● Scenario Simulation · Hypothetical
Taiwan Crisis: How Markets Would Play Out
Taiwan makes ~90% of the world's most advanced chips through TSMC. A serious disruption there isn't a regional story — it's a global supply shock. Pick a scenario below to see a reasoned, illustrative path for the major indices, safe havens, and the sectors that would get hit or bid.
SEV 1
Gray-Zone
Blockade / Quarantine
China encircles Taiwan, inspects/turns back shipping. No shots fired, but trade and chip flow choke. A standoff measured in weeks.
SEV 2
Kinetic
Limited Conflict
Missile exchanges, blockade enforced by force, TSMC fabs go offline. U.S. carriers move in; no full invasion yet.
SEV 3
War
Full Invasion + U.S. Involvement
Amphibious invasion, direct U.S.–China combat, advanced-chip supply offline indefinitely. A global, GFC/COVID-scale shock.
Sector & Asset Impact — peak move
How it would unfold
The advisor's read
A Taiwan shock is the one tail risk that hits a growth book like ours directly, because the AI-capex trade runs through TSMC. That's exactly why a real plan isn't all-in on any single theme: the same event that craters semis is what bids defense, energy, gold, and Treasuries. The playbook isn't to predict the invasion — it's to own enough of the other side that a shock is survivable, keep a cash/short-Treasury reserve to buy the panic, and rebalance on the way down. Historically the deepest, fastest crashes (COVID −34% in 33 days, the 2008 GFC) recovered fully for investors who stayed mechanical and didn't sell the bottom. Diversification and dry powder are the hedge — not a forecast.
Important. This is a hypothetical, educational scenario tool, not a forecast and not investment advice. The figures are illustrative ranges based on the magnitude of comparable historical shocks (COVID-19, the 2008 financial crisis, the 2022 Russia–Ukraine invasion and energy spike) and Taiwan's role in advanced-semiconductor supply — not modeled predictions of any specific event. Actual outcomes would depend on policy response, central-bank action, the duration of any disruption, and countless unknowns. Markets are unpredictable; no one can reliably time a geopolitical shock. Capital Wealth is an investment research firm; consult your advisor before making any decision.
