that has already started.
If OpenAI, Google, Microsoft, Amazon, etc were attacked by China in a more critical way, it would have to be for some major short term advantage that is capitalized on immediately, because long-term it would be a losing strategy by itself. China has systems to disrupt as well, so if they let loose on cyber then the US has options too.
Either way, don't conflate general economic preference around an election for whether people would tolerate being unable to access Gmail or order from Amazon like they would all rush to riot in the streets. I think that misreads the situation.
Pearl Harbor and 9/11 are not great examples as they happened in the context a wildly different America. 9/11 was almost a quarter century ago. In both cases the country was more unified and had less income inequality then it does now. Enough people were disgusted by Biden not moving the needle for them personally they ignored the first four years of Trump and voted in him again just so they could benefit themselves.
>If it came down to attrition, it would maybe be AI machine attrition or drone/missile attrition which is in a way a resource war which the US could win even without TSMC, but from where we're standing today it would take more ramping up which is a process that has already started.
I'd argue China adding 1/3 of the entire US electricity capacity in a single year and increasing along with their extreme battery overcapacity makes AI and drone production something that China will win. Like I said it remains to be seen how will the US military will hold up because they do have the Arizona TSMC facility running and that could be a buffer to help the US hold on but people will still feel the pain in massive inflation in all areas and thats where peoples selfishness will rear its ugly head. Why care about Taiwan when the population could just elect someone that will negotiate a short term win for the US (at the expense of a long term loss).
>If OpenAI, Google, Microsoft, Amazon, etc were attacked by China in a more critical way, it would have to be for some major short term advantage that is capitalized on immediately, because long-term it would be a losing strategy by itself. China has systems to disrupt as well, so if they let loose on cyber then the US has options too.
So I have been in meetings for things like Franklin Project (https://defconfranklin.com/) which are among many great initiatives the people are doing to help the US prepare for an initial attack where China disrupts all the little mom and pop orgs scattered across the US in a first strike to disorient the homeland. Is it enough? I dont know, we will have to wait and see. I dont know what China is doing to prepare for a response. It seems like their AI initiatives are a pragmatic move (use low cost Ai implemented at various layers across the stack) I do worry that in the last few years its been revealed how little so many Americans take education and critical thinking seriously and that will directly translate into sloppy IT infrastructure around the country.
>Either way, don't conflate general economic preference around an election for whether people would tolerate being unable to access Gmail or order from Amazon like they would all rush to riot in the streets. I think that misreads the situation.
I think you misread my point: Americans would make themselves heard by electing someone who will deliver a quick relief for them at the cost of long term loss.
Off topic, but the reason Vietnam played out the way it did was because of China's implicit guarantee that they'd intervene in force if American troops came anywhere close to their borders like during the Korean War.
Fresh off WW2, with a titanic arsenal and industrial base, America and all of its allies couldn't end the war on their terms after China intervened.
That's why the US only did search-and-destroy missions, targeting Vietcong cells in the south and bombing supply lines in Laos. Which didn't matter much.
Once the Americans left, the North marched down a proper army and wrapped it up.
I assume that in the failing of the tech industry brings discomfort like you mentioned will have an impact on society such as strikes, riots, protests. The US will surely hope this gets mirrored to the Chinese society, although i would like the mention that there is a difference between self sabotage and external sabotage, Chinese people are pretty understanding and patient not all are against their government. Most respect and are grateful for what their government has done for the country in the last 30 years,, i would say roughly 80% of them feel this way. This sentiment is beneficial, because it only speeds up recovery from economical disruptions such as this example, housing market is another story.
Another note most of the world understands US's strategy for this type of disruptions used as a weapon, if they can cause civil unrest, the US can use this against the government and it will into the advantage of the US. I would like to note this is not a country of easy convincing, The majority of the seating members of the CCP are deeply interested in their society's interests, then globally second. You have 1.4b people this is not an easy management to handle.
In my eyes best to not compete and work together. There are hard obstacles ahead that are going to need all of our efforts collectively, in Hines-sight this is childish and a waste of time, literally. We made it this far, all of the great achievements and innovations that with out a doubt all have collectively contributed as humans. Climate changes, Populations management, Biological threats, viral threats, pandemic management, genome advancements etc...
Some of the moves that leaders make are simply moving us back in time and when one does something unfavorable to the other it sets the tone for how future engagements and decisions are made, whether silly or not. Indeed no leader is innocent in their decisions, but my point still stands.
The battle against communism has been going on for a long time and it was an important factor in most of the major wars of the 1900s when it openly stated it needed to establish global dominance. In the grand scheme of things, this is more of that, but now China is the center of gravity for communism rather than Russia. The Arctic opening up and taking Taiwan are both elements that increase potential for power projection, which is a serious threat given that CCP leadership has shown to be very bullish on Marxism-Leninism.
If they could not be insane and trade, that would be great. Unfortunately that's not the world we live in and the US has to push back against it or the world can fall into ruin. So we're cleaning up Venezuela. Maybe Cuba and Iran.
>China has a much high pain tolerance than US citizens at least
Can you give some examples of why you think this? I really can't imagine how this would be true.
Best examples would be in last 25 years when they've had mass affluence.
China was able to sustain some pretty strict zero-COVID policies much longer - all the way to late 2022.
Pain tolerance might be the wrong term. Pain tolerance implies speaks to something intrinsic about a population, while really what we're looking at is how much discomfort a population can endure before it really agitates for policy/political change, and so it's much about how a population feels, as the tools available to the government to control, manage, deflect and address the pain/discomfort.
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No need for historical stuff, look at China today like right now.
The high population with oversupply of STEP means everything is more cutthroat there. They have 25% youth unemployment. 996 produces lots of problems but also higher pain threshold. When a new idea comes along they move at lightning speed.
Oversupply of companies in every industry. For example: China mandated companies start producing EVs. Next thing you know there are 100+ car companies in China. All creating jobs that local areas depends on. Now the EV incentives are gone and it has led to extreme price war and everyone fighting for survival in the jungle. What do you think those surviving companies will be like once the weak have been killed off? Imagine them coming after American companies who are fat and bloated and may not know whats coming for them (the employees certainly don't).
This ability to push harder than anyone else is already paying dividends. In 2024, China added 429 GW of new power capacity, more than one-third of the entire US grid. Thats many more factories producing weapons, data centers crunching AI, and lower energy costs enabling more new opportunities.
Now take these people and put them on a war footing? They will out manufacture, out speed and with the amount of STEM they have possibly out wit the US.
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Unpopular opinion: We don't really NEED these bleeding edge chips. What does humanity need? Clean air, clean water, healthy food, health care, compassion, education.
Lot of people seem to be happy to live without the last two unfortunately.