Investing in the Chip-Tech World
How much of the modern world is powered by chip-tech? From computers and TVs to cars and washing machines, chips (or semiconductor devices) enable almost all of our digital goods.
When the COVID-19 pandemic brought the regular world to a halt, it put a focus on our increasingly digital world and personal electronics. Even as consumption of major purchases like vehicles slowed down, more than 1 trillion chips were shipped globally in 2020.
As economies picked up and demand increased across all goods, a global semiconductor shortage started to impact the largest companies and economies in the world. All of a sudden, the global semiconductor field was front-and-center in the minds of politicians, executives, and investors.
This graphic from eToro breaks down the importance of the semiconductor industry, and where moves are being made in it.
Understanding the Semiconductor Supply Chain
At its core, a chip or integrated circuit (IC) is a small device that contains electronic circuits on a semiconducting material.
Only a few millimeters wide, these chips (usually constructed on silicon) have millions of transistors packed into a tiny device. When designed and utilized together, they power devices and allow them to operate.
It’s a complex device that requires an extremely robust manufacturing system, capable of making millions of precisely designed products. The modern semiconductor supply chain has two primary business models:
- Foundry model: Also known as fabless design, companies like NVidia and Qualcomm outsource production of chips to fabrication foundries like TSMC. They are then assembled and tested by specialty companies (OSATs) before being received by the end consumer.
- Integrated model: Integrated device manufacturers (IDMs) are companies like Intel that design, manufacture, and sell their own chips. This was the traditional model of chip development before foundries took off, and many IDMs now outsource part of their production to foundries and OSATs.
As demand for semiconductor devices grew, a massive and sophisticated global supply chain formed to get chips from concept to consumer.
|Market Share by Region||IDM||Fabless||Foundry||Wafer Production|
|U.S.||51%||65%||0%||13% (North America)|
|Rest of World||0%||0%||13%||9%|
Many of the pioneering companies in the field, like Taiwan’s TSMC and South Korea’s Samsung, became some of the world’s largest and most influential companies.
Anticipating the Chip-Tech Powered Future
The global economic impact of the semiconductor field is monumental, and its breadth is quickly becoming better understood.
In the U.S. alone in 2020, the semiconductor industry contributed an estimated $246.4 billion to the country’s GDP and almost 2 million jobs. When measuring direct, indirect, and value-added impacts of semiconductors, global GDP contribution estimates come in at $2.7 trillion.
But more than ever, recent disruptions to the supply chain have raised alarm bells and increased investment. Slashed forecasts from automakers and electronics manufacturers are increasing demand for chip production capacity, and chipmakers have already announced investments for new factories in 2021:
|Company||Announced Fab Investment (2021)||Fab Location|
|Intel||$20B||U.S. (Arizona x2)|
And those six factories are just the beginning. Over the next two years, 29 fabrication factories are projected to be constructed globally, with total investment surpassing $140 billion.
Policymakers are stepping in as well, as countries race to increase market share in case of further disruptions. In June, the U.S. Senate passed a $250 billion tech and manufacturing bill with $52 billion earmarked for the semiconductor field specifically.
The timing is imperative, as an even more chip-dependent future continues to unfold. Driven by advances in 5G, A.I. and IoT in everything from automotive and electronics manufacturing to smart factories, chip-tech and investments in it are becoming more important than ever.
How Can Investors Take Part?
eToro’s Chip-Tech CopyPortfolio* gives investors direct access to the semiconductor technology market.
Curated by experienced and proven investment teams, the thematic portfolio offers exposure to a broad range of chip-makers and innovators in production, with no management fees.
*Your capital is at risk.
CopyPortfolios is a portfolio management product, provided by eToro Europe Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
CopyPortfolios should not be considered as exchange traded funds, nor as hedge funds.
Every Cannabis Product In One Graphic
The cannabis industry is growing by billions every year. This graphic provides an overview of cannabis products and ranks their popularity.
Every Cannabis Product In One Graphic
There are few markets experiencing growth quite like cannabis, which in 2020 had an additional 7,000 products hit dispensary shelves compared to the year prior. However, for novice cannabis consumers and investors, the different products and their uses can be overwhelming.
This sponsored graphic by Tenacious Labs provides an overview of cannabis products, and is part of a multi-part series that covers different factors affecting the future of cannabis.
Let’s break down cannabis products on the market today.
First, is cannabis flower, which is the ingestible part of the cannabis plant and is the most popular way to consume. It is cultivated, harvested, dried, and cured, as part of the preparation process before making its way to the end consumer. Due to its popularity, it also represents the largest component of the U.S. legal market.
In 2021, some $10.9 billion in dried herb or “buds” were purchased. In addition, pre-rolls generated $2.2 billion, which are pre-rolled products prepared by dispensaries. The psychoactive effects from consuming flower are felt almost instantly, which remains a key appeal.
