WEBVTT - TSMC Stuck in Middle of Global Panic Over Chips 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all partnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:31.400 YouTube search Bloomberg Global News. Let's get right to our guest, 0:00:31.440 --> 0:00:34.400 because there's lots of stuff going on, certainly watching the 0:00:34.479 --> 0:00:37.680 continued rollout of the vaccine and new development, certainly when 0:00:37.680 --> 0:00:41.080 it comes to the virus. Dr William Hasltin is back 0:00:41.080 --> 0:00:43.599 with us, chairman and President of Access Health International. It's 0:00:43.600 --> 0:00:46.320 a nonprofit thing tank on a mission to improve access 0:00:46.320 --> 0:00:48.839 to high quality and affordable health care for people everywhere. 0:00:49.159 --> 0:00:51.440 He has found in more than a dozen biotech companies, 0:00:51.479 --> 0:00:57.000 including Human Genome Sciences. His autobiography, released earlier this year, 0:00:57.040 --> 0:00:59.480 My Lifelong Fight against disease from Polio and aids to 0:00:59.680 --> 0:01:03.040 two COVID nineteen. And he's also got a book out. 0:01:03.080 --> 0:01:05.920 I don't know how he finds time to sleep called Variance, 0:01:05.959 --> 0:01:08.000 The Shape Shifting Challenge of COVID Natine. He's back with 0:01:08.120 --> 0:01:10.760 us on the phone in Connecticut, Doctor Hasseltine. Good to 0:01:10.800 --> 0:01:14.479 have you back. How are you, Carol. It's a pleasure 0:01:14.480 --> 0:01:17.160 to be here. Thank you for that very center this introduction. 0:01:17.319 --> 0:01:20.480 I just speak the truth. Um, tell me how you're doing, 0:01:20.560 --> 0:01:25.360 and tell me when it comes to COVID headlines, vaccine headlines, 0:01:25.640 --> 0:01:28.200 what is it that you are constantly kind of looking 0:01:28.200 --> 0:01:30.200 out for. What's kind of front and center when it 0:01:30.240 --> 0:01:32.880 comes to the information that continues to flow out on 0:01:32.880 --> 0:01:36.880 both the virus and the vaccine. Well, first thing to 0:01:36.920 --> 0:01:40.679 say is, we're very fortunate to have great vaccines that 0:01:40.720 --> 0:01:45.360 are working really effectively and very safely, especially the m 0:01:45.440 --> 0:01:49.240 R and A vaccines. They're protecting people really well. Uh, 0:01:49.360 --> 0:01:52.960 they are as safe as of any vaccine I've ever seen, 0:01:53.720 --> 0:01:57.440 and we're very fortunate. The biggest question for those is 0:01:57.480 --> 0:02:00.600 how long will they be protecting us, and how well 0:02:00.640 --> 0:02:03.920 will they protect us against the variants? And for how long? 0:02:04.840 --> 0:02:08.000 Today this morning, we got the first shoe that dropped, 0:02:08.880 --> 0:02:11.400 and that is that one of the best of all 0:02:11.440 --> 0:02:15.880 the vaccines, the moderna vaccine doesn't protect against two of 0:02:15.919 --> 0:02:21.280 the common variants after about six months very well, at 0:02:21.320 --> 0:02:25.960 least as judged by the ability of the antibodies in 0:02:26.000 --> 0:02:30.000 people who were vaccinated to neutralize the virus as different 0:02:30.040 --> 0:02:33.040 from a real vaccine. Test is showing that it's failing 0:02:33.080 --> 0:02:37.280 to protect people in real life, but it's a pretty 0:02:37.320 --> 0:02:41.240 good indication that it's not going to protect people for 0:02:41.440 --> 0:02:44.480 very much longer, so that the net result is also 0:02:44.639 --> 0:02:47.480 quite positive. And the very same report it said, if 0:02:47.520 --> 0:02:49.840 you get a booster at six months, you're golden again. 