The escalating conflict with China … where Taiwan fits in … we’re already at war … why Eric Fry is watching Federal Law 117-167 … tonight’s 2024 AI Wars Summit with Eric
Last September, Air Force Secretary Frank Kendall warned that China was building up its military to prepare for a potential war with the U.S.
Of the many reasons why conflict is a possibility, “Taiwan” is high on the list.
In his New Year’s address several weeks ago, Chinese President Xi Jinping said that reunification with Taiwan is a certainty:
The reunification of the motherland is a historical inevitability. China will surely be reunified.
Although our government has recognized the People’s Republic of China (PRC) as the sole legal government of China, we’ve only “acknowledged” – not endorsed or supported – that China views itself as sovereign over Taiwan.
Meanwhile, we’ve had unofficial political relations with Taiwanese leaders for years, going so far as passing the Taiwan Relations Act, which “declares it to be the policy of the United States to preserve and promote extensive, close, and friendly commercial, cultural, and other relations between the people of the United States and the people of Taiwan.”
Why is Taiwan so important that it might result in a war?
There are a handful of reasons, but one of the biggest boils down to semiconductor chips.
For readers less familiar, semiconductors are the “computer brain” that powers our cutting-edge technologies, including artificial intelligence. Our modern world and all the tech gadgets you love and use every day would not exist without these “chips.”
But semiconductor chips aren’t just for consumer technology products. They are critical for national defense and our military’s most advanced weaponry.
From the Center for Strategic & International Studies:
All major U.S. defense systems and platforms rely on semiconductors for their performance.
Consequently, the erosion of U.S. capabilities in microelectronics is a direct threat to the United States’ ability to defend itself and its allies…
Ensuring U.S. leadership in semiconductor technology and securing the integrity of the value chains that design, manufacture, package, and distribute these chips are perhaps the preeminent economic and national security concerns of the modern era.
Circling back to Taiwan, where does it fit in?
Here’s The Economist with the answer:
They are the chips that power everything from mobile phones to electric cars—and they make up 15% of Taiwan’s GDP.
Taiwan produces over 60% of the world’s semiconductors and over 90% of the most advanced ones…
The semiconductor industry is called Taiwan’s “silicon shield”, giving the world a big reason to defend the island. Yet chips are the industry most affected by the split between America and China.
The bottom line: Taiwan is the single most important country in the world when it comes to tomorrow’s bleeding-edge technologies.
China is dead set on controlling it. And the U.S. is dead set on preventing that control.
Last fall, recognizing the risk of China’s semiconductor dominance, the Biden Administration issued widespread restrictions on selling chip products to Chinese companies
From The New York Times back in October:
The Biden administration on Friday announced sweeping new limits on the sale of semiconductor technology to China, a step aimed at crippling Beijing’s access to critical technologies that are needed for everything from supercomputing to guiding weapons.
The moves are the clearest sign yet that a dangerous standoff between the world’s two major superpowers is increasingly playing out in the technological sphere, with the United States trying to establish a stranglehold on advanced computing and semiconductor technology that is essential to China’s military and economic ambitions…
Companies will no longer be allowed to supply advanced computing chips, chip-making equipment and other products to China unless they receive a special license. Most of those licenses will be denied, though certain shipments to facilities operated by U.S. companies or allied countries will be evaluated case by case, a senior administration official said in a briefing Thursday.
The tensions have continued to escalate since then. Yesterday brought the latest saber-rattling from China.
From Bloomberg:
The European Union can avoid getting swept up into China’s response to US chip-equipment curbs, Beijing’s ambassador in The Hague said in an interview with a Dutch newspaper.
“If the Americans treat us in a hegemonic manner, we will of course respond,” said Tan Jian, Chinese ambassador to the Netherlands, in an interview with NRC published Sunday…
“The US has stretched its idea of security far, too far, even to matters that have nothing to do with military risks,” he said in the interview. “And they are putting pressure on their allies to do the same.”
To the Chinese ambassador’s point, earlier this month, after pressure from the Biden Administration, ASML cancelled shipments of some of its products to China.
The reality is that the U.S. and China are already in a war
While we hope it never turns into a military war, there’s no denying that our nations are battling for technological supremacy.
And at the heart of this conflict are AI-related semiconductor chips.
Here’s how our macro expert Eric Fry puts it:
The “AI Wars of 2024” marks a new era of technological competition among leading nations.
And this war focuses on developing advanced AI capabilities to achieve technological superiority. I believe those who harness its power will lead the world for the foreseeable future.
It’s a race – or a war – for world power.
History shows us that when global superpowers go head-to-head in these types of wars, enormous sums of money flood into certain, related corners of the market.
As we pointed out in yesterday’s Digest, the space race of the 1950s and 60s resulted in the modern-day equivalent of hundreds of billions of dollars pouring into the U.S. technology sector.
A similar tsunami of government dollars is swelling to a crest again today. And Eric has pinpointed perhaps the greatest influencer over where this tsunami breaks – Federal Law 117-167.
It has a critical deadline of one week from Thursday. Eric believes this presents a perfect opportunity to add select, top-tier AI/tech stocks to your portfolio that will be impacted by this legislation.
Tonight at 7 PM Eastern, Eric will explain all the moving parts in this fast-moving story during his 2024 AI Wars Summit
You’ll get the details of Federal Law 117-167… its impact on the AI/chip sector… why now is such an attractive moment for tech/AI investing… Eric’s #1 favorite AI stock to buy today (yours free, just for attending) … the name of an AI stock that you must avoid… even a little-known trading strategy that will give you the opportunity to double your money at least 10 different times in 2024 regardless of what happens in the stock market.
To join us, just click here once to instantly reserve your seat for this free event kicking off at 7 PM Eastern. In any case, keep your eyes on Taiwan. It has the potential to be a tinderbox issue here in 2024.
Here’s Eric to take us out:
And after waiting in the wings for years, AI has taken center stage and is stoking investors’ imaginations with visions of lavish stock market gains for years to come.
But there’s far more than dazzling profit potential looming just beneath the surface of this major, once-in-a-lifetime megatrend. And it has the power to draw a line between those who make their move now… and those who choose inaction.
That’s why tonight, I’m holding the 2024 AI Wars Summit.
During the event, I’ll detail why I believe Federal Law 117-167 could make or break investors’ financial success this year, and what you can do to position yourself accordingly.
Click here now to automatically secure your spot. I hope to see you there!
Have a good evening, Jeff Remsburg
