Things I (Don’t) Worry About: Collapse of the Semiconductor Industry

One of the most asked questions I receive is “what keeps you up at night?” So, I figured I would turn that question into a series called “Things I (Don’t) Worry About” where I’ll discuss all the things that have me tossing and turning and what helps me sleep like a rock. First on the docket is the semiconductor industry.

I’ve done a number of videos on semiconductors in recent times, so my concerns shouldn’t come as too big of a surprise…but let’s dive right in.

The production of semiconductors can be equated to the personification of globalization. These dinky little chips have one of the most complex supply chains in the world; think dozens of highly specialized companies helping chips move along the value add chain until they are finally ready to be jammed into your smartphone.

With that in mind, you can start to picture how little it would take to disrupt the entire semiconductor industry. This makes the competition between industry leaders Intel and TSMC that much more important, as it will help to expand operational capabilities and increase resiliency in the supply chain.

The bottom line is that even if China does not decide to invade Taiwan, we are already looking at a scary future for all that tech we know and love.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Quantum Computing and the Future of Technology

We’ve all been hearing sci-fi tales of quantum computing for decades now, but what will its impact actually look like and how soon can we expect it?

When we think of traditional semiconductor tech, there are physical size constraints which will eventually cause a plateau in processing capacity. Quantum computing operates at the atomic level and a single qubit can *theoretically hold more data than the largest supercomputer.

“Theoretically” is the key word in that sentence. While there are advanced quantum computers, practical applications are still limited by our understanding and command of quantum mechanics, intricate assembly, and the hefty maintenance required.

Scaling up quantum computing will take time, but the impact of this technology could revolutionize data processing and materials science.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

The Bleeding Edge of Semiconductors: A Tale of Three Companies

The semiconductor industry is one of ever-growing importance and its leaders—Intel and TSMC—are now fighting to be the first to bring the next generation of advanced chips to market.

Since its founding in the late 60s, Intel has been on the leading-edge of semiconductor manufacturing. For decades it pushed new technologies forward, vastly influencing technology developments across myriad sectors. Intel’s reign of supremacy ended, however, when in 2016 it misjudged the readiness of a novel lithography technology—extreme ultra-violet (EUV).

When Intel hesitated, Taiwan Semiconductor Manufacturing Company (TSMC) took the EUV plunge, and it paid off. TSMC is now the leading producer of sub-7nm chips, having utilized EUV lithography technology on a mass scale since 2019. Intel, on the other hand, just reached that point last year. Intel is hungry though, and has ambitious plans for the near-future, including securing the next generation of lithography machines (high-NA EUV) before any of its competitors.

The importance of the semiconductor industry will continue to grow as technology evolves and the green transition is carried out. Adding additional layers of security, stability, and cushion to the manufacturing process will be essential as geopolitical tensions rise and the world deglobalizes.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

TranscripT

Good morning from a frigid Colorado. It’s a balmy zero degrees this morning. And today, I want to tell you a tale of three companies and the state of the semiconductor industry from a technological and production point of view. Now, if you go back to the world before 2017, the technology of the day was something called deep ultraviolet, which was basically a way of producing microchips and intel.

The American technological giant was the world leader by pretty much any measure, and they had gotten a little cocky and they’d gotten a little bit lazy. So they would design chips two or three or four models out, but would only produce the next one up because they were so far ahead of everybody else. They didn’t feel the need to jump steps.

So they would use the EUV and they would make a chip that was marginally better than the one before. And then at the end of the year, no one was had caught up. So they do it again and again and again. And they do this for like 15 years. I mean, they’re very good at what they do, but they could have pushed the technological envelope a lot more if had they chosen to.

In part, that was because of the nature of the technology. The problem with it is you have to kind of make micro adjustments and physically adjust the equipment for each type of chip. And you have to do that manually and physically. And so with every design, you had to do it all over and with every machine in a fabrication facility, you would have to do it independently.

So no new chips from different machines are going to be quite exactly alike. And it generated a relatively higher loss rate from the final semiconductors than what we have today. And so generated a little bit more waste. But again, they were the industry leader. No one was close. Well, they were always had their eye on the future, however.

And so they invested in new technologies that would take them beyond the EUV, one of which is EUV, extreme ultraviolet. And the company that developed that technology is ASML out of the Netherlands. And back in 2016, ASML thought the stuff was ready to go. So they’re providing demonstrations for Intel, showing them how this technology is better. You can not only get more nodes on a chip and get to smaller and smaller nanometers, but it’s all digital.

