Suncor Energy Inc T.SU

Taiwan - Should we be Worried?

[Experienced]

Great Question!

Short Answer?

YEP!!!

Why?

There is a lot going on WRT Taiwan and the US under the Biden Administration is just waking up to this fact and the possible implications for the US and indeed the rest of the world.

Among other things, Taiwan produces approximately 90% of the world's semiconductors.  Now, the US under the bipartisan Chips Act, is moving to correct that situation but they are several years away from having any real impact.  This means that a takover of Taiwan by the PRC would put the PRC in essentially a control position for the rest of the world for at  least a few years.

A takeover of Taiwan would also place the PRC in complete control of all shipping in the Taiwan Strait which one of the most important pieces of real estate in the world.

Scenarios?

There is an election in Taiwan in January of next year.  The current President of Taiwan can't run for re-election under their constitution so the election is up for grabs.  The leading opposition candidate is Terry Gou, the CEO of FOXCONN which has strong links to China.  he has actually met with the PRC leadership and they are supporting his campaign.  If he wins then, it is possible that the PRC will effectively control Taiwan without firing a shot - and this could have a big impact on the economies of the West.

If he doesn't win, then there is a strong possibility that sometime in 2024, the PRC will move on Taiwan.  This will most likely start with a few things, namely, a naval blockade, cyberattacks and the cutting of undersea communications links that Taiwan depends on (the PRC has already done this by cutting a cable to an outer island).  If this is insufficient than we would likely see air attacks which could place semiconductor manufacturing plants at risk and by extension, Western economies.

I am keeping a close eye on these developments as they have a big impact on what happens to me portfolio of investments.  IMO, it is something that all investors should be doing.

[PabloLafortune]

I met Terry's younger brother Tony (RIP) once.  Nice guy, down to earth, friendly.