Garmin: Country Risk Investment Thoughts – Opinion


Garmin: Country Risk Investment Thoughts – Opinion

Listed on the NASDAQ and with a US/Swiss headquarters, Garmin has a significant manufacturing operation in Taipei City, Taiwan. This is a serious strategic problem as China claims sovereignty over Taiwan and will never accept its existence as an independent state.

There is talk of a Chinese invasion of Taiwan. Were that to happen, Garmin would face a major disruption and the costly need to relocate production and R&D elsewhere in the world.

China’s Current Geopolitical Dilemma

Fact: China imports a lot of raw materials by sea both to feed its population and to turn them into finished goods for export

Generalising: China has inhospitable tundra of Russia to the North, mostly sea to the East and the Himalayas to the West.

Fact: China has massive and improving armed forces but a deep water Navy that is significantly inferior to that of the US.

Fact: China’s demographics are unfavourable. By the end of the century, the population could easily be half its current size. Supporting an ageing skewed-male population and first-rate military thus becomes economically difficult for China in our lifetimes.

Likely: 2022 marks the year that China’s population will start to shrink



China’s economic success has turned it into the world’s factory but it has failed to develop sufficient domestic demand to sustain the economy. So its economy relies on imports and exports and is therefore intertwined with maritime supply chains which, sadly for China, are de facto secured by the US navy. Even if the USA withdrew from the oceans India could still block China’s maritime access to oil from the Middle East. China has an energy security problem.

China’s Grand Strategy

China’s Grand Strategy is likely to be expansionist. Without deep sea naval control of its supply routes, modern China exists at the behest of the USA.

The only way to expand its area of control is in Asia…to the South/South-East. The route to achieving that control is incremental, taking in at least 3 island chains. But Phase 1 can only start at Taiwan/Japan to force out American influence before progressively expanding control even as far as India and Hawaii.

China knows this is its only ‘realistic’ expansionist strategy option. If they don’t want to be expansionist then they have to accept American superiority and America has WAY better demographics and domestic resources than China for the long game so the current hegemony isn’t going to improve for China.

Sure China could boost demographics with immigration. Let’s be real. Who wants to go there other than for a holiday? A: No-one.

And sure, China may exert influence on African and South American countries to secure raw material production via The Belt & Road Initiative but that’s no good if you can’t ship “it” to mainland China. Influence and control are two very different things.


Key Events

In 1997, USS Nimitz sailed through the Straits of Taiwan. This was a wake-up moment for China as they realised they could do nothing about it. A significant military expansion has taken place since then.

Today in 2022, we see the West can act economically as one with sanctions against Russia over Ukraine under the guise of protecting democracy (it’s about degrading Russian military and stopping Russia’s geopolitical expansionist ambitions to gain shorter and more cheaply defensible borders eg negating Suwalki and the Baltic countries)

By about 2025, Japan should be able to repel a Chinese invasion attempt. My guess would be that invading Taiwan over 100 miles of sea would be easier now than in the future. Costly for sure, but militarily doable, although even Hitler eventually baulked at crossing the mere 30 miles of the English Channel and that didn’t end well for him.


China has to geographically expand the area it controls. It cannot do it through global economic dominance because America rules the waves….sound familiar to the Brits? That’s how, a while back, we had the biggest empire the world has ever seen.

Taiwan must be the first port of call for China’s expansion and increased security.

  • A longer-term plan to invade Taiwan is beset with uncertainties of the future, plus demographic and financial difficulties.
  • A Medium-term plan to invade Taiwan is beset with increased military difficulties posed by China’s adversaries ramping up defensive capabilities.
  • A short-term plan to invade Taiwan will, for sure, cause a global economic depression. Half of China’s population could starve within a year following a naval blockade.
  • Maybe a Chinese naval blockade of Taiwan is easier? but it would be met in kind and the problems with the short-term plan materialise here as well.

If not now…when?

Western Companies & The East

Globalisation was supposed to bring economies into the global world of nations and it has done that to a degree, allowing smaller countries to specialise and grow when previously that would have been impossible. The lure of cheap Eastern labour was irresistible for many Western corporations, some less scrupulous Western companies (Nike et al) appear to have accepted goods made by Uyghur slave labour. Everyone seemed to be a winner. Except, the West kinda assumed that every other country would gravitate towards democratic rule which clearly hasn’t happened even when the West specifically tried to impose it (Afghanistan, etc).

Against that are set many problems including IP theft in China and the geopolitical issues very briefly indicated above.

In my opinion, companies are crazy to overly depend on the East for key aspects of their supply chains. Yet we are now in a position where it is impossible for any single nation to make, say, a mobile phone or smartwatch, from resources within its own borders. Some components somewhere in the supply chain will only come from China. You could see today’s world as beautifully interconnected or as a House of Cards.

Garmin & Taiwan

Recent months have seen several tech companies question their investments in China, Apple is seemingly an exception to this and Garmin’s investments in Taiwan are riskier in different ways to those companies investing directly into China

Garmin has a long history in Taiwan and probably can’t culturally move away from the country. Yet, if I were in charge of Garmin I’d pack up my bags sooner rather than later.

So. The point of this article is to highlight that companies like Garmin face relatively short-term, existential threats well beyond the trivialities of a new Apple Watch Ultra.

IF this sort of thing interests you then try this video from some highly credible people. There are plenty of similar ones that are more entertaining though from less credible presenters ;-).

Comments and additions are welcomed. I just thought I’d mix it up a little.


Reader-Powered Content

This content is not sponsored. It’s mostly me behind the labour of love which is this site and I appreciate everyone who follows, subscribes or Buys Me A Coffee ❤️ Alternatively please buy the reviewed product from my partners. Thank you! FTC: Affiliate Disclosure: Links pay commission. As an Amazon Associate, I earn from qualifying purchases.

5 thoughts on “Garmin: Country Risk Investment Thoughts – Opinion

  1. Come for the opinions and takes on the minutiae of sports devices, stay for the geopolitical analysis. Love it.

  2. All of the Apple Silicon chips are manufactured by TSMC (Taiwan Semiconductor Manufacturing Company). Apple Macintosh computers are assembled in Shanghai. Apple is if anything even more exposed to geopolitical disruption to supply chain of there is conflict with China and Taiwan.

    MediaTek chips are also manufactured by TSMC and TSMC even fabs high-end chips for Intel (how the mighty have fallen.)

    1. yes the chip factors get quite complex and interesting.
      my understanding is that China does not make high grade processors. sure it makes loads of chips but the kind that run your microwave rather than your HIMARs
      i think taiwan DOES make quite a lot of these high grade chips.
      China absolutely wants taiwan and these. The USA absolutely wants these supplied unrestrictedly.
      hence another aspect of the danger

  3. Neither China nor Russia make high end chips. They don’t have the foundry technology. It’s a huge geopolitical risk for them which became apparent when Trump banned access to US chips for some Chinese companies and Biden banned all US chip technology sales to Russia.

Comments are closed.