Tuesday, April 18th 2023
Cross-straits Conflict May Have Spooked Warren Buffett to Liquidate His $4 Billion Stake in TSMC: Report
Ace investor Warren Buffett held a US $4 billion stake in TSMC as of January, and has reportedly sold all of it over a period between February to April, 2023. The sale has triggered alarm bells in some circles over the possible reasons someone like Buffett—who wrote the book on long-term strategic investments—would liquidate their holdings. The ongoing slump in the semiconductor industry, and economic recession in the West, seem to cut it as valid reasons. Fortune Magazine has a more grim theory.
Fortune writes that the possibility of a cross-straits conflict between Taiwan and China is at an all-time high, and this could have been a consideration for Buffett to sell his TSMC stake. It is assessed that a Chinese invasion of Taiwan now—with global chip supply chains not yet having attained "resilience"—would minimize economic reprisals on China from the West. The other side of the story could be that the economic slump, in combination with semiconductor manufacturing facing its biggest technological challenges as it approaches the 20-angstrom realm, may have soured TSMC's long-term prospects for Buffett.
Source:
Fortune
Fortune writes that the possibility of a cross-straits conflict between Taiwan and China is at an all-time high, and this could have been a consideration for Buffett to sell his TSMC stake. It is assessed that a Chinese invasion of Taiwan now—with global chip supply chains not yet having attained "resilience"—would minimize economic reprisals on China from the West. The other side of the story could be that the economic slump, in combination with semiconductor manufacturing facing its biggest technological challenges as it approaches the 20-angstrom realm, may have soured TSMC's long-term prospects for Buffett.
38 Comments on Cross-straits Conflict May Have Spooked Warren Buffett to Liquidate His $4 Billion Stake in TSMC: Report
“The United States might win a pyrrhic victory, suffering more in the long run than the ‘defeated’ Chinese”
Though the only way I see for China to come out on top is for the CCP to be toppled which could be a great thing
www.theguardian.com/world/2023/jan/10/taiwan-invasion-by-china-would-fail-but-at-huge-us-cost-analysts-war-game-finds
The loses we would suffer would be small compared to backing down and letting them have Taiwan. We CAN NOT allow that.
Then there are the nuke options. Once again, the US Nuclear arsenal ridiculously and hilariously out-classes anything the Chinese have, so if they choose the nuke option, we will wipe them off the face of the Earth in less than a day. And while they will do damage to the US, any such damage will be far less extensive. We will prevail, they will not.
And before anyone mentions the Russian nukes, you can save it. The Russian Nuclear arsenal is greatly and severely degraded compared to what it was in the Cold-War era. They have, at best, 250 viable warheads to offer and half that in usable ICBM missiles to mount them on. Their submarine launched nukes number in the dozens. So even IF Russia were to join the Chinese and go nuclear, they would be laughably out-matched.
I don't think China can afford more than a few Hypersonic shots. Those are extremely expensive missiles. But we also don't have that many carriers, and the chance of sinking a carrier is well worth the cost.
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Taiwan is only 100-miles off the coast of China. Roughly the same distance as the D-Day landings, though in this case, the US Navy exists (Nazis didn't have a good Navy). That means that to have a similar response time to Chinese airplanes, our Carriers have to be within ~100 to ~300 miles from Taiwan. We can't just be sitting out at max-range and flying in each time, otherwise Chinese airplanes / missiles will land in Taiwan before our F35s can intercept.
Because our CSGs will be ~500 miles (or less) from the Chinese mainland, they will be vulnerable to Hypersonics + whatever sensor-network the Chinese has setup. The wargame linked above suggests ~2 Carriers go down or so in the fight. We'd be looking at $30+ Billion bucks down the drain in a matter of minutes. ($13B from the Carrier itself, plus all the airplanes, equipment, and 5000+ sailors). Or maybe the Hypersonics fail, who knows. Its not like they've been tested in practice yet.
China's hypersonic missile is good for hitting non-military targets and military targets that have weak defenses, unless they put a small nuke in one. However, if they do that it'll be all out war and much of the world will join us on principle alone.
Note: China's YJ-21 Hypersonic Missile is Mach10 on its final approach, so that's only half-a-second for CIWS to engage.
The other defense: Patriot missiles, travel between Mach2 to Mach3, meaning the Hypersonic Missile is 3x+ faster than the Patriot and can likely outrace it.
And the shear mass + kinetic energy behind hypersonic missiles is also a threat. Even if you landed a direct hit with a CIWS, its not like half-a-second of machine gun fire will slow down a 1000kg missile very much when its already going Mach10. The point of these things is to just kill a ship from the kinetic energy alone, there's probably no explosives on the thing. We only have 11 carriers, half of which are in maintenance at any given time.
Our Carriers are $13+ Billion behemoths. That means that China can afford to spend $1 Billion per missile and still have a good trade against us. I don't think that's how expensive the missiles are btw, but that's just how the economics work out in this scenario. I hope its bluster, and there's a chance its still bluster. But IMO, the weakness is in the sensor + homing system. The Mach5+ hypersonic speed / strategy is clearly the "correct" way around the USA's missile + gun defenses around a carrier.
The question is if China's sensor network is silent and stealthy enough to provide data to the Hypersonic Missile. Whatever is providing the homing data for the YJ-21 needs to hide from an entire Carrier Strike Group, which would be no small feat.
The rest seems to be spit-balling so I'm going to call it good here as we're getting off-topic.
Final point, if China picks a fight with Taiwan and we choose to back them(which we will), China will have their hat handily handed to them.
www.navweaps.com/Weapons/WNUS_Phalanx.php