0:02:50.560 --> 0:02:53.600 You're maybe better off than you were before. And so 0:02:53.720 --> 0:02:57.560 it's uh good news, bad news story. Bad news doesn't 0:02:57.600 --> 0:03:01.280 last that long against the variant. It news, there's something 0:03:01.280 --> 0:03:04.000 to think. So what I've done is I put in 0:03:04.080 --> 0:03:07.720 my calendar six months from when I got my last shot, 0:03:08.080 --> 0:03:10.640 I'm going to get another. So, I mean, do you 0:03:10.639 --> 0:03:12.560 think we'll start to see a recommendation from the CDC 0:03:12.800 --> 0:03:16.720 soon for that for that booster shot. CDC has been 0:03:16.760 --> 0:03:19.040 a little slow in this pandemic, but I think they'll 0:03:19.040 --> 0:03:21.760 come to that position. And you know, the first person 0:03:21.800 --> 0:03:24.280 to mention that was a head of fiser. You may 0:03:24.320 --> 0:03:26.600 remember that just a few weeks ago Albert Boule is 0:03:26.680 --> 0:03:29.760 saying that of the fightser shot, so he knew something 0:03:29.800 --> 0:03:32.920 that we did it. But now we do from the 0:03:32.960 --> 0:03:40.480 moderna publication, which is six eight months out, fewer than 0:03:40.520 --> 0:03:43.320 half the people are protected against the Brazilian and the 0:03:43.360 --> 0:03:48.440 South African variant according to these studies of antibody neutralization. 0:03:49.280 --> 0:03:53.360 So if we don't pursue a course of booster shots 0:03:53.400 --> 0:03:56.640 for everyone, mark your calendar's kind of thing right now, 0:03:57.720 --> 0:04:03.400 could we potentially see another outbreak? Absolutely, because most of 0:04:03.480 --> 0:04:06.480 the viruses that are infecting people in the United States 0:04:06.920 --> 0:04:09.600 and I should say around the world today are variants. 0:04:09.840 --> 0:04:14.280 They're not the original UH strain, and the reason for 0:04:14.320 --> 0:04:19.520 that is the variants are more infectious and they displace one. 0:04:19.560 --> 0:04:24.839 We're now in the fourth wave of increasingly transmissible variants. 0:04:25.000 --> 0:04:27.920 First wave was what came out of China a year 0:04:27.920 --> 0:04:33.080 ago February. It changed and swept the world. Then late 0:04:33.120 --> 0:04:36.880 summer early fall, a whole bunch of new variants came 0:04:36.880 --> 0:04:39.920 and they displaced whatever else was there. And right now 0:04:40.480 --> 0:04:43.839 the Indian strains seems to be displacing even the British 0:04:43.880 --> 0:04:48.919 strain in Britain. So this is a natural course that 0:04:48.960 --> 0:04:53.240 we're seeing faster than we expected. Um and it does 0:04:53.320 --> 0:04:57.640 mean that I believe we will be seeing recommendations for 0:04:57.680 --> 0:05:01.839 six months boosters pretty soon. So does that mean Dr Hazeltine, 0:05:01.920 --> 0:05:04.600 that it's every six months or is there a chance 0:05:04.640 --> 0:05:08.200 that modern advice are able to change the formulation somewhat 0:05:08.560 --> 0:05:12.719 slightly and actually give a shot that has longer lasting 0:05:12.800 --> 0:05:18.840 antibodies until we get new types of vaccines, and I'm 0:05:18.880 --> 0:05:21.680 not sure how we're going to do that. There's some 0:05:21.800 --> 0:05:25.480 ideas on the drawing board, but until we figure out 0:05:26.120 --> 0:05:28.719 how to make vaccines that are going to last longer, 0:05:29.440 --> 0:05:33.000 it's probably going to be a minimum of every year 0:05:33.160 --> 0:05:38.320 and possibly more often. We're to the point now, though 0:05:38.360 --> 0:05:41.400 we're not right. And we're to the point now though 0:05:41.440 --> 0:05:44.120 where where some of the healthcare professionals who got the 0:05:44.160 --> 0:05:46.479 shot in December would be approaching that six month mark. 0:05:46.520 --> 0:05:49.640 We only have about twenty seconds left, Doctor Hezeltine. Well, 0:05:49.720 --> 0:05:53.200 you're correct, I were approaching the time when it's about 0:05:53.200 --> 0:05:54.880 time to get and I should say, if you haven't 0:05:54.920 --> 0:05:57.480 caught those two vaccines, the other ones you may need 0:05:57.520 --> 0:05:59.680 a little more often. So I think it's time to 0:06:00.000 --> 0:06:05.120 consider booster shots for the earliest people who are vaccinated. 0:06:05.720 --> 0:06:10.680 So let's talk about You wrote a story, um and 0:06:10.920 --> 0:06:14.320 uh and it talks about this anti viral drug cocktail. 