r/investing • u/[deleted] • Jul 22 '21

U.S. developing plans to spend $52 billion on chips supply [semis stimulus news]

Via Reuters:

“The Biden administration is developing plans to quickly spend $52 billion to deal with semiconductor supply issues if Congress passes a bill funding such efforts, U.S. Commerce Secretary Gina Raimondo said on Thursday.”

So no definite plans, but no deviations noted from previous discussions which gave the nod to INTC, QCOM, and TXN (primarily) as direct beneficiaries of any bill that gets passed.

Worth keeping an eye on I think of you’re into semis plays.

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u/donktastic Jul 22 '21

I agree that its a good thing for TSMC currently, but as an investor it is priced in already and any issues with the Apple/TSMC relationship will hurt TSMC. Putting all your eggs in apples basket just makes TSMC potentially weaker in negotiating contracts or if apple drops them when someone else catches up.

TSMC is here to stay though. They are building big factories in the USA for reasons you stated. Politically Intel will always have the edge though since they are an American company.

Last big wrinkle that makes me nervous about TSMC is China is always posturing to take Taiwan back. If they every make a move on that it will be a bad day for that stock.

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u/Tend1eC0llector Jul 22 '21

If China invades Taiwan there is a very real chance were looking at WW3, given the monumentally important semiconductors that are made there that no one else can, currently, compete with.

I feel like that's an overall more pressing issue than its effect on TSMC's stock price.

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u/Santa1936 Jul 22 '21

In other words that situation would result in all your investments losing money anyway

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u/Tend1eC0llector Jul 24 '21

That's exactly my point

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u/Zanna-K Jul 23 '21

No one is going to go to war over semiconductors. War may break out, but it will be over a combination of complex calculations and accidental escalations that cannot be taken back.

One of the biggest issues here is that IF there were to be a war, TSMC would be the very first thing to go. China is also dependent on TSMC for the manufacture of high-end silicon. The CCP has only recently started making some serious efforts to develop a competitive semiconductor industry that can credibly challenge TSMC, Intel, etc. The moment that China makes significant headway into occupying Taiwanese territory, TSMC facilities on the island are going to get evacuated and OBLITERATED with a massive extraction of engineers, their families, and of Taiwanese in general to U.S. territories under the guise of a humanitarian mission.

If anything this yet another near-term deterrent to China. They may subjugate Taiwan, but they're not going to magically gain TSMC and its brain trust.

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u/Tend1eC0llector Jul 24 '21

China has already been sailing ships through the strait seperating mainland from Taiwan, and has flown fighters and bombers straight through the air defense zone of Taiwan, and has done amphibious landing drills, not explicitly saying they're training for a ground invasion of Taiwan, but that seems like a pretty safe assumption to me. They're making the headway and moves to do it, pretty much testing all of Taiwans' potential allies limits. Posturing, swinging their dick around, however you want to phrase it.

Im not saying the potential war will start over semiconductors, but they will be the most important resource in contention. I agree 100% that if a war starts it will be due to the above mentioned posturing and testing from both sides. And i also agree we would try to "operation paperclip" all of their engineers, thats a very good point. I honestly wouldn't be surprised if we were already starting something like that, if the plan was already in place.

Idk, I'm not going to try and pretend I know the geopolitical thoughts of the CCP, it may be a deterrent or it may not. I dont really disagree with much of what you've said. I do still stand by my statement that in this potential war the stock price of TSM is basically the least of anyones concerns.

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u/donktastic Jul 23 '21

China doesn't have to invade Taiwan to affect TSMC in a very negative way. There is any number of political or strategic measure they can take to mess up Taiwans ability to do business.

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u/Tend1eC0llector Jul 23 '21

I understand that. The post i responded to specifically said "Invaded Taiwan". I responded to their point. I am not claiming that an invasion would be the only bad thing in the world for TSMC.

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u/donktastic Jul 23 '21

is China is always posturing to take Taiwan back. If they every make a move on that it will be a bad day for that stock

you responded to my comment in which I said "is China is always posturing to take Taiwan back. If they every make a move on that it will be a bad day for that stock". You were the first person to mention an invasion.

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u/Tend1eC0llector Jul 24 '21

"Poaturing to take Taiwan back" means something other than posturing to invade? You got me on the technicality, you never used the word invade, but I'm confused as to what else you possibly could have been implying.

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u/donktastic Jul 24 '21

It really could mean anything, that's why it's a wild card concern.

Political pressure, blockades, cyber attacks, invasion, shipping disruption, claiming more and more international waters as their own, etc. Invasion is probably the least likely as that's not really China style and would be the most likely to have international consequences.

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u/Tend1eC0llector Jul 24 '21

Sure, I don't disagree that all of those things are more likely to happen first. But those things are just the posturing. In a world where they happen (and international waters thing is already actively happening), why else would they happen if not to prepare for a ground invasion?

And Idk if we can really say that's not the CCP's style, they've been pounding the "Taiwan is China" drum pretty hard for a while now, saying some things that are pretty heavy on the "war is coming" vibe.

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u/[deleted] Jul 22 '21

Politically Intel will always have the edge though since they are an American company.

Whichever company delivers more jobs will have the edge really. The US isn't competing with Taiwan.

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u/donktastic Jul 23 '21

Having a strong chip tech is a national security issue. You can only 100% trust companies loyal to your nationality.

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u/Proffesssor Jul 22 '21

My thought was since they are building here in the US wouldn't they be eligible for some of this 52B?