Interesting analysis on staying competitive in semiconductor manufacturing.
“The dotted black lines toward the bottom show the estimated cost of building a leading edge fab (the lower line) and a line showing double that number (the upper line). Our thesis is that companies whose annual revenue fall between those two lines are at risk of falling off the Moore’s Law treadmill.“
TSMC came close once. Samsung looks close now (though this doesn’t include the rest of the group subsidising the fab). It also shows that Intel’s plans to offer fab services need to succeed.
“Senior secured bonds have always been a constituent of the high yield market. However, over the past few years, their share of the overall index has increased dramatically and is now at a record level of the market. While the coupon structure is different, senior secured bonds are “secured” by the assets of the borrower, much like leveraged loans. This recent development — the growth of senior secured bonds as an overall percentage of the high yield market — blurs the lines between these markets and may lead to increasingly similar behavior between the markets.”
“Over the past 30 years, battery costs have fallen by a dramatic 99 percent; meanwhile, the density [a key measure of quality] of top-tier cells has risen fivefold.”
The UK is the only major region where the number of liquid companies (defined as having more than $1m of average daily traded value over six months) is down since 2003.
Nice post about why aggregates businesses are so good.
“What makes a rock pit valuable is that nobody else can compete with it. The nearest rival owner from two towns over isn’t going to haul his rock into your territory because the trucking bills would eat up all his profit. No matter how good the rocks are in Chicago, no Chicago rock-pit owner can ever invade your territory in Brooklyn or Detroit. Due to the weight of the rocks, aggregates are an exclusive franchise. You don’t have to pay a dozen lawyers to protect it.” -Peter Lynch in One Up On Wall Street, 1989
“By most metrics, freight markets are showing clear signs of a lasting recovery … In short, the early stages of this recovery are characterized by a rebalancing market, a return to normalcy after a four-year roller coaster of volatility.“
“The common trait of people who supposedly have vision is that they spend a lot of time reading and gathering information, and then they synthesize it until they come up with an idea.” — Fred Smith, Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator
