Transcript
0:00 Nvidia even directly stated that Taiwan's King Yuan Electronics should build a packaging plant. King Yuan Electronics plans to set up a factory in the U.S., costing a total of 1.3 billion USD, roughly 40 to 45 billion NTD. Nvidia tells you, "You don't need to pay for this; you don't have to. Nvidia might even help find the site for the U.S. plant and resolve issues. I’ll cover the 45 billion for you, and once it's built, if you provide testing services, we can settle it gradually from there." This is the first time a Taiwanese semiconductor company is building a plant with Nvidia footing the entire bill.
0:24 >> Can such a good thing really exist? This is what you call remembering the source of the water you drink; do you know what they plan to do now? They are creating a one-stop Taiwanese supply chain, from King Yuan Electronics and Quanta to Wistron, making it all a cohesive system. King Yuan Electronics was there during the era when Jensen Huang said he was "wearing straw sandals in the startup days." King Yuan supported him all the way to this day; they are showing gratitude because Taiwanese companies have always stood by their clients.
0:49 >> Brother, as we just saw, there is a shortage of H200s in China. With supply being completely insufficient, they keep sweeping up stock. You say TSMC’s orders are already full— isn’t the earnings call tomorrow? Only then will we know if orders are maxed out. You say what's even scarier is that it's not just China sweeping up stock. Is it really that exaggerated that crowds of Chinese are practically begging TSMC to take their money? >> That's right, because TSMC has its earnings call tomorrow, but Nvidia has already approached them, pleading, "I only prepared 700,000 units of the H200 for this year." Yet now, Chinese company ByteDance is increasing its budget to 100 billion RMB for AI investment, and Tencent is rushing to issue 5 billion USD in bonds to invest in AI as well. Why? Because they discovered that the performance of the H200 is 60 times that of the original H20, and it’s 15%cheaper than the previous model. Everyone is rushing to grab them, yet Nvidia only estimated selling 700,000 units this year, but now potential orders have already exceeded 2 million units. What can Nvidia do quickly? Tell TSMC to hurry up and ramp up production. So now, once ByteDance can buy the H200, they immediately raised their original 85 billion RMB chip expenditure budget for this year to 100 billion. It's essentially 100 billion extra, offering such a massive amount of cash to buy Nvidia chips; it all depends on how much capacity Nvidia can increase, and that capacity, of course, relies on TSMC, and then Tencent.
2:13 >> They quickly issued $ 5 billion in bonds over the last two days, needing to prepare for the second and third quarters as they start investing in AI computing and data centers. What can they buy? They are buying H200 chips, so they had to issue those bonds immediately. NVIDIA is now rushing to tell TSMC, "Since your 4nm capacity is dedicated to the H200, you need to ramp up production quickly." Now there is a global breakthrough. Beyond the " shortage" we mentioned earlier, NVIDIA is even stating that Taiwan's King Yuan Electronics should handle packaging and testing. Didn't we just say that packaging and testing are in high demand right now? King Yuan Electronics plans to set up a plant in the U.S., costing a total of $ 1.3 billion, roughly 40 to 45 billion New Taiwan dollars. Well, now NVIDIA tells them, " You don't need to spend that money; you don't have to." They might even help find a site in the U.S., saying, "I'll cover that 45 billion for you." Once it's built, if you provide the testing services, you can gradually pay it back from the proceeds. This is the first time NVIDIA is fully funding a plant for a Taiwanese semiconductor company.
3:04 >> Can you believe such a good deal exists ? >> This is what they call repaying kindness and showing gratitude, you know? Do you know what NVIDIA is planning to do now? They’ve chosen a place called Fort Worth in Texas. This site actually has over 30,000 ping of land, which has already been selected, and they expect to be there. The point isn't just how big the land is; Quanta and Wistron are also there. So, what are they trying to do now? They are creating a one-stop-shop with Taiwanese companies—from King Yuan Electronics to Quanta and Wistron—fully embracing the Taiwanese supply chain. Do you know what another very important point is?
3:39 Back when NVIDIA was still making gaming chips—or, to put it nicely, GPU chips—and was still very small, nobody paid attention to them. Except for Morris Chang at TSMC who helped them, King Yuan Electronics was the one willing to help test their chips and arrange capacity when it was extremely tight. So, Jensen Huang remembers that back in his "grassroots" startup days, King Yuan Electronics supported him all the way to today. So why are Taiwanese companies looked upon favorably by Americans or U.S. firms? Because they show gratitude, and Taiwanese people have always stood by their clients.
4:16 We’ve seen the first instance of an international giant taking a stake in a Taiwanese PCB company. Amazon directly purchased private placement shares of Gold Circuit Electronics at 856 NTD per share, spending a total of 1.589 billion NTD. This is the first case of a major global company investing in a Taiwanese PCB firm. So, a US AI company has directly invested in a Taiwanese PCB maker. Do you know what happened on that same day? >> Gold Circuit announced plans to build a new factory worth 7.9 billion NTD. What does this signify? Actually, Gold Circuit was already planning the new plant, and Amazon’s investment is essentially saying, "I’m investing and providing capital." Let me tell you , besides the massive AI demand, the reason Amazon is getting involved is that the US is facing an even greater shortage of PCB components. Do you know what Wall Street is saying now? US companies are rushing to Taiwan, scrambling to secure all the PCB supply . Why? The reason is, surprisingly, drones. We never realized that drones actually use the most PCBs. Do you know how many PCB pieces are needed for 10 million drones? It actually requires 50 million pieces, while motors only need 40 million, propellers 40 million, and airframes just 10 million. It turns out PCBs are the most used component. They took them apart to see which parts were most numerous, and people realized that circuit boards are used the most in drones—they have the highest volume and are the most difficult to produce.
