Geopolitical Risks and Overseas Fab Margin Dilution

Taiwan drills, water scarcity (now highlighted as critical bottleneck for 2nm AI production per C.C. Wei's concerns), AMEC challenge, and U.S. loophole crackdown pose structural risks. Overseas fabs expected to dilute margins by 2-4% over 2024-2029. Longtan site revived for 1.4nm fabs and CoWoS hub by 2030.