Out of interest, how easily would it be for someone to swap from an AMD chip to a comparable Intel chip. Have we seen anyone make this move yet?
Could AMD reshore production in any sensible time frame?
Tidying Note - If we keep stock specific discussions on threads it’s easier for everyone to follow.
Thank you for the feedback on posting on specific threads. I wasn’t sure what the etiquette was on that.
The capital cost for restoring AMD manufacturing to US shores would be high. Likely in the $50b range as they would have to acquire globalfoundries (who they spun off) or a similar fab. The turnaround on something like this would be 12-18 months minimum.
Swapping between AMD and Intel is a pain as the sockets are not universal, and differ within each companies SKUs. It’s not impossible to swap, just requires a new motherboard which adds to cost (and e-waste).
I’ve posted about this elsewhere, I think this risk is overstated.
That’s not embarrassing or an accident, US-Taiwan codependency is built upon their mutual reliance for technology and military might respectively. If the US had been willing to sell F-35s to Taiwan as requested then it would be almost perfectly analogous for their relationship.
It’s not just Apple’s M1, it’s almost all of Apples products (80%+ of Apple’s revenue is from TSMC-based products and the remaining 20% is services based on those products). Google, Microsoft, Amazon cloud are all using TSMC-fabbed compute (either directly with inhouse designs or from designers). TSLA hardware (inhouse + AMD, Nvidia) is reliant on TSMC. Then you’ve got all the indirectly impacted companies that rely on CDNs/cloud like Netflix, Disney.
If you remove TSMC hardware then Facebook/Meta might even top out the S&P500 because they are mostly on Intel hardware, but even they would be severely impacted.
Based on the widespread disruption if you do believe China invading Taiwan is a realistic scenario I think there are probably much better positions to consider than long Intel, puts on Apple or S&P500, gold, old iphones, second hand cars, non-perishable food & potassium iodide.
If you wanted to go long a stock as a hedge against WW3 I think Samsung is the more logical choice as it will become the world’s leading high-end foundry (until IFS is up and running) everything currently running through TSMC would be trying to go through Samsung. Likewise GF for less advanced nodes.
Even if TSMC collapsed, no one is going back to in-house fab, the fabless model is proven to be the way forward, with even Intel now embracing it with TSMC outsourcing and IFS. Everyone would have to tape out designs for other foundries (Samsung, IFS) which is expensive, but much cheaper than buying a fab.
I am long TSMC, AMD though so I’m certainly biased. I’ve said elsewhere I’m keeping an eye on Intel because I do think they have a real shot with Diamond Rapids, but I’m not buying at this price.
Yeah I think that’s a good piece, I think Intel are absolutely doing the right thing, but these things take time - like 4+ years (hence my interest in DR). It seems likely to me in the intermediate years as market share and margins fall there could be better buying opportunities.
Dr Ian Cutress has a good interview recently he asks the Zen Lead Architect (Mike Clark) how long he was working on Zen before it launched and Mike laughs when Ian suggests “2/3 years?” (timestamped link below) because the reality is 5 years. Later Mike all but confirms that while we are waiting for Zen 4, design work is already taking place for Zen 8.
I do not believe that a China - Taiwan war is the most likely outcome, I do believe however that China will use pressure to force Taiwan to make concessions, or to use political capital to force foreign nations to reduce trade with Taiwan.
Xi Jinping has been a man of his word regarding his views on China.
Using put options would not be ideal, given there is no certainty on this type of event occurring, whereas holding Intel provides an opportunity to sell weekly hedged calls, cash in on the quarterly dividend, ride the sector growth etc. Then should a Taiwan cold war begin to precipitate out of this slurry of uncertainty, then a sector rebalance would be favourable. I could only dive into a puts tactic if volatility didn’t price me out first, which I think it would.
Samsung’s relative geography to a region that could face heightened tensions, would give me some concern for capital rotation as a means to reduce exposure. So although I agree that Samsung is not really at risk, I feel it would be an awkward position for me personally to take until I understand how the markets will react.
Thank you for the input… yes the risk is overstated, but it is still there and very asymmetric so I feel it is worth holding a small position for myself.
I am still trying to find the RISC-V golden goose though, that would change my position dramatically on this!
I am myself going to read up on this subject. My understanding is that the new Intel CEO seems to be driven to bring new change and reinvigorate the company - much like Satya Nadela @ Microsoft. The former CEO was apparently the accountant-type.
Sold 15%. INTC overselling themselves and lying to investors by overly exaggerating why they aren’t performing well. I’d have kept it all if they were more honest and upfront. Allocating that cash to GOOGL.