0:06:14.680 --> 0:06:17.360 So tell us about what this is about what this 0:06:17.440 --> 0:06:19.680 might do, especially for a place like India, which is 0:06:20.000 --> 0:06:24.160 really having a difficult time right now with COVID nineteen. Well, 0:06:24.200 --> 0:06:27.800 there are two ways to prevent infections on our vaccines, 0:06:27.839 --> 0:06:30.320 which are by far the most convenient. You get one 0:06:30.320 --> 0:06:33.920 shot and and or two shots and you may have 0:06:34.520 --> 0:06:38.480 many months to many years of protection. Or if you're exposed, 0:06:38.520 --> 0:06:40.720 to take a drug cocktail that will prevent you from 0:06:40.720 --> 0:06:45.480 getting infected uh for a week or two. Um. Let 0:06:45.480 --> 0:06:47.680 me give you an example of something that happened last year. 0:06:47.720 --> 0:06:50.560 There's a new drug called Zofluza that was developed by 0:06:50.560 --> 0:06:56.000 a Japanese company now sold I believe in America by 0:06:56.120 --> 0:06:59.360 genn Tech. Uh. And if you are exposed to flu, 0:06:59.520 --> 0:07:02.240 your kid comes home from school with the flu. Uh, 0:07:02.360 --> 0:07:04.880 you take that one pill and you're you have about 0:07:05.000 --> 0:07:09.200 eight chance you reduce your chance of being infected by 0:07:09.840 --> 0:07:13.200 that's what we're talking about. Drugs. You can take when 0:07:13.280 --> 0:07:16.280 exposed or when you think you may be exposed to 0:07:16.280 --> 0:07:19.360 prevent you from getting infection. Now it turns out that 0:07:19.720 --> 0:07:24.440 the slow poke in treatment of and prevention of infection 0:07:24.480 --> 0:07:28.160 has been drugs. But they're rapidly catching up. And just 0:07:29.080 --> 0:07:31.880 a week ago there was some very very interesting news 0:07:32.240 --> 0:07:35.080 that many of the drugs that are useful for treating 0:07:35.080 --> 0:07:38.240 hepatitis C. There are seven different drugs used in two 0:07:38.280 --> 0:07:42.400 drug combinations work in a very unexpected way against the 0:07:42.840 --> 0:07:47.240 protein of the covid virus called n SP three, and 0:07:47.920 --> 0:07:52.320 to everyone's surprise, it's powerfully synergistic with another drug called 0:07:52.400 --> 0:07:55.880 ramdesivier and one and one in this case makes ten, 0:07:56.680 --> 0:08:00.680 not too and so it's giving us the idea that 0:08:00.800 --> 0:08:04.160 there should be a lot of combinations of drugs which 0:08:04.240 --> 0:08:07.080 together can be what's called synergistic the one and want 0:08:07.160 --> 0:08:11.040 let equals sent. The great thing about that discovery is 0:08:11.200 --> 0:08:16.560 India is the powerhouse from manufacturing small drugs and can 0:08:16.640 --> 0:08:19.400 produce these drugs, which in the United States cost about 0:08:19.400 --> 0:08:24.040 eighty dollars for three months treatment cost maybe thirty five dollars. 0:08:24.040 --> 0:08:27.320 In fact, new costs thirty five for a three months treatment. 0:08:27.560 --> 0:08:29.200 So if you only need them for a few days. 0:08:29.200 --> 0:08:31.400 That you're only talking about a couple of bucks for treatment, 0:08:31.560 --> 0:08:33.640 So how would this for that couple of other dogs? 0:08:33.640 --> 0:08:36.720 And you're in good shape to help stop this epidemic, 0:08:36.800 --> 0:08:39.960 not only by getting vaccines which are in short supply, 0:08:40.400 --> 0:08:43.240 but by using combinations of drugs. Well, So how would 0:08:43.240 --> 0:08:44.800 this How would this work in a place like India 0:08:44.920 --> 0:08:47.080 right now? How would they how would they distribute this quickly? 0:08:47.160 --> 0:08:48.880 And how would they know who to distribute it? Tours 0:08:48.920 --> 0:08:51.480 it's safe to assume that the infection right there is 0:08:51.520 --> 0:08:55.400 so high that you can assume you've been exposed. That's 0:08:55.440 --> 0:08:58.240 probably a pretty good assumption. I don't think there's enough 0:08:58.320 --> 0:09:01.400 drug right now. For of all, we don't really know 0:09:02.160 --> 0:09:05.240 what the right these are pills. This isn't a shot. 0:09:05.360 --> 0:09:08.360 Ram decipere now has to be infused and the drug 0:09:08.440 --> 0:09:11.760 that we now know it works best with these hepatitis 0:09:11.760 --> 0:09:15.440 C drugs their pills, but it works best with ram desipere. 