Supply chain
The strategy for the past 20 years or more has been "China4theWorld, India4India". This has changed. This is the first time that the "China4China, India4theWorld" strategy has been formally announced in front of Chinese colleagues in the room. What this means in practical terms is that the Chinese supply chain and manufacturing will only serve the Chinese market, no exports will be made from China. By 2023, exports from India will have reached China's level, by 2025 India will have reached China's total production, from '26 onwards Chinese exports will virtually cease.
A prerequisite for this process is building the right capabilities and capacity in India. It will take roughly 3 years to build the capabilities and about 5 years to reach the required capacity, starting in 2023, including electronic components.
What does this mean for China's GDP? The current (2023) production level will be stagnant, growth will only be achieved at the rate of domestic market growth. My estimate is that Indian GDP will grow by $1-200M per year from '26 onwards with our company's decision alone, while China's will stagnate. Multiply that by roughly 100, given that about half of the US Fortune 200 companies who have some meaningful economic activity in China.
China is going to feel that...
More to the point, no, Trump has exactly nothing to do with the process. I was thinking back on the plane yesterday, the first time I heard about this project was a few weeks after Pelosi's visit to Taiwan in November 2022. The orange clown may have strong marketing, but old Biden has harder balls than Trump ever had.
Chip Fab and Papa Biden
One of the highlights of the meeting was a visit to our factory in Sherman, Texas. On the way there it was striking in the bus (when I wasn't looking at my eyelids from the inside due to the shameless amount of BBQ brisket and Woodford Reserve bourbon I had consumed the night before...) that there were towers and construction everywhere - we're talking about a 40k population dump outside of Dallas... then during the presentation I understood what was happening.
One of the key elements of Biden's 2022 Inflation Reduction Act was to bring back the microelectronics industry that had moved abroad - now that's something I saw live. A $30B (yes, billion) microelectronics cluster is being built under the leadership of Texas Instruments, culminating in a TI Chip Fab plant, which is virtually the most expensive electronics investment ever. On top of that are about 4-5 other major suppliers and countless smaller service companies. Trial production is scheduled to start in 2026. According to city officials, the population will double in 3 years, so they expect 40,000 people to move in. Already around 8,000 people have arrived in the city in the last 2 years. I remember a couple of months ago there was a small skirmish here in the comments section about the availability of the supposed resources needed to ramp up chip manufacturing, I think that's a pretty good example of how there will be enough people.
Other
There were other interesting topics, typically related to CO2 emission reduction. For example, we are putting serious energy (and money...) into making the company carbon neutral by 2030. Of course, I understand if there are a few grumpy comments here, but believe me it's not just a pose. A good example is our factory in Dubai - we installed a solar farm on the roof of the hall 3 years ago, since then we generate about 60% of our annual electricity consumption on our own roof. Sure, I know, recycling, whole life energy use... but still, that's how much less oil we've had to burn in the last three years. Instead, it's worth looking at the fact that there are now environmental people at the top of the biggest US multinationals. And no, not because of the regulatory environment... simply because the capital market is watching and punishing. It's no longer sexy to own stock in a company that is not environmentally conscious. Okay, maybe it's greenwashing, maybe it's a sham... but the first step has been taken.
I saw an interesting graph, according to our marketing people, by 2050 30% of the fuels used in transport will be hydrogen. If you add that sales of our hydrogen application portfolio are forecast to double every year until 2029(!) then the 30% share seems plausible...
So that was interesting, na.
P.S.: please don't quote anything from the above post in any form anywhere - keep it here in the group.