So you kind of type in what you want to the machine over the course of a few days to a few weeks, and then the machine doesn’t actually have to be physically manipulated in the way that DV did. Now what that would mean is you’d have a higher success rate and more efficiency. But back in 2016, Intel was like, I don’t think this technology is quite right and we’re the industry leader.

We’re going to give it a few more years. Well, ASML not very happy with that. Marketed the technology to everybody else and a company decided to take the plunge. That company is TSMC out of Taiwan. And when we get to 2017, TSMC suddenly hits the ball out of the park and proves that EUV is ready for mass application and over the next couple of years very rapidly overtakes Intel because they have a shorter turnaround time for their chips and they can make chips with smaller nanometer sections.

It isn’t until 2022 or 2023 that Intel finally makes its first extreme ultraviolet chips. So TSMC in Taiwan has been the industry leader now for several years now. We’ve had a kind of a reverse in the roles. Now ASML, the Dutch have another another new technology called high numerical aperture, whose physics I’m not even to pretend to understand.

And they have marketed again. And this time Intel is the one that’s behind. And they’re kind of desperate and kind of hungry. And TSMC is the one that’s resting on their laurels. So the first delivery of those new machines, the high end chips, went to Intel in the second week of January of this year. And Intel expects two things.

Number one, they plan to overtake TSMC using the EUV technology in 2024, hoping to get down to two nanometers. Right now, the industry lead is at about three nanometers and that’s a TSMC product. And then next year they hope to leapfrog even further, provided that these new high end machines work, which will, you know, we’ll find out pretty soon.

Anyway. That’s where we are right now. In terms of the overall geopolitics, it’s pretty straightforward. Right now, 90% of all I hand chips are made by one company, TSMC, in one city in Taiwan, it’s a high concentration. But if Intel working with ASML can pull this off, all of a sudden we will have facilities in the United States that are working on the higher end stuff with some of the first facilities that are going be going online outside of Phenix and Columbus, Ohio.

So stay tuned because the geography of these chips is about to evolve pretty significantly if high works. And if not, we’re still stuck with Taiwan, it could be worse.

How To Do Greentech Well: The SunZia Wind Farm

The largest Greentech power generation system in the hemisphere is under construction in New Mexico. SunZia has raised $11 billion for this project and aims to generate 3.5 gigawatts of wind power for the NM, AZ, and CA energy markets.

This is a massive step for the green transition, and it will play a pivotal role in bolstering green power generation within the US. You might be wondering why they chose wind power; well, it’s more cost-effective than solar, more reliable, and tech advances have enabled us to tap into more stable and powerful currents.

The transmission component of this project is important to; it shows that the energy can be generated and captured in regions with low demand and moved across state lines into areas with high demand. We’ll have to wait and see how this will work in practice, but this is looking like a ‘win’ as of now.

The SunZia project is just the tip of the spear as we’ll continue to see more of these projects pop-up soon, but this is a great start for the green transition. The first energy from this plant isn’t expected to be generated until 2026, so don’t pop the bubbly quite yet.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

TranscripT

Hey, everybody. Peter Zeihan here coming to you from Colorado. Now, I get a lot of flak for never having good news. So I figured, you know, here, here’s something fantastic that’s happened over the holidays. There’s an organization called Sun Zia, which is a company that produces and transmits electricity that has closed funding and started construction on what will be the largest green tech power generation system in the hemisphere, 3.5 gigawatts, which in electrical terms is huge.

Why does this matter? A bunch of reasons. Number one, $11 billion is how much money they had to raise. Raising money these days is difficult because the baby boomers are majority retired. All of their capital, all their savings has been put into relatively static things like cash and T-bills. And so if you’re trying to raise funding for anything, it’s gotten a lot more expensive.

In addition, unlike if you were to build, say, a natural gas power plant or anything that’s fossil fuel based with those systems, fossil fuels, only about one fifth the cost of your of your full lifecycle cost for your facility has to be raised at the front end to pay for construction. But most of it is instead raised from fees when you’re generating the power as you go.

Instead with green tech, two thirds of the cost is upfront because there’s no fuel costs, but the upfront cost is much higher. So you’re talking about two thirds of the total value of the entire lifecycle of the project has to be raised before day one. And so doing that at all is difficult. Now the capital costs of roughly tripled, but Sunsilk was able to pull it off.

