Red Roulette.

This book previously mentioned as a good read by Pabrai as Munger had been reading it…

Here is an interesting interview with the Author.

https://youtu.be/bbIVQF6RIhs

Fascinating comment at the end about turning the book into a documentary, he has a friend who is a well known maker and that Apple TV will not feature any films about China on its network for political reasons and influences.

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We’ve discussed the likes of Tesla and Apple and access to the Chinese Market, manufacturing and politics, it’s a very interesting mix.

IMO interesting that such matters do not impact on the valuation of such companies eg fallout from Taiwan and other matters.

IMO interesting that such matters do not impact on the valuation of such companies eg fallout from Taiwan and other matters.

Fun thought I had the other day:
What would happen to the world economy if the four largest fab sites of TSMC were bombed by someone?

The recent relatively small backlog of automotive chips would seem like a ripple by comparison.
But it gives an idea how relatively small gap between supply and demand can be not just an inconvenience or increased cost, but an existential threat to some businesses.
Quite aside from that impact, it might be enough to wipe out some economies and start separate new wars.

Jim

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Fab sites of TSMC?

Fab sites of TSMC?

Taiwan Semiconductor Manufacturing Company, based in Taiwan, makes the plurality of all high end integrated circuits globally, and many of the more boring chips as well.
The bulk of their operations are in Taiwan, highly geographically concentrated.
Their chip fabrication factory locations, fabs, are in some ways the most delicate and complicated things mankind has ever made.
(The JWST is nice too, of course).

Historical story telling aside, to get control of these factories is the best reason someone would want to invade and take over Taiwan.
Economically speaking, it’s like getting hold of the world’s main factory for nukes or fertilizer.

Jim

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Please tell me that there are between three and five of these factories, so that henceforth we may refer to them as the Fab Four

–sutton
thinking that rimshots on cold dark January Mondays are particularly annoying

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Please tell me that there are between three and five of these factories, so that henceforth we may refer to them as the Fab Four

Alas, that time has passed.
They now have six top-of-the-line “12 inch GIGAFABs”.
Five in Taiwan, one in China.
Of course, they have lots of other fabs, too.
They have names like “Fab 12” and so on. There is a “Fab 3” and a “Fab 5”, but tragically I don’t see a “Fab 4”.

Targeting them shouldn’t be difficult, here are all the addresses
https://www.tsmc.com/english/aboutTSMC/TSMC_Fabs

I can really see a nice plot for a Bond villain to take some short positions and buy some big fireworks…

Jim

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Fascinating, this makes Taiwan much more highly prized by China and the US than I’d realised.

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Passing thought.

What if Taiwan threatened to blow up these critical fab plants if invaded? Would that bring support from the rest of the world to oppose a Chinese invasion - to protect their own economies?

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<< They have names like “Fab 12” and so on. There is a “Fab 3” and a “Fab 5”,
but tragically I don’t see a “Fab 4”. >>

The number four is considered unlucky because it sounds a lot
like the word for “death”, and as a result Chinese buildings often
lack a fourth floor – just as American buildings sometimes skip
the 13th floor.

-Rubic

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The number four is considered unlucky because it sounds a lot
like the word for “death”, and as a result Chinese buildings often
lack a fourth floor – just as American buildings sometimes skip the 13th floor.

That might be part of it. Seems to fit well with their current and separately numbered backend fabs (1,2,3 and 5).
But I’m guessing a lot of it is that obsolete fabs are no longer listed, so their numbers are retired.
They have no Fab 7, Fab 9, Fab 13, or Fab 17. If one knew nothing that there were five gaps, there may conceivably once have been a four.
Or maybe there is also a certain distrust of odd numbers. Or Beatles.

Just keep hoping they stay running. Or the lights might go out.

Hon Hai (aka Foxconn) is the other Taiwanese behemoth that’s important but many have never heard of.
But their manufacturing is more geographically distributed and not as technically challenging.

Jim

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Jim,

Thanks for giving me more to worry about. :rofl:

Isn’t Foxconn the Apple supplier?

Isn’t Foxconn the Apple supplier?

Yup. If it has an Apple logo on it, Foxconn probably assembled it.
Apple represents about 40% of their revenue.

The Wikipedia article has a nice list of their other past and current big clients.
Amazon, Cisco, Google, HP, Dell, Intel, Microsoft.
But also Huawei, Acer, Lenovo, Nintendo, Toshiba…

Jim

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The ultimate Black Swan scenario is an EMP zapping the semiconductors in the machinery running the global energy, information, transportation, security, banking and everything else systems.

Our sun is long overdue for a massive EMP blast eruption. I personally feel a good Federal investment would be to Faraday Cage as much of the national energy structure as is physically possible ahead of this coming event. Yes, it is coming because it has always happened periodically over the eons. If this were to happen, the worldwide demand for replacement semiconductors would be truly mind boggling.

https://www.domesticpreparedness.com/commentary/electromagne…

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The ultimate Black Swan scenario is an EMP zapping the semiconductors in the machinery running the
global energy, information, transportation, security, banking and everything else systems.

I guess that doesn’t really count as a Black Swan, as it’s foreseeable.
Lots of dire things are foreseeable, of course. We merely continue to hope they don’t happen soon.

Eruption of the Yellowstone supervolcano?
Collapse of the western cliffs of the Canaries, wiping out the entire east coast of North America with a tsunami?
One of my favourites: another magnetic pole reversal.
(during which there is almost no magnetic field to halt solar wind…)
Not to mention the halting of the North Atlantic thermohaline conveyor.
Or for those with longer time frame worries, how about a resumption of the North American midcontinent rift process?
It lasted long enough to create lake Superior, then went to sleep. Frmo wiki: “no known deeper rift ever failed to become an ocean”.

Look on the bright side…geologically speaking, we’re in a brief inter-glacial period.
A resumption of the current ice age was due any time now…again, geologically speaking.
But a little bit of extra CO2 means that probably won’t happen any time soon.

Jim

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The ultimate Black Swan scenario is an EMP zapping the semiconductors in the machinery running the global energy, information, transportation, security, banking and everything else systems.

This isn’t quite as dire as it might seem. Coronal Mass Ejections don’t move at light speed, so we have 12 to 48 hours or so of warning. Induced voltage is proportional to length of conductor, so small stuff isn’t at much risk. The power grid can be saved by disconnecting the segments and disconnecting the transformers, which are the things most at risk. If you are worried about your electronics, you could wrap them in foil (to form a Faraday cage) and lean that against your metal water piping. Cars will probably be okay, they aren’t long enough to have much voltage across them.

Bringing the grid back up and getting all the power plants synced again will be a pain in the ass, but this isn’t Armageddon.

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