5:32 Even in US military factories in Pennsylvania, they conducted tests. They can produce 500,000 motors a year without issues, but they can only make 90,000 to 100,000 PCB boards. What does this mean? You’ve made the motors, but you can’t complete the build, so the drone still can't fly. >> Based on the ratio, you would need 1 million circuit boards, so effectively, you can't manufacture the drones. So, why is everyone in Taiwan fighting over these and lining up with cash to buy?
5:59 Musk recently posted about why Taiwan is such a great partner to the world. JPMorgan recently released a report forecasting the memory market, projecting that it will grow from 64.1 billion this year to 280 billion USD by 2028. This market is growing very rapidly. Of course, this is just a forecast report on the memory market. Musk’s reply was quite funny. He said that regarding future memory prices, Micron's pricing is quite reasonable, while other suppliers are quoting prices that are ridiculously high, bordering on extortion.
6:29 >> What Musk said at the very end is the interesting part: customers won't forget what is happening now. It implies that if you mess them over... >> Micron made a wise choice, winning a chance for long-term support from clients. This explains why people are building plants in Taiwan and why companies like Nvidia and Amazon are investing—it’s all about this. Musk didn't name names, but this caused a stir in South Korea. The JoongAng Ilbo reported on it, noting that there are only three major AI memory companies in the world: Micron, SK Hynix, and Samsung. Who is doing the extorting, and who needs to be remembered? It’s the Koreans themselves.
7:08 >> That is, Samsung and Hynix. Exactly, it’s about remembering who is loyal to me; of course, it’s Micron. Who is extorting and robbing? That would be Hynix and Samsung. So, looking at the Korean predicament, you can see why the Korean AI industry hasn't been able to thrive. Why are so many people lining up with money to invest in Taiwan, even offering to pay for factory construction? Is it because Taiwanese people, like C.C. Wei said, "I don't dare raise prices by 5%, even though I’d love to raise them by 60%or 100%, but only when clients thrive can Taiwan do well"?
7:39 >> Whether it lands or not, the issue has been a massive topic of debate in Taiwan today, but there is another very important signal, and that is TSMC. TSMC's stock price hit a record high of 1,085 today. Beyond the stock price, everyone was more focused on their earnings call in the afternoon. This earnings call wasn't just watched by Taiwan, but by the whole world. Who would have thought that after all that attention, the global markets would drop? Why? Did you see what Bloomberg said? They said TSMC’s profits surged by an unexpected 39%, thanks to the AI boom. What exactly does this 39%surge mean? You see, they announced today that their Q3 net profit broke 450 billion NTD; that is a massive figure.
8:22 Beyond shocking the world with this earnings call, C.C. Wei immediately added a second point: "Due to the extremely high demand, beyond our first plot in the U.S., we are going to expand." Everyone was wondering, "Is that for real?" He said yes, stating that the original Arizona site is now expanding into an independent, super-large flagship facility. Just look at this chart, and you'll know how massive the AI demand is right now. Today, our TSMC is counter-attacking in the U.S., and their first move shocked everyone. Do you know what C.C. Wei said during the earnings call today?
8:53 TSMC had already purchased 445 hectares of land in the U.S., which is equivalent to 1,100 acres—about half the size of a city block. But today, they announced that due to strong demand for AI, they are going to buy a second large plot of land in the U.S. They mentioned a large plot to build a massive flagship facility in Arizona, a "GigaFab" manufacturing site. It's not just one factory; it's to meet the huge demand from smartphone, AI, and high-performance computing clients.
9:24 >> No, it's going to be a super-large manufacturing complex. So, for this Arizona site—we don't know the exact size yet, but they already bought 45 hectares for the first phase—now they are adding a second phase. We can imagine this will be a massive manufacturing hub in the future, effectively extending Taiwan's semiconductor prowess into the U.S. So, just how strong is TSMC today? Why do we say the entire U.S. is now scrambling and needs Taiwan? You can tell by looking at TSMC's revenue. They reported 989.9 billion NTD for the third quarter. TSMC is quickly entering a new era where they earn one trillion per quarter, which means earning four trillion a year. What's most impressive is their revenue and profit growth.
10:04 Both revenue and profit grew by 40% compared to the same period last year. Well, it was 39.1%, close to 40%, but they are rounding it to 40%growth. TSMC is now making 205 million NTD every hour. This is literally by the hour; it’s no longer measured by the day. Earning 205 million an hour, their EPS has reached 17.44 NTD. If you multiply that by four, they are on track for an annual EPS of nearly 70 NTD. Soon, many are predicting that by 2027, we might see a TSMC earning 100 NTD per share— a TSMC earning ten times its capital will emerge.
10:37 >> This isn't an overestimation because if we look at their gross margin, it reached 59.5%in the third quarter. Generally speaking, 57%is already very impressive, yet they hit 59.5%, exceeding everyone's expectations. It might even reach a 60%gross margin as early as the fourth quarter, making even more profit, with operating margins hitting 51%. Wow. TSMC is going to be even more profitable. Earning 5 billion NTD a day—that's not just 400 billion a year; a TSMC earning 1.6 to 1.7 trillion a year is about to appear.