0:09:15.440 --> 0:09:18.040 And they're probably other drugs that are being developed. MOLL 0:09:18.120 --> 0:09:21.720 no peer of heer by Merk and other companies, proteation 0:09:21.760 --> 0:09:26.160 inhibitors by Fiser and other companies. Uh, it'll take a while. 0:09:26.200 --> 0:09:28.640 But if I were India, I would do a massive 0:09:29.120 --> 0:09:34.280 warp speed trial to see what's working. With so many 0:09:34.320 --> 0:09:36.600 people infected, you could get that answer in a month 0:09:36.720 --> 0:09:40.960 or two. So essentially, rather than rather than, rather than 0:09:40.960 --> 0:09:44.840 somebody getting the vaccine, they're given this cocktail tail what 0:09:44.920 --> 0:09:48.040 at first signs of it or just in general no, no, 0:09:48.640 --> 0:09:53.120 or you're even just exposed. You're exposed. Okay, it's like 0:09:53.200 --> 0:09:55.480 with with with no losing. You don't have to be infected. 0:09:55.520 --> 0:09:58.600 You don't want to be infected. So if somebody comes 0:09:58.640 --> 0:10:00.760 into your household or you're at a workplace or the 0:10:00.760 --> 0:10:03.320 school where people are getting the fluid, you pop this 0:10:03.360 --> 0:10:06.440 pill and your chances about decreased that you're going to 0:10:06.520 --> 0:10:09.360 get it. That's fantastic, and I think it's a whole 0:10:09.400 --> 0:10:12.680 different approach that people. We're going to have a farm, 0:10:12.800 --> 0:10:16.960 a big pharma copea of anti sarroscopy drugs in about 0:10:16.960 --> 0:10:19.320 six months to a year, and I think that will 0:10:19.360 --> 0:10:22.160 be a good supplement. The great thing about those drugs 0:10:22.200 --> 0:10:29.320 also is resistance to vaccines. Resistance to immunity is parallel 0:10:29.440 --> 0:10:32.760 and like a different world from drug resistance. So you 0:10:32.880 --> 0:10:35.680 get that maybe the best of both worlds. Vaccines plus 0:10:35.720 --> 0:10:39.360 these drugs to protect yourself against all of these very 0:10:39.600 --> 0:10:41.360 I think a lot of good news is coming down 0:10:41.360 --> 0:10:44.000 the Hey just quickly, just twenty seconds tho, Dr has 0:10:44.400 --> 0:10:46.440 I mean to be clear that you take this pill 0:10:46.480 --> 0:10:48.880 and you're good for a couple of weeks or is 0:10:48.880 --> 0:10:52.480 it longer than that? Probably not longer. At this point, 0:10:52.600 --> 0:10:55.439 it's taken us thirty years to get shots which might 0:10:55.520 --> 0:10:59.000 protect us for eight to nine months from HIV. You've 0:10:59.000 --> 0:11:01.240 got to really be careful with long term effects for 0:11:01.320 --> 0:11:04.600 long acting drugs or people who are entirely healthy. But 0:11:04.760 --> 0:11:07.000 we can get there. We can get to a shot 0:11:07.040 --> 0:11:10.040 that will last probably a year or more, but it'll 0:11:10.040 --> 0:11:11.599 take us some time, but we can get there with 0:11:11.640 --> 0:11:14.760 their drugs too. All right. Yeah, we've said we've got 0:11:14.760 --> 0:11:16.360 to about have a bunch of tools to do this. Um. 0:11:16.440 --> 0:11:19.480 Dr Heseltine, thank you so much. Always appreciate checking in 0:11:19.520 --> 0:11:21.680 with you. Dr William Hazeltine, Scherman and President of Access 0:11:21.679 --> 0:11:24.800 Healthy International. What are you thinking? I'm thinking how long 0:11:24.840 --> 0:11:28.240 are we going to be in this situation? Right? Yeah? 0:11:28.360 --> 0:11:30.600 It's what it feels like. It feels like, I mean, 0:11:31.040 --> 0:11:33.600 my my thoughts on involved a lot, but it's interesting, 0:11:33.640 --> 0:11:36.120 like He's saying that, you know, you have multiple tools 0:11:36.160 --> 0:11:38.760 because there are probably ultimately people who will not get vaccine. 