So our number one big achievement for the capital cycle. Number two, the size 3.5 gigawatts, biggest in the hemisphere. If we are going to do the green transition, we need to increase the amount of power generated in the country by at least 50%. This is a nice little bite taken out of that. But from my point of view, if we’re going to deal with the post China world and expand the industrial plant to manufacture everything we need, we need to expand it by another 50%.

So regardless, if you’re a green, if you’re pro-development or both, this takes us a significant step forward. We still need another 500 of these steps, but you know, we’re going in the right direction. Okay. Number three, what it is, it’s wind and it’s in New Mexico. So wind, as a rule, is much more cost effective. And solar in large part because every time the sun goes down, all those solar panels just become paperweights, whereas the wind blows at night.

In addition, while we have had incremental improvements in the capacity of photovoltaic cells over the last 15 years, it’s nothing compared to what has gone on with wind. It used to be that wind turbines were 100 feet tall.

This year we’re going to have prototypes for ones that are thousand meters, 1000 feet, 300 feet tall. You know, just massive, massive structures. And they generate more than an order of magnitude more power than the old ones do. And more importantly than their size is their height, because they’re reaching wind currents that are far more stable and far stronger.

And so we’re seeing places in Texas, in Iowa, and now in New Mexico that are using some of these taller turbines to not just generate intermittent power, but baseload power. And that’s one of the big problems with green tech. If the wind stops or the sun goes down, you’re kind of out of luck and you have to switch to a more conventional system or a battery system, which is much more expensive.

But if you are tapping a wind current, that never stops, you can use it for baseload and avoid both of those problems. And that’s part of the goal here for the Sun Zia project. But fourth, and I think most importantly is that unlike almost every green tech project that we have done in the United States to this point, a huge portion of his own solar project is transmission.

They realize that there aren’t a lot of people in New Mexico and Albuquerque can only suck up so much power. And so this project includes massive transmission lines that go into Arizona and link into the network that goes into Los Angeles. And of the three and a half gigawatts of power generation that they’re anticipating all but a half a gigawatt of it is for export to the Arizona and California markets.

And the fact that this taps into the L.A. market is beyond awesome. I don’t know how many of you have heard of California, but doing business there is almost impossible. Electricity demand is hardly encouraged, but in many ways, electricity generation is flat out illegal. Very heavy regulatory environment. The state is also very power hungry and they import about a third of their electricity because they’ve made it very difficult for producers to operate in their home state.

Arizona is by far the single largest supplier they have. And every night when the sun goes down and all those panels of Californians built stop working, ten gigawatts of fossil fuel power comes from Arizona across the border, flooding into the L.A. zone. The Sun Zia project will now be able to put roughly three gigawatts of power into that network.

It doesn’t solve it at a stroke, but it’s a much more sustainable program from an environmental point of view than anything that we have right now. So, you know, a great step forward. One of the big things that we forget about in the wind and solar is not just the intermittency. It’s just that not everybody is places sunny and not every place is windy and most people don’t live in those locations.

So our best wind locations are the Great Plains from eastern Montana, North Dakota, going down to the panhandle of Texas and west Texas. Our best solar zone is from southern California. Go into west Texas as well. New Mexico is on the edge of that great Plains region, great wind potential, great solar potential. But there aren’t a lot of people in that entire area.

You got a wire somewhere. And this is one of those projects that has managed to work out the details of crossing state boundaries, two of them, and getting power to where people actually live in Phenix and Los Angeles. So we need many, many, many, many, many, many, many, many, many more of these for this to go. But the fact that we have our first really big one that’s already started construction.

First power is expected in 2026. It’s a great start.

 

Why I’m Done With Twitter (or ‘X’ or whatever you call it)

What was once a platform where you could access open-source information that was reliable and free…has now been laid to rest by Elon Musk. Yes, I’m talking about that little blue bird we’ve known and loved for years.

I’m not one for beating dead horses, but at the very least, I’d like to explain my reasoning. #1 is misinformation: the lax content moderation policies have opened the floodgates of disinformation. #2 is a lack of meaningful interactions: what was once a breeding ground for stimulating conversations has become a vat of unintelligible sludge. #3 is Elon Musk: I simply can’t support anything that man does anymore.

