A Nation on Notice
Computers on wheels... 60 Minutes picks up on the 'chip story'... The short-term and long-term impacts... A nation on notice... Our colleague Dave Lashmet explains... Get his 'Venture No. 73' recommendation right now...
This is why it pays to do (and follow) the research...
Not that we needed another example, but last night's episode of 60 Minutes on CBS focused on a major story that we've told you about here in the Digest over the past several months...
We're talking about the trouble brewing between the U.S. and China... with Taiwan – and its treasure-chest supply of semiconductors (or "microchips") – as the sticking point.
In the June 10 Digest, we noted that the small independent (for now) nation and South Korea combine to make about half of the world's semiconductors. As we wrote...
That's a staggering concentration of production for any industry... And many people only realized it recently.
At the time, we were talking about supply-chain issues related to the COVID-19 pandemic... A shortage of chips flowing throughout the world helped to throw car prices out of whack in multiple countries.
We probably don't need to tell you how much electronics are in cars these days. They're basically computers on wheels.
As we reported in June – and as Stansberry NewsWire editor C. Scott Garliss detailed again last week – geopolitical tailwinds for investing in chip manufacturing in the U.S. (and Europe) have been growing... That's why this is a bullish investment trend.
The short-term shortages are the tip of this iceberg...
They are real.
Then, of course, there's the macro picture... And by that, we mean the growing consternation and expectation that the Chinese government wants to basically take control of Taiwan, much like it has pushed to do in Hong Kong over the years.
Taiwan is a country on notice. And as Scott wrote in last Monday's Digest...
The republic of Taiwan and mainland China have essentially been in conflict since the Chinese Civil War in the middle of the 20th century...
Back in January, during his New Year's speech, [Chinese President Xi Jinping] called for a peaceful reunification with Taiwan based on the "one country, two systems" framework, just like Hong Kong. And he also warned that Beijing would resort to force if necessary.
This is a shot across the bow.
Add it all up, and as we wrote in June, a recent White House review noted...
The U.S. has become too reliant on overseas production for computer chips. It said the country needs to invest in its own manufacturing for national security reasons, as well as to remain competitive against China and on the broader global scale.
In fact, that's already happening...
The U.S. Innovation and Competition Act of 2021 has already passed in the Senate... And the House of Representatives will make its own version of the bill. It currently totals $250 billion to spur American innovation, including roughly $50 billion in government subsidies for chipmakers.
And beyond that...
Some leading chip companies are already growing operations in the U.S...
Whether all-out war happens on the ground in Taiwan, we can't say for sure... But in the meantime, it looks like companies are recognizing the importance of diversifying operations abroad – and seizing the opportunity to do so.
Intel (INTC) is currently the only company that makes cutting-edge, high-end chips in the U.S... And as 60 Minutes reported, the company isn't even able to make the top-of-the-line chips that go in Apple's (AAPL) smartphones, for example.
But as we wrote in June, Taiwan Semiconductor Manufacturing (TSM) – the world's largest contract chipmaker and most advanced manufacturer – announced plans earlier this year to build a $12 billion semiconductor fabrication plant in Phoenix, Arizona.
The company also plans to build at least five facilities in the state over the next 10 to 15 years. This is all part of the reason why Intel is looking for government support of its efforts to so-called "on shore" chipmaking.
Our colleague Dave Lashmet told us today that the subtext of the story is important to understand...
As the editor of our excellent Stansberry Venture Technology newsletter, Dave has been all over the "chip story" for a while. For just one example, you can note his recommendation of leading chipmaker Nvidia (NVDA) in our Stansberry Research Hall of Fame, with a 777% return on a partial position.
Here's what Dave shared with us in a private note earlier today. As you can see, it's how he pieced the different angles of the story together...
1. Intel is telling governments that it needs tax breaks because Taiwan will fall to the Chinese.
2. Taiwan is telling the same governments, "Please don't invest in chipmaking. Just defend us from the Chinese because you need us."
3. China is now asking ships in "Chinese territorial waters" to report to the Chinese mainland or other ports before proceeding.
In other words, a blockade around Taiwan is starting. How's that for threatening behavior?
Dave also points out that China imports high-end chips, just like the U.S. But according to Dave, the difference is...
China sees Taiwan as a breakaway province – where conveniently, everyone already speaks the Han Chinese dialect. So it's pretty easy for China to step in and enforce its dictates... exactly like it's currently doing in Hong Kong.
If and when that happens, Taiwanese chip exports to the West will fall to zero. And everything electronic globally will suddenly get stamped as "made in China."
I doubt anyone outside of China wants that to happen.
This all doesn't come as a surprise...
It's a big part of the reason why Dave previously recommended two U.S. defense contractors to his subscribers. He has been looking ahead at these threats for a while...
A lot of people don't realize that semiconductors like the ones we're talking about are used in everything from fighter jets to computers that control nuclear systems, as well as your smartphones and cars. As Dave wrote in a recent special report for his Venture Technology subscribers...
The U.S. government sees this risk... That's why it's spurring a silicon chipmaking renaissance in the U.S.
As we know, whenever the term 'national security' is invoked, the money is not far behind...
Over the next decade, Dave expects as much as $1 trillion to be invested in super high-end silicon chip manufacturing in the U.S. And as is Dave's calling card in Venture Technology, he has found a relatively tiny firm that's set to profit from this massive shift...
It's a U.S. company that's new to this specific market, but one that has chipmaking experience going back decades... It's perfectly positioned to be a major player in the coming chip revival within this country.
Just last week, Dave shared his latest research on this company with a wide audience... He calls it "Venture No. 73." Right now, you can get all the specific details about this recommendation, plus a full year of his research, at a $3,000 discount to the regular price.
But don't delay... Our best offer is set to go offline tonight at midnight Eastern time. That's less than six hours from now. The clock is ticking... Click here to get started.
The 'War on Cash' Is Here
The "war on cash" will have disastrous consequences... One of those consequences will be the loss of privacy, says James Bovard, a best-selling author and columnist for USA Today. In this interview, he tells our editor-at-large Daniela Cambone why...
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In today's mailbag, feedback on Dave's Masters Series essay from Sunday. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
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"New vision is amazing, near and far, I just threw a sack of contacts stuff and readers in the trash. No more solutions, cleaning procedures, multi-focal sunglasses, etc." – Stansberry Alliance member Norbert W.
All the best,
Corey McLaughlin
Baltimore, Maryland
August 30, 2021