0:11:38.800 --> 0:11:40.240 So how do you treat somebody who all of a 0:11:40.280 --> 0:11:42.880 sudden says they're exposed, so you want to prevent them 0:11:42.880 --> 0:11:45.240 from getting it, so they get maybe a cocktail. Yeah, 0:11:45.280 --> 0:11:49.080 it's a great point. You're listening to Bloomberg Business Week 0:11:49.280 --> 0:11:53.280 with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 0:11:53.400 --> 0:11:56.200 Bloomberg Radio. So there's a story in the upcoming issue 0:11:56.240 --> 0:11:59.480 of the magazines out later on this week on newsstands, online, 0:11:59.480 --> 0:12:02.400 on on Bloomberg about how the company that's become the 0:12:02.480 --> 0:12:05.440 leader in the most advanced types of semiconductors on the 0:12:05.440 --> 0:12:08.040 market today is TIMS stuck in the middle of a 0:12:08.040 --> 0:12:12.520 global panic over chip supply company t s MC. Joel 0:12:12.520 --> 0:12:15.040 Weber is editor at Bloomberg Business Week. He joins us 0:12:15.080 --> 0:12:19.280 now on the remote from Brooklyn, and Joshua Breustein, technology 0:12:19.280 --> 0:12:21.280 writer at Bloomberg Business Week, joins us on the phone 0:12:21.320 --> 0:12:25.120 from New York City. Joel, I was I was pretty 0:12:25.160 --> 0:12:29.520 shocked to read how much Samsung and t SMC Intel 0:12:30.160 --> 0:12:34.600 are spending divine designing the next generation chip business given 0:12:34.640 --> 0:12:38.320 that here we are now in this global supply crunch, 0:12:40.000 --> 0:12:44.320 well billions, and the number even like the number that 0:12:44.360 --> 0:12:47.480 we've seen from from Intel, the twenty billion that they 0:12:47.880 --> 0:12:51.480 want to throw at the Arizona project seems paltry when 0:12:51.480 --> 0:12:54.720 you get the big numbers that the t s MC 0:12:54.880 --> 0:12:57.360 is the world throw around, and you know t s 0:12:57.440 --> 0:13:00.360 MC is is I think pre chip short edge. There 0:13:00.360 --> 0:13:03.400 are probably a lot of people who had no who 0:13:03.400 --> 0:13:07.480 that company was. You know, if you're if you're in 0:13:07.520 --> 0:13:10.400 the in the tech business, Uh, t s MC has 0:13:10.520 --> 0:13:14.640 quietly become just a juggernaut over the past couple of decades, 0:13:15.200 --> 0:13:17.440 and so I think a lot of people suddenly woke 0:13:17.520 --> 0:13:21.160 up to the realization that this is a huge powerhouse 0:13:21.160 --> 0:13:24.240 company UM in the midst of the chip shortage. And 0:13:24.280 --> 0:13:27.319 what the story that Jock edited in in this UM 0:13:27.600 --> 0:13:31.680 this week's issue is about is effectively t SMC sort 0:13:31.679 --> 0:13:34.040 of finds itself in the middle of now a game 0:13:34.080 --> 0:13:37.920 of geopolitics that looks really complicated. So so, Josh, what 0:13:38.000 --> 0:13:40.760 did uh what did our reporters discover as they dug 0:13:40.760 --> 0:13:44.920 into this story. Yeah, so the t SMC story is 0:13:44.920 --> 0:13:47.720 is interesting. This is a company, as Joel said that 0:13:47.800 --> 0:13:53.199 was really unknown UM outside of tech circles until very recently, 0:13:53.480 --> 0:13:57.199 and it pioneered a process for making chips where it 0:13:57.240 --> 0:14:00.679 would allow its customers to design the chips and then 0:14:00.760 --> 0:14:04.480 it would manufacture them. This is different from companies like Intel, 0:14:04.520 --> 0:14:08.120 who were handling UM the entire thing, and this really 0:14:08.120 --> 0:14:11.920 was a revolution in the chip industry. UM t smcs 0:14:12.000 --> 0:14:15.080 real big break came when it began manufacturing chips that 0:14:15.120 --> 0:14:18.480 Apple was designing for its iPhones, and that allowed t 0:14:18.640 --> 0:14:22.080 SNC to really learn how to make the most sophisticated 0:14:22.160 --> 0:14:24.400 chips on the market, and that's been a great business 0:14:24.400 --> 0:14:27.440 for it. It is UM an enormous company. It's very 0:14:27.480 --> 0:14:32.600 important throughout