Published By Banyan Hill Publishing | | | | Published By Banyan Hill Publishing | | | | Cold War Series: 6 Opportunities to Invest in Today's Chip War By Ian King
Editor, Strategic Fortunes | Banyan Nation, Welcome to your third and final installment of “The Cold War Series.”
As a quick recap, in part two, we discussed: - Why China’s giant 5G network towers pose a nuclear threat.
- The poaching of some of America’s most brilliant minds for the sole purpose of serving China.
- New oil, plus the real reason the building discussed in the first two parts of this series is igniting a massive Chip War.
If you missed my email yesterday, I highly recommend checking it out.
Because it is absolutely crucial to understanding how you can begin to profit amid one of the biggest conflicts brewing right in your backyard.
So, let’s begin! China's Mission for Global Dominance We need to produce 36,000 microchips every second, and 92% of these advanced chips are made in Taiwan.
In fact, they are made by one company … Taiwan Semiconductor Manufacturing.
That’s its building in this now-infamous picture.  It’s a $440 billion company that has a virtual monopoly on advanced chip manufacturing.
It’s a very well-run company.
The United States has close ties with it. We depend on each other.  | However, China is aggressively moving in. It sees Taiwan as its own.
It already has plans to annex the island in its mission for global dominance by 2049.
Its president, Xi Jingping, has already warned against any international interference and that Beijing “reserves the right” for reunification.
CIA director, William Burns, alerted Washington that President Xi had ordered his military to be ready to invade Taiwan in the next four years, stating: “I wouldn’t underestimate Xi’s ambitions with regard to Taiwan.”
But U.S. Secretary of State, Antony Blinken, warned: “Beijing is determined to pursue reunification on a much faster timeline.”
If this story sounds familiar to you, it’s because it’s already been told.
It’s the same tactic Russia used to invade Ukraine.
Russia claimed that Ukraine was its to begin with. It doesn’t want to call it a war but rather an “annexation.”
However, Ukraine’s economy doesn’t impact our economy all that much.
But Taiwan … 92% of advanced semiconductors are made there. So, if China invades, the global economy will take a punch to the gut.
By the way, it’s no coincidence that China and Russia signed a “no limits” partnership last year and have been meeting with each other. They are forming an alliance.
For more on that, listen here. (Or click here to read a transcript instead.)
So, why hasn’t China invaded Taiwan already?
For one, they’re much smarter than that.
An all-out war would shut down the global economy. And that hurts them just as much as it hurts us.
They have a more cunning plan. They are infiltrating the country, trying to steal the design of these chips.
You’ve already seen how they’ve infiltrated the U.S. (via spy balloons, academic poaching, silly pagodas and the like).
So just imagine what they are doing in Taiwan … just 100 miles away.
But there’s another reason they haven’t invaded yet. They’ve seen what has happened to their allies in Russia. Russia thought it would take over Ukraine in no time, but … it hasn’t.
Thanks to great technology powered by microchips, Ukraine has held Russia back. | | | The Most Complicated Technology in the World “But can’t China just start manufacturing chips on their own?”
Well, that’s what it’s betting on. It’s doing all it can to steal the technology and “copy and paste” it into its own factories.
But its plan won’t work.
Russia tried to do that back in the 1980s. But it failed. It found out that getting the cake doesn’t necessarily mean you can figure out the recipe.
You see … chip manufacturing is the most complicated technology in the world.
The machines that make these chips cost $200 million and are only made by one company. It’s called ASML and is located in the Netherlands.  That machine relies on parts from 5,000 other companies around the world.
One of those companies, for example, is a private company in Germany named Zeiss.
It makes the lens for that $200 million machine. It’s the only company in the world that can make this lens.
I’ll say it again, these machines are very complicated. They are the size of a double-decker bus and weigh around 180 tons. They are made of seven different modules, built on 60 various manufacturing sites, and assembled in Taiwan.
