A renaissance across the semiconductor industry 

Perhaps the most profound technological revolution of the next couple of decades will be the electrification of everything—cars, trucks, heavy machinery, and so on. Battery technologies are the clear driver of this industrial disruption, but new semiconductor developments (particularly within silicon carbide) are an equally important part of the story. This piece by Tiernay Ray, the longtime Barron’s reporter, details how the growth of chip vendors like STMicroelectronics and On Semiconductor—and even OEMs like Tesla—are reminiscent of the booming Intel microprocessor market in the 1980s. 

“The computer chip industry has mostly been about processing information, in the form of electrical pulses representing ones and zeros,” Ray writes. “A new age is dawning in which chips don’t process information, they manipulate energy to shape it and to manage its use in the built environment.” He continues: 

“Tesla’s cars are the first big market for the chips, known as silicon carbide. Silicon carbide chips are particularly adept at managing high voltages, which is key as electric vehicles increasingly are equipped with higher-voltage batteries. Silicon carbide’s so-called wide band gap can resist a greater charge than silicon, but when switched to conducting mode, the chips allow more electrons to flow than silicon, presenting less resistance and so getting more power out of a battery. The industry of silicon carbide is nearing an inflection point where wafers of the material will increase in size, and the transistors will shrink in size, leading to economies of scale reminiscent of those that made the Intel microprocessor market a success in the 1980s.”

*** 

Why the average age in business and politics is rising

This week, Derek Thompson at The Atlantic had a smart story on a fascinating subject: “In practically every field of human endeavor,” he writes, “the average age of achievement and power is rising.” Why is that? As you might expect, the answer is both multivariate and somewhat open to interpretation, but Thompson outlines a few ideas that helps explain the phenomena. 

“Longer lives and increasing workism could explain why our political and business leaders are quickly getting older. But they don’t explain the biggest mysteries I’ve highlighted in the field of science—such as why the average age of Nobel Prize laureates has increased or why young star researchers are rarer than they once were. The best explanation for both of these trends is the ‘burden of knowledge’ theory. We are learning more about the world every year, but the more we learn about any subject, the harder it is to master all the facts out there and push the frontier of knowledge outward.”

***

Machine learning is having an on-premise moment

There is no doubt in my mind that we are still relatively early in the global shift to cloud computing, but this piece in Protocol suggests a somewhat provocative counter-narrative: “Cloud computing isn’t going anywhere,” writes Kate Kaye, “but some companies that use machine learning models and the tech vendors supplying the platforms to manage them say machine learning is having an on-premises moment. For many years, cloud providers have argued that the computing requirements for machine learning would be far too expensive and cumbersome to start up on their own, but the field is maturing.”

“In the end, like the shift toward multiple clouds and hybrid cloud strategies, the machine learning transition to incorporate on-prem infrastructure could be a sign of sophistication among businesses that have moved beyond merely dipping their toes in AI. ‘There’s always been a bit of a pendulum effect going on,’ Lange said. ‘Everybody goes to the cloud, then they sort of try to move back a bit. I think it’s about finding the right balance.'”

A few more links I enjoyed:  

How to Embrace Doing Nothing – via Arthur C. Brooks
“Despite the difficulties, learning to do nothing is good for us. Letting the mind roam free during unstructured and undemanding tasks can make us better at creative problem-solving. Unconscious thought during idleness can produce ideas that are more original: Descartes reportedly invented his revolutionary coordinate system in bed, watching a fly on the ceiling; Einstein formulated his general theory of relativity while daydreaming. Being a little bored might also refresh us: A researcher writing in Frontiers in Psychology in 2014 argued that boredom can induce us to see our ordinary activities as meaningful and significant. And although no studies specifically show this, I strongly suspect that doing nothing, if we can do it well, makes us happier too.”
Will Thorndike – The Power of Long Holding Periods – via Colossus
“Will Thorndike is author of The Outsiders and host of 50X. We cover the hallmarks of great compounders, how the best serial acquirers deliver outsized returns, and what he’s learned about developing conviction.”

This information should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the investments or strategies referenced were or will be profitable, or that investment recommendations or decisions we make in the future will be profitable. This article contains links to 3rd party websites and is used for informational purposes only. This does not constitute as an endorsement of any kind. While Nightview uses sources it considers to be reliable, no guarantee is made regarding the accuracy of information or data provided by third-party sources. Nightview Capital Management, LLC (Nightview Capital) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Nightview Capital including our investment strategies and objectives can be found in our ADV Part 2, which is available upon request.