Weekly Geopolitical Report – Taiwan and the Risk of Deglobalizing the World’s Semiconductor Industry: Part II (June 7, 2021)
by Patrick Fearon-Hernandez, CFA | PDF
This series is written as a corollary to our recent multi-part WGR series titled “The Geopolitics of Taiwan,” published last month.[1] In Part I of this report, we showed how Taiwan and the Taiwan Semiconductor Manufacturing Company (TSM, $111.85) represent a key vulnerability in the global computer chip industry. In short, the U.S.-China geopolitical rivalry threatens to cut off Taiwan and its most advanced chip manufacturer, Taiwan Semiconductor Manufacturing Company (also known as TSMC), from some of their key markets, suppliers, and capital sources. In this second and final part of the series, we will discuss the economic and financial implications if Taiwan and the company are indeed forced to deglobalize and join either a U.S. or Chinese economic bloc.
[1] See WGR, “The Geopolitics of Taiwan: Parts I (5/3/21), II (5/10/21), and III (5/17/21).”
As of the date of this report, certain Confluence Investment Management LLC strategies are invested in Taiwan Semiconductor Manufacturing Company (TSM). Opinions, estimates, and forward-looking statements included in the report are as of a certain date and subject to change without notice. This report is published for informational purposes and is not an offer or solicitation to buy or sell any security. Past company performance is no guarantee of future results.