While I’m saying goodbye to Twitter (X) for personal use, we’ll still distribute my videos there. However, the best place to get my updates is via the newsletter or my YouTube channel (both of which are linked below)…

Join My newsletter

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

TranscripT

Hey everybody. Peter Zeihan here coming to you from New York. I know normally people don’t like it when I do a video from my hotel room, but I’ve got a view of the cathedral right here, so I figured maybe we’d make an exception the day I’d stay here and talk about distribution channels and specifically why I’m leaving Twitter completely

So three things. First of all, I used to love Twitter because it provided me access to firsthand information in places that the mainstream media, for whatever reason, couldn’t or wouldn’t go. The best example I can give you is the Ukraine war. As technology has become more important in global media, the number of people who were employed in that space has dropped.

And so there’s a lot fewer eyes and fingers touching any particular story that has one of the reasons why we have a lot more opinion in our news than we used to. And a lot less fact checkers. Your editors, fewer people see anything. And so when something new starts up, especially when there’s something new, is kind of neo violent and dangerous, there just aren’t enough people within the existing media landscape to redirect in this case to either side of the front line in Ukraine.

And so Twitter was where individuals who had personal contacts in the area could provide information. And sure, there’s a lot to vet, but the point is, it was a source of information. Now, when the Ukraine war began, the old Twitter management went through and purged Russian bots from the system, which all of a sudden opened up Twitter to be glorious in any number of venues because it was no longer being spammed by disinformation.

It was not to the same scale. But then Elon Musk came in and as part of his commitment to free speech, he destroyed all content moderation and allowed encouraged the bots to come back in force. And so now I would say on my feed, my curated feed, it’s about 90, 95% misinformation. And so I’ve gone from spending an hour to thumbing through Twitter, getting a feel of what’s going on in the world, to spending 12 hours and having no idea what’s going on because it’s just crap.

So I’ve stopped. The second big issue has to do with interaction. Now, part of the thing that was wonderful about old Twitter is the people who were providing that firsthand information were accessible. And, you know, not to put too much of shine on it, but when you’ve got 100,000 or more followers, those people tend to pay attention if you ask them a question.

So for me, it became free information gathering and I could engage with conversations with potential sources as well as just normal viewers about what was going on. And it gave me ideas of what to do, for example, for these videos, because you guys could interact with me, you could access me, and vice versa. Well, that stopped basically the things that are in the for you category, a mention by you has disappeared from my feed.

And over the last six weeks I have had seven interactions with all of you combined. Now, if you want to spare me with porn bot that gets through and if you want to launch a crypto scheme and see if I’ll fall for it, that gets through. And if it’s a porn themed crypto scheme that absolutely gets through. But it’s gone from being one of the most rewarding parts of my job to just complete a time suck and a waste of everything that I do.

So that’s gone. And then there’s third is Elon Musk himself. What a wanker. It was one thing when he would blindly parrot whatever piece of Chinese propaganda came across the screen. And another thing, when he started doing the same thing for Russian propaganda and then Iranian propaganda. But of late, he’s gone down the white supremacist road in the anti-Semitic road.

And it’s almost like Musk has revealed to the world that in reality he’s not a green or a businessman. He’s just an unapologetic apartheid era, white South African, which apparently is exactly what he is. And so I’m done. I will still be using Twitter as a distribution channel for the videos. For those of you who are somehow able to find some sort of use for it, probably the crypto pros.

But for everybody else, I would just underline that the fastest way, the most reliable way to get the videos is to sign up for the newsletter w WW dot z e i h a incom slash newsletter sign dot com slash newsletter, which is always the first place that the video goes before Twitter, before YouTube, before everything else. So just sign up direct.

We will never share your data with anyone and the video remains free. Okay, that’s it. I’ll see you around. I’ll still be checking in on Twitter every few weeks to see if anything’s changed because, you know, God, it certainly can’t get worse, is my thinking. But then it keeps getting worse. But who knows? Maybe we’ll have a change in management.

Maybe we’ll have a change in policy, and it’ll be some version of what it used to be. But until then. Newsletter. All right. Ticker.

Ask Peter: Is the Next Arctic Breakthrough Here?

Note: This video was recorded over the summer during one of Peter’s hikes.

Since I stumbled upon a snow field on my hike today, I figured we should take the next question in the ‘Ask Peter’ series: are we approaching a new era of exploration, exploitation and development in the Arctic?

While I can’t rule it out, the Arctic has a knack for keeping us at bay. The area is unpopulated, you have to build infrastructure for anything you want to do, and it just sucks to work in the tundra. Did I leave out the high development costs, high maintenance costs, and seasonal income?

