Money‚ Semiconductors

Microsoft’s G42 deal puts UAE in America’s AI tent

16 Apr 2024

The $3 trln software giant is paying $1.5 bln for a minority stake in Abu Dhabi-based artificial intelligence group G42. Microsoft gets years of cloud storage business. But it also implies an end to the Gulf state’s effort to be a neutral AI counterparty to China and the US.

Biden’s subsidies are working a little too well

15 Mar 2024

The US president’s incentives for chips and clean energy have provoked a competitive scramble and raised the cost of building factories – which cuts the handouts’ real value to recipients like Intel. The risk is that investment zeal sets the scene for future gluts.

Snowflake shows how easily AI valuations can melt

29 Feb 2024

Growth slows a little and a 65-year-old CEO retires. The result: a fifth of the data firm’s $75 bln market value vanishes. It’s a sign of how much perfection is priced into AI-related stocks. Snowflakes are never alike, but when it comes to investor exuberance, tech firms can be.

Nvidia’s AI mini-bets set an example not to follow

15 Feb 2024

SoundHound AI shares surged 76% thanks to a $3.7 mln investment from the giant chipmaker. Not bad for a company likely to miss projections it set before going public in 2022. The colossal Nvidia will be fine even if SoundHound proves a dud. Coattail riders can’t say the same.

Chiplets-to-chips future featured in $35 bln deal

16 Jan 2024

Semiconductor designer Synopsys is buying Ansys, a firm which helps integrate systems. The buyer’s rich stock price should make an estimated low return tolerable. But the key is the future of the chip business: fancier technology requires more integration.

Nvidia’s AI boom outpaces China limits

21 Nov 2023

The $1 trln semiconductor company tripled revenue, despite a crackdown on exports to the giant market. Unlike Apple, which also faces risks in China, there’s no substitute for Nvidia’s chips for fueling AI. Right now, the only limit on growth is how quickly it can meet demand.

Capital Calls: Big Oil, Intel

27 Oct 2023

Concise views on global finance: Exxon returned $8 bln of cash to investors in the quarter, while Chevron returned some $6 bln. With investment rising and M&A on the table, investors are competing with new priorities; Intel shares jumped 10% after slowing declines in revenue.

US tech controls help and hinder China chipmakers

20 Oct 2023

Washington’s latest restrictions aim to curb Chinese access to semiconductors for AI and warfare. Beijing is years away from replicating sophisticated components and tools like those made by ASML. But the rules create opportunities for local champions such as $30 bln SMIC.

One $16 bln deal travels lonely dual track

9 Oct 2023

Buyout shops GTCR and Apax may be exploring both a sale and an IPO for insurance broker AssuredPartners. Using two separate paths typically aims to create competitive tension and lift valuations. With equity, debt and M&A markets all cool, neither option poses a plausible threat.

Intel’s latest breakup is a test for more to come

4 Oct 2023

The semiconductor giant will hive off more of its empire with IPO plans for its programmable chip unit. Weak markets dinged its last spinoff, but this separation can flout strong profit to highlight $18 bln of hidden value. It’s a dry run for a bigger split down the road.

IPO candidates are trying to flip the FOMO script

18 Sep 2023

Arm’s IPO investors got a 25% return on the first day. Instacart began its roadshow with a low number, only to bump it up. Klaviyo just lifted its price range. Companies and their bankers are finally getting an open window. Creating envy over big debuts will help it stay open.

Apple investors grow fat on iPhone’s thinning buzz

12 Sep 2023

The tech giant’s latest handset, to be unveiled Tuesday, may offer incremental improvements. Sharper pictures and faster charging won’t spur many upgrades. The $2.8 trln group’s main innovation is persuading investors to pay a higher multiple for slower-growing revenue.

American economic power is potent but unstable

8 Sep 2023

Washington weaponized the country’s dominance in tech and finance, evidenced by restrictions on Chinese chip imports and Russia sanctions. Such policy power has invited backlash, most recently against Apple’s iPhones. The dynamic makes valuable interdependence harder to sustain.

Capital Calls: Burning Man, Intel/Tower

5 Sep 2023

Concise views on global finance: The festival’s mud-soaked disaster reveals tensions between libertarian ideals and providing infrastructure in a warming world; the $155 bln chip giant’s partnership with its former acquisition target salvages some of the benefits of a tie-up.

AI frenzy’s feedback loop stuffs Nvidia

23 Aug 2023

The $1.2 trln semiconductor designer’s second-quarter revenue doubled. Tech giants’ valuations are soaring on AI hype, so naturally companies are pouring money into it, including by buying Nvidia's chips. As long as investors quack for more, Jensen Huang's firm gets fed.

China does Intel a small favor

16 Aug 2023

The chipmaker aborted its $5 bln acquisition of Tower Semiconductor after failing to secure approval from Beijing. The questionable deal was made worse by the target’s struggles. And given the cross-border tech tension, a $350 mln break fee at this stage is a small price to pay.

Tokyo’s $7 bln buyout dials up global chip wars

27 Jun 2023

A state-backed fund’s pricey purchase of semiconductor materials maker JSR will help the Japanese industry shaken by geopolitical jitters build national champions rather than lose to foreign rivals. For customers from Samsung to Taiwan’s TSMC it spells more uncertainty.

Economic stability hangs on US love of BBQ

26 May 2023

The US government is racing to ink a deal to avoid default ahead of the long weekend that marks the start of summer. Agreeing on how to handle the debt ceiling would relieve US creditors and calm markets. The rush will almost certainly leave big problems unfixed.

Counting the cost of the US-China chip war

11 Apr 2023

Six months into Washington’s sweeping export restrictions on semiconductors, Chinese and global chipmakers including TSMC are navigating the fallout. In this Exchange podcast, author Chris Miller talks about the fight for the critical technology and how Beijing may retaliate.

China’s chip suppliers have some growing up to do

14 Dec 2022

Beijing is readying a $144 bln fiscal package aimed at supporting its equipment makers that are woefully behind Dutch and Japanese rivals like ASML. A combination of targeted subsidies and local demand will help. But catching up will be a years-long, if not decades-long, slog.