the global tech industry, and now with the 0:14:32.680 --> 0:14:37.680 chip shortage, you're seeing officials really across the globe worrying 0:14:37.840 --> 0:14:41.440 about UM, their supply chains, and in a lot of 0:14:41.480 --> 0:14:45.640 cases wanting chips to be manufactured closer to home. The 0:14:45.760 --> 0:14:48.960 thing with for t SMC is that almost all of 0:14:49.000 --> 0:14:53.000 its highest level chips are made in Taiwan UM, and 0:14:53.040 --> 0:14:55.280 so it's going to be facing increasing pressure from places 0:14:55.320 --> 0:14:58.360 like the United States and from Europe to UH to 0:14:58.520 --> 0:15:02.840 evolve into something that it never has been. Right and 0:15:03.080 --> 0:15:05.920 closely tied as you, as you just said, to Taiwan, 0:15:06.080 --> 0:15:08.320 which kind of puts it also in China's grasp and 0:15:08.360 --> 0:15:13.200 I do wonder how that also kind of complicates things. Joshua. Yeah, 0:15:13.200 --> 0:15:16.120 I think when when you're talking about Taiwan and UM 0:15:16.160 --> 0:15:18.480 and the West looking at Taiwan, I think there's a 0:15:18.520 --> 0:15:22.440 bit of nervousness that it is very close physically to China, 0:15:22.560 --> 0:15:25.840 UM that you might be a little bit nervous about 0:15:26.000 --> 0:15:29.800 your long term prospects of relying on something of strategic 0:15:29.800 --> 0:15:34.360 importance that happens really in China's backyard. UM and t SNC. 0:15:34.640 --> 0:15:39.720 You know, it has uh its own interesting relationship with China. 0:15:39.760 --> 0:15:44.000 It's also not making it's most sophisticated chips in China 0:15:44.640 --> 0:15:46.680 UM and China wants to have its own chip industry 0:15:46.680 --> 0:15:49.760 as well. So I'm wondering where this leaves the companies 0:15:49.760 --> 0:15:55.120 that it that it supplies chips to. Well, I think 0:15:55.400 --> 0:15:58.480 that the companies who rely on t SMC for chip 0:15:58.520 --> 0:16:03.120 manufacturing are probably doably pretty happy with the way that 0:16:03.200 --> 0:16:05.360 this works. They get to design the chips, they don't 0:16:05.400 --> 0:16:09.240 have to build these multibillion dollar factories where they're made. 0:16:09.880 --> 0:16:15.040 UM and you know, I think that there's UH interest 0:16:15.120 --> 0:16:17.760 in having t SMC. You continue to do that, but 0:16:17.840 --> 0:16:21.920 maybe in a way that will make companies and policymakers 0:16:22.040 --> 0:16:25.840 outside of UM Taiwan or not that close to Taiwan 0:16:26.000 --> 0:16:29.440 just a little bit more comfortable UM with the prospect 0:16:29.440 --> 0:16:32.840 of supply shocks. Yeah, I mean, I think one of 0:16:32.840 --> 0:16:35.120 the things that is interesting about this is that you 0:16:35.280 --> 0:16:39.360 have a ton of different UH countries all wanting to 0:16:39.400 --> 0:16:41.920 throw their weight around, whether it's the US or China 0:16:42.040 --> 0:16:45.960 or Japan, and ultimately you have UM Taiwan here, which 0:16:46.200 --> 0:16:50.040 is basically I mean this is like one of basically 0:16:50.040 --> 0:16:55.000 the biggest company that Taiwan has UM and so Josh Like, 0:16:55.320 --> 0:16:56.840 one of the things that stuck out to me as 0:16:56.880 --> 0:17:00.480 I was, you know, thinking about the capital expend manatures 0:17:00.600 --> 0:17:04.119 and UM everything else that you know, the competitors that 0:17:04.160 --> 0:17:06.680 would want to try and steal back some market share 0:17:06.720 --> 0:17:10.600 from t SMC arresting with here is like ultimately t 0:17:10.800 --> 0:17:13.000 SMC is the one with the leverage, right like you. 0:17:13.000 --> 0:17:15.440 You can't just like spool up one of these factories 0:17:15.480 --> 0:17:17.720 and do it overnight like you. You have to be 0:17:17.760 --> 0:17:20.720 thinking decades out here. So to some extent like that 0:17:20.960 --> 0:17:26.600 they have the cards right. Absolutely, t SMC has a 0:17:26.600 --> 0:17:29.560 big head start on most of its competitors when it 