Russia is one of the few places with any sort of population in the Arctic, but they lack the capital and know-how to do anything of note, let alone at critical mass. Places like Norway have ice-free seas, which has allowed them to get into offshore oil and natural gas deposits; however, there’s no real opportunity to expand this capacity.

Without a series of technological breakthroughs, I can’t imagine there will be much development in the Arctic. This is seemingly one of those things at the top of the world that will stay that way.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hollywood on Strike: The Future of Writers and Actors

The entertainment industry is changing, and the writers and actors are making sure their voices are heard. With all the technological changes hitting Hollywood, strikes like these shouldn’t come as a surprise.

As we’ve seen with the fall of Blockbuster or the demise of RedBox, this industry is constantly evolving. The old revenue models must be reimagined and updated as we move into the streaming service era.

But what does that mean for the screenwriters who can no longer determine viewership metrics and get paid royalties? Or for the background actors sacrificing their digital rights so CGI copies of them can be made and used forever?

This strike is an inevitable step in Hollywood’s evolution, and these questions will change the industry forever.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Transcript

Hey everybody. Peter Zeihan here coming to you from Seattle. It is late October and this is one of those that can store. So you probably won’t see it till November. But whatever the topic I want to discuss today is strikes in Hollywood of all places. We’ve got two separate strikes going on, one of which has at least temporarily been resolved, one involving the writers, which for the moment is behind us.

They’ve settled and one involving the actors. And the issue is, honestly, one of technology with the advent of a sufficient processing power to allow streaming services over Internet connections. We now have a number of major providers such as Hulu or Apple or Amazon or Netflix that are not just providing legacy shows, but new shows and transmitting them to their end users and consumers to a completely different network that doesn’t use the normal TV radio approach, VHF, things like that.

Well, this means different models used to be that all the income came pretty much from advertising, and now there are different ways to do it with, say, a per month subscription charge. You’re going to see more and more and more in this going forward. So we have to split it in those two factions. So first, the labor that deals with the screenwriting and then the labor that deals with the acting.

So screenwriters, this is going to be an ongoing issue largely because of the revenue play. When screenwriters used to produce things, whether it was for television or movies before, they’d work directly with the movie house, which would generate their income from either advertising or ticket sales. Now that you’ve got streaming, the question is what constitutes readership or viewership?

Because it’s not the same model. And is it something that’s a once and done? Is it something that gives them income over time? Because unless you’re an A-lister where you can demand whatever terms you want, everyone else has to kind of suffer through and for the writing. The rise of air is providing more and more support for people who are particularly creative and leaving everyone else by the curb.

But as problematic as that is, from the point of view of the writers, it’s a disaster for the actors. We already have technology that allows us to fill in the background with either a complete greenscreen generated system or even to a certain degree, extras. And I think the the two movies that have demonstrated how this technology is coming along, the best one is Ant-Man two, the one where we had some characters who in today’s world are in their sixties.

But we had a couple of scenes where they were shown when they were in their twenties, in their thirties, and you can use the technology to make people look younger. We’ve also had World War Z, which is a hot mess, great book, horrible movie. But when you had the swarms of zombies, you know, those weren’t real zombies. They were all CGI generated.

And we could see how they looked very, very real. Well, you play both of those movies forward because those are both five years old now. And we’re getting to the point where you can film an extra from a number of different angles and insert them into the background just fine. And so part of the reason that the actors were striking is because they were being asked to sign documents to basically surrender their future digital rights.

So you’re an extra in this movie, you’re filmed, and then they reserve the right to recreate you royalty free in the future. And obviously, if you’re a low ranking actor or an extra an aspiring actor that pretty much end your career. It won’t really hurt the A-listers, but pretty much everybody else would be left in the cold and very soon we’re going to be able to take footage from people who are dead and use A.I. Technologies to put them into leading roles if we want to.

And so the the balance, the ability for you to profit off your skill set in your presence all of a sudden isn’t there anymore? And it’s a question of who generates the revenue at the moment, the law suggests it’s the people who control the A.I. driven software. It actually designed the movies in the first place. So from a writers point of view, this is going to get a little bit stickier as we move forward, but it’s going to be more of an evolutionary process.

But for the actors, you’re actually looking at the evisceration of an entire class of people, and that will take with it the way movies are produced. Because if you can just have a handful of A-listers and be listers who are doing kind of a number of the main roles and have the star power to draw people and everything else is computer generated and it looks as real as the real thing.

