Chips ahoy!

 

"As exciting as all this chip stuff is, we should have started it during Trump's first term. Why? As the expression goes, time is of the essence." 

Relax foodies - this not about sweet treats. It is however, about one of the first things Trump did shortly after being sworn in. Remember Project Stargate? Backed by Oracle, Open AI, and Softbank Group, these companies are investing lots and lots of money, to build factories in the US, to manufacture lots and lots of chips. Currently, the first factory is under construction in Abilene, Texas. If things go as planned, this factory will be the first of many for the Stargate crowd.

Why are we doing this? Just like in the movie The Graduate, the Dustin Hoffman character was advised by an older gentleman to go into plastics. Why? That is where he thought the future was. One of the tough lessons we learned during Covid was how fragile our supply chains are. And chips, should we lose our supply from Taiwan due to war or whatever - could flatline our economy. It is for this reason the principal investors in Stargate have been working with President Trump to mitigate this risk.

But Stargate might be only the beginning. Our country, our economy, runs on computer chips. During the last administration, we convinced Taiwan Semiconductor Manufacturing Company (TSMC), with the help of the American taxpayer, to build a huge plant in Arizona. In that plant 3nm chips will be manufactured onshore. This is huge for Apple, as they need 3nm chips. Is there enough water in AZ to keep this plant running? We shall see.

As exciting as all this chip stuff is, we should have started it during Trump's first term. Why? As the expression goes, "time is of the essence." If we are lucky, and I mean really lucky, we can keep the lid on in Taiwan until the end of the decade. If our luck runs out, and China invades Taiwan in 2027 - batten down the hatches. We will be in very rough seas for a very long time.