Tai Wan believes itself to be independent of China. And that's where things get hairy …
China wants Tai Wan. Much like how Russia wants Ukraine.
The U.S. is morally sympathetic toward Tai Wan's independence … proven by Nancy Pelosi's visit on August 2 despite warnings from China. But officially, the U.S. recognizes China's control over the region.
Since the visit, China has escalated military drills in the area and imposed sanctions on Tai Wan.
And the U.S. is trying to stay out of it …
Last December, a South Korean semiconductor company announced its merge with a Chinese equity firm would no longer take place.
The Committee on Foreign Investment in the United States pulled the rug. And the message hit loud and clear for the entire industry. Chip manufacturers better tread lightly …
On August 9, Biden signed a bill to boost U.S. chip manufacturing.
This sector is under a lot of pressure. Over the next few months, we could see a lot of volatility build.
And skilled traders can turn volatility into profits.
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