2022 Was All about Energy, 2023 Is All about Chips

The second largest application for helium, representing an estimated 19% of demand, is semiconductor chip manufacturing. Helium is used in wafer fabs as a carrier gas in deposition processes, to leak test vacuum systems, as a component of specialty gas blends, for load-lock cooling and for backside wafer cooling.

=====================================================================================================

Last year, nothing was as important as the growing energy crisis.

Because while the financial world was fixated on interest rates and inflation, energy was by far the biggest underlying issue. The removal of Russian fuel from global trade put immense pressure on every nation's ability to generate electricity.

After all, you can't just cut 20% of the global fuel supply and expect prices to stay calm...

The silver lining, of course, is that this furthered the transition to new and alternative energy sources. Renewable power, in particular, was a big winner thanks to turbulence amidst fossil fuel markets.

That’s not to say that fossil fuels will disappear anytime soon.

As we're already seeing, developing nations with big growth aspirations, like India, are gobbling up plenty of fossil fuels like coal. Because while renewables are slowly becoming cheaper and more abundant, they still can't meet the entire world's energy needs just yet.

That’s why developed economies, like the US, will need to lead the way. And as the following charts from Bloomberg show, they are making headway:

As you can see, US reliance on coal and petroleum is easing. Granted, natural gas is still the most important fuel for power generation in the States and is still growing in demand. But, it's not growing as quickly as the output from wind, solar, biomass, and other renewable sources.

That’s good news for the environmentalists, and it's good news for our energy investments.

But as much as we could keep talking about energy — and don't get us wrong, it's a story that isn't going away anytime soon — there is a bigger trend brewing that we can't ignore.

See, we've been scouring markets for insights into what really matters to businesses and the economy right now. And one thing in particular, as a report from Hubs reveals, is front of mind for many. It seems the biggest supply and demand issue right now stems from a severe lack of semiconductors...

That’s why Biden's government seems so insistent on ensuring there are more chips for the US and less for any potential enemies. After all, it is hard to ignore the fact that China's desire to control Taiwan could involve the seizure of the world's most important chipmaker: TSMC.

The point is that semiconductors have quickly become the key commodity of our current era. Like wheat, cotton, oil, and gas before it, control over the production and distribution of this commodity will likely lead to the rise and fall of nations.

We really aren't exaggerating when we say that.

As this excerpt from a Washington Post opinion piece bluntly puts it:

‘If China did achieve supremacy in advanced chip manufacturing, military and economic supremacy could easily follow. That kind of power, wielded by a regime defined by its dystopian surveillance systems and the violent repression of a cultural minority, is a frightening specter.

‘But we’re far from that reality.

‘China spends as much money importing chips as it does oil. China may be able to outcompete the United States when it comes to building the most ships or the most drones — but this country [the US] can probably beat it in building the best systems to control them.

‘That’s the edge we must maintain.’

And it is that edge that could make early investors in this trend a fortune in our view, which is precisely why we’ll have more to share with you on this developing story in the coming weeks.

After all, this is far too big a trend to cover in a simple weekly update. We simply wanted to start laying the groundwork for you now because there is so much to discuss and delve into.

It is one hell of a rabbit hole; we can tell you that for sure.