2. Cartridges, Concentrates, and Extracts
Cannabis concentrates are a growing category which have taken the market by storm in recent years. They come in various forms including raw concentrates, cartridges, and extracts. Preparing them involves removing impurities form the plant, leaving only the desired compounds such as cannabinoids and terpenes.
This highly concentrated form of cannabis results in THC levels of 80-90%, compared to the 10-20% range most commonly found in dry herb flower. Raw concentrates hit $2.2 billion in U.S. legal sales in 2021. And cartridges, which are products intended to be vaped and are typically paired with a battery accessory, were worth $5.1 billion.
The appeals associated with concentrates include a higher dose which results in stronger effects, plus a more discrete experience given they have little to no smell.
Next, are edibles, where the THC is metabolized by the liver and consumed through infused food and drinks. This leads to an different experience relative to inhaling. For example, the euphoric or psychoactive effects typically last much longer and can take 1-2 hours to kick in.
The legal U.S. edibles market is growing fast. It recorded revenues of $2.3 billion in 2021 but is expected to reach a value of $8.5 billion by 2027. These growth prospects have not gone unnoticed, in fact, the alcohol industry is betting big on cannabis. As of late, waves of investments and acquisitions are occurring targeting cannabis-infused beverages.
A key driver of growth comes from the health conscious consumer who may want to avoid the smoking process altogether.
4. Topicals and Others
Last are topicals and other products. Topicals are CBD-infused non-psychoactive products like lotions, balms, and oils. These are gaining notoriety for their wellness properties including the relief of pain, soreness, and inflammation. However, the market remains relatively modest, with a market value of $200 million. Furthermore, the topicals market appeals to those not interested in any psychoactive effects, and is particularly popular amongst women and pet owners.
Other products include papers, pipes, batteries, and all other accessories, which also provide notable revenues and opportunities.
Measuring Market Share of Cannabis Products
With all these products in mind, let’s take a look at market share. Although edibles, vapes, and concentrates have risen tremendously in value over the years, flower still remains number one, representing 43% of legal sales, followed by cartridges at 20.3% market share.
|Product||Market Share (%)||Market Value ($B)|
Seasonality also plays a role in cannabis consumption. Since dry flower tends to be consumed outdoors, the data shows that it loses market share during the cold winter months.
The Next Chapter
Cannabis products have come a long way from their early days when variety was considered a choice between an indica or sativa strain. As the industry develops and more money is injected into the space, we should see product innovation accelerate even further.
Visualizing the Evolution of the Global Meat Market
The global meat market will be worth $1.8 trillion by 2040, but how much of that will plant-based alternatives and cultured meat command?
The Evolution of the Global Meat Market
In the last decade, there has been an undeniable shift in consumers’ preferences when it comes to eating meat.
This is partly due to the wide availability of meat replacement options combined with growing awareness of their health benefits and lower impact on the environment compared to conventional meat.
In this infographic from CULT Food Science (CSE: CULT), we examine how meat consumption is expected to evolve over the next two decades. Let’s dive in.
Taking a Bite out of Meat’s Market Share
The COVID-19 pandemic triggered a massive turning point for the meat industry, and it will continue to evolve dramatically over the next 20 years. Taking inflation into account, the global meat market is expected to grow overall by roughly 3% by 2040 as a result of population growth.
However, as consumption shifts, conventional meat supply is expected to decline by more than 33% according to Kearney. These products will be replaced by innovative meat alternatives, some of which have yet to hit the mass market.
- Novel vegan meat replacement: These are meat alternatives products made from plants that resemble the taste and texture of meat.
- Cultured meat: Also referred to as clean, cultivated, or lab grown meats, cultured meat is a genuine meat product that is produced by cultivating animal cells in a controlled environment without the need to harm animals.
Aside from new meat replacements, biotech will also transform adjacent industries like dairy, eggs, and fish.
The Future of Food?
Meat replacements and cultured meat could overtake the conventional meat market, with cultured meats reigning supreme overall with a 41% annual growth rate (CAGR) between 2025 and 2040.
New technologies for cultivating non-animal based protein will provide one-third of the global meat supply due to an increase in commercial competitiveness and consumers becoming more accepting of these kinds of products.
Meanwhile, conventional meat will make up just 40% of all global meat supply by 2040, compared to 90% in 2025. For this very reason, conventional meat producers are investing a significant amount of capital in meat alternative companies so they can avoid disruption.
Invest in the Revolution
The changing tides in the industry have sparked a variety of undeniable opportunities:
- Regulatory approvals: Singapore is the first country to legalize cultured meat for consumers, and many more will no doubt follow behind in the coming years.
- Lower production costs: Cultured meat and dairy have made quantum leaps in reducing production costs.
- Changing consumer ethics: Consumers are demanding a more ethical approach to factory farming and cultured and plant-based alternative products are becoming a more accepted solution.
CULT Food Science (CSE: CULT) is a cutting edge investment platform advancing the future of food. The first-of-its-kind in North America, CULT aims to provide unprecedented exposure to the most innovative start-up, private or early stage lab grown food companies around the world.
Will you be part of the revolution?
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