The US has a number of ways to encourage allies to support its semis restrictions on China. These range the “stick” of enforcement to the “carrot” of waivers and targeted expansion of the restrictions.
The decoupling train has left the station – with US companies showing clear momentum in reducing or eliminating their reliance on China. China still has a lot to offer, and while the process will take years, there are a growing number of alternatives.
There are a lot of reasons to doubt that cars cannot be built in the same ways as electronics – the industry has had a 100 years of trial and error. But if one company can get it right, it will force everyone else to follow suit.
For the past decade, we have labeled anything newish as a “Tech” company, but the markets are reminding us that there is a difference between companies that use technology to solve business problems and those that are actually solving technology problems.
It seems very likely that most AI Training will be run on Nvidia GPUs. The software environments for training are too numerous and changing rapidly, which favors the soft, warm familiarity of CUDA over speculative gains offered by new entrants.
Qualcomm rounded up all the bad news to report this quarter. The bar will now be very low. This will give them breathing room next year, focusing on the Street on macro, which is better than letting them get impatient about autos.
Qualcomm claims Arm wants to shift its business model to charge OEMs rather than chip companies. We think is unlikely, but wow will it be hard if they do try to make that shift.
This downturn in semis is different from past cycles in that each segment seems to be taking a beating at different times. This cycle is serial, not parallel, and we probably need to see all of that play out before the sector starts to recover.
Foxconn looks incredibly well positioned to usher in a new age of auto manufacturing, and they have the resources that it will require to nurture a new ecosystem of auto makers.
The shift to EVs is disrupting the auto supply chain. To name just one example, Foxconn, the company that epitomizes the model which separates electronics design and manufacture is now aggressively promoting its ability to replicate that model for cars.