As Nancy Pelosi sets a visit to Taiwan, there’s increased concern China is getting ready to invade its Asian neighbor.

Will Beijing respond?


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DrBanneker

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Oh for sure, I wasn't saying you were wrong, we clearly agree based on previous threads on this. Despite the CHIPS act and the alleged, potentially historical superconductor events that have (allegedly) been happening over the last few days I don't think the US would abandon Taiwan. Similar to why we'd never abandon Ukraine or Australia. There's a clear incentive for checking adversary power in the short+long term.

To me the ultimate question is do we think Xi is as stupid or misinformed as Putin? I think Xi has built a similar information bubble that doesn't present balanced information, but ultimately he's not as dumb. And I think a year of watching the US slowly dismantle Russia like this has to be a clear warning sign of what could happen to them. But, as mentioned earlier, it would be worse. Russia has their own active food and crop resources. China is a heavy importer for food and oil, meaning that unless they have a way to simply make the US disappear they're gonna get fukked in a Taiwan invasion situation.

I think they're gonna wait. Taiwan can be taken without military invasion. Culturally. It would take time but it's possible.

Also at least the Russians had some battle hardened veterans from Chechnya, Syria, etc. China hasn't been involved in a real conflict since Vietnam in 1979 and that was a completely different PLA. If the US wasn't around I would wager they would try to cut their teeth in a small conflict (Myanmmar, Cambodia, I dunno) to test out their equipment and strategies in a real situation.
 

Vandelay

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Oh for sure, I wasn't saying you were wrong, we clearly agree based on previous threads on this. Despite the CHIPS act and the alleged, potentially historical superconductor events that have (allegedly) been happening over the last few days I don't think the US would abandon Taiwan. Similar to why we'd never abandon Ukraine or Australia. There's a clear incentive for checking adversary power in the short+long term.

To me the ultimate question is do we think Xi is as stupid or misinformed as Putin? I think Xi has built a similar information bubble that doesn't present balanced information, but ultimately he's not as dumb. And I think a year of watching the US slowly dismantle Russia like this has to be a clear warning sign of what could happen to them. But, as mentioned earlier, it would be worse. Russia has their own active food and crop resources. China is a heavy importer for food and oil, meaning that unless they have a way to simply make the US disappear they're gonna get fukked in a Taiwan invasion situation.

I think they're gonna wait. Taiwan can be taken without military invasion. Culturally. It would take time but it's possible.
I think Xi is almost as stupid as Putin. The same symptoms are present; authoritarianism, dictator for life, rampant corruption, state controlled media, bloviated sense of self-importance, lack of public political and social dissent, cult of personality (the US is unfortunately getting dangerously close to this). It's the Kanye West doctrine where you start to believe you can do no wrong.

The irony is, authoritarianism arguably allowed them to grow as fast they did, but it will probably be their undoing as well. 1 child policy worked too well and the only reason 1.4 billion put up with authoritarianism for so long is because they saw their quality of life increase at a rate no other civilization in history has seen.

Honestly, I truly believe the US is being strategically ambiguous not just with Taiwan, but the overall strength of their military in general.

Xi is just fortunate to have the second biggest economy in the world and the interconnectedness that comes with it. Russia was made into a pariah even prior to the open conflicts with Ukraine, so it probably was inevitable they would slide into regional conflicts because they simply can't grow anymore. I know part of it was their own doing, but I wonder what would've happened if they were welcomed better once the Berlin Wall collapsed.
 

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TSMC tells vendors to delay chip equipment deliveries, sources say
Sam NusseySeptember 15, 20235:54 AM EDTUpdated 2 days ago
Illustration shows TSMC logo
A smartphone with a displayed TSMC (Taiwan Semiconductor Manufacturing Company) logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

TOKYO/SINGAPORE/AMSTERDAM, Sept 15 (Reuters) - Taiwan's TSMC (2330.TW) has told its major suppliers to delay the delivery of high-end chipmaking equipment, as the world's top contract chipmaker grows increasingly nervous about customer demand, two sources familiar with the matter said.