Only Read if you Geek Out Over This Tech: Every second, a generator inside this machine spews out 50,000 tiny droplets of molten tin. Each droplet is then blasted twice by a powerful laser to create plasma. EUV radiation, or Extreme Ultraviolet Radiation, from the plasma is concentrated into a beam and bounces off six special mirrors before reaching the machine’s mask. This piece moves with precision in the nanoscale and etches features just a few dozen atoms in size. It has to draw transistors into a wafer with features measuring only five nanometers, approximately the length your fingernail grows every five seconds. This wafer with billions or trillions of transistors is eventually made into computer chips.
So, no. China cannot just copy this technology. Not for another 20 years.
It’s way too complicated.
A lot of people say that we won the first Cold War thanks to our space program. Others say it is due to our Nuclear Warheads, or maybe Russia’s economy just crumbled.
And all of that is partly true.
However, one must ask: Why did we have a stronger space program, better nuclear weapons and stronger economy?
It was our advancement in microchips.
Again, microchips are the brain of our technology, and we’ve become way more advanced than any other nation.
China is 20 years behind our technology. That’s why it is desperately spying on us. They have no other choice.
So, the key to winning this war — is microchips. America’s 3-Step Plan to Win the Chip War See, this isn’t a war fought with guns and missiles. This war is fought with strategy, intellect and technology.
And the U.S. has enacted a three-step plan to win this war: eliminate, suffocate and innovate (my words, not the Pentagon’s).
It’s a plan that was used during Ronald Reagan’s presidency back in the 1980s against Russia. It worked then, and I believe it will work again. 👉 Step 1: Eliminate. We are cracking down on the Chinese spy games. Popping balloons, taking down pagodas and dismantling 5G towers. We don’t want them getting their hands on this technology. So, we are actively eliminating Chinese influence within our borders. Even denying their bids to buy farmland.
👉 Step 2: Suffocate. We need to cut China off from this technology. And it’s already started. Washington banned all companies, around the world, from selling chips and chip-making equipment.
For example, ASML. The company that makes those $200 million machines. The United States gave direct orders … you can sell your basic machines to China, but NOT your advanced ones.
And they listened.
But we didn’t stop there. Washington also banned U.S. citizens from working with Chinese chip manufacturers. We essentially said: “You can’t work there.”
So 43 U.S. citizens and C-Level executives at these Chinese chip companies had to come home.
These microchip companies are nothing without the people there to make them work. And it’s time for these folks to come home. Along with chip manufacturing.
The days of offshoring are over. It’s time to onshore.
👉 Step 3: Innovate. The U.S. government recently approved spending $253 billion to onshore chip manufacturing via the Chips Act. While, in the grand scheme of things, that is not massive. But it is a first step.
And U.S. companies have responded by matching it with $300 billion committed to building microchips.
Intel is shelling out $100 billion in Ohio, $20 billion in Arizona and $3.5 billion in New Mexico.
Micron is putting $100 billion into a New York plant and $15 billion in Idaho.
Texas Instruments is investing $36 billion in its home state.
Samsung is putting in $17 billion in Texas.
Wolfspeed is investing $5 billion in North Carolina.
And billions of dollars are being invested in smaller plants in Florida, California, Indiana, Oregon and Utah.
If you invest in any of these five companies, one should do well over the next few years.
But none of those opportunities are bigger for investors than the sixth opportunity that I discuss right here.
Historically speaking, whenever the U.S. government and private sector joins forces to expedite an innovation, fortunes can be made.
I’m talking about gains of 1,000% to even 5,000% within five years.
To see how you can profit, go here.
Regards,
Ian King
Editor, Strategic Fortunes P.S. That brings us the end of this special-edition series! I’d like to do more in the future, but first I’d like to hear from you. Write to us at BanyanEdge@BanyanHill.com and let us know: - What do you think of the approaching “tech war” between the U.S. and China?
- What other topics would you like me to write in-depth on?
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