Geopolitical Premium/Discount — Scenario Model

Current Price

$329

Geopolitical Premium/Discount Component

$10/sh

Market Implies

65% chance of upside scenarios

18% crisis probability

Scenario Overview

Scenario	EV	$/sh	Prob	Key Gate
de risk	$89B	$34	29%	full diversification
gradual improvement	$35B	$13	18%	—
status quo	$18B	$7	18%	—
escalation	($5B)	$0	18%	partial recovery
crisis	($45B)	$0	18%	stabilization begins

Gate Milestones

Growth is gated by milestones. Cost step-changes and capability unlocks are tied to specific milestones.

2027

arizona fab2 start

Arizona Fab 2 begins production on sub-3nm

Unlocks: Leading-edge production outside Taiwan

Fab 2 targeted 2027-2028 [TSMC PR]

2029

arizona sub3nm

Arizona produces N2/A16 — leading-edge de-risked

Unlocks: Eliminates 'single point of failure' for advanced chips

$165B US investment, 5 fabs planned

2032

full diversification

Arizona + Japan + Germany = 40%+ of production

Unlocks: Geographic risk fundamentally reduced

Fab timeline expansion

2027

trade restriction

Major new trade restrictions on Taiwan semiconductor exports

Unlocks: Revenue disruption, supply chain uncertainty, stock de-rating

Export controls tightening trend [TSMC IR]

2032

partial recovery

Tensions stabilize, Arizona absorbs displaced demand

Unlocks: Market adjusts to new normal, discount narrows

Arizona fab capacity growth provides alternative supply

2027

military crisis

Military crisis in Taiwan Strait

Unlocks: Massive stock de-rating, supply chain disruption fears

Cross-strait tension escalation [defense analysis]

2030

stabilization begins

Crisis subsides, Arizona capacity accelerated

Unlocks: Partial recovery as US/Japan fabs absorb demand

Arizona already profitable, can scale faster under crisis

Full Year-by-Year Models

Blue = input · Black = computed · Click to expand

Market-Implied Probability Reconciliation

Given these scenario EVs, what probability weights would the market need to assign to produce the current market-implied value of $10/share?

Scenario	Geopolitical EV Adjustment	Per Share	Implied Prob.	Weighted Contrib.
de risk	$89B	$34	28.8%	$10
gradual improvement	$35B	$13	18.4%	$2
status quo	$18B	$7	17.6%	$1
escalation	($5B)	$-2	17.6%	$-0
crisis	($45B)	$-17	17.6%	$-3
Total			100%	$10/sh

Note: These probabilities apply to the geopolitical EV adjustment. Advanced logic, packaging, mature nodes, and net cash contribute separately. Negative values represent a discount to EV.

Target contribution: $10/sh. Residual: $0.0/sh.