U.S., Asml, China discussed on BTV Simulcast


In Arizona Samsung is opening up a fab but the problem is it's not going to be a leading note fab It's still going to be ten nanometer and above So for Apple to have leading node chips the chip that go into a smartphone have it manufactured in the U.S. it's going to take a long time but they can do it for other parts and that is the plan that let's not rely completely on the region but have that diversification in terms of where some of their other chips are made But it doesn't try to depend upon the U.S. for chip design Are our folks designing it Yeah so all your fabulous companies whether it's Nvidia AMD Qualcomm these are fabulous companies designing the chips manufacturing in Taiwan and China is assembling them and also there's one element of the supply chain in terms of equipment So that is being supplied by ASML or lamb research and those are again Europe and U.S. based companies that China needs Is there a movement within the tech industry broadly defined to in fact try to bring this stuff on the shore even if it takes a decade or more Yeah so that's where the chips act comes into play $52 billion at stake They're still trying to figure out how to hand out those subsidies because if you give them all to Intel inter will spend on CAPEX they're going to buy those equipments for the process node gap that they have with TSMC But that's not going to be enough You need to build that supply chain and that is where you need different parts of the supply chain to be moved to the U.S. or in close proximity whether it's Mexico or Canada And that's the hard part Because we still have just in the last week or two or three in China the omicron variant coming up and then shutting down Shanghai for example in other parts is are we seeing that in the when you talk to these folks are we seeing that now in the supply chain There is a risk but at the same time what they've done well is keep the factories running So we haven't seen that kind of shutdown where there is no production at all The other thing to keep in mind is the gap in the cost right So if these companies were to move the production onshore the gross margin is going to take a big hit That's the one reason why they moved to Asia to begin with because of the lower cost So it's a double whammy All right man did good good stuff as always talking supply chain and microchips That's Mandy seeing Bloomberg intelligence senior technology analyst Come down next the confidence dent in Europe favors capital spending with dividends on watch You're listening to Bloomberg intelligence on Bloomberg radio providing in depth research and data on 2000 companies and 130 industries You can access Bloomberg intelligence via BI go on the terminal I'll Paul sweetie He's 13 minutes.

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