The question I asked AI is as following:
Samsung is trying to build a gigafactory in Taylor of Texas for the supply of chips in order to fill the gap of TSM. Meanwhile AMD, GOOG and TSLA are contacting Samsung and requested for supply of chips as they afraid TSM may not meet with the ever-growing demand caused by furious AI trend. TSLA is going to establish a super-factory for chips on their own for the demand for Optimus and robotaxi will be on a worldwide class and they afraid the production of TSM is limited. They afraid that TSM can only supply AAPL and NVDA and have no more power to supply others. INTC is developing their 14A and 18A and they afraid TSM is unable to supply so many clients. So, it is normal for them to find other suppliers and Samsung has great wish to replace TSM long ago and this is a good chance to do so. This is the side of supply, and geopolitical side is China having the largest military drill against Taiwan and Department of War in US released a 100-page report that China is ready to attack Taiwan by the end of 2027 and can win if they go ahead. Thus, TSM may fall into the control of China and western countries hard to get any chips from them. In case of Santa Claus Rally, it has been making 3 major indexes went down in the past days and the Magnificent Seven all wend down. But why the price of TSM under such a case still can go up for a wave of 10 days?
I want to make supplement that why Samsung is so keen to use this chance to replace TSM? Why Samsung goes to Texas to establish gigafactory? It is in response to Trump’s tariff war to bring back employment to US so and there is no need for them to pay any tariff. But why Samsung is going to produce 2nm chip in US and TSM not? That is due to the local law of Taiwan for protection of intellectual property, that overseas production must be on a N-2 basis, that is two generations later than domestic production. Therefore, 3nm chips can only be done aboard by the end of 2027 and 2nm will be even later according to Moors’s Law. Why Samsung cannot replace TSM? It is because of the quality. Samsung is like building a village house in a limited area but TSM is building a multi-storey building in the same land area and thus the quality is much better. The quality of Samsung is only up to 50% usable after finishing, but TSM is nearly 100%. AI just said “unmatched” without clear explanation. Hope in the future, the AGI (Super-AI) can be cleverer.
If China starts a liberation war against Taiwan, US, Japan and western world will unite together to protect TSM for they don’t want it fall into the control of China. When the US military base in Okinawa or Guam is attacked, it will trigger the NATO defence system of 32 countries and China of course will ask help from Russia, North Korea and Iran. Thus, the scale of war will be near to World War III. It can be seen that Russia used 4 years’ time which equals to World War I or II still cannot defeat Ukraine completely. The geographical statue of Taiwan is that it has a strait which will be harder to attack than Russia in land to Ukraine. So, what China wants to use is to have a round-the-island block up to give threat on the island to surrender rather than direct attack. That is, they are going to use psychological war which may take a longer time than direct fighting. Therefore, made people having an idea the fighting will not come true tomorrow and stocks of Taiwan and Japan both on record high and TSM is rising even Magnificent Seven are falling.
In the beginning of 2025, I forecasted S&P would go up to 6600 points and the year-end closing is at 6845. But I caught the very bottom on 7th April. People are afraid of the golden pit will come very soon. Normally January will rise, February will fall. See in 2020 the pandemic, in early February it still has record high but in February had a great fall and in March even had circuit breaker. In 2024, the Santa Claus Rally had a drop of 0.28%, but the whole year also has a rise of 17.3%. In 2025, the market also rose in Jan and early have record high on Feb, but dropped due to tariff war. Now the Santa Claus Rally dropped 0.2%, but days not yet all gone. We still have to watch. Market may go up and pass through summer solstice of 21st June, but should mind the full solar eclipse in north Europe on 12th August. The target of 2026 is 7900 points and let’s see how it comes to be.
The path of market will not be in a straight-line, short-term fluctuation is nothing but Dusk in the Wind. Make sure your target is either on 2030 Landing on Mars or 2035 the Pay & Performance Scheme of Elon Musk and not on Dusk in the Wind!