📱 The great chip glut
Hey Snackers,
Miller High Life proudly calls itself “the Champagne of Beers” on its cans, but the French aren’t having it: 2.3K cans of the lager were dumped and crushed in Europe after the Champagne regulator requested “the destruction of these illicit goods.” Someone call Emily in Paris.
Stocks barely budged yesterday as investors awaited Big Tech earnings, starting with Google parent Alphabet and Microsoft today. Meanwhile, Coke beat sales growth expectations as consumers kept chugging its famous beverages despite several price hikes.
Samsung could post its worst profit in decades as the great chip shortage turns into a glut
Overflowing chip bowl… not talking Doritos. Stale chip demand could take a big bite out of Samsung's earnings this week. The South Korean tech titan is the world’s largest producer of memory chips, which are used in everything from smartphones to computers to servers. Memory-chip prices dropped 20% last quarter as companies like Samsung slashed prices to cope with an industry-wide glut. Now the flip-phone icon expects its worst quarterly profit since 2009.
Short circuit: Earlier this month, Samsung said it would begin a “meaningful” chip-production cut, following similar moves by rivals like Micron and Western Digital.
Unchipper: Semiconductor giants have been losing money on every chip they churn out. Samsung's chip unit is forecast to post a record $1.6B loss on Thursday.
Boom and bust… Tech gadgets were hot commodities midpandemic as homebound consumers splurged on new PCs, TVs, and phones. But demand for $1K flat screens has cooled, hurting chipmakers (which boosted production to ease “the great chip shortage”). Now they’ve got too many chips. The industry is notoriously cyclical, but the latest oversupply is historic.
Not all chips are created equal… It depends on what’s in demand. While appetite for personal devices like PCs and phones has cooled, demand for AI-powering tech is heating up. Chipmakers like Intel and Nvidia are going all in on AI, and the AI hardware market could hit $90B by 2030 (up 8X from 2021). Nvidia shares have surged on hunger for its AI chips, which are selling for up to 20X more than its gaming processors.
China plans its biggest digital-currency rollout, accelerating the global race to turn cash into code
Clearin’ the cache… more like cash. China’s prepping its digital piggy bank to pay public workers in the city of Changshu (population 1.7M) fully in digital yuan (#digi-yuan) starting next month. The project will affect all public workers, from teachers to government officials — and marks the country’s biggest push to circulate its digital currency.
Number yuan: Back in 2021, China became the first major economy to launch an e-currency. Over 100 countries, including the US, have been playing catch-up since.
Mixed reaction: Changshu’s digi-yuan project is trending on Chinese social media. While some say it could help curb government corruption, others worry that older people will struggle to take their finances online.
Sorry, anon… All digi-yuan transactions are recorded on a digital ledger that’s monitored by the Chinese government, giving the surveillance state even tighter control (picture: digi-yuan expiration dates to boost spending). Chinese citizens lead the way in global mobile-payment adoption, but getting them to use digital yuan could depend on integration with payment superapps:
Tap to pay: Alipay and WeChat Pay each have 1B+ users and process hundreds of billions of dollars’ worth of annual transactions. China has struggled to get its citizens to use its digi-yuan app, because most of them use superapps for payments and social interactions.
Competing with corporate: The digi-yuan was tested as an express payment option on Alipay last year, and China could exert greater pressure on tech companies to fully integrate it.
The e-conomic race is on… China, India, Nigeria, and a handful of other countries have launched digital currencies. Now China is positioning the digi-yuan for international use, which could offer an attractive alternative to the US dollar for sanctioned countries like Russia. Meanwhile, the US Treasury is reportedly close to finishing its development of a digital dollar, which could give millions of unbanked Americans access to digital payments.
What else we’re Snackin’
Beyend: Bed Bath & Beyond has thrown in the towel, filing for bankruptcy and announcing plans to liquidate its inventory and close up shop (unless it can find a buyer). FYI: tomorrow’s the last day to use its iconic coupons.
Out: Fox News said its top anchor, Tucker Carlson, will leave the network after it reached a $787.5M settlement in its defamation suit with Dominion Voting Systems. In 2020, Carlson had the highest-rated program in cable-news history.
Moët: LVMH is popping the bubbly after becoming the first European company to cross $500B in market cap. The luxe glomerate crushed quarterly sales expectations as big spenders snatched up Louis bags and Bulgari bling.
Funged: The first NFT-related insider-trading case is going to trial after a former OpenSea employee was accused of using confidential token-listing info for personal gain. Scrutiny of digital tokens has been intensifying.
Kale: Sweetgreen hopes to fuel salad-bowl demand with a $10/month loyalty program for delivery and discount perks. Shares of the lettuce legend are down 75% over the past year as WFH hits office lunch breaks.
Tuesday
- Earnings expected from Microsoft, Google parent Alphabet, Visa, UPS, Verizon, GM, McDonald’s, GE, Spotify, Pepsi, 3M, Raytheon, JetBlue, and Chubb
Authors of this Snacks own shares of: Apple, Google, GM, Nvidia, and Microsoft