jiefeng jiang
By Yan Taw (YT) Boon
If data is, indeed, the “new oil”, then refining it into a useful resource is all about 5G networks. As countries and companies race for dominance in 5G, we believe the semiconductor industry stands to benefit from strategic investment opportunities and policy support.
Maintaining a steady supply of chips is now of paramount importance to national security, as a simmering tech war between the US and China – accelerated by trade frictions in 2018, heightened tensions in the Taiwan strait, and most recently, US bans on exports of advanced semiconductor technologies – has gradually decoupled and reshuffled global supply chains.
Now, we are seeing more nations ramp up investment opportunities in 5G networks and bolstering their own semiconductor supply chains to localize chip manufacturing and research.
We believe this renewed strategic focus – aided by policy initiatives – is providing attractive opportunities for local champions. The US Chips Act and the EU Chips Act are just two examples of $50 billion support packages aimed at funneling investment into the self-sufficiency of chip research, design and manufacturing.
It’s clear, in our view, that the world has awoken to 5G’s potential to harness the vast power of data – and that we are currently witnessing a technological arms race as nations seek to gain superiority. As oil wars dominated the last century, we expect chip wars to dominate the next.
Even Warren Buffett – despite his often-doubting take on technology – has come to appreciate the semiconductor industry’s global strategic importance. Indeed, the Oracle of Omaha recently purchased a $4.1 billion stake in chipmaker Taiwan Semiconductor Manufacturing Company (TSM).
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