RE: HERE IS MY BIG NEWS9 Jan 2021 12:58
PS
Re AAPL, here's a PoV that might interest ( GaveKal) :
.." Growth stocks have had their run in the past ten years, with falling bond yields and a rising Dollar. In a
reflationary world, they will underperform. Plus, tech is the main battleground in the war between the
U.S. and China. I see the tech world breaking into three separate zones, one dominated by America, one
dominated by China and India evolving into a zone by itself. You can own the champions in each zone,
which means you can own Amazon or Google for the West, or Tencent in China. In danger are
companies that straddle the two worlds. Huawei tried, and we saw it being killed. I see Apple at risk,
too. ...as it straddles the U.S. and Chinese tech spheres.
In the middle of this tech war sits Taiwan.
Taiwan today is what Alsace-Lorraine was 120 years ago. There were two hugely important events this
year that most people have missed because of the Covid crisis. One, the market value of the global
semiconductor industry has moved above the market value of the global energy sector. The market is
telling us that semiconductors are more important than energy; they are the commodity of the future.
We should think of Taiwan the way we used to think of Saudi Arabia.
What’s the second important event?
At the end of 2019, the market value of Taiwan Semiconductor Manufacturing was $200 billion, while
the market value of Intel was $350 billion. Today, TSMC is $450 billion, while Intel has dropped to $200
billion. Why? This summer, TSMC came out and said they can produce 7 nanometer chips and will be
able to produce 3nm chips in 2023. A week later, Intel came out and said they won’t be able to produce
7nm chips by 2021. So in the summer of 2020, we witnessed the passing of the technological baton from
Intel to TSMC. The leadership in the semiconductor industry now belongs to Taiwan.
Why does this matter?
It matters because Washington has decided to make semiconductors the battleground in its war against
China. And that means that Taiwan is the battleground in the great conflict of the 21st Century, an island
that Beijing regards as a renegade province, sitting 60 miles from its shore. Taiwan has always been a
sore point between China and the U.S., even when Taiwan produced plastic toys and bicycles. Imagine if
Saudi Arabia was a political uncertainty between America and China, where the regime depended on
Washington for survival, but the territory was claimed by China. We’d be very worried..."
Just a PoV.
ATB
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