0:17:29.640 --> 0:17:33.960 comes to making the most sophisticated chips, and that's going 0:17:34.000 --> 0:17:37.240 to give it a lot of leverage. Um. But as 0:17:37.480 --> 0:17:41.040 you also see add um, national governments want to throw 0:17:41.040 --> 0:17:44.080 around money as well, Like that is a potential opportunity 0:17:44.119 --> 0:17:47.199 for t SMC. It's also a potential opportunity for some 0:17:47.280 --> 0:17:50.399 of its competitors to close the gap. But closing that 0:17:50.440 --> 0:17:52.520 gap is not going to be easy or even a 0:17:52.600 --> 0:17:56.320 foregone conclusion that it will happen. Okay, I got one 0:17:56.359 --> 0:17:58.639 more for you, Josh, which is I thought that the 0:17:58.840 --> 0:18:01.840 lead of this story was super interesting. Like to give 0:18:01.880 --> 0:18:03.959 you a sense of how long TIS and C has 0:18:03.960 --> 0:18:05.959 been around, can you rewind the clock and tell us 0:18:05.960 --> 0:18:09.600 what we found out? Yeah, So the lead of the 0:18:09.640 --> 0:18:13.480 story UM starts with Morris Chang, who is t s 0:18:13.600 --> 0:18:17.800 MC's founder, UM, who was born in China, UM, but 0:18:17.880 --> 0:18:20.200 actually spent the early part of his career in the 0:18:20.320 --> 0:18:25.440 United States, and he recently was reminiscing about a industry 0:18:25.480 --> 0:18:32.400 conference he went to in nineteen UM with the with 0:18:32.480 --> 0:18:34.639 the founders of Intel's who were not yet the founders 0:18:34.680 --> 0:18:36.920 of Intel because the company had not yet been founded, 0:18:37.320 --> 0:18:41.200 but he remembers going to this conference, UM, going out 0:18:41.280 --> 0:18:43.639 and having beers with them and as he put it, 0:18:44.080 --> 0:18:47.360 singing arm in arm all the way back to our hotel. Um. 0:18:47.400 --> 0:18:50.600 So these guys have known each other for a long time. UM, 0:18:50.720 --> 0:18:55.160 and you know that the basic, uh, the basic foundation 0:18:55.200 --> 0:18:57.000 of the chip industry has been around for quite some time, 0:18:57.520 --> 0:19:01.000 and they felt favored by the gods, and as Debbie 0:19:01.000 --> 0:19:03.359 points out in the piece, until passed up a chance 0:19:03.400 --> 0:19:06.160 to actually invest in the nineteen eighties in t SMC. 0:19:06.960 --> 0:19:09.360 It's just fascinating, and I feel like we're not quite 0:19:09.400 --> 0:19:14.120 sure how the chips may fall or going forward. Um. 0:19:14.200 --> 0:19:16.800 Great great reporting, Debbie Wu. Of course, the reporter who 0:19:16.840 --> 0:19:19.320 did this story for Bloomberg Business Week, Josha Breustin, now 0:19:19.400 --> 0:19:23.080 Tech editor at Business Week, giving us the details along 0:19:23.080 --> 0:19:26.239 with Jill Webber, editor of Bloomberg business Week, and in 0:19:26.280 --> 0:19:29.600 this week's Business Week Small Business Survival guid cash is 0:19:29.720 --> 0:19:33.000 king once again at Small Business. Who'd have thought, right, 0:19:33.040 --> 0:19:35.320 because it's like Tim bin all In when it comes 0:19:35.320 --> 0:19:37.520 to digital Yeah, especially at the beginning of the pandemic 0:19:37.520 --> 0:19:40.800 when nobody would touch cash. Rob Mandelbama is freelance contributor 0:19:40.800 --> 0:19:42.920 at Bloomberg Business Week and joins us on the phone 0:19:43.000 --> 0:19:45.120 from Brooklyn. Rob, this is something I run into because 0:19:45.119 --> 0:19:46.600 I do drive. So I go and I fill up 0:19:46.600 --> 0:19:49.119 my car in Brooklyn, and it's always like ten or 0:19:49.119 --> 0:19:52.160 twelve or fifteen cents cheaper per gallon. So I, here's 0:19:52.160 --> 0:19:54.000 something about me. I fill up with cash all the 0:19:54.040 --> 0:19:56.679 time because I don't want to pay that extra fee. 0:19:57.160 --> 0:20:00.719 But as you report in Bloomberg Business this week, this 0:20:00.800 --> 0:20:04.240 is starting to spread to other types of stores as 0:20:04.359 --> 0:20:08.000 customer as businesses tire of those swipe fees, which add 0:20:08.040 --> 0:20:11.200 up to a lot of money. They certainly do. UM 0:20:11.280 --> 0:20:16.320 businesses have complained about swipe fees for decades, and you know, 0:20:16.560 --> 0:20:20.119 credit cards, as you mentioned, are just becoming more and 0:20:20.200 --> 0:20:23.520 more the currency of the moment. I talked to one restaurant, 0:20:24.040 --> 0:20:27.719 you know, percent of its sales were credit card sales. 