11:06 >> It effectively means they can earn 5 billion today. >> Earning 5 billion a day. >> I open my doors, and I've already made 5 billion. It will be even more profitable by the fourth quarter because margins are still climbing, so TSMC is actually going to get even better. So what everyone is curious about today is what kind of entities companies like Intel and Samsung have become, and what our relationship with them is at TSMC? He commented today that a certain U.S. competitor has now become our client, a very good client indeed, collaborating with TSMC on both advanced processes and packaging for their high-end products. What does this mean? One competitor is outsourcing its most advanced products to TSMC, though of course, he didn't explicitly name the company.
11:47 >> It's Intel. >> Everyone in the industry knows it's Intel, so what has Intel become? By handing over their most advanced products and packaging to TSMC, if you use this analogy, they’ve become like UMC in Taiwan—handling mature products while all the best tech and products go to TSMC. No wonder their margins are so high and the whole world is seeking them out. Let's look at TSMC . We can see it from the structure chart; it’s truly overwhelming. This was Q3 2024, at that same time, 3nm was only about 20%, 5nm was about 32%, and back then 7nm still held a 17%share.
12:22 Let's look at the latest figures; 3nm has reached 23%. >> It increased by 3%, that's right. Yes, a 3%increase, and then 5nm is at 37%, while 7nm is retreating, you know? 7nm has already dropped to 14%, and advanced processes overall have reached a 74%share, meaning TSMC is now focusing almost exclusively on processes at 7nm and below. Let’s use a comparison so you can understand: even now, mainland China hasn't been able to break through 7nm, claiming they use 14nm to make 7 nm-like products, while TSMC, having mastered 5nm, is effectively moving away from 7nm.
12:54 >> They hardly make those products anymore , perhaps only for a few special clients do they still produce anything above 7nm. Now let's look at another share to understand how important they are to AI and Jensen Huang, and why Nvidia now must go to TSMC no matter which sector they are in. Let's look at High-Performance Computing (HPC). We generally classify AI under HPC. In Q3 last year, HPC accounted for 34%, similar to smartphones. But back then, consumer electronics, namely smartphones, were already declining, and HPC wasn't as dominant yet; its growth in 2024 was only 11%. And yet, by this quarter, the astonishing HPC figures include >> it has hit 57%.
13:37 >> It went from 51 to 60, and then to 57. Smartphones dropped by 4%. We can clearly see that this HPC sector is changing very rapidly while consumer electronics are trending downward. What does that signify? TSMC's largest client might be about to change. NVIDIA may become the largest, while Apple might not be in the future. The overall shift is massive, but the most significant change is what C.C. Wei said today, which is truly thought-provoking. Wow, that was a brilliant statement. When he speaks, you really need to decode every single word. TSMC has over 500 different clients. He mentioned that because their process technology is so complex, like working on 2-nanometer nodes, he addressed whether people are worried about an AI bubble. When he said that, you finally understand what the AI bubble really means. Currently, the lead time for clients to engage with TSMC is at least two to three years in advance. It means if you want to use TSMC's capacity for chips now, sorry, but the technical collaboration and how to adopt their processes should have been discussed two or three years ago.
14:41 >> It was already in place two to three years ago. >> Three years ago. So you don't need to worry about whether TSMC's capacity will be filled two or three years from now. It's a terrifying thought. Why are so many people talking about the EPS of 17 we just saw? Why do so many expect it to reach 100 by 2027? This proves it’s for real. >> No wonder TSMC's Q3 performance was so strong; everything was locked in two or three years ago. Right, and they are already discussing things for two or three years from now. Next, let's look at TSMC's "AI engine" or "wealth engine " diagram. Intel, Qualcomm—these are all huge, but don't forget NVIDIA in the middle.
15:23 >> Right, so what does C.C. Wei's statement today signify? No matter how you all group together—isn't the US forming groups now? Everyone is teaming up and forming alliances. Who are all the alliances looking for? TS--MC! And it’s the most extensive and in-depth, everyone is looking for TSMC. No wonder they have to build so many plants in the U.S.;the demand is just too great. And how formidable is TSMC? You really don't need to worry about its future, because what was said today is worth understanding. They have started doing some different things. What are these different things? TSMC is now very focused on their clients 'clients. They are taking action with their clients' clients—what does that mean?
16:04 >> Let me give an example. I am currently handling Nvidia's orders, so I also engage with OpenAI, because OpenAI is Nvidia's client, so they directly ask, "What are your needs?""What problems do you have that I can help you solve?" They aren't just serving Nvidia anymore ; they are also serving people like OpenAI and Microsoft. That’s why they said, "I have started doing things differently; I am paying close attention to my clients 'affairs." Furthermore, they assess things both top-down and bottom-up, so TSMC has the most extensive and comprehensive understanding of the entire market.
16:39 From this earnings call, we can see that the entire group is looking for what? They are all looking for chips; everyone is trying to solve the problem of insufficient AI capacity. So, what's up with OpenAI and AMD? They gifted them 30 billion in stock in exchange for OpenAI's orders; everyone is scrambling to solve the massive AI demand. Then there's AMD and Broadcom, which are Nvidia's rivals. Broadcom also allied with OpenAI in the last few days. And this is very impressive— they actually started cooperating 16 months ago, a year and a half ago.
