Technology
Is Big Tech In Another Bubble?
Is Big Tech In Another Bubble?
“It’s different this time.”
Right now all the talk is about big tech IPOs – particularly with Alibaba completing the biggest IPO ever and companies like Uber moving towards $40 billion valuations.
Warren Buffett says that in business, the rear-view mirror is always clearer than the windshield. To this point, we would have to agree: even though it may feel like this time it is different, there may be something unexpected hidden that clouds our collective judgement. We may have another tech bubble on our hands.
Detractors will say that companies in the Dotcom bust spent too much money too fast, and that everything was speculative. That, in today’s market, companies are making real ground on revenue and earnings growth, and companies are more scalable than ever.
However, we would point out that it is many of the things that make startups scalable that also could lead to the demise of big tech. Technology moves so fast that all it takes is an idea to disrupt their business model. Yahoo! purchased Geocities in January 1999 for $3.57 billion and now Geocities does not exist. Why? Because the business model got outdated very fast – platforms such as WordPress allowed people to build sites without the embedded advertising and hosting got way cheaper. This all happened over the course of a few years, and it was a game changer.
Do we expect that companies like Facebook, Snapchat, Uber, Lyft, Amazon, and Alibaba to be around in the same capacity in 10 years? What will their maturity look like, especially as technology continues to change? How will this affect valuations for more speculative IPOs?
Original graphic from: WhoIsHostingThis.com
Technology
All of the Grants Given by the U.S. CHIPS Act
Intel, TSMC, and more have received billions in subsidies from the U.S. CHIPS Act in 2024.
All of the Grants Given by the U.S. CHIPS Act
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
This visualization shows which companies are receiving grants from the U.S. CHIPS Act, as of April 25, 2024. The CHIPS Act is a federal statute signed into law by President Joe Biden that authorizes $280 billion in new funding to boost domestic research and manufacturing of semiconductors.
The grant amounts visualized in this graphic are intended to accelerate the production of semiconductor fabrication plants (fabs) across the United States.
Data and Company Highlights
The figures we used to create this graphic were collected from a variety of public news sources. The Semiconductor Industry Association (SIA) also maintains a tracker for CHIPS Act recipients, though at the time of writing it does not have the latest details for Micron.
| Company | Federal Grant Amount | Anticipated Investment From Company |
|---|---|---|
| 🇺🇸 Intel | $8,500,000,000 | $100,000,000,000 |
| 🇹🇼 TSMC | $6,600,000,000 | $65,000,000,000 |
| 🇰🇷 Samsung | $6,400,000,000 | $45,000,000,000 |
| 🇺🇸 Micron | $6,100,000,000 | $50,000,000,000 |
| 🇺🇸 GlobalFoundries | $1,500,000,000 | $12,000,000,000 |
| 🇺🇸 Microchip | $162,000,000 | N/A |
| 🇬🇧 BAE Systems | $35,000,000 | N/A |
BAE Systems was not included in the graphic due to size limitations
Intel’s Massive Plans
Intel is receiving the largest share of the pie, with $8.5 billion in grants (plus an additional $11 billion in government loans). This grant accounts for 22% of the CHIPS Act’s total subsidies for chip production.
From Intel’s side, the company is expected to invest $100 billion to construct new fabs in Arizona and Ohio, while modernizing and/or expanding existing fabs in Oregon and New Mexico. Intel could also claim another $25 billion in credits through the U.S. Treasury Department’s Investment Tax Credit.
TSMC Expands its U.S. Presence
TSMC, the world’s largest semiconductor foundry company, is receiving a hefty $6.6 billion to construct a new chip plant with three fabs in Arizona. The Taiwanese chipmaker is expected to invest $65 billion into the project.
The plant’s first fab will be up and running in the first half of 2025, leveraging 4 nm (nanometer) technology. According to TrendForce, the other fabs will produce chips on more advanced 3 nm and 2 nm processes.
The Latest Grant Goes to Micron
Micron, the only U.S.-based manufacturer of memory chips, is set to receive $6.1 billion in grants to support its plans of investing $50 billion through 2030. This investment will be used to construct new fabs in Idaho and New York.
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