PGIM, Prudential Financial's investment management arm, ranks an invasion of Taiwan as the second biggest global tail risk, after an unexpected liquidity crunch in key capital markets. "It's also one of the risks investors feel least prepared for," it says in a report based on investor surveys. Mike Edwards, deputy chief investment officer at New York-based Weiss Multi-Strategy Advisers, says that should China initiate an invasion, "investors would face significant uncertainty, and certain tech ecosystem supply chain disruptions." "This would be most acutely felt in global semiconductors and the likes of Apple, as well as in Asian currencies and beta-heavy names, plus any Chinese assets that require offshore funding," Edwards tells Markets Group. The semiconductor conundrum Because Taiwan Semiconductor Manufacturing Co. (TSMC) is comfortably the world's largest contract manufacturer of semiconductors, a Chinese takeover has raised fears about what this might mean for the world economy.