17:13 OpenAI and Broadcom have already been working on AI chips, so the whole alliance started early last year. >> So OpenAI has partnerships with Broadcom, AMD, and also Nvidia. Everyone is teaming up and competing; they are all going at each other. They want to challenge Jensen Huang—Lisa Su is challenging Jensen Huang, and Broadcom also has an ethnic Chinese executive who wants to challenge Jensen Huang. >> Caught in the middle, >> Stuck in the middle, he is actually very nervous. Why does Jensen Huang insist on coming to Taiwan to set up shop, no matter where it is? Because in the world of AI today, if you don't have Taiwan and you don't have TSMC, you're out of the game. That’s why Jensen must come, or he'll be kicked out. He will be kicked out and won't be able to win in this competition, so the headquarters must be in Taiwan, because everyone is in an AI alliance race. So the latest news today is that another new character has appeared in this alliance, BlackRock, a financial giant, has also joined, making this group different. We are truly dazzled and confused, now even BlackRock is in.
18:14 Even a major financial group has joined , so what kind of group have they formed? There’s Nvidia, xAI, Musk has joined, Microsoft has joined, plus the Abu Dhabi Investment Authority (MGX), the AI company we talked about last time, and those famous in Bitcoin, forming a new Artificial Intelligence Infrastructure partnership. They started by investing $ 40 billion to acquire a data center, and it doesn't stop there; they formed a $ 30 billion equity capital fund, bringing in partners like KKR and Singaporean sovereign funds, creating a transnational alliance. What about the future? They have leverage; they can borrow $ 100 billion.
18:52 >> Investing that $ 100 billion directly into this project—the money is coming in. It's not just chips, AI technology, or data centers; even the funding mechanism is set. But what is the key? Chips. So where is the chip production? Jensen Huang doesn't make the chips himself, so the whole world has to look to Taiwan. Why was TSMC's earnings call today so strong? Let me explain just how strong it was. It turns out the latest news also shows that Taiwan is truly crucial. Today, it's not just TSMC that's on fire; another company suddenly took off, called Foxconn.
19:22 >> Foxconn is on fire too. Foxconn is booming! Foxconn suddenly surged, not just hitting a new high in the Taiwan stock market, but jumping by 16.5 NT dollars. The second-largest company by market cap in Taiwan rose by nearly 8%, quite a gain. Looking at the Wall Street Journal, we see the secret: Young Liu said he met with OpenAI's Sam Altman and will collaborate with Nvidia , which drove the stock price up. Goldman Sachs says it could hit 400 NT dollars, and while that's just a reference price, it's a solid estimate.
19:48 But what does this represent? A new alliance is forming, including OpenAI and Nvidia, and now Foxconn is being pulled into this group. And it's not just this group; let's see what the latest group is. Originally, Compal was often the butt of jokes. Do you know why Jensen Huang always hits the night market after his scheduled business dinners whenever he visits Taiwan? Because no one was "full"(a play on words for Compal), so during the first dinner, since nobody was full, they had to go to the night market. Sorry, just a joke. But the second time, Compal showed up, so there was no need for a night market run. Compal has always been one of our electronics giants, but they never landed any Nvidia orders, which was quite pathetic. So, in a fit of pique, Compal decided they absolutely had to become an AI server concept stock. As it turned out, another company was squeezed in there too, our old friend, the Dell Group.
20:31 They are actually very strong in laptops and make servers, but they kept getting skipped over. Since they were left out of the main group, they had to quickly look to Taiwan. If you’re looking for a "second-tier" group, we’ll form one ourselves, so Compal and Dell formed a massive alliance. Why was it like this originally? Because for the Stargate project—they originally wanted to compete for OpenAI's orders, the Stargate orders— but you know how Masayoshi Son and Jensen Huang are, right? Actually, the servers are made by Foxconn and Wistron anyway, so I'll just go straight to Foxconn. Why would I let you take a cut ? So they didn't get the order, and out of frustration, they wanted to break in , so they made an AI server deal with Compal, and thus Compal landed the order. So, when we looked at Compal back then, during the first and second times, they couldn't even "get a meal."
21:15 What did that make them? Just like a second-tier player. But now, they've completely turned things around. After this turnaround, we realize one thing: how strong the Taiwanese supply chain is. Everyone is coming here, searching one by one, trying to pull everyone into the fold. Right, it's hard to imagine, but maybe even the wealthiest billionaires in the US are in Taiwan right this second. Maybe Sam Altman is in Taiwan. When you look at these two pieces of news, you can see one thing: American billionaires and centibillionaires might all be " visiting" Taiwan lately. And if you look at the latest news today, you can also see how much AI needs Taiwan. This is Lite-On, which does power management , because power consumption will change significantly in the future. So Lite-On said they are expanding capacity by 2.5 times next year, and it’s already all been booked up in advance. So back to this matter, regardless of whether there are bidders for T18 and T17, we have already surpassed the US. The truth is the whole world wants Taiwan; it's not just TSMC, Foxconn and Inventec are in demand, and Quanta is also being fought over. We previously mentioned a concept regarding national affairs, but I didn't expect them to actually form an alliance today. What happens after the alliance? I just described it as a community of shared destiny, but your description makes me feel it's more profound. What are they?
22:24 They are AI gangsters: "Today you must listen to me; if you don't listen, don't think about staying in this circle." Right now, the whole US has formed what is called an AI Team. All these companies have formed a so-called motive, but their real motive is to tie all of the world's AI infrastructure to the Americans. So let's look at this chart. Regardless of which chip, AI model service, or database application you use, whether it's NVIDIA or AMD, they have actually formed an alliance.
