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21 July 2021

Fishing for Chips

You would be hard pushed to find someone that has not heard of the microchip. Since the dawn of the portable calculator, they have become commonplace in homes around the world. The so-called ‘Moore’s Law’ – that computing power doubles every two years – has seen chips become smaller and more powerful and extended their use into a wider spectrum of devices. PCs, phones, and even some watches hold the ability to perform functions once reserved for the supercomputers, under the lock and key of specialist laboratories.
 
Today, you might find a microchip just about anywhere as we live in a data rich world that is becoming ever more connected. The more data that is created, the more technology is produced to monetise this data. This perpetual cycle has given rise to a lesser known term; the internet of things (IoT), aptly named to describe the network of physical objects that are embedded with sensors, microchips, and software to connect and exchange data with other physical objects (A.K.A. “things”).
 
Imagine your car is stuck in a traffic jam. Your smartphone will tell all the other phones around it to take an alternative route. Sound farfetched? This has been happening for some years now for users of Google maps. Now imagine how this function can be harnessed by other technologies. One can imagine your fridge detecting the longevity of vegetables from one supermarket to the next, giving consumers a more informed choice on their grocery shopping. Already, many fridges can tell you when you’re running low on an item before adding it to your next online order. For some this might be a step too far on their privacy, but it is astonishing nonetheless (See: The Internet of Things – Are We the Customer or Are We the Product?)
 
Perhaps the most recently acknowledged, and more recognised, use of microchips is in the automotive sector. We have all seen the technology in our cars come on leaps and bounds in the last decade. Satellite navigation, driving analytics and voice control functions all rely heavily on the astounding revolution in semiconductor technology. From Vauxhall Corsas to Ferrari F8s, the requirements of the consumer don’t discriminate (See: Stalling the Automotive Sector). At the turn of the millennium, the average cost of electronics in a car was around 18% of the total. Today it represents 40%. It seems horsepower is being swapped for chip power.
 
The recent chip shortage, explored by my colleagues across various articles, has caused a conundrum for carmakers (See: The Chip Shortage). But it has also created an opportunity for investors, and if nothing else, it has demonstrated the dominant role that these pieces of silicon continue to play in our lives. Oil might be dead, but a new sheriff is in town.
 
Fishing for Chips

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Spacenomics
21 October 2021
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