A.I. Revolution Threatens 27% Of Jobs
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Yen Strengthens As Bulls Bet On Turning Point
Yen bulls that have reaped nothing but disappointment in 2023 thus far. But they are finally eyeing gains as the currency climbs to its strongest in a month. However, short-term pains await yen bulls prior to any sustained rallies.
Today’s News
As the world’s largest exporter of gallium and germanium, China’s recent export controls on metals used in semiconductors are undoubtedly affecting the world. However, the U.S. in particular are directly affected by these restrictions due to the rising demand of electric vehicles (E.V.).
Traditionally, semiconductors in power electronic devices were made of silicon but that has changed since a new combination has that pairs silicon carbide (SiC) and Gallium Nitride (GaN) is capable of offering power efficiency gains which outperforms silicon. The new combination of semiconductors are able to conduct high-power applications that are detrimental for electric vehicles, dubbing SiC as a technology accelerator.
The world is transitioning from fossil fuel-powered vehicles to electronic vehicles in hopes to reduce carbon emissions. Back in 2020, road transport alone was reportedly responsible for approximately one-fifth of Europe’s carbon emissions, with other countries reporting similar figures. This has prompted the world to revisit the adoption of E.V. despite technological barriers at the time.
Today, China’s restrictive measures have sent shockwaves to the semiconductor industry as such:
Price Cuts And Rising Inventory For U.S. E.V. Market
The U.S. electric vehicle market is growing, but not fast enough during the latest quarter to prevent a backlog of electric vehicles from stacking up at some automakers’ dealerships or to allow Tesla to avoid new price cuts, according to analysts and industry data.
Rising inventories and price-cutting could represent only a short-term pause in the E.V. market growth. But these could be signals that would boost the U.S. E.V. sales above the current 7% market share level. However, it would also be more costly and difficult than expected, even with the federal and state subsidies, reports indicate.
Renault Chairman Warns Of Strong Pressures For E.V. Sector
A “Chinese storm” is looming over Europe’s growing E.V. sector, Renault Chairman Jean-Dominique Senard expressed over the weekend, as Asia’s superpower dominates key raw materials to make batteries for zero emission cars.
China’s recent decision to restrict exports of gallium and germanium should raise red flags for European leaders as it shows the continent’s over-reliance on China and the need to build a costly supply chain, Senard said in an interview.
“We are capable of making electric vehicles, but we are fighting to ensure the safety of our supplies,” he said, adding China’s E.V. industry and supply chain for raw materials resulted from years of investments that would cost billions of euros to replicate.
Stockpiling Of Gallium Remains Rampant
China’s planned export controls on gallium have caused frantic stockpiling of specialty semiconductor wafers made gallium, according to the world’s largest gallium buyer, Freiberger Compound Materials, who relies almost entirely on Chinese suppliers for its gallium needs to make wafers that go into mobile phone radio signal amplifiers and optical electronics.
Consuming an estimated 10% of global gallium output, the company has found itself at the centre of turmoil following China’s surprise announcement to control exports of gallium and germanium products from 1 August onwards.