Then we’re in a fundamentally different model for everything and we’re probably going to be in that environment by the end of this decade. So one way or another, Tinseltown is going to be very, very, very different, and it’s probably going to have a lot fewer people.

Why Huawei’s 7nm Chip Isn’t a Big Chinese Breakthrough

The Chinese telecom firm Huawei (the same firm that was caught modifying equipment on behalf of the Chinese government) has released a new phone with a seven-nanometer chip.

After some digging, it appears that this breakthrough is not as significant as I initially thought – and it comes down to what the Chinese have access to. They are using a process called deep ultraviolet (DUV) lithography, and while it gets the job done, its days are numbered in the cutting-edge field. Further, the unofficially reported yield rate Huawei achieved is nowhere near the industry standard.

The other process of creating these chips – extreme ultraviolet (EUV) lithography – is still only accessible to the Chinese via subsidies, poaching, and theft. So, I won’t be classifying the release of this phone as a “significant” breakthrough.

If the Chinese head down this path, it’s quite illuminating as to how far they’re willing to go for the sake of saving face. Should China keep this up, it’s just one more way they risk harming their position on the global stage.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Transcript

Hey everybody. Peter Zeihan here coming to you from Phoenix, where it’s 180 bajillion degrees outside. So we’re into this one from inside. A lot of you have written in and honestly, I was pretty curious myself about something that’s going on in China with the telecommunications firm Huawei. Now, that is a firm that has stands accused or guilty early of trying to modify wireless equipment and cellular equipment for the wider world so that the Chinese government can have a cheap and easy inside.

And everyone’s communications. They got discovered by the Australians, the Australians basically, or everybody else. And now we’re dealing with widespread sanctions by led by the Americans, by participating by every major country in the world that does the production of cellular equipment. And it’s kind of course, their business model. Now, in the last month, they have released a new phone, which is the first in a while because it took them a while to do anything without the ability to import equipment from anywhere else.

And it has a seven nanometer chip in it. And for those of you who’ve been watching me for a while, I’ve said that there’s not a lot that the Chinese can do that’s better than 90 nanometers. That’s what they can do themselves without external help. And 28 nanometers because of sanctions is about the best they can hope for.

So seven obviously potentially a very big deal. So we took a little bit of time. We dug into the details. And the short version is I’m not as worried as I was when this first came out. And it has to do with what the Chinese have access to. There are two types of chipmaking styles. The first uses something called deep ultraviolet, and that’s what was used for this chip.

Now, this is an older technology that has a number of drawbacks. You basically have to customize your equipment and modify your equipment for each individual chip design. So every time you have a new design, you have to kind of overhaul your factory in your lithography system from the ground up. And the way that the Chinese have done this is basically pirating design details from TSMC and Taiwan and then hire you just a huge number of people to do some technology transfer.

And they basically, especially when sanctions kicked in, you just basically were told they have a bottomless budget to go out and build a SUB10 nanometer chip. And they did. And it cost them five times as much as it should have. And the chip that they end up making wasn’t that great because they couldn’t do the design, that information, those people, they weren’t able to hire away.

So it’s basically a crypto mining chip made with a little bit smaller etching, which means that for a phone it’s really not a great option. More importantly, you’ve probably, from the Dutch point of view, the Dutch are the ones who make this equipment is that this theft started well before the sanctions run, but sanctions have only been in place for two, maybe three years now.

This started five years ago. So it is the ultimate expression of what the Chinese can do with a bottomless supply of money and absolutely no business ethics and the ability to hire anyone they want, all of which is, you know, an under threat in the sanctions regime now. So, you know, kudos for being able to get something sub seven, but it’s only about as good as your average smart phone from maybe 2017 which which is not nothing, but it’s certainly not the breakthrough that some people seem to think it is.

The second sort of technology is called extreme ultraviolet, and that is what you do to do all the good chips and the leading edge chips. Now, especially the three in the five nanometers that most smartphone folks are wanting to put in their machines. This system is much more modular and you don’t have to redesign everything from the ground up.

So when it finally did come online, which which is just like four or maybe about four years ago, everyone was really excited because all of a sudden the time to target for bringing the design to production could be shrunk. Still talking months to years. But you don’t have to re fabricate everything within your facility every time you have a new chip design.

And so far it seems to be performing to snuff and it’s this sort of equipment that the Chinese can’t get at all, in fact, don’t have any of at all in the country. So the U.V., they were able to use the stuff that they had and buy stuff that was no longer restricted or that wasn’t restricted yet, combined with a huge amount of subsidies, combined with a lot of poaching.