22:52 What does that alliance represent? You might want to use someone else's, but there isn't any. You might think this is a financial game, but it's not; it's them monopolizing the world. Can you imagine if AI becomes an infrastructure later on, and you need to take an autonomous vehicle, you will still have to use this system. Besides NVIDIA, AMD has also joined in. >> It hasn't actually been that many days since AMD joined as well. All of this happened after September, so you see the Taiwan stock market and TSMC surging after September for this reason , because the whole world is like a gang or a major league all-star team forming a squad. That's why we see Musk acting very urgently; he realized that after the whole squad—the strongest team in the world—was formed, he quickly said, "I want to join this team too." After joining this team, what kind of effect will it have on the world? If any country today wants to build AI-related infrastructure, you must buy chips and the entire system service from the US and from Trump. For example, if you want to use OpenAI but use a different chip, sorry, that service isn't available, because they have formed a team. It’s like a gang, it’s like a monopoly. I'm saying the US is just a gang, and you all have to listen to them.
24:02 >> Because they have all formed a coalition, whether it's OpenAI plus AMD , or OpenAI plus OpenAI, it's all part of the same thing. We see India, Italy, the UK, and South Korea all negotiating with OpenAI or Nvidia, and they really have no choice but to talk to the US. The US says, "Only if I agree to give it to you, can you get it." So today, the US announced that because the UAE is willing to invest $ 1.4 trillion in the US, you can now have this alliance team serve you. The US Commerce Department agreed that Nvidia can sell 500,000 AI chips, and who will operate them? OpenAI will operate them, and who will collaborate with them? A UAE startup called G42.
24:44 >> This is terrifying; it's the US " all-star team" joining forces with the UAE's "all-star team" to operate like this. The point is, you have to pay $ 1.4 trillion to invest in the US first; the prerequisite is that you have already committed to investing $ 1.4 trillion. So, doesn't this seem like the mob? Of course it's the mob! And if you aren't willing to pay this money, sorry, just like in this picture, you're out. Right, but this G42 is actually extremely powerful! It's not just that; it is the strongest company in the UAE. Didn't we mention this last time? The acting president of NTU, Kuo Ta-wei, is now in Abu Dhabi, one of the UAE's emirates, experimenting with an entire smart city. That is this company G42, because it is actually formed by UAE royalty, Tahnoon bin Zayed, who is the one driving the whole thing, so what has he put together? He’s linked OpenAI, Nvidia, and G42, which has become a circle.
25:37 >> And he is a good friend of Trump; this circle is deep enough. He is also very close friends with the entire Trump family, including his acquisitions of US-related sports goods, sports broadcasting companies, and similar entities. >> They have investments in all of these, but the point is what he wants to do. He wants to collaborate with the famous company we used during the COVID-19 vaccinations, using AI to develop related vaccines and drugs. Furthermore , he is also partnering with robotics and driverless car companies. So in Abu Dhabi, what have people been doing for a long time? They have been running autonomous vehicles underground to measure rainfall, so this is basically telling you, do you still think this is just a bubble? Actually, they have already formed a massive alliance, treating AI as basic infrastructure. If you take a close look at the details, you’ll find that the whole world is locked in; it’s terrifying. You see, it’s like I invest money, you buy back from me, then we invest in related peripheral companies, and after OpenAI invests in AMD—if you look at the inner circles, you might think the Americans have formed an alliance and are just playing among themselves.
26:39 Wrong! Wrong, that's not it. Next, they invested in this British startup that specializes in AI infrastructure and services, so it’s also in that loop. Nvidia invested in it, and AMD invested in it too. This company is now active in the UK and even Norway, where it’s working with OpenAI to build so-called "AI gates." So, this British foundational service—the basic AI service—has been taken by them. Well, what exactly is this company? It has another shareholder, not shown in the diagram, but the original shareholder is ASML, which everyone is familiar with; that company makes a lot of money and they invested too. This company is called the EU's own OpenAI, because they believe that we must have sovereignty over AI R&D and keep it enclosed, so I’ll let you invest, but I want to play my own game, and OpenAI invested in them. By investing in them, the entire EU will also be locked into this loop in the future. Furthermore, this is the strongest robotics investment firm in the US, so you can imagine that when it comes to developing future robotic technologies or autonomous robots, they will be locked in as well. When you look at this chart and these services, you realize that what the Americans are planning goes far beyond what you imagine. Nvidia is in it, Oracle is in it, and SoftBank is there too; SoftBank has a lot of investment money involved and recently acquired a robotics company. And even though Google doesn't seem to be in it, in reality, the entire loop is interconnected. This CoreWeave is a cloud service company invested in by Nvidia, and Meta and Amazon are involved. It all looks completely interconnected, densely woven together. Let me give you an example. Do you think you’re just chatting with it every day? Wrong.
28:11 It’s not just that; your daily life and work will all be integrated and structured within American apps, within the American app ecosystem. What do we mean by the American system? If you want to create an image today, or say, something like what's on the screen right now, whether you need to draw a picture or find a house. It can handle everything for you. You tell GPT, "I want to find a house." And it will start searching for you. For example, based on your net worth and what you can afford, like a house for around $ 229,000, it can show you where it's located. How many bedrooms and living rooms do you need? If you want a three-bedroom, two-living-room house, it finds it for you immediately. Do you know where it's integrated? It's integrated right into the OpenAI app.
