Intel and Micron Spread their Wings
It’s been a big week for Intel (INTC) and Micron (MU), with the two US semiconductor companies locking in deals for new global sites.
Firstly, Intel has (after a bit of back and forth) locked in a deal to build a $33 billion semiconductor manufacturing plant in Germany, after the German government said it would cover one-third of the plant cost. In addition, Intel has confirmed a $4.6 billion semiconductor test and assembly facility in Poland. Lastly, Intel will be investing $25 billion on a new factory in Israel, making it the largest ever international investment in the country.
Lastly, as part of Indian PM Narendra Modi’s US trip, it was announced that US memory chip maker Micron would invest up to $825m in a new chip assembly and test facility in Gujarat, India. With support from the Indian government, the total investment would come to $2.75 billion.
This is all part of global efforts to diversify the semiconductor supply chain away from Asia and create more regional sovereignty, particularly in Europe and the US.
Thanks to the CHIPS Act, the US is seeing a surge of investment in new fabs, with GlobalFoundries, Intel, Samsung, Taiwan Semi and Texas Instruments all investing heavily in new facilities in the country.
UK Launches First Geothermal Heating in almost 40 Years
The Eden Project in Cornwall has opened the UK’s first geothermal heating plant since 1986. In 2021 Eden Geothermal completed a 4.9km well and subsequently installed a 4km-long vacuum insulated tube which, when passed through a heat exchanger, delivers heat of ~85 degrees celsius. In the Netherlands, they are aiming one-quarter of all of their heating to be contributed by geothermal by 2050.
The largest geothermal plant in the world is The Geysers in California which has 18 geothermal power plants, drawing steam from 350 wells and providing a net generating capacity of ~725 MW of electricity - enough to power 725k homes, of a city the size of San Francisco.
Cosmic Navigation to Replace GPS?
Japanese researchers have developed an alternative wireless navigation system relying on cosmic rays (muons) according to a new paper published in iScience. According to co-author Hiroyuki Tanaka at the University of Tokyo, “cosmic rays fall equally across the earth and always travel at the same speed regardless of what matter they traverse”. Meaning, such systems would make it possible to communicate as effectively at the bottom of the ocean and in underground mines, just as at the earth’s surface. By using muons (subatomic particles making up much of cosmic radiation) these researchers have developed a new kind of GPS called muometric positioning system (muPS).
Historically, similar technology has been used for archaeological purposes, for example, identifying hidden corridors in the Great Pyramid of Giza and identifying hidden Mayan ruins in Belize.
At present, companies like Ideon (private) are using the technology to help mining companies identify and explore for mineral deposits.
Tesla Supercharger Quickly Becoming the North American Default
Rivian has joined Ford and GM, to be the third auto company to adopt Tesla’s North American Charging Standards (NACS) plug. Rivian cars shipping in 2024 will come with a NACS adapter, giving drivers access to a network of over 12k Tesla Superchargers across North America. All of this looks like NACS will start to become the default charger network in North America, with rival EV charging networks like Chargepoint, EVgo, FLO and Australia’s Tritium all going down the path of offering NACS connectivity.
AI Comes to the Battlefield
Red Cat Holdings (RCAT), a manufacturer of defence drones, has completed the second phase of its partnership with Australia’s Athena AI (private) - a vision-based AI system. Recent trials have successfully shown that Athena’s AI systems have been able to undertake target recognition (i.e. weapons and humans) and battle tracking at night which Red Cat’s CEO says will “give warfighters the unfair advantage”. Athena has licensed its computer vision architecture to Red Cat.
Thumbs up to Lab Grown Meat
Good Meat (private), an Eat Just subsidiary, and Upside Food (private) have received approval from the US Department of Agriculture for the sale of cell/cultured chicken in the US. Cultured (or lab grown) meat essentially takes stem cells from an animal and grows those cells, thanks to a culture medium, within a bioreactor. The meat sold from the companies in the US will be labelled as “cell cultivated chicken”. This approval is the first outside of Singapore where Good Meat currently has approval to sell their product (below) to consumers.
There has been considerable progress on the economics of cultured meat of late, with significant leaps being made by many startups out of Israel, the US, Singapore, Australia and elsewhere in bringing the cost down to parity with real meat (in the instance of chicken). It’s a different story for other proteins (i.e. beef), however, there is an evident trend of cost efficiency which, like Moore’s Law in semiconductors, should catalyse a surge in production and demand over the next couple of decades. Given that livestock contribute to ~14% of greenhouse gas emissions and use an unsustainable amount of water (particularly in feed), such advancements in cultured meat unit economics could play a very major role in improving the environmental impact of our appetites!
Amazon Coming for Ocado
Shares of Ocado (OCDO.LN) a UK grocery retailer and automation leader leapt as much as 40% this week following reports in The Times that Amazon (AMZN) and others were eyeing off an 800 pence bid, an 86% premium to the last price.
Ocado has two businesses - an online grocery platform, in partnership with Marks & Spencer, with ~1m active customers. Further to this, their technology division (below) is powering warehouse automation for some of the world’s largest retailers including Coles (Australia), Kroger (USA), Groupe Casino (France) and many others.
Given the current difficulties Amazon is having in closing the iRobot deal, and the likely pushback from retailers and regulators of having Amazon control the tech stack of rival grocery retailers, it would be optimistic (in my opinion) that such a deal would close. Could you imagine the advantage Amazon would have by owning detailed data on their rival’s grocery delivery business?
Immersive Retail
Patents filed by Block (SQ) and Snap (SNAP), as well as the leap in mixed reality development thanks to Apple, give us a glimpse of what will be quite as rapid pace of innovation in the retail sector.
Firstly, Block is patenting technology which will be able to identify when a product is in a video, like YouTube or Netflix, and link an e-commerce tag to that product to enable a more seamless retail experience. For example, if you’re watching Stranger Things and see a great sweater, the technology will (in theory) be able to identify that item allowing you to buy it within the Netflix platform. Although Block can leverage a considerable amount of data to develop such technology, I suspect they’d be trailing Google, Amazon and Shopify who, given they’re ecosystem and data, would be better positioned to pull off such retail experience.
Now to Snap, who were arguably the first mover in immersive retail experiences. This week we saw them seek to patent Customisable Personal Stores where users can shop in virtual stores and interact with (avatar) friends. The possibilities of this tech become clearer when you look at the capability of Apple’s Vision Pro which, with 4K displays and advanced sensors (i.e. LiDAR), will be able to very accurately display a Nike or GymShark store within your living room. Although Snap has traditionally been leaders in AR shopping experiences, I suspect (as above) that Shopify, Google and Amazon will have the most to gain from such immersive experiences given their data and ecosystem.
Thank you and have a great weekend ahead!
Charlie Nave
LinkedIn or E-Mail (cnave@granitebaycap.com)
Associate Professor (Practice) Monash Business School and Monash Centre for Financial Studies (MCFS)
Granite Bay Capital is an innovation focussed consultancy with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity. Any views expressed in this article are those of the author and do not constitute financial advice.