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Daily Archives: July 17, 2022

Chart: Food and Beverage Prices Are Driving Inflation in the U.S.

Source : Bloomberg

Humour: News in Cartoons

Infographic: Money, Not COVID Is the Biggest Travel Hurdle This Summer

Source : Freight Waves

It’s the Best and Worst of Times for Semiconductor Supply Chains

Nicolás Rivero wrote . . . . . . . . .

Chips are in short supply. Chips are over-supplied. Chip manufacturing has expanded too fast and surpassed demand, but also can’t scale up fast enough to meet demand. The chip business is booming. Chip stocks are falling.

It’s a confusing time to figure out what’s going on in the semiconductor industry.

To understand the contradictions in semiconductor supply chains right now, it’s important to keep in mind that there are many types of chips, built in very different ways. Older generations of chips used to control basic mechanical functions in cars and dishwashers are built using equipment that has been around since the 2000s, while the cutting-edge chips that render graphics and run AI models in the latest smartphones and computers require ultra-precise machinery.

The state of the semiconductor sector is so muddled because the production of some types of chips has already ramped up enough to meet demand, while manufacturing for other types of chips is still catching up. Overall, though, these conflicting storylines are a sign that the chip shortage is finally starting to ease.

Semiconductor supply is rising, and demand is easing

The overall production of semiconductors is rising around the world. TSMC, the world’s biggest chipmaker, increased its planned investment in new plants and equipment from $30 billion in 2021 to $44 billion in 2022. China has invested about $50 billion since 2014 to support domestic chip production, while US lawmakers are (maybe) on the verge of doling out $52 billion in subsidies and incentives for new semiconductor plants in the US.

Meanwhile, South Korea’s Ministry of Economy and Finance reports that Korean chipmakers are sitting on a rapidly growing stockpile of unsold chips. The country, which is the world’s biggest producer of memory chips for electronics like laptops and smartphones, hasn’t seen its semiconductor inventory rise this fast since 2018.

Plenty of chips for smartphones and laptops, but not for cars

Chipmaker Micron Technologies warned investors on June 30 about a looming glut of high-tech memory chips used in smartphones and laptops. Consumer demand for those devices unexpectedly dropped thanks to rising inflation, sagging consumer spending in China, and fears of an impending recession, according to CEO Sanjay Mehrotra. “Given the change in market conditions, we are taking immediate action to reduce our supply growth trajectory,” he said.

Micron Technologies predicted that its smartphone division would ship about 130 million fewer chips than expected this year and its PC division would cut sales by about 30 million chips—a 10% drop in both categories. The downturn will last at least half a year, chief business officer Sumit Sadana predicted, unless a recession hits and brings demand down further.

Meanwhile, automakers are complaining they still can’t find enough low-tech chips to keep their assembly lines running at full capacity. GM, Toyota, and Honda each told investors their sales had slumped in the most recent quarter because of the ongoing chip shortage. Collectively, automakers will build an estimated 3 million fewer cars this year for lack of semiconductors.

Semiconductor stocks are feeling recession fears

Investors are watching semiconductor supply rise while contemplating the possibility that inflation or a recession will cause a drop in consumer demand for everything that uses chips, including electronics, appliances, and even cars. As a result, chip stocks have been plummeting, even though semiconductor sales are still historically high and chipmakers are recording record revenues. The Philadelphia Stock Exchange Semiconductor Index, which tracks big chip manufacturers, has fallen nearly 40% this year, after doubling in value during the pandemic.


Source : QUARTZ

Chart: Market Share of Internet Browser

Source : Chartr

How Society Thinks About Risk

From pandemics to nuclear energy – the world is full of risks. Psychologists at the University of Basel have developed a new method of determining how risk is perceived within a society.

Many of our everyday activities involve a certain degree of risk – whether to our work, finances or health. But how is risk perceived within a society and how do individuals think about risk?

This was what Dr. Dirk Wulff and Professor Rui Mata, researchers in the Faculty of Psychology at the University of Basel, set out to discover. “There is a lot of academic interest in the phenomenon of risk,” explains Dirk Wulff. “But disciplines such as psychology, sociology and economics define it in different ways.”

According to Wulff, little attention has been paid until now to the fact that the meaning of risk can differ from individual to individual depending on goals and life experience. He feels it is important to understand how different people think about risk in order, for example, to gauge attitudes to new technologies or societal challenges.

Risk links polar ends of the sentiment spectrum

To investigate this, the researchers have developed a new method based on word associations and an algorithmic process that maps the representation of risk for different groups and individuals. The researchers adopted a new approach, employing a snowball word association method. Participants were asked to name five things they associated with the term risk and then, in turn, five things they associated with these associations. Using this method, researchers surveyed a nationally representative sample of 1205 people, with equal representation of men and women and different age ranges.

An algorithm was used to generate a semantic network of risk from the 36,100 associations. It identified the following components: threat, fortune, investment, activity and analysis. The semantic cluster “threat” (danger, accident, loss, etc.) was the component most prominently associated with risk, closely followed by “fortune” (profit, game, adventure). “Up until now, studies have mostly focused on the negative components of risk and ignored the fact that it can also have positive associations,” Wulff comments.

The method is designed to map both individual and group-specific differences in risk perception. The psychologists investigated the differences between men and women and between different age groups. Overall, women and men and people of different ages appeared to share similar thoughts about risk. Nevertheless, there were some differences: a higher proportion of older people than younger people and a higher proportion of women than men associated risk more closely with threat and less with fortune.

Small differences between languages

The researchers also posed the question: Do people from different language regions think about risk in a similar way? To investigate this, they compared the semantic network of risk that emerged from the German survey group with those that resulted in two other languages – Dutch and English. There were some small differences in the frequency of associations. For example, in Dutch the term risk tended to be more closely associated with threat and in English more with fortune and finance. Overall, however, the results indicate that there are some universal correlations in risk representation that transcend language boundaries.

“Our study lays new foundations for examining the question of how people think about risk,” says Wulff. “It could play an important role in helping to provide a better understanding of how different social groups interpret risk, enabling risk communication strategies to be improved to combat social polarization.”


Source: University of Basel