28:53 You're basically using GPT to view and buy houses. Using the Taiwan context, will you still need to go through real estate agencies? So, at first glance, it seems like they are investing a trillion dollars worldwide and losing money, but don't forget that you are using AI every single day. Once you realize you can't quit using AI daily, that's when they start integrating everything into it. Okay, you want to look at a house, and it has actually integrated real estate apps inside it.
29:18 The point is, if it weren't integrated, you wouldn't even see it, because you're already in the habit of asking AI what to do and where to go every day . If you need to book a room, maybe Agoda or Booking, that's also been integrated inside. You want to listen to music, maybe on YouTube, but sorry, I might partner with Spotify, and eventually, Spotify might replace that —this could all happen. >> Those who don't join are completely out . That's why Jensen Huang said that everything in the world will be integrated into the US-based app ecosystem. That's why everyone is so nervous and rushing to join this alliance. This isn't just a wealth cycle or a chip cycle; it's expanding globally. It's turning into a situation where the US is like a syndicate, monopolizing global AI infrastructure and every part of your life. So, there's one person who's very nervous.
30:07 Who is that person? >> Musk. He's very nervous right now. >> Musk is truly nervous. You know why? He was originally so close to Trump, but before long, he's been pushed out of the core circle. Now that everyone is teaming up and he's not in a team, he's thinking, "What am I even doing here?" In Taiwan, the biggest thing these past two years is that if you didn't attend Nvidia's GTC, you're basically nobody. In the United States, if you haven't been invited to dinner at the White House by Trump, you're nobody. So Trump is bringing all the big names in, and now the outsider is called Musk. Of course, he has many valuable assets; he has the largest fleet of autonomous vehicles and electric cars, and he's actually experimenting with integrating robots next. Optimus is actually very powerful, and he’s also into AI, so someone sees his value, and that’s Jensen Huang. Musk is now like another America outside of America, so it doesn't matter if he isn't on the main team, as long as we are all Team USA, so he is forming a team now. He also has a financial loop: investing $ 20 billion in AI. Right, $ 20 billion, then Jensen Huang invests $ 2 billion, and then that $ 2 billion.
31:12 >> Is used to buy back Jensen Huang's stock and Jensen Huang's AI chips, thus forming that loop. So Nikkei Asia did a statistic today, and you can see why the U.S. has such strong ambitions. They analyzed who will be the global chip hegemon in the coming years, and you might worry about one thing: with them creating so many loops and tossing around a trillion dollars, who wants the chips? Who wants to lie? Who is going to produce them? It turns out the Americans have already figured it out.
31:37 That's why you discover that by 2027, the U.S. will invest a total of $ 158 billion in chip factories, more than three countries combined. China, Taiwan , and South Korea together don't even add up to the U.S. If we look at the actual numbers, China—we claim China is building the most fabs right now— but once you compare them, you realize China is actually losing in this chip war and competition; they are only investing $ 94 billion by 2028.
32:03 >> While the others are investing $ 158 billion. Well, even if you include Taiwan and South Korea, the U.S. is still investing $ 158 billion, which will eventually form a massive structure. The U.S. makes its own chips , has its own AI technology, and uses U.S. apps. So the so-called global gang —everyone has to sit at that round table, you could call them a gang or Knights of the Round Table—everyone has to sit at that table and negotiate with Trump. Hey, the UAE has $ 1.4 trillion, so if you want to buy into this loop—whether you choose the AI loop or the AMD loop—how much money are you going to put up? Trump is effectively dominating the whole world.
32:40 But let's look at something interesting . Sam Altman from OpenAI is obviously the main character this time, and he said something quite interesting that answers this question: while everyone is worried that the stock market is a bubble, he said, "Instead of looking to expand factories, it's better to hope for TSMC to expand." So what does he mean by that? He means that in the circle we just talked about—whether it's the Americans' circle or the global circle—if you don't have TSMC behind you, if you don't have Taiwan in this circle, you can't play the game.
33:10 Actually, TSMC's stock quietly started to move back in September. Wasn't it said that stocks would be used to trade for chips? As a result, AMD surged 35% in pre-market trading, and our TSMC also rose by over 2%, continuing to climb afterward. So you see that as this loop grows larger, with more people constantly joining the U.S.— whether it's the Eastern Conference all-star team, the Western Conference all-star team, the UAE all-star team, the Indian all-star team, or the EU all-star team—TSMC's stock just keeps rising. So the world's indispensable chip treasury turns out to be Taiwan.
33:43 Even with $ 158 billion invested in U.S. expansion, the main character is still Taiwan's TSMC. Where exactly does TSMC's competitiveness lie now? We know one thing; you've seen the new footage recently released by TSMC. While they mention hiring many American employees in Arizona, what surprises us even more is what? It turns out that TSMC's strength and creativity lie in the fact that many things in the Arizona plant have already been automated. Yes, that's right. So far, according to TSMC , the yield rate of their Arizona plant is actually about the same as our factories in Taiwan. How can they achieve that? Wasn't it said that the Arizona plant has higher costs? Doesn't it employ many American workers? How could this be the case? Because of this , look at TSMC Arizona Manufacturing, they interviewed many of their employees. You can see they interviewed a few, and they talked about their work . Look at how they are; they are like this. Oh, they are really quite big.
34:42 Well, Americans generally have a physique that is...... >> a bit more burly. This, of course, somewhat subverts the stereotype we have of our Taiwanese engineers; they are in a state of being more burly and stronger. They explained how they handle shifts, saying that for five days a week, it’s eight hours a day; or if you work three days and take four off, it’s 12 hours a day; or if you work four days, it’s 10 hours a day.
