Taiwan Blockade 2027
shark@shark
−6.3%
since Oct 10
The idea
I think a Chinese blockade of Taiwan hits in 2027 and drags in the US and allies, cutting off the world's chip supply and triggering Chinese retaliation on rare earths. This basket owns chipmakers with factories outside Taiwan and rare earth producers outside China, plus smaller slices in defense stocks and gold, while staying away from Taiwan-based chip production entirely. It keeps a cash buffer to add if prices fall further. If tensions genuinely cool and the standoff fades, the case for holding this weakens.
What it owns
- If Taiwan's chip factories are cut off, companies that manufacture chips in their own US and allied plants become the only available supply. · Intel CorporationIt makes most of its chips in its own factories in the US and abroad rather than Taiwan, so chip buyers would turn to it if a blockade cuts off TSMC., GlobalFoundries Inc.It makes chips in New York, Vermont, Germany and Singapore with ongoing expansion in Dresden, positioning it as a ready backup if Taiwan becomes unavailable., Micron TechnologyIt is the only major US memory chip maker and is building new plants in Idaho and New York, though it still operates significant factories in Taiwan., Texas InstrumentsIt makes the simple, widely used chips that power cars, factories and weapons, almost entirely in its own plants in Texas and Utah., Analog DevicesIt sells chips into radar, missiles and military radios, making much of them in its own US and European plants rather than in Taiwan., Amkor TechnologyIt does the final assembly and packaging of chips in Korea, Southeast Asia and a new Arizona site, a step that Taiwan dominates today.36%
- China controls most rare earth supply and would likely cut it off in a conflict, making Western producers scarce and valuable. · MP MaterialsIt runs Mountain Pass, the only working US rare earth mine, and is building magnet production in Texas, making it a first option if China cuts off rare earth supplies., Energy FuelsIt refines rare earths at its Utah mill, one of the few places outside China that can convert raw ore into usable material., USA Rare EarthIt is building a US magnet factory, addressing the part of the rare earth chain that China controls most tightly., VanEck Rare Earth and Strategic Metals ETFIt owns a diversified basket of rare earth and strategic metal miners, capturing a price spike in these materials without betting on a single company., Ramaco ResourcesIt owns a Wyoming rare earth deposit that would become far more valuable if China cut off supply.29%
- An escalating blockade would trigger urgent orders for missiles, warships and drones. · Lockheed MartinIt builds the F-35 and many of the missiles that the US and its allies would deploy in a Pacific conflict., RTX CorporationIt makes Patriot and other missile defense systems that Taiwan, Japan and the US Navy would rely on heavily in a conflict, and uses rare earth magnets in its products., Huntington Ingalls IndustriesIt builds the Navy's carriers and submarines, and a conflict over Taiwan would be fought primarily at sea., Kratos Defense & Security SolutionsIt makes affordable combat drones and target jets, the kind of equipment the Pentagon would need in large quantities for a Pacific conflict.16%
- Gold tends to hold value when geopolitical conflict rattles stock markets. · SPDR Gold SharesIt holds gold directly and offers protection if a blockade escalates into armed conflict, when the metal typically serves as a safe haven., Newmont CorporationIt is the biggest gold miner, so its profits increase more than the metal itself when the price rises during a crisis.9%
- Cash10%