He better be able to back it up.
Biden just announced a complete ban on selling advanced computer chips and manufacturing equipment to China.
It’s a major blow to the Chinese semiconductor industry and a minor blow to ours.
The U.S. doesn't produce many chips of its own (yet), but it remains one of only a handful of countries capable of building the machines that build advanced chips.
With the ban in place, China's impressive expansion has been delayed indefinitely.
Biden’s master plan is simple: Boost some of the critical industries that have been neglected over the past few decades.
But this is a drastic move. Biden instantly slashed billions in revenue without a second thought.
His plan is to build up a strong domestic industry. Based on his ambitious plans, we’re looking at a 1,000% scale-up or more.
It’s going to cause some major growing pains, but I think the U.S. is ready.
Billions of dollars in funding is making its long journey through the American bureaucracy as we speak.
It could be months or years before decisions are made. Then actually spending that money could take even longer.
Until then, the fallout is spreading to both sides. China is losing access to priceless hardware, while the U.S. is losing a customer with a constantly growing appetite.
As of right now, semiconductor manufacturing facilities, or “fabs,” are few and far between in the U.S. Smaller businesses currently dominate the industry.
That’s all about to change. Those so-called smaller players could get enough of a boost to play in the big leagues.
Enough money is being poured into the industry to prompt massive development. And not all of it is coming from Biden.
Now that U.S. businesses are practically being forced to choose domestic sources, we’re looking at a government-sponsored racket.
Every Dollar Sent to China Is Being Dragged Back Home
Some claim this type of market meddling is unethical, but it’s a win-win from my perspective.
China wields a dangerous amount of power thanks to its sheer economic dominance in some of the world’s most important industries.
And let’s be honest — most of that dominance was gained by exploiting and abusing workers.
Bringing back a strong U.S. fab network would ensure none of that labor is done by underpaid workers in dangerous conditions.
China is also notorious for stealing intellectual property from the rest of the world. Since computing power is now a matter of national security, selling top-tier chips is like handing over nuclear weapons.
Biden’s decision to cut China off is as ambitious as anything he’s planned yet. But if it’s going to work, there are a few major steps he needs to take.
The U.S. semiconductor industry is looking at a major surge in the next decade. That means more fabs, more employees, and a massive payout for investors.
But one raw material shortage could derail Biden’s entire plan.
It’s just like the inevitable lithium crunch. We’re not producing nearly enough material to support such a massive growth spurt.
If the U.S. semiconductor industry is going to survive and thrive, it’s going to need to lock down the biggest supply we’ve ever seen.
There’s Just One Problem…
And its name is Putin.
Thanks to the dictator’s “special military operation,” Ukraine isn’t producing its usual share of this valuable element.
Before the invasion, Ukraine was responsible for more than 50% of the world’s supply.
Now it’s responsible for exactly 0%.
Without this stuff, not a single chip on Earth could be made. It’s used to build the high-precision lasers that etch nanometer-sized pathways into semiconductor wafers.
And it’s going to be one of the biggest supply crunches of the decade if Biden has his way.
It’s about to become the most valuable substance on the planet. Without it, the computing industry itself will grind to a halt.
I’m not talking about a simple slowdown or a shortage.
Without this material, global production of computer chips stops today.
Once the media wake up and realize it, it will be the trendiest investment plan of the year.
You can thank me later.