And they were able to cobble together a phone that does use something that is technically sub10 millimeter, even though it doesn’t perform anywhere like that for a phone. The EUV is simply off the market for them and everyone else is moving forward. So from my point of view, this is really instructive. Think of it this way. Think of it like I had said, that the Chinese couldn’t build a television.

And I’m thinking of like those OLEDs that you hang on the wall that way, like £20 have a slight curve and the deep black and blah, blah, blah, blah. And the Chinese are like, Oh, we can totally built a TV. And they came out with like a 48 inch tube TV. It’s technically a TV. Technically, I was wrong, but under the terms of the technology, this is not something that really takes them forward.

If anything, this is a one off because they can’t use the stuff to advance because they don’t know how to make the better chips. And the reason that do you’ve was ultimately abandoned is by the time we get to about 15 nanometers, it was really skirting the edge of what you can do with physics because the wavelength for the light is wider than what you need to etch on the chip.

And they basically had to tweak the laws of physics to get down to seven, but that’s the upper threshold. But even doing something a little bit dumber than that, it’s not clear that the Chinese have the ability because they no longer have access to the expertize of the Dutch. So this is really, really illuminating to me for how far the Chinese are willing to go in order to say that they broke the sanctions, but they really did it.

There’s nothing about this that is home grown. There’s nothing about this that is replicable. In fact, there’s a possibility that may kind of fall into that category of stupid things that they’ve been doing lately in that you’ve got a number of people in the American Congress who are not interested in doing a week of research to figure out the details or just like, oh, always breaking sanctions.

Well, we’ll show them. We’ll just put it in front of the president, a bill that says that all technological transfers and sales to Huawei are now illegal. So not just the top, but stuff, everything. It’s Congress. Who knows how that’s ultimately going to shake out. But the Chinese are finding more and more ways to sacrifice their position on the altar of ego.

And it looks like this might be one more. All right, everyone, take care.

Astropolitics: How Are the Aliens Getting Here?

All this talk of little green men has both disturbed and intrigued my inner nerd. While I don’t know if aliens have actually visited us, talking about the possible tech being used is a fun little distraction for all of us.

These three transport technologies should sound familiar to sci-fi lovers, Trekkies, and everyone in between. If they don’t ring any bells, I suggest you go do some extensive “research” and return once you have a baseline appreciation for the finer things in life. Now, back to the aliens.

Three transport technologies could explain how our extraterrestrial friends might be visiting us. Option one (and the least likely of the three) is a system of rings that allows ships to travel from point to point, but since we haven’t detected any infrastructure – this isn’t super plausable. Option two (and Han Solo’s personal favorite) is hyperspace. This tech would be problematic because anyone could jump to hyperspace, and since we haven’t been visited by the Empire or a bunch of space-minivan-driving carpetbaggers – this probably isn’t happening either. Option 3 (as seen on Star Trek) is warp, and it’s the most feasible explanation. This technology would likely come with a degree of government regulation since top-of-the-line systems would be expensive and large.

While talking about aliens is a fun diversion, please take all of this with a grain of salt. I haven’t seen evidence or information about any of this, but it sure makes for a fun discussion.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Transcript

Hey everyone. Peter Zeihan here from the top of Silver Hills. I’m going to give you the quick run of the oil before it’s too strong. You’ve got Silver Hills Rich there, a lost wilderness behind it. Whose ridge? Ten mile reach near brick and rich mosquito range. Down here, we’ve got South Park, the old interglacial that is fair play.

Best breeders in the state. I don’t know why some asshat works where he keeps trying to take it off the menu and then the southern front ranger, which southern front ridge really doesn’t have all that many really top points except for this guy, of course, is the mighty Pikes Peak. Okay, now I’m going to move over here to a shelter so I can talk to you out of the wind about aliens.

I have been a little disturbed by how many people have written in asking me for comment about all this new stuff that’s going on with you.So UFOs are just a new acronym as Uaps. I’ll tell you what I know, which is nothing. I’ll tell you what I think. I have no indication that there are aliens. I have no indication that they’ve been visiting us.

I just know that people are talking about it. So let’s talk about the technologies that would be involved and what that would mean in each scenario. How about that? That I can do as we’ve seen with the world here, as transport technologies change, how it evolves, the way we interact, the way we move, the way we deal with one another with the economy and the political system looks like.