Shares in TSMC suppliers including Dutch-based ASML (ASML.AS) declined following the Reuters report.

The instruction by TSMC, which is grappling with delays at its $40 billion chip factory in Arizona, is aimed at controlling costs and reflects the company's growing caution about the outlook for demand, the sources said.

Suppliers currently expect the delay to be short-term, the sources said, declining to be named as the information is not public.

TSMC said it does not comment on what it called "market rumour".

The company referred Reuters to comments by CEO C.C. Wei in July that weaker economic conditions, a slower recovery in China and softer end-market demand is making customers more cautious and more mindful of controlling inventory.

Companies affected by the instruction to delay include ASML, which makes lithography equipment essential for high-end chipmaking, one of the sources said.

In an interview with Reuters last week, ASML CEO Peter Wennink said some orders for its high-end tools have been pushed back, without saying who by, and that he expected it would be a "short-term management" issue.

ASML, Europe's most valuable tech listed company, is operating at maximum capacity and overall sales are forecast to grow 30% this year.

"We've had several (news) reports about fab readiness. Not only in Arizona ... but also in Taiwan," Wennink told Reuters, referring to preparations for chip manufacturing.

Shares in ASML declined 2.5%, making the company the biggest loser in the euro zone STOXXE50 (.STOXX50E) index.

ASM International (ASMI.AS), a smaller equipment firm that is also a supplier to TSMC, fell 5.6%, with BE Semiconductor (BESI.AS), a packaging equipment firm, down 3.3%.

Major U.S. semiconductor firms Applied Materials (AMAT.O) , KLA Corp (KLAC.O)and Lam Research (LRCX.O) were all down between 2.2% and 2.6% in premarket trading.

Analyst Michael Roeg of Degroof Petercam said he was not surprised by the selloff.

"There has been a lot of excitement about artificial intelligence and the implications for the semiconductor industry," he said, adding that AI was positive for TSMC, which makes chips for NVIDIA (NVDA.O).

"However the strength in demand for AI chips is not strong enough to compensate (for) what is happening in other segments."

He cited mobile phone, laptop, industrial and more recently automotive chips as problem areas. "That's a lot of end markets that are sluggish," he said.

DOUBLE WHAMMY
TSMC has been forced to push back production at the Arizona plant by a year to 2025, as it struggled to recruit workers and faced pushback from unions on efforts to bring in workers from Taiwan.

"If you ship a lot of people from Taiwan to help build a factory in Arizona, they're not working somewhere else. So this is kind of a double whammy," Wennink said.

TSMC Chairman Mark Liu said last week there had been "tremendous" improvement at the Arizona site in the last five months.

The Taiwanese chip giant is not alone in worrying a bounceback in demand may take longer than expected.

Apple (AAPL.O), a key TSMC customer, launched a new series of iPhones this week that included a faster chip, but it did not raise prices, reflecting the global smartphone slump.

Media reports that Beijing has ordered some government employees to stop using iPhones at work, and the launch by tech firm Huawei of a flagship phone using Chinese-made chips, is causing further unease at TSMC, one of the sources said.

TSMC used to make chips for Huawei but suspended supplies after Washington imposed sanctions on the Chinese firm. Analysts have found Huawei worked with Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC) (0981.HK) to manufacture an advanced chip for its latest smartphone.

TSMC forecast in July a 10% slide in 2023 sales and as much as a 4% point drop in operating margin this quarter from the previous quarter, citing weak demand for smartphones and PCs and uncertainty about the market for artificial intelligence.

The chipmaker is also facing elevated capital expenditure, which increased 21% to $36 billion last year, from expansion plans put in place during the pandemic-driven chips boom.

It estimated in July that investment spending for this year would be at the lower end of a previous forecast of $32 billion to $36 billion, and said it expected a slower increase in the next few years.

Reporting by Sam Nussey in Tokyo, Fanny Potkin in Singapore and Toby Sterling in Amsterdam; Editing by Miyoung Kim and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.

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