0:20:27.800 --> 0:20:31.080 So those swipe fees really add up for for places 0:20:31.119 --> 0:20:34.520 like that. Ye, swipe fees for credit card transactions the 0:20:34.560 --> 0:20:37.320 report amount it to nine billion dollars in the US 0:20:37.440 --> 0:20:40.640 or at two of credit card sales. So so how 0:20:40.720 --> 0:20:43.720 is this playing out at mom and pop stores throughout Brooklyn? 0:20:44.720 --> 0:20:48.440 UM well throughout Brooklyn and throughout the rest of the country. Um, 0:20:48.480 --> 0:20:51.640 there are payment processors. These are the people who sort 0:20:51.680 --> 0:20:55.199 of connect the merchant to the banks that sort of 0:20:55.240 --> 0:21:02.040 handle credit card transactions. Payment processors are approaching merchants sometimes 0:21:02.119 --> 0:21:05.880 and saying, we have a way to lower your fees 0:21:06.119 --> 0:21:10.720 to zero um, and we do that by making the 0:21:10.720 --> 0:21:14.760 customer pay them. That can be very difficult though, if 0:21:14.760 --> 0:21:17.640 you're a business and you're you're you don't necessarily want 0:21:17.640 --> 0:21:21.840 to be the one who's necessarily charging more for something 0:21:22.359 --> 0:21:25.000 because you want to provide the customer the cheapest price. 0:21:25.720 --> 0:21:29.280 It depends, right, you know, if you're a restaurant that 0:21:29.440 --> 0:21:34.520 it provides a particular you know, a particular experience or 0:21:34.680 --> 0:21:37.159 a particular kind of food. You know, people who go 0:21:37.240 --> 0:21:40.359 to restaurants because they like the food, uh might be 0:21:40.400 --> 0:21:44.280 willing to go to to pay that extra four percent. Um. 0:21:44.320 --> 0:21:46.879 You know, if you're the only fish merchant you know 0:21:47.280 --> 0:21:50.960 in walking distance, people might uh suck it up and 0:21:51.160 --> 0:21:53.800 pay credit cards. Most people do, in fact, uh just 0:21:53.840 --> 0:21:57.680 absorb the fee. So how important, first of all, is 0:21:57.760 --> 0:22:02.360 small business to all of these credit cards? Oh? Uh, 0:22:02.960 --> 0:22:07.120 not very important, Carol. Uh Yeah, I mean, I mean 0:22:07.359 --> 0:22:10.720 they would they would disagree of course. Uh, don't forget 0:22:10.720 --> 0:22:13.919 shops small on Saturday. But um, but you know, I 0:22:13.960 --> 0:22:19.439 mean the vast majority of credit card transactions take place 0:22:19.440 --> 0:22:23.639 at giant retailers, you know, at at the costcoes, the 0:22:23.680 --> 0:22:27.480 wal Marts, the Sephoras, you know, the target no love 0:22:27.520 --> 0:22:30.159 lost between credit cards and small business was interesting to it. 0:22:30.200 --> 0:22:32.359 I didn't know. And in your story you talk about, 0:22:32.640 --> 0:22:35.000 you know, we get those cards that give us rewards 0:22:35.000 --> 0:22:38.919 and cash back and travel points, and merchants are the 0:22:38.920 --> 0:22:41.560 ones that ultimately are paying for those benefits for consumers. 0:22:42.119 --> 0:22:44.439 That's right, that's right. And they're much more expensive for 0:22:44.480 --> 0:22:46.600 merchants and other cards. You know, it could be the 0:22:46.600 --> 0:22:50.080 difference between paying a two percent transaction fee and paying 0:22:50.119 --> 0:22:52.080 a four percent transaction fee or four and a half 0:22:52.160 --> 0:22:55.280 or five. So I do customers seem okay with the 0:22:55.320 --> 0:23:00.720 way this is going? According to the merchants, the credit 0:23:00.720 --> 0:23:04.240 card companies will tell you something different. According to the merchants, 0:23:04.320 --> 0:23:10.119