The Netherlands is huge news because of ASML.

The moment China got ahead and took the Russian deal they abused their market position and showed they aren't a partner but one that will use leverage in ways that are excessive especially in a time of crisis. Taking the Russian "deal" and that always works out for those in history... /s

The China Market experiment is over, they turned East again.

The chips being built in the US will be the top tier and China played themselves by doing this leverage move.

Tim Cook says Apple will use chips built in the U.S. at Arizona factory

> The plants will be capable of manufacturing the 4-nanometer and 3-nanometer chips that are used for advanced processors such as Apple’s A-series and M-series and Nvidia ’s graphics processors.

> “Today is only the beginning,” Cook said. “Today we’re combining TSMC’s expertise with the unrivaled ingenuity of American workers. We are investing in a stronger brighter future, we are planting our seed in the Arizona desert. And at Apple, we are proud to help nurture its growth.”

> “And now, thanks to the hard work of so many people, these chips can be proudly stamped Made in America,” Cook said. “This is an incredibly significant moment.”

The production will be able to meet all US Apple demand for chips, and "capable of manufacturing the 4-nanometer and 3-nanometer chips that are used for advanced processors such as Apple’s A-series and M-series and Nvidia" which is huge as that is where the innovation is.

The chip market needs lots of competition to prevent what happened in 2020 with the chip shortage, market players manipulated the market when they obtained leverage and hoarded chips to prevent other industries from competing across GPUs, EVs, devices, etc.

Once the chip shortage happened, partially due to geopolitical reasons, that changed everything. The West/US will never fully rely on a single point of failure again no matter how hard the HBS MBAs and Chicago thinking push it to trim and be "efficient". Some industries are too important for other industries and leverage on that over those areas is too risky and costly now.

IN 2020/2021 I would have paid double right now for GPUs directly from the source, not from some sketchy third party.

Right now our EV/auto, military, space and even AR/XR industries as well as gaming and everything that requires chips, we are at the mercy of an external market that has a slant against the West. It will take some years to get out but we'll never not expect that in the future again. If costs go up costs go up, but availability should never be allowed to be used as leverage again, that is too risky and too costly long term.

Availability that is reliable is always more important than efficiency or cost, because right now lack of availability is costing lots of extra time that has the potential to lose entire industries, that is not acceptable in any way.

Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity backed near entire market leverage monopolies/duopolies/oligopolies that control necessary supply and you have trouble.

HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezed out and with that, an ability to change vectors quickly. It is the large company/startup agility difference with the added weight of physical/expensive manufacturing.

The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience

> Superefficient businesses create the potential for social disorder.

> A superefficient dominant model elevates the risk of catastrophic failure.

> If a system is highly efficient, odds are that efficient players will game it.

Hopefully that same mistake is not made in the future. It will take time to build up diversification of market leverage in terms of chips for availability. Hopefully we have learned our lesson about too much concentration, with that comes leverage and sometimes a "gaming" of the market.

This chip shortage, and all the supply chain problems during the pandemic as well, will hopefully introduce more wisdom and knowledge into business institutions that just because things are ok while being overly super efficient, that is almost a bigger risk than higher prices/costs. Competition is a leverage reducer. Margin is a softer ride even if the profit margins aren't as big.

Plenty of industries are subsidized that make sense for resiliency to make them competitive, food being a big one, energy, electricity, water as well. I'd put chips in that category now.

Cost has to take into account leverage when outsourcing, for times like this where hoarding, trade wars, pandemics and geopolitical issues including manipulation have impacted supply. This affects all industries that ride on top of it.

Essentially the China market experiment is over. The largest chunk of the chip production is located there, most of the materials for chips is owned by them and they moment they reached a leverage state they used it.

China's Auto-Chip Hoarding Probe Should Be Worrying Distributors

China Stockpiles Chips, Chip-Making Machines to Resist US

There are other factors but ultimately authoritarians have plans to weaponize the supply chain and have. We'd be suckers to keep that leverage in place, it affects all competing businesses on top of chips.

> China is a large consumer of major commodities including crude oil and iron ore, but it relies heavily on imports to meet its domestic demand for those commodities.

> The country is diversifying its supply of critical natural resources by buying overseas companies and pivoting toward “stable autocratic regimes” for imports, said a report by Verisk Maplecroft.

> “By securing diversified sources, China will be in a better position to weaponise trade with geopolitical rivals,” the risk consultancy said.

China heavily subsidizes chips so we better to compete or else leveraged to authoritarian systems that don't like the West or open markets.

China’s Share of Global Chip Sales Now Surpasses Taiwan’s, Closing in on Europe’s and Japan’s

> Global chip sales from Chinese companies are on the rise, largely due to increasing U.S.-China tensions and a whole-of-nation effort to advance China’s chip sector, including government subsidies, procurement preferences, and other preferential policies.

You can't be efficient if you can't get materials for other industries.

Highly efficient capitalism moves away from a fair market to an oligopoly that looks more like a feudal or authoritarian system where the companies are too powerful and part of that power is absolute crushing of competition, that is bad for everyone even the crushers.

The same type of thinking led us to have a near single point of failure in trade on Asia for chips, and now look at us. Chip shortage for years all to save some percentage, we ended up leveraging the entire market to it.

https://www.bnnbloomberg.ca/japan-netherlands-to-join-us-in-chip-export-controls-on-china-1.1875521.amp.html

Good, cut them off completely. Time China learnes how we treat Authoritarian dictatorships.

This has been bothering me for a long time. The idea that so many vital facilities and production takes place in locations vulnerable to China's whims.

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Taiwan war in 3, 2, 1…

Then China moves on Taiwan.