So, for example, when deepwater navigation was developed by the Liberians in the 14th, 15th and 16th centuries, they had the ability to reach out and interact with the rest of the world. The rest of the world could not really return the favor. And so they were able to build these giant empires. So if you had some kind of an analog for that, for space travel, in theory, we could be the ones who were visited as opposed to the ones who are doing the visiting now.

Science fiction is very, very rich with different kinds of technologies that can be used to do different things. I just love to talk about three. It’s not that these were the only three. These are the three that I think it’s easy to kind of wrap your mind around. So first rings, basically, you put rings in space and you put a ship into the ring and it gets shot to the next ring.

And the next one, the next one makes one noise and on and on. Basically, think of it like an old style bank service too. But you put ships in it the up and the down side of this. Well, the upside is I’m positive that we’re not dealing with this if there’s aliens visiting us now, because you have to have rings that go to the next solar system.

So you will need hundreds of them over light years and we would see them coming. And if there was ever a problem, you could probably blow up the infrastructure. We’re also very glad we don’t have that here because it’s not like a road. It’s like a single artery. Everyone has to use it. And so whoever built it and controls it and operates it as an immense amount of political and economic power builds a very oligarchic system.

We’re glad we don’t have that second one. The one that’s probably most problematic would be hyperspace. The idea that you can put a device on any sort of vessel and it just can just show up and pop out somewhere else and might have to do multiple jumps to get between star systems. This is what they use in Star Wars.

Now you’ve all seen the Millennium Falcon and Han Solo. And if you haven’t, I don’t even know why I’m speaking to you right now. But his ship was kind of a piece of crap, a poorly maintained, but had a good hyperdrive. And that was kind of the point. Anyone can have a hyperdrive. So Star Wars, the political system flips back and forth between periods of centralization where they try to control everything.

And then it all spins apart because they can’t, because of the technology, because anyone can in their family space system can go to a different star system. If this is what is visiting with us, we’re going to have problems because it’s either going to be something like the empire, where it can be an invasion, it can bring literally millions, if not billions of troops, or it’s going to be dozens of warlords and hundreds of carpetbaggers who can just get a small cargo ship and pop over here and exploit us.

Now, I don’t think that’s what we’re dealing with here, because it would be obvious if it was the empire, I’d be a big ass ship with a lot of troops, and they’re not going to be subtle. Even if it’s a nice empire, they’re not going to be subtle. And if it was tens of thousands of small traders, there’s no way they’d be operating in any sort of organized hierarchy.

They’d just be coming and going and everyone would know because they’d like sit down in Chicago, Central Park every once in a while. So it’s probably not that the more realistic, just for the information that we’re seeing right now is warp, you know, the Star Trek approach, where it’s not all that hard out at warp drive, but if you want one that’s fast has to be on a pretty big ship.

And that means government and that means you can have a degree of hierarchical control over policy. And if you’ve got things zipping in and out that we can’t really see, the idea that that would be stealth to some degree makes a lot of sense. So of those three technological tucked logical pathways, I’d say Warp is the one that we’re dealing with right now.

If it is indeed happening. And that’s probably the best because it’s kind of a middle ground between the the chaos slash centralization of Star Wars and the ossification and oligarchic of the rings. This is like cowboy bebop. I if you know, if were found by the federation, there would be a anyway, I hope you enjoyed this little diversion.

I honestly have not seen any of the information that is circulating out there about whether or not anything is actually going down with the uaps. So take this for what it is and just a little bit of fun. All right. That’s it.

 

The Problem with Central Bank Digital Currencies

With all the buzz around central banks starting digital currencies and one of these entities controlling all transactions, I think it’s about time I burst everyone’s bubble…

Fintech has blown up because it slims down the traditional money transfer process and removes some of the associated fees, meaning you can transfer money faster and cheaper. However, the Federal Reserve will wipe out most fintech startups within the next five years with their service – FedNow.

FedNow allows for the instantaneous clearing of funds when transferred using the Fed as the intermediary. Oh, and it’s functionally free. Put the hype for this or that financial product – whether crypto or otherwise – to the side for a minute and dwell on how said systems might compete with free, immediate, and from the source. Queue the gnashing of teeth.

What we’re seeing in China is different from this. They’ve married digital currency to social currency scores, making Orwell look alright. This could never happen in the US, but if China continues down this road, its entire financial space will be under the government’s thumb. Any dynamism left in the Chinese economy will be stamped out fairly quickly if this continues.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.