A warning: stop trying to buy the dip!
This time, the Democrats are coming for Jensen Huang!
When DeepSeek burst onto the scene, U.S. stocks lost only about $1 trillion.
But Huang had a sudden inspiration, and Nvidia single-handedly wiped out $2 trillion.
The Democrats’ move is like Xiang Zhuang dancing with a sword, with Liu Bang as the real target.
From “purging Huang” to “de-Taiwanization,”
To see the other side of this chess game, you first need to understand the semiconductor industry itself.
The semiconductor industry really is dominated by Taiwanese people:
Centered around Nvidia, there’s TSMC upstream, all kinds of semiconductor services companies further upstream, server and semiconductor suppliers downstream, and computing-power providers even further downstream—with vast numbers of Taiwanese companies embedded throughout.
In Irvine, New Jersey, and Fremont in the U.S., and Zhangjiang and Jiading in Shanghai, China, there are large Taiwanese communities that are relatively insular.
Before the AI boom, investors saw this industry as “high-tech, but somehow never profitable.”
But that defies both common sense and what we see on the ground. It defies common sense because even highly cyclical high-tech industries have pricing power—especially semiconductors, where downstream industries also enjoy high margins.
It defies what we see on the ground because, in both the U.S. and China, Taiwanese people make up a very large share of the “highly educated bourgeoisie, content with being moderately well-off.”
The best explanation is that the entire industry is tightly controlled by a small circle, which has plenty of ways to shift profits from publicly listed companies that it effectively controls but in which it holds only a minority stake, to upstream and downstream profit centers wholly controlled by the family or the circle.
When the management team and all the upstream and downstream players are from the same hometown, this can be done very cleanly.
And this is a high-tech industry to begin with, so outsiders can hardly tell whether “only some company in Hsinchu can really handle the packaging stage” is just management shifting profits.
So we see a giant publicly listed company like Supermicro, worth tens of billions, getting involved in smuggling servers—and the founder himself was personally involved.
This suggests that even a company as large as Supermicro is family-run at its core, rather than a multinational corporation run by professional managers.
Many Chinese-owned businesses in East and Southeast Asia trade at a “corporate governance discount.”
A company that looks highly profitable at first glance may not actually pass those profits on to outside shareholders. Instead, a management team with tight control shifts them in various ways to be absorbed within its own circle.
$NVDA
#NVIDIA
This time, the Democrats are coming for Jensen Huang!
When DeepSeek burst onto the scene, U.S. stocks lost only about $1 trillion.
But Huang had a sudden inspiration, and Nvidia single-handedly wiped out $2 trillion.
The Democrats’ move is like Xiang Zhuang dancing with a sword, with Liu Bang as the real target.
From “purging Huang” to “de-Taiwanization,”
To see the other side of this chess game, you first need to understand the semiconductor industry itself.
The semiconductor industry really is dominated by Taiwanese people:
Centered around Nvidia, there’s TSMC upstream, all kinds of semiconductor services companies further upstream, server and semiconductor suppliers downstream, and computing-power providers even further downstream—with vast numbers of Taiwanese companies embedded throughout.
In Irvine, New Jersey, and Fremont in the U.S., and Zhangjiang and Jiading in Shanghai, China, there are large Taiwanese communities that are relatively insular.
Before the AI boom, investors saw this industry as “high-tech, but somehow never profitable.”
But that defies both common sense and what we see on the ground. It defies common sense because even highly cyclical high-tech industries have pricing power—especially semiconductors, where downstream industries also enjoy high margins.
It defies what we see on the ground because, in both the U.S. and China, Taiwanese people make up a very large share of the “highly educated bourgeoisie, content with being moderately well-off.”
The best explanation is that the entire industry is tightly controlled by a small circle, which has plenty of ways to shift profits from publicly listed companies that it effectively controls but in which it holds only a minority stake, to upstream and downstream profit centers wholly controlled by the family or the circle.
When the management team and all the upstream and downstream players are from the same hometown, this can be done very cleanly.
And this is a high-tech industry to begin with, so outsiders can hardly tell whether “only some company in Hsinchu can really handle the packaging stage” is just management shifting profits.
So we see a giant publicly listed company like Supermicro, worth tens of billions, getting involved in smuggling servers—and the founder himself was personally involved.
This suggests that even a company as large as Supermicro is family-run at its core, rather than a multinational corporation run by professional managers.
Many Chinese-owned businesses in East and Southeast Asia trade at a “corporate governance discount.”
A company that looks highly profitable at first glance may not actually pass those profits on to outside shareholders. Instead, a management team with tight control shifts them in various ways to be absorbed within its own circle.
$NVDA
#NVIDIA
