TSMC is building chip plants in Arizona.

Alright so today we’ve got:

• US returns to age-old industrial policy.

• Tech executives are under the gun to implement AI.

• Ford and Tesla announce an EV charging partnership.

  Let’s do a scan.

The Big Picture

Experts say that the US has returned to what is called the industrial policy with the Chips Act. Wait, what’s industrial policy and what is the chips act? Industrial policy in the US is when the government has stepped in to incentivize domestic growth in certain business sectors. Chips Act was passed last year, with a rare bipartisan agreement as US now treats chip production as a national security threat. The Act includes manufacturing investments at $53 billion for chip producers to setup shops in US.

Post lockdowns in 2020, there were chip shortages which affected automakers resulting in global automotive production reduction by 23%. TSMC, Intel, and Samsung Electronics are expected to be top candidates for receiving the benefits. TSMC has since announced $40 billion of investments with 2 plants in Arizona but wants relaxation in the US proposal which limits expansion of their plants in China and has additional restrictions on technology sharing. US share of global chip production has reduced from 37% in 1990 to 12% in 2020. This policy attempts to reverse that citing chips as key national security infrastructure.

Sector Sweep

Tech

• TikTok is testing it’s own chatbot in the Phillipines market called Tako.

• Wendy’s is using Google’s natural language software for taking customer orders. The company said they had been working with Google on data analytics, machine learning and cloud tools from 2021.

• Corporate technology executives are under pressure to deliver on AI. In a recent KPMG survey, 60% said they would plan to execute AI over the next 2 years while 6% said they have a team in place right now.

• Consulting firm, Pricewaterhousecoopers is planning to invest $1 billion in AI technology with the help of Open AI’s GPT-4 model. This would include recruiting AI workers, training staff on AI, helping them build tools. One of the key goals would be towards advising other companies how to implement generative AI.

Automotive

• Ford and Tesla announced a partnership to share EV charging on a Twitter Spaces conversation between CEOs Jim Farley and Elon Musk. Ford also plans to adopt Tesla’s charging port in the future.

• Tesla Model Y became the first EV vehicle to become the world’s best selling car in Q1. Overtaking Toyota Corrola and Toyota RAV4, despite twice the sticker price, the global Q1 sales for Model Y came in at 267,200 units.

Health

• Hosptals, nursing homes are increasingly concerned with the unproductive debt limit discussions. Goverment payments to Medicaid, Medicare and certain Affordable Care Act could be paused with priority to other programs.

• Although investments in startups is slowing, venture fund investment in healthcare stays resilient. Investors believe that innovation in life sciences would pay off as they put in $6.8 billion in healthcare this year’s Q1.

Retail

• Net income at Dollar Tree dropped by 44% this year. Reduced consumer spending as well as theft is what is supposed to have affected the company’s earnings.

Food

• Farm startups like AppHarvest and Local Bounti are facing headwinds like tight financing, and pests. Although their farming is within closed walls, the companies are still vulnerable to pests. Their shares have fallen by 95% over the last year.

That’s all for today folks. Do keep a lookout for our weekly email about stock deep dives and personal finance strategies this Saturday.

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