35:06 So it essentially means they have a lot of choices, making their working hours more flexible. Naturally, they also talked about the pros and cons of working here, and so on, after interviewing a great many people. With so many American employees, and given their large physical build, we might need to custom-make different styles of cleanroom suits for them to wear while working inside. Besides that, you might start to see a pattern, which is that their number of employees doesn't seem that high; so why is that the case?
35:36 Because, in fact, TSMC announced their automation project a few weeks ago, meaning that for their situation in Arizona, they know American employees can't work long hours, can't work rotating shifts, and there might be labor unions involved. >> Plus, their labor costs are high. >> Right, the costs are high, so they have to find ways to automate. That’s why TSMC’s Arizona plant can function so well by reducing the number of engineers through maximum automation, which of course lowers the labor needed for the equipment.
36:06 >> You can see there’s hardly anyone inside. Right, those engineers are mainly just monitoring the machine data or debugging any issues that might arise during operation; that’s basically the job. So, by reducing the headcount, I think TSMC’s operations in Arizona can run very smoothly. So I ask, why did TSMC specifically release this article saying that they are using Americans for this? Because don’t forget that just a few days ago, Trump sent people to inspect the LG and Hyundai plants, saying you can’t use Koreans, so we use Americans—see, we use Americans, it’s all Americans— so we are using Americans, not like the situation where Trump might say we’re using Taiwanese. But as I’ve said, TSMC is truly too important. Look at these past few days, Bessent has been saying that the biggest threat to U.S.
36:52 national security is that these chips are all produced in Taiwan. He said that if this administration doesn't reduce this risk by the end of its term , then this government is a failure. He considers the proportion of TSMC’s production in the U.S. as the most critical key to this administration's success. So, what else did he say? He said, "Oh, we,"—Bessent said— "we need to shift three to five layers of this chip manufacturing to other countries." >> Right, and he himself said that 99%of these chips being produced in Taiwan could become the world economy’s greatest single point of failure. And look, because, you see, since he said Taiwan would become the greatest single point of failure, what did the Japanese media say? The new U.S. defense strategy requires Taiwan to strengthen its defenses, so if there is an attack on Taiwan, the U.S. military will intervene. Of course they have to intervene! They already called it the greatest single point of failure; if that fails, then the U.S. fails, so what else can they do? Right? Alright, let’s talk about another piece of news, which is that TSMC is supposedly raising prices for its 2nm process by 50%. I’ll tell you, it’s actually a misunderstanding. Why? Because for 3nm, a wafer costs about 20,000 USD, while for 2nm, a wafer is 30,000 USD— that’s a 50%increase. It means the quote increased by 50%; that’s what it means. It doesn’t mean the price of 2nm itself is going up further; that’s not what it means. But regardless, what does this signify?
38:06 What does this mean? Because right now, for 2nm, TSMC is the only one in the world capable of mass production, and they are currently completely booked. Plus, with Nvidia, Qualcomm, and Apple all placing orders, the 2nm process next year will be very, very, very good . Alright, so I’ll explain why TSMC is so important. As you know, the whole world—as Yu-feng just mentioned—the U.S. stock market keeps hitting new highs. >> Yes. And what is the U.S. innovation relying on? It relies on Nvidia, right?
38:29 Didn't Nvidia say these past few days that they want to invest 100 billion USD into OpenAI? And then OpenAI will buy these so-called chips from me? They’ve become a cycle—what kind of cycle? Look at NVIDIA investing in OpenAI, and then OpenAI partnering with Oracle, and Oracle partnering with NVIDIA again. They’ve formed this closed loop where they keep making money, just cycling profits back and forth. Right, exactly. That’s how they’ve inflated the entire AI market . Have you noticed that there’s a core here? For the world right now, if two companies fail, everything else pretty much collapses. What are they?
38:58 NVIDIA. Because NVIDIA makes almost all the AI chips currently—only NVIDIA can do it. You rarely see people using AMD or Intel, and don’t even get me started on China. But the question is, who manufactures for NVIDIA? The foundry is TSMC, it’s that simple. Today, if these two companies run into any issues, the global economy could grind to a halt, and global stock markets might stop hitting new highs. Isn't that what we've been saying on the show? Thanks to TSMC, Taiwan's total stock market value has surpassed Germany's. I mean, what does that even mean in terms of scale? Germany has 80 million people, while we only have 23 million. That’s why I call it the pride of our entire nation. However, regardless of the fact that it’s our national pride—and yes, it’s a global treasure—in the eyes of Scott Bessent, it represents the single biggest point of failure for the global economy. When it comes from someone like him, you realize that TSMC’s standing in the industry and its global status are truly of immense significance. So, for Taiwan right now, can chips really become a bargaining chip? We’ve often said that South Africa has been the one to bully us the most; they even went as far as changing the name of our diplomatic office. Well , it turns out Taiwan actually played a card: "If you're going to treat us like this, let's see.""It’s fine, I just won’t give you my chips." To everyone's surprise, South Africa actually softened its stance and said, "Let's not be like this." Yes, you know our relationship with South Africa has been steadily deteriorating ever since we cut diplomatic ties. Why is that?
