Visitors take a look at 5G chips at the JCET Group stand during China International Semiconductor Expo … [+]
VCG through Getty Images
If it is not compared to gold (Bitcoin) or oil (solar) then it may not deserve it. The “new oil” in the tech world is semiconductors. It is the “Big Bay Area” of China where the new drilling will take place. Right now, this is where the demand is coming in a world facing chip shortages for car manufacturers.
About two years ago, the Chinese government unveiled its latest strategy for competing with the Western world, namely the US. hitting a lot of China’s chords – this is their old cat-style replica in imitating the Bay Area of San Francisco, and more importantly, it’s a challenge for Palo Alto. China is not going to compete directly with the Bay Area of California. It’s going to be bigger than the California Bay Area.
The cities of Guangdong-Hong Kong-Shenzen, China think, will finally smoke Silicon Valley.
As of right now, there are American companies like Intel
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helping them. Of course they know this. I already raised this here on December 13th.
On November 23, Swan CEO Bob Swan wrote a letter to Joe Biden calling for a national strategy to protect the semiconductor industry. There is only one place to protect it from – Shenzhen.
According to the Semiconductor Industry Association, the U.S. accounts for just 12% of global semiconductor production capacity, with more than 80% of that capacity in Asia. Rising costs and foreign government subsidies to national champions (as in China) are a major disadvantage for U.S. semifinal companies that still make substantial capital investments at home.
I wonder where? Advanced Micron Devices is a semiconductor company out of California. This is the part … [+]
VCG through Getty Images
Around the same time Swan was writing that letter, China Strategy Group, which includes ex-Google
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Axios reporter in China Bethany Allen-Ebrahimian brought that report to light on January 26th.
“America’s technological leadership is fundamental to security, wealth and a democratic way of life. But this important advantage is now in jeopardy, with China pledging to surpass the United States in areas of crisis,” the report said.
China will also work in close partnership with Taiwan, which it claims to have, and South Korea, a country that is more obedient to the United States, but has more closely linked financial interests. more to Chinese demand.
The U.S. has been trying to stop Chinese companies, namely Huawei, from accessing chips, including going so far last year to block the tha Taiwan Semi
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Chipless: Cion SA. China’s application.
Check out these charts with investment research firm TS Lombard. China’s demand for skewers has surpassed oil, on and off, for the past 20 years. Now, thanks in part to pandemic, it’s off the records. It is not clear whether China ‘s demand is causing the shortage facing the car sector now, but it is plausible.
American semiconductors make it. Demand in China is richer than crude oil. If the chip is large … [+]
TS Lombard
The rapid acceleration of “internet of things” will forever move semiconductors ahead of oil as the world’s leading commodity for growth, TS Lombard analysts Rory Green and Steven Blitz wrote in a report to last week’s messages .
The chip shortage that led GM to cut production at four facilities in the US, Canada, Mexico and South Korea reflects the pace and scale of this change.
For now, U.S. chip makers such as Advanced Micron Devices are world leaders in the design and sale of semiconductors, accounting for 45% to 50% of global sales.
But as the charts above by TS Lombard show, manufacturing (chart 2) has shifted to Asia and enough to make the U.S. trade situation turn negative.
For now, Taiwan and South Korea make up 83% of global processor production and 70% of memory chip production. The area’s leadership will continue to expand thanks to the Baymore District.
Wall Street is keeping a close eye on the launch of the STAR Board exchange trading fund for our locals here in the United States. That ETF will be loaded with the new Chinese semiconductor names looking for funding. Wall Street will definitely throw at them like kids feeding ducks at a zoo.
Once that ETF becomes open to American investors, it will be similar to GameStop
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did two weeks ago.
On Feb. 2, U.S. Senator and Senate Auto Caucus co-chairman Rob Portman, among others in car-producing states, sent a letter to the new Director of the National Economic Council Brian Deese urging him to work with the Transport to manufacture the semiconductor shortage for car repair.
“This shortage is threatening our economic recovery from a pandemic, and the consequences are particularly severe in automated manufacturing states such as ours. We urge you to work with us to address the global semiconductor shortage, ”the seniors wrote.
They called on the White House to “obtain the necessary funding to implement the half-tree provisions in the latest National Defense Authorization Act, which would boost and encourage the production of half-tree production Future production of semiconductors. ”
There is a recognition in Washington that advanced chip manufacturing should be designed and done here. The Creating Assistive Incentives to Export Semiconductors (CHIPS) Act for America, which was introduced in the last Congress, as well as the National Defense Authorization (NDA) Act, provides federal support for local chip makers. The bill has not yet been voted on.
“It’s an excellent first step, but it doesn’t address an important issue,” said Marc Fasteau, vice-chairman of the Coalition for a Successful America, DC’s think tank. He is currently writing a book on business policy for the US, of which semiconductors are a part.
Under CHIPS and NDA bills, new advanced chip furnaces – known as fabs – can receive donations to be owned or controlled by any country except China, Russia, North Korea and Iran.
Taiwan Semi’s prospective material in Arizona would be worth it.
“The problem is that TSMC won’t make their most advanced chipsets or find their most advanced research jobs out there,” Fasteau says, citing the 5 nanometer chips that TSMC said they will in Arizona. “By 2024, when the new product is up and running, chip technology will have moved on and TSMC will be preparing to make the next generation of chips in Taiwan. The Arizona fab U.S. chip maker will not move to a leadership position or even to parity with Taiwan and Samsung, the other global leader in advanced chip manufacturing, or keep the U.S. ahead of China. The NDA and CHIPS should be amended to require grants to be awarded only to projects owned or controlled by US companies, ”he says.
What does the market tell you?
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TS Lombard’s Green calls semiconductors “the fortune of US competition in China. ”
The Biden Administration will continue to build on relations with South Korea and Taiwan, and like Trump before, will also use chips as levers against China.
“The reason China is not so far ahead is because we control the supply of equipment to make semiconductors to make sure it doesn’t fall into government hands,” said Roslyn Layton, co-founder of China Tech Threat, its business intelligence company explores China’s role in high-tech supply chains. “China is trying to move quickly to close the gap in the design and manufacture of their own snacks. They want to be self-sufficient. They don’t want to bring in anything if they can avoid it. ”
For Beijing, that dependence on foreign resources for high-tech is a “Chinese knife at the neck”.
“Developing domestic innovation and technological self-reliance are its two key policy priorities for 2021,” says Green. “The near-term focus is the de-Americanization of technology supply chains.”
The investor takeaway is that the semiconductor market is indeed more rooted than fiction, compared to the 1999 dot-com bubble. Taiwan and South Korea are the “new OPEC”, with China building and developing. application management. Bottles to global growth revolve around Taiwan and South Korea’s chip manufacturing.
Alternatively, the MSCI South Korea (EWY)
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