40:19 Because you know South Africa is a member of the BRICS nations, and it has excellent relations with China. Especially this year, as they are set to host international summits like the G20, South Africa basically looks down on us. They even demanded that our representative office move from the capital to Johannesburg, essentially wanting us to just leave their capital city altogether. >> But now we have finally found a way to hit them where it hurts, and what are we using? Chips. So we are using chips to restrict them, preparing to limit their exports, and a total of 47 semiconductor product categories are basically prohibited from being shipped to South Africa. At this moment, South Africa was suddenly caught off guard.
40:59 Why? Because what kind of serious impact do these 47 semiconductor items have on them? Do you know that South Africa has an ambition, and what is that ambition? It's that they want their automotive manufacturing industry to play a major role in Africa. >> Why? Because nearly 22%of South Africa's current GDP is supported by this so-called automotive industry. The population supported by this, if we look at the direct automotive industry, there are nearly 110,000 workers, plus nearly 80,000 in peripheral industries, meaning almost 200,000 workers depend on the automotive sector. So what does the automotive industry need? Chips!
41:36 Since they rely on automotive chips, and now that the supply is being strangled, how can they build cars? Moreover, companies like Volkswagen, Mercedes-Benz, and others that have set up plants in South Africa—if they can't get chips, these foreign businesses will also start considering leaving. So, now they have started to plead with us. Of course, as Dr. Peng reported, they directly contacted our representative in South Africa, saying, "Oh, please don't be like this, we can still talk." So our Ministry of Economic Affairs has decided to temporarily hold off on the sanctions for now.
42:09 >> They said they received South Africa's request for negotiations, suggesting they can talk it over and not be so extreme. Yes, but some have mentioned that South Africa originally wanted to use their rare earths or other minerals to sanction us, but it was useless because we can sometimes obtain those things from other countries. So, our subsequent move—these 47 semiconductor-related categories—is what hurts them the most, because it affects their status as an "automotive kingdom," and their future ambition is to capture over half of the entire African market by 2035. That is their ambition, but without chips, you're bound to retreat. So, in terms of our current national power, we are actually using chips as a diplomatic tool for the first time to engage with other countries; this is the first time we've seen something like this. And for the second point, our strength is also being demonstrated in Poland. Do you remember that Wang Yi just left Poland a few days ago? Why was that? His China-Europe Railway Express couldn't pass through Poland, right? Then, of course, as of today, September 20th, Poland said, "Oh, we can open up a few spots for you to get through," but what is the key point? He, actually Minister Lin, the Foreign Minister, can go to Poland to attend meetings. In other words, if you look at today, Poland is preparing to hold the so-called Warsaw Security Forum, and in this forum, for all government officials—for instance , diplomatic personnel, vice ministers, or the Foreign Minister—they have directly listed Minister Lin Chia-lung’s photo and his title as Taiwan's Foreign Minister among the official representatives.
43:40 >> They listed him completely and directly , side-by-side with other nations. Wait , why would it be like this? Because Poland has actually discovered a very serious issue. If—and of course, this also has to do with the so-called " proof of loyalty"—why? Because if they have better relations with Taiwan, letting the U.S. see this phenomenon, the U.S. will place more trust in what? Trust in Poland. Why say that? Let's look at this Bloomberg statistic on the right. In the past, there wasn't much trade between Taiwan and Poland regarding the drone industry. It wasn't until last December that the production value started to rise, and now, when you see the results for this August.
44:18 >> Yes, >> Taiwan has become Poland's biggest exporter of drones. This means Taiwan has now become the largest market for exports to Poland, with a market scale of nearly 32 million U.S. dollars. You know, Taiwan only exports 7 million U.S. dollars worth of drones to the U.S., but to Poland, it's 32 million. Do you know why they export to Poland? Because the U.S. now requires that your drones and related items cannot contain Chinese supply chains. >> So they can only source them from Taiwan. After they receive the parts from Taiwan and assemble them, where do they take them? Besides being able to sell them back to the U.S. market, they can also use them on the Ukrainian battlefield, because Ukraine also dislikes China very much, and without Taiwan, they wouldn't be able to produce their drones. Yes, so now our drone-related industry with Poland is seeing its output value constantly expanding. With this expansion, it's possible that in the future, its share in Taiwan might increase even more. As for Poland, remember back in early September, they were harassed by about 20 Russian drones, which is why they were so angry that they threatened to close the border during Russia and Belarus's military drills and stop transit for their freight trains. But today, it's not just Poland; even Denmark is being harassed by drones, including over four of their key airports, with two being military airfields.
45:46 >> These were all drones. >> Around September 25th, these drones appeared, and Denmark has already declared that they likely came from Russia, acting as a form of continuous harassment, so even von der Leyen said this is just part of Russia's pattern of border destabilization. It is a part of it. Right now, Billund Airport and Denmark's Aalborg Airport, which is essentially an airbase, are being affected. In these places, many Russian drones have appeared. So whether you are harassing Poland or Denmark, Russia is being quite brazen, and aren't we all suspecting that behind the scenes, there might be Chinese-made drones providing assistance? So, these incidents in Denmark might cause European nations to take countermeasures against Russia's drone harassment, but what will these countermeasures be? It will likely be the Poland model—that cooperative relationship between drones and Taiwan —which could eventually expand across all of Europe. So now you see why our Foreign Minister Lin Chia-lung is traveling everywhere, including to Poland; why is that? It’s actually because Taiwan is demonstrating its " non-China" supply chain and "anti-red" drone strength in Europe. International politics, military affairs, and finance —Critical